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Oral Answers to Questions
(9 years ago)
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Rishi Sunak (Richmond (Yorks)) (Con)
1. What assessment he has made of the likely long-term effects of the current refugee crisis on efforts to address mass migration into and within the EU.
Sir Simon Burns (Chelmsford) (Con)
11. What (a) assessment he has made and (b) discussions he has had with his EU counterparts on the likely long-term effects of the current refugee crisis on efforts to address mass migration into and within the EU.
Wendy Morton (Aldridge-Brownhills) (Con)
15. What assessment he has made of the likely long-term effects of the current refugee crisis on efforts to address mass migration into and within the EU.
The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)
I discussed the migration crisis with my counterparts at the EU Foreign Affairs Council earlier this month. There is rising recognition among EU member states that Europe cannot continue indefinitely to absorb very large numbers of migrants and that a comprehensive approach is needed, with much greater focus on tackling the root causes of migration as the UK has long advocated. On the issue of mass migration within the EU, my right hon. Friend the Prime Minister has made it clear that we are focused on reforming migrant access to welfare to reduce the artificial pull factors that draw migrants to the UK.
Rishi Sunak
I thank the Secretary of State for that answer. Does he agree that the best long-term solution to tackling the migration crisis is to improve the living conditions of people in major source countries and that this Government’s commitment on international aid is a tangible example of our leadership in that area?
Mr Hammond
I agree with my hon. Friend. There are two distinct groups. There are those who are displaced by war and conflict, and for the period of their displacement we have to ensure they have the resources they need, usually through the United Nations, to feed themselves and to be able to educate their children and to access healthcare. Then there are those who are coming from countries where, frankly, life is very hard, and we have to work with those countries of origin to ensure economic development that gives everybody a chance to do something that gives them an incentive and a reason to want to stay.
Sir Simon Burns
Does my right hon. Friend agree that, important as it is to address the long-term causes of mass migration from outside the EU, it is equally critical to address the problems of mass migration within the EU caused by the artificial pull factor of our welfare system?
Mr Hammond
I agree. As I said in my opening response, that is where we are focused—dealing with the very generous access to benefits and public services that acts as a distortion in the labour market, and which encourages people to come to the UK in anticipation of net earnings far higher than the wages they could otherwise earn.
Wendy Morton
Does my right hon. Friend agree that the UK’s position outside the Schengen area is a great advantage in addressing the causes and consequences of the ongoing migration crisis?
Mr Hammond
Again, I agree. Being outside the Schengen area has allowed us to stand back from the immediate pressure of this migration crisis and take a slightly more detached view, where we have focused on helping in the upstream areas with very generous humanitarian support to the Syrian region. It is not only being outside the Schengen area; it is having the justice and home affairs opt-out that allows us to say very clearly that we will not share in any compulsory reallocation of migrants within the EU.
Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)
How will the Government ensure that the 20,000 refugees they have agreed to take from the region include some of the most vulnerable—children, disabled people, women who may have faced sexual violence—and how many of those refugees does the right hon. Gentleman expect to be here by Christmas?
Mr Hammond
The hon. Gentleman makes an excellent point. This is exactly the Prime Minister’s point: many of the people we see on our television screens walking down railway lines are fit young men coming to Europe to look for work—and that’s fine—but there are also many extraordinarily vulnerable individuals in displaced persons camps who are simply not able to try to make that difficult and dangerous crossing into Europe, and we will take those people, asking the UN to prioritise the most vulnerable.
Mary Creagh (Wakefield) (Lab)
Some of those fit young men are fleeing the conscription of Assad’s regime because they do not want to kill their own people. Turkey and Lebanon cannot continue indefinitely to absorb the millions of refugees from Syria’s crisis. What is the right hon. Gentleman going to do to respond with compassion and competence in the European Union? Will he reconsider his decision not to participate in the resettlement from within the EU, as Ireland and Denmark have done?
Mr Hammond
No, we will not reconsider that decision. We judge that the best contribution we can make is to take some of the most vulnerable. I am not saying that the fit young men do not have a reason for fleeing. I am saying that we must focus on the most vulnerable people, who do not have the option to flee. While I am on my feet, I would like to pay tribute to Turkey, Lebanon and Jordan, who have borne an extraordinary burden over many years, absorbing refugees and displaced people from Syria.
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
Why do the Secretary of State and the Government continue to conflate those important but separate issues? The refugee crisis—it is not a migrant crisis—is an exceptional circumstance. Those individuals and families are fleeing the region first and foremost for their own safety, but they want to go home. Does he not agree that a humanitarian plan for long-term peace in Syria would do far more to address the crisis than these short-term measures, which appear to have been designed to curry favour with the right-wing press?
Mr Hammond
I do not know where the hon. Lady has got that from. Of course we agree that addressing the upstream problem by getting a political settlement in Syria and defeating ISIL so that it cannot carry out its barbarous activities is the right way to go. I also agree with her that, when we come to build the new Syria, post-Assad, we will need those engineers, doctors and teachers who are now being encouraged to resettle in Europe. We have a responsibility to ensure that the new Syria has access to those qualified and educated people.
Nadhim Zahawi (Stratford-on-Avon) (Con)
Is my right hon. Friend aware of the first robust piece of research undertaken among refugees in Germany, which shows that 70% of them blame Assad and his barrel bombs for their predicament? The rest blame the murderous ISIL group. Only 8% of them want to remain in Europe, with 92% wanting to return home, which speaks directly to this Government’s policy of focusing on the camps in Jordan, Lebanon and Turkey and helping people to stay there before they return to their country.
Mr Hammond
There has been a lot of focus on ISIL, but it is important to remember that it is Assad’s persistent indiscriminate attacks on his own civilian population with chlorine gas and barrel bombs that have been the principal driver of this mass migration.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Prime Minister said in his conference speech that the problem with the EU was that it was “too big” and “too bossy”. Looking at the refugee crisis, however, we can see that his rhetoric was simply wrong. Does the Foreign Secretary not agree that the problem for the refugee crisis has not been a European Union that is too strong and overbearing, but rather one that has been too weak, too unco-ordinated and too ready to fall back into the old habit of nationalism? Do not the desperate scenes that we have witnessed all summer demand more co-operation between states rather than a retreat into the use of barbed wire and nationalism and a failure of collective, co-ordinated leadership precisely when it is needed most?
Mr Hammond
I am happy to agree with the right hon. Gentleman that co-operation between states is the right answer. Unfortunately, however, that is not what happens when competences are ceded to the EU, which results in dictation to states by the European Union. That is a distinction that he would be well advised to study.
Patrick Grady (Glasgow North) (SNP)
2. If the Government will invite a Minister of the Scottish Government to join the UK delegation to the Paris climate change conference in December 2015.
The Minister for Europe (Mr David Lidington)
Yes, my right hon. Friend the Secretary of State for Energy and Climate Change wrote to all three devolved Administrations last month to invite the relevant Ministers to join the UK delegation in Paris.
Patrick Grady
That is welcome news, as it will give the Scottish Government Minister a chance to speak about Scotland’s ambition to tackle climate change. Does the right hon. Gentleman agree that that is particularly important, given the criticisms that the UK Government are facing today from the United Nations environment programme, which has stated that their cuts to renewables are completely at odds with the pledges being made by 150 other countries ahead of the Paris summit?
Mr Lidington
I obviously welcome the participation of Scottish and other devolved Ministers in the UK delegation, but I really think that the hon. Gentleman should do a bit of homework and remind himself that the UK is well on track to achieve its emissions reduction targets by 2020, en route to the 80% reduction by 2050. And I am sorry that he did not even mention the Prime Minister’s commitment of a further nearly £6 billion in additional climate finance to help the poorest countries to adapt to the challenge of climate change.
Andrew Rosindell (Romford) (Con)
Does the Secretary of State agree that if the devolved Assemblies are being represented at the conference in Paris, the British overseas territories should also be given representation? They are not part of the British Isles and could therefore be affected by climate change in lots of ways. Surely they should also have a voice at this important conference.
Mr Lidington
The Foreign Office will, of course, be very much involved in the UK delegation at the Paris climate change conference, and every Foreign Office Minister always keeps the interests of the British overseas territories closely in mind. We know that my hon. Friend will always make sure that we continue to do so.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
At this rate, it will not matter who gets on the plane to Paris, because when they get there the UK will be a laughing stock as a result of this Government’s lack of commitment to tackling climate change. We are haemorrhaging jobs in the solar industry and in the insulation sector, and all because of a lack of Government policy. How can Foreign Office Ministers do their job if we are not taking the right action at home?
Mr Lidington
I am sorry that the hon. Gentleman did not revise his question after hearing my previous answer. I remind him that not only are we on track to meet the climate change targets we have set, but we are setting a lead by committing large sums of additional British taxpayers’ money to help the poorest countries adapt to climate change. This country is the world’s sixth largest green exporter, and the record is one of which we can be proud.
Catherine West (Hornsey and Wood Green) (Lab)
Perhaps the Minister would like to revise his answer, given that Al Gore has said:
“It is time for the UK government to honour and live up to that legacy, and return to its global leadership position, domestically and abroad, by supporting an ambitious international agreement in Paris”.
It appears the Prime Minister may have lost interest in the subject, and the solar industry is in crisis domestically.
Mr Lidington
First, may I welcome the hon. Lady to her new responsibilities on the Opposition Front Bench?
For the reasons I have already given, I think that this Government continue to have a good record on climate change, and my right hon. Friend the Prime Minister takes a very close interest in this in all the international discussions. This was a major item he discussed with President Hollande during the President’s recent visit to Chequers. We are very committed to helping the French Government to deliver an ambitious outcome at Paris which commits all countries to significant emissions reductions, and to targets binding in international law and help for the poorest countries, which will struggle most to make the change.
Mr Laurence Robertson (Tewkesbury) (Con)
3. What recent discussions he has had with the Government of India on outstanding payments due to British companies for work carried out during the 2010 Commonwealth games.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
In the case of SIS Live, the British high commission in New Delhi has provided consistent support to the company and urged the Government of India to resolve the dispute over payment. I personally raised this issue with the Indian high commissioner just yesterday, and we will continue to press for a satisfactory settlement.
Mr Robertson
I thank the Minister for that response and for the work he has carried out on this issue. SIS Live is a perfectly respectable British company which fully delivered on its commitments in the 2010 Delhi Commonwealth games. Does he agree that the outstanding debt of £29 million should be paid to SIS Live in advance of the Indian Prime Minister’s visit to this country later this year?
Mr Swire
Yes, we very much hope this will be resolved before Prime Minister Modi comes here shortly. The visit will be an opportunity for us to discuss a wide range of issues. Bilateral trade with India is extremely good, but what is important is the signal this matter sends to other potential British companies looking to invest in India, so we do want it resolved.
Keith Vaz (Leicester East) (Lab)
While of course accepting the need for British companies to be paid and for Indian companies to be paid by British companies with which they are doing business, may I join the Minister in welcoming the visit of Narendra Modi, which has caused huge excitement among the British Indian community in places such as London and Leicester? Will it enable the Government to send out a message that it is not just learning Chinese that is important but that a bit of Hindi will go down well in our bilateral relations?
Mr Swire
I very much hope the right hon. Gentleman is not going to test me on my Hindi now. Of course we are all looking forward to the visit of Prime Minister Modi. Quite apart from the Government-arranged events, there is going to be a huge diaspora event, in which the Prime Minister will be able to speak—I am sure the right hon. Gentleman is closely involved in organising it. Clearly, we want more British students to study in India, but the opportunities for the provision of English language teaching in India are the ones on which we should concentrate.
Mr Speaker
Of course the Indian Prime Minister is the representative of a great democracy.
Paul Scully (Sutton and Cheam) (Con)
4. What discussions he has had with his Japanese counterpart on that country’s constitutional constraints on foreign policy initiatives.
The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)
I have congratulated the Japanese Diet on passing security legislation that will allow Japan to play a greater role in maintaining international peace and security. When I visited Tokyo in August, I discussed with Foreign Minister Kishida how the UK and Japan can work together to uphold the rules-based international system, once these changes have been introduced.
Paul Scully
Following the Prime Minister’s announcement in New York that the UK will make a greater contribution to UN peacekeeping operations, does my right hon. Friend agree that we should encourage Japan to use its special defence forces to contribute to UN peacekeeping as well?
Mr Hammond
Yes, I do. By passing this legislation, the Japanese have allowed themselves more freedom to co-operate with international partners in preserving international peace, and we are very keen that that includes more Japanese peacekeepers on UN peacekeeping operations as well as Japanese logistic support to other operations carried out by partners and allies around the world.
Andrew Gwynne (Denton and Reddish) (Lab)
Some of the concerns of the Japanese have centred around the activity of the People’s Republic of China in the East China sea and the South China sea regions, particularly the recent dispute with Japan over the Diaoyu-Senkaku islands. When the Foreign Secretary is in discussions with the Japanese and the Chinese, will he try to build some sense of peace and stability in that region to try to allay the concerns not just of Japan but of other countries in the region?
Mr Hammond
First, let me congratulate the hon. Gentleman on his very good pronunciation of those particular islands. Our position on this is clear: we do not take a position on the different claims to sovereignty over disputed territory in the East China or the South China seas. What we are clear about is two things: first, these disputes must be resolved in accordance with international law and peacefully; and secondly, the international right to freedom of navigation and freedom of overflight must be preserved. That is the position that we consistently take and that we consistently make to Japanese, Chinese and other south-east Asian interlocutors.
Chris Davies (Brecon and Radnorshire) (Con)
5. What assessment he has made of the progress of negotiations to reform (a) the EU and (b) the UK’s relationship with the EU.
Andrea Jenkyns (Morley and Outwood) (Con)
14. What assessment he has made of the progress of negotiations to reform (a) the EU and (b) the UK’s relationship with the EU.
The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)
We are making good progress in our discussions on reform of the EU at both a political and technical level. We will continue discussions with our EU colleagues as well as with the European Parliament and Commission ahead of the December European Council. As the Prime Minister said last week, he will also be writing to the president of the European Council in early November to set out the areas of change that we wish to achieve.
Chris Davies
Does the Minister share my concern that economic and monetary union states could force new legislation on non-EMU states by commanding a majority in the EU? What measures can be put in place to ensure that a country not in the eurozone, as Britain is proud to be, can guarantee that their voice is heard in the EU as loudly as those inside the eurozone, particularly on policy relating to the single market?
Mr Hammond
My hon. Friend is right to point out that concern. It is the case that the eurozone states will have a qualified majority between them in due course. That is why part of this negotiation is about putting in place a framework to govern relationships and decision making between eurozone and non-eurozone states so that the interests of the non-eurozone states are protected as the eurozone proceeds with the closer integration that—in our judgment—will be necessary to ensure that the euro is a successful currency. That is something that is greatly in the interests of the United Kingdom.
Andrea Jenkyns
For the past two years, the residents of Morley and Outwood have been telling me of their concerns about EU migration, free movement of people and access to our NHS benefits and other services. What assurances can my right hon. Friend give them that those concerns will be addressed in the renegotiations?
Mr Hammond
I can assure my hon. Friend that those issues are right up there at the front of our renegotiation strategy. Whether they like it or not, our partners across Europe understand that those are the primary concerns that the British people are expressing in opinion poll after opinion poll and during the recent general election campaign. If Britain is to be able to embrace a reformed European Union, those issues will have to be addressed in the settlement.
Emma Reynolds (Wolverhampton North East) (Lab)
If progress is made in all of the four areas that the Prime Minister has put forward, is the Foreign Secretary minded to vote for our EU membership?
Mr Hammond
Clearly, what I seek is a package of reform that will allow me and the British people to embrace enthusiastically Britain’s future in the European Union. The British people will, however, approach this process with a sceptical frame of mind. They will be looking for real and substantial reform, which is binding and enforceable and irreversible in the future. That is what we are seeking.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
What legal advice has the Foreign Secretary had that would give him reason to believe that he can get these substantial changes that would allow non-euro countries fair representation within the architecture without treaty changes being required?
Mr Hammond
We expect that some of the changes that we are seeking—by no means all, but some—will require treaty change. We are exploring in technical discussions with the Commission’s lawyers how we might enter into binding arrangements ahead of treaty change that will have the effect of binding our partners into the agreements they have made.
Mr David Nuttall (Bury North) (Con)
17. Can the Foreign Secretary confirm that apart from some technical changes relating to the right of EU citizens to claim welfare payments, the basic principle of free movement of people is not going to change in the renegotiations?
Mr Hammond
The basic principle of freedom of movement to work is not being challenged, but I disagree with my hon. Friend that changes to access to welfare are merely technical. The point was made very well that access to extraordinarily generous in-work benefits effectively distorts the labour market and creates a pull factor towards working in the UK that we need to reverse.
Stephen Gethins (North East Fife) (SNP)
The Foreign Secretary has made it clear that any changes will require treaty change. Can he tell us one member state that backs treaty change?
Mr Hammond
To be clear, I did not say that any changes will require treaty change; I said that we expect that some of the changes we are seeking will require treaty change. It is perfectly true—I do not know why the hon. Gentleman finds it so amusing, and I have said it in this House many times before—that none of our partners welcomes the idea of treaty change, but all of them accept that this is something we have to do if we are going to carry the British people with us.
Mr John Baron (Basildon and Billericay) (Con)
21. What progress is being made to ensure that this Parliament, by itself if necessary, can say no to any unwanted EU directives, tax or regulations?
Mr Hammond
Part of our reform strategy is to look for a greater role for national Parliaments working together to block unwanted legislation so that we, the people of Europe, cannot have imposed on us by the Commission something that the majority of us do not want. But my hon. Friend knows that it is completely unrealistic to seek an individual national veto in all areas. A European Union of 28 member states with individual national vetoes simply would not work.
Tom Brake (Carshalton and Wallington) (LD)
Will the Foreign Secretary comment on the solid progress being made on one of the five principles for the Prime Minister’s vision for a new European Union—that is, the competitiveness agenda and specifically, for instance, delivery charges for items posted within the EU, or trade deals with the US?
Mr Hammond
I do not know whether the right hon. Gentleman is privy to some information that I am not, but last time I checked with the Prime Minister he had four categories in which he was pursuing the negotiation. On competitiveness, it is true that the mood in the European Union has changed. Since the financial and economic crisis, more and more member states are focused on the need for Europe to be able to compete in the global economy, and the Juncker Commission is focused on an agenda. We think it could go further; we would like it to be more ambitious, but it is pointing in the right direction. Our challenge is to institutionalise that change and make sure that the European Union is firmly pointed in that direction as a matter of institutional structure, not of individual Commission choice.
Andrew Bridgen (North West Leicestershire) (Con)
23. The Foreign Secretary said that our renegotiation will require a treaty change. Does he see that occurring before or after the proposed EU referendum, and will that treaty change trigger a second referendum?
Mr Hammond
We are exploring with the Commission legal services and others the possibility of binding legal commitments like the protocols that were entered into by Denmark and Ireland that will be incorporated into the treaties at the next available treaty change. That will give us what the British people need, which is assurance that the agreements that have been entered into will be complied with by the other member states.
Chris Heaton-Harris (Daventry) (Con)
6. What recent diplomatic steps he has taken to promote peace and security in Somalia.
Jeremy Lefroy (Stafford) (Con)
16. What recent diplomatic steps he has taken to promote peace and security in Somalia.
The Minister of State, Foreign and Commonwealth Office (Grant Shapps)
As my right hon. Friend the Prime Minister announced at the UN General Assembly last month, we are deploying up to 70 UK military personnel to assist the UN Support Office for AMISOM—the African Union Mission to Somalia.
Chris Heaton-Harris
Much of the rebuilding work in Somalia has been undertaken by Britain and led by the British Government. Will my right hon. Friend confirm that economic and infrastructure development in Somalia goes hand in hand with peace and security?
Grant Shapps
My hon. Friend is absolutely right. I was in Mogadishu in July and saw some of that work taking place. Britain’s influence there should not be underestimated. America has its embassy in Nairobi, and no other EU state has a presence in Somalia, so Britain is the only EU country with an embassy in Mogadishu. From there we give technical, logistical and planning assistance, which the Government there very much welcome.
Jeremy Lefroy
May I pay tribute to the work of the African Union peacekeeping forces from Uganda, Burundi, Djibouti, Kenya, Ethiopia and Sierra Leone, who have lost more than 1,000 lives in returning Mogadishu and much of the rest of Somalia to a form of peace? What does the United Kingdom propose to do to continue to support these brave men and women?
Grant Shapps
My hon. Friend is absolutely right. The brave troops of the AMISOM command have been doing an incredible job, and I pay tribute to all the countries he mentioned for their involvement. When our military personnel turn up, they will be helping with engineering and logistical support. I have discussed that with our embassy and with UNSOA, the co-ordination force on the ground. It is absolutely right to pay tribute to the very brave work being done by all involved.
Oliver Dowden (Hertsmere) (Con)
7. What assessment he has made of the implications for his policies of recent violence in Israel and the Palestinian territories.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
We are deeply concerned by the recent violence and terrorist attacks across the occupied Palestinian territories and Israel. Our immediate focus is on urging all sides to encourage calm, take steps to de-escalate and avoid any measures that could further inflame the situation.
Oliver Dowden
Does the Minister agree that there can be no justification whatsoever for random terror attacks on Israelis in the streets of Israel? They are just like us: normal people trying to go about their ordinary lives. We should be absolutely clear in condemning that sort of activity.
Mr Ellwood
I absolutely concur with my hon. Friend and condemn the violence that has taken place across Israel and the occupied Palestinian territories. There is no place for the sorts of terrorist attacks we have seen, and the effect they are having on innocent civilians’ sense of safety is appalling.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
Are not the deaths of an Eritrean immigrant who was just murdered in Beersheba by Israeli thugs, the deaths of seven Israelis and the deaths of 40 Palestinians the direct consequence of Netanyahu’s refusal to grant freedom to Palestine, the illegal wall, the illegal settlements, the 500 check points and the persistent desecration of the al-Aqsa mosque by Israeli settlers? Will the Government take action to get Netanyahu to the conference table?
Mr Ellwood
We recognise that there are frustrations due to the lack of progress towards peace, and we share those frustrations. The peace process was launched more than two decades ago, yet we still have not achieved the two-state solution that was envisaged, but there is absolutely no justification for the sorts of attacks we have seen.
Mr Peter Bone (Wellingborough) (Con)
25. Does the Minister agree that it certainly does not help that the Palestinian Authority encourages incitement against Israel?
Mr Ellwood
President Abbas has condemned the use of violence and reiterated the Palestinian Authority’s commitment to reaching a political solution by peaceful means. We have seen tensions spike in the past, but it does seem different this time, with young people seemingly unafraid of death and brandishing knives, knowing what the consequences will be. The pattern so far has been one of lone wolf, low-tech attacks, but the escalation and the tensions are certainly worrying.
Mr Jim Cunningham (Coventry South) (Lab)
13. What discussions has the Minister had with the Israeli Prime Minister regarding the Gaza reconstruction mechanism? One hundred thousand people have been displaced, and no homes have been built since July. What are we doing about that?
Mr Ellwood
The hon. Gentleman will be aware that Prime Minister Netanyahu visited recently. We have been making every effort to promote calm. The Prime Minister and the Foreign Secretary have spoken to key regional leaders over the recent weeks, and British officials have been pressing both sides to take steps to de-escalate the situation.
John Howell (Henley) (Con)
22. What assessment has the Minister made about the significant damage to the holy site of Joseph’s tomb at Nablus, which was destroyed by up to 100 Palestinian rioters?
Mr Ellwood
I strongly condemn the burning of the tomb of Joseph in Nablus. The basic right of freedom to worship in safety and security should be protected for all. We have called for a swift and transparent investigation into the incident and for those responsible to be brought to justice.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
As Israeli civilians are being stabbed and murdered by Palestinians on virtually a daily basis, a Rafah cleric, in his sermon on 9 October, brandished a knife and called for Palestinians to slaughter Jews in a holy war. Is it not time that the nature of this incitement was recognised and combated if there is ever going to be hope for peace and justice?
Mr Ellwood
As I say, the Foreign Secretary spoke to President Abbas last week. We are encouraging him to work with Prime Minister Netanyahu. We are also aware that the US is looking at the situation very closely, and Secretary Kerry is ready to visit the region when appropriate.
Neil Parish (Tiverton and Honiton) (Con)
20. Earlier this month, Palestinian Authority President Mahmoud Abbas proclaimed:“We welcome every drop of blood spilled in Jerusalem…With the help of Allah, every martyr will be in heaven, and every wounded will get his reward.”Does my right hon. Friend the Foreign Secretary share my concern that such provocative remarks have fuelled the recent wave of deadly attacks on Israel? What more can we do to help?
Mr Ellwood
There has been too much provocation on both sides. The current violence underlines the fact that a lasting resolution that ends the occupation and delivers peace for Israelis and Palestinians is long overdue. We have been round this buoy many times. The Oslo accords seem in the far distant past, and the tensions are ratcheting up again. We call on both sides to come together.
Richard Burden (Birmingham, Northfield) (Lab)
Does the Minister agree that all murders and attacks on civilians are unacceptable? That includes knife attacks on Israeli civilians and also settler attacks on Palestinian civilians that have been running into the hundreds for several years now. Will he join Amnesty International, Israeli human rights organisations and the United Nations in expressing concern at the increasing use of live ammunition by Israeli troops and police, even when life and limb are not immediately under threat, because that fuels a lot of the tension that we are seeing now?
Mr Ellwood
We can recall what has happened in the past when the violence has ratcheted up to the levels that we are seeing today. That is why we are urging all sides to come together to avoid what we have seen in the past.
Sir Eric Pickles (Brentwood and Ongar) (Con)
Does my hon. Friend recall the words of our right hon. Friend the Prime Minister in his speech to the Knesset last year? He said:
“I will always stand up for the right of Israel to defend its citizens. A right enshrined in international law, in natural justice and fundamental morality”
Does my hon. Friend believe that it is now time for us to review our relationship with the Palestinian authorities? Would it not be better to pay directly to the projects themselves rather than through the Palestinian authorities so that British taxpayers could have a better assurance that the money is going to Palestinians rather than being siphoned off as a stipend to terrorists?
Mr Ellwood
My right hon. Friend articulates the strength of the tensions and the need for us to come together. As I say, peace has eluded that country and the Palestinian authorities for years now. It is important that we take advantage of John Kerry’s offer to visit the region in the very near future.
Royston Smith (Southampton, Itchen) (Con)
8. What diplomatic steps his Department is taking to secure a stable Government in Libya.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
On 8 October, UN special representative Bernardino León announced details of the political settlement in Libya, urging Libyan parties to agree the deal before 21 October. Yesterday I attended a meeting of international partners hosted in the Foreign and Commonwealth Office to discuss robust support for a Government of national accord.
Royston Smith
Everyone in this Chamber will welcome the progress towards a new national Government in Libya. However, we have been here before, so will the Minister commit to reviewing our approach to Libya in the event that the timeline for a national Government is breached?
Mr Ellwood
If I may correct my hon. Friend, we have not quite been at this point before. We are on the eve of signing a peace document to get a Government of unity, but we are not there yet. That will happen next week. If it does not happen, the difficulties faced by Libya—including not only the current migration patterns, but, most importantly, ISIL developing a foothold there—will continue.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Prime Minister used to be so proud of this country’s intervention in Libya. Surely we should be seen as taking a much stronger role in trying to bring all the parties together so that Libya can have some sort of future and its people can live in peace.
Mr Ellwood
I am slightly puzzled by the hon. Gentleman’s question, because we have been at the forefront of engaging with the parties in the very difficult aftermath of Gaddafi’s fall. We offered to assist back in 2012 and 2013. We were invited to leave the country, along with other UN organisations. We have encouraged, through the UN and working with Bernardino León and the Prime Minister’s envoy, Jonathan Powell, the bringing of the parties together. No country could have done more.
Michael Fabricant (Lichfield) (Con)
Although I would not dare to try to emulate Sir Peter Tapsell, does my hon. Friend recall that originally Libya was made up of Tripolitania and Cyrenaica? Does he not believe that if the worst comes to the worst, it may be necessary, because they are two very different peoples, to divide Libya?
Mr Ellwood
My hon. Friend is correct, although he misses out a third region, namely Fezzan, and it was the Italians who brought the country together. As well as those three regions, there are more than 135 tribes, including 35 main tribes. They have been sat on by a dictator for 40 years, and lifting the lid off that results in society trying to flex its muscles. That is the difficulty and challenge we face.
Kirsten Oswald (East Renfrewshire) (SNP)
9. What support his Department is providing for refugees in camps along the Syria-Turkey border.
The Minister for Europe (Mr David Lidington)
We have pledged more than £1.1 billion for humanitarian relief in Syria and neighbouring countries. Roughly half of that sum goes towards helping people inside Syria, and the other half is provided to refugees in the neighbouring countries in the region.
Kirsten Oswald
Does the Minister agree that the Prime Minister’s commitment that the UK will take 1,000 refugees before Christmas—which equates roughly to two refugees per constituency—is simply not good enough and represents a missed opportunity to do the right thing?
Mr Lidington
No, I do not. The hon. Lady underestimates the important fact that we shall be offering a home to people who are among the most vulnerable and traumatised as a result of the conflict. We need to ensure that they are given a proper reception and the full package of support from the national health service and, in many cases, local authority social services. They have to be properly provided for.
Kwasi Kwarteng (Spelthorne) (Con)
Given the increased terrorist activity in Turkey, what assurances can the Minister give on the support the British Government are specifically giving Turkey with respect to the migrant question?
Mr Lidington
We have made it very clear to the Turkish Government that we stand with them in resisting terrorism. We have a history of good counter-terrorist co-operation with the Turkish authorities, and we have told Turkey that we are willing to explore how we can further strengthen that.
Mr Graham Allen (Nottingham North) (Lab)
10. What discussions he has had with his international counterparts on establishing an authoritative figure for the number of people killed in the second Gulf war and its aftermath; and if he will make a statement.
Mr Ellwood
I frequently discuss Iraq with my international counterparts. The Government have not produced any estimate for the number of Iraqis killed as a result of terrorism and war-related violence since 2003, although we are aware that others do so. Our focus today is on supporting the Government of Iraq in their efforts to build a more stable and secure future for their people.
Mr Ellwood
I did say that there are others, including the Iraqis themselves, who have put together those numbers, and I am more than happy to share those with the hon. Gentleman if he wants to see them. With regard to the decision to invade Iraq, lessons have certainly been learned. We await the Chilcot inquiry, but I recall that after the invasion a diktat went around the Department for International Development saying that the war was illegal, so in Basra we went from being liberators to occupiers. That is not the way to do it. There are lessons to be learned, and we are learning such lessons and applying them in Iraq today.
Graham Jones (Hyndburn) (Lab)
12. What recent assessment he has made of the situation in Syria.
The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)
Syria is facing a humanitarian crisis as a result of the continued assault by the Assad regime on the civilian population and the brutal occupation of a significant part of the country by ISIL. The Russian intervention—purportedly to join the fight against ISIL, but in fact targeting principally non-ISIL opposition positions—is complicating the situation and risks driving much of the opposition into the arms of ISIL.
Graham Jones
The Financial Times reported on Thursday that ISIS is making $1.5 million a day, plus racketeering, plus ransom money, plus proceeds stolen from the banks. It is a $1 billion organisation now. Where is that money going? It is not kept in shoeboxes under beds. What are the British Government doing to pursue the financial interests of ISIS?
Mr Hammond
The UK is heavily involved in that particular strand of coalition activity—intercepting financial streams—and, of course, the coalition is also taking kinetic action to try to disrupt ISIL’s revenue-generating activities. However, because we target cautiously, to avoid collateral damage and civilian casualties, there is a limit to the kinetic action that we can take.
Crispin Blunt (Reigate) (Con)
While the Russian intervention has complicated the military situation, might the actuality of Russian and Iranian practical military support for the regime somewhat simplify the politics of this situation? They now need a solution; otherwise they will be in an indefinite war supporting the regime. Is this not now the moment to invest in a serious diplomatic effort to bring all the parties together?
Mr Hammond
It is probably too early to judge whether or not my hon. Friend’s point is valid. Let me say again that the British Government believe that we must have political engagement to find a solution to the Syrian civil war, while we certainly need a military solution to the challenge of ISIL. We are ready to engage with anyone who is willing to talk about what that political transition in Syria might look like, but we are very clear that, from our point of view, it must at some point involve the departure of Bashar al-Assad.
Alex Salmond (Gordon) (SNP)
The Foreign Secretary clearly has his itchy fingers on the trigger of military intervention, as indeed do the Defence Secretary and the Prime Minister. With 12 other countries already bombing in Syria, what analysis has been done of what additionality or what further sorties would be flown by RAF Tornadoes, and what possible difference could they make to the military situation?
Mr Hammond
My right hon. Friend the Defence Secretary has already made it clear—I remember saying the same, when I performed that role, more than a year ago—that the point is one of military efficiency. We are already flying reconnaissance missions over Syria, but our Reapers now have to fly over Syria unarmed looking for situations, which they then relay back to call in other allies to carry out strikes. That is not the most efficient way to carry out operations.
Alex Salmond
We could drop a few bombs from our reconnaissance aircraft, but what difference would that make to the military situation? Why does the Foreign Secretary not listen to his own Back Benchers? As a non-combatant nation, there are certain advantages in being able to make diplomatic initiatives. Given that the Prime Minister is meeting the President of China—another non-combatant nation and a permanent member of the Security Council—why not discuss a joint diplomatic initiative, instead of just thinking that additional bombing is the answer?
Mr Hammond
I have discussed the situation in Syria with my Chinese counterparts on several occasions. At the moment, I judge that the Chinese are not willing to take a diplomatic initiative that would separate them from the Russians. Let me be clear that we are part of coalition activities in Syria. We are not carrying out kinetic actions, but we are flying reconnaissance and surveillance missions and feeding back the output of those missions to the coalition.
Hilary Benn (Leeds Central) (Lab)
Russia’s military intervention has certainly changed things, but one thing that remains unchanged is the suffering and agony of the Syrian people. Given that we can now expect more people to flee their homes, and recognising, as we heard earlier, that the neighbouring countries are almost at bursting point, will the Foreign Secretary tell the House what discussions he has had with Foreign Ministers about the possibility of establishing safe zones for people in Syria?
Mr Hammond
As the right hon. Gentleman will know, there have been extensive discussions about safe zones, which were originally a Turkish idea, over many months. At the moment, we judge the creation of safe zones to be impractical and impossible to enforce. We are acutely conscious that if we create something called a safe zone, it must be safe. There must be someone who is willing to enforce the safety of that zone. We judge that that means boots on the ground, and we and the United States are certainly not prepared to put boots on the ground in northern Syria.
Hilary Benn
I take the point that the Foreign Secretary makes, but that does not mean that we should not try. The boots could be those of neighbouring countries.
Something that there is widespread agreement on, as we have just heard, is the threat from ISIL/Daesh, with over 60 countries now being part of the coalition that opposes it. What steps are the Government taking to secure a UN Security Council resolution to authorise effective action to end the threat from this murderous organisation, including disrupting the huge flow of funds from its oil extraction and trading operations, which was revealed by the Financial Times last week and referred to by my hon. Friend the Member for Hyndburn (Graham Jones) today?
Mr Hammond
In response to the right hon. Gentleman’s response to my comments, I say that it is easy to volunteer others to put boots on the ground, but it is pretty difficult to tell people to do what we are not prepared to do ourselves.
UN Security Council resolutions are already in place and we will continue to test the appetite of the permanent five for going further, but the Russian intervention in Syria complicates matters not only on the ground, but in the Security Council.
James Cleverly (Braintree) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Foreign and Commonwealth Affairs (Mr Philip Hammond)
The Foreign Office is focused on protecting Britain’s security, promoting Britain’s prosperity and projecting Britain’s values around the world. My priorities remain the struggle against violent extremist Islamism in all its forms, the containment of Russian actions that threaten the international rules-based system, and the renegotiation of Britain’s relationship with the European Union.
James Cleverly
I thank the Foreign Secretary for that answer. The Chancellor is right to say that China is vital to our future, but in the light of its recent economic slowdown, what are the Government doing to enhance our trading relationships with the high growth-potential economies of our Commonwealth partners?
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
My hon. Friend is absolutely right. We very much welcome the state visit by the President of China and Madame Peng, which starts today. Of course, China is hugely important to us in terms of bilateral trade, but so is the Commonwealth.
This Government have unashamedly put the Commonwealth back into the Foreign and Commonwealth Office. We have reinvigorated our network within the Commonwealth and look forward to the upcoming Commonwealth Heads of Government meeting in Malta. We are an early investor in the Commonwealth Enterprise and Investment Council. Trade between two Commonwealth countries is much cheaper than trade by one Commonwealth country outside the Commonwealth. This is an area that we are concentrating on and we want to see far greater trade within the Commonwealth.
Hilary Benn (Leeds Central) (Lab)
It was reported yesterday that 14 cleaners who work at the FCO were called to an investigatory meeting by the Department’s contractor, Interserve, because they had the temerity to write to the Foreign Secretary to congratulate him on his reappointment and ask to discuss the living wage. Given that a basic freedom is the right of any individual to contact us as elected representatives, without fear or favour, will the right hon. Gentleman join me in condemning this attempt to intimidate staff for having exercised that right?
Mr Philip Hammond
The right hon. Gentleman wrote to me about that matter last night and I have investigated it. I have confirmation from Interserve that although a review meeting was held, no disciplinary action was taken against any cleaner as a result of their writing that letter. It has been reported that some of the people involved in writing the letter were the subjects of redundancies. Redundancies were unfortunately necessary because the Foreign Office is surrendering the Old Admiralty building as part of the campaign to reduce the estate footprint of Government Departments and save the taxpayer money. He will be pleased to know that all the redundancies announced by Interserve in connection with the Foreign Office contract were carried out in consultation with the Public and Commercial Services Union.
Hilary Benn
I am sorry that the Foreign Secretary did not feel able even to condemn the calling of those cleaners to a meeting—it seems to me that people should be able to write to whoever they want. One cleaner who works full time said that they want to be paid the living wage for cleaning offices in the right hon. Gentleman’s Department because they cannot afford to pay their rent without claiming housing benefit. The letter states:
“I really don’t want to receive any benefits, but at the moment I have no choice.”
Given that other Whitehall Departments currently pay the London living wage of £9.15 an hour, why are staff cleaning the offices of the right hon. Gentleman paid so much less?
Mr Hammond
The good news is that from next April all cleaners working for Interserve, including those on the Foreign Office contract, will receive the national living wage when it is introduced.
James Berry (Kingston and Surbiton) (Con)
T2. Does my right hon. Friend agree that the UN Human Rights Council resolution on Sri Lanka achieved an historic opportunity for justice for the victims of grave human rights abuses in that country? Will his Department continue to scrutinise the implementation of that resolution?
Mr Swire
Yes we will. We see the resolution as the start of a process, not as its end, and we withstood criticism from the Opposition Benches on our whole policy towards Sri Lanka. We have been at the forefront of getting this resolution, and we are in the right place. I met Foreign Minister Mangala Samaraweera a couple of weeks ago in New York, and Prince Zeid more recently in London. We stand ready to help and assist in the implementation of this resolution.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
T3. Turkey is currently hosting 2.5 million refugees, including 2.2 million Syrians, and organisations based in Turkey are struggling to alleviate the rank poverty and conditions affecting those refugees. Does the Secretary of State agree that the UK should play its part in helping to co-ordinate a new response to take appropriate action to help those affected?
The Minister for Europe (Mr David Lidington)
Yes, I do. My right hon. Friend the Foreign Secretary and I raised that matter with our European counterparts, and we urged other countries to commit themselves to the levels of support that the United Kingdom has already led in providing.
Neil Carmichael (Stroud) (Con)
T5. Does the Foreign Secretary agree that the best way of bringing a long-term solution to the migration crisis is to work with our partners to ensure good governance and economic growth in the middle east?
Mr Philip Hammond
Yes. Not only in the middle east but in all countries of origin, the long-term solution is to improve conditions and seek stability, security, good governance, the rule of law and economic growth.
Mr Jim Cunningham (Coventry South) (Lab)
T4. When was the last time that the Foreign Secretary spoke to the Russians about the situation—particularly the military situation—in Syria?
Mr Hammond
I spoke informally to the Russian Foreign Minister when we were together in New York for the UN General Assembly at the end of last month. That was the last time that I discussed the situation with the Russians.
Robert Jenrick (Newark) (Con)
T6. Since September there has been a worrying resurgence in intercommunal fighting in the Central African Republic after the reported beheading of a young Muslim taxi driver. Hundreds of people have been killed and thousands displaced, and there is now genuine concern that the conflict will descend into genocide, and worse. Will my right hon. Friend reassure the House that the British Government are providing political and humanitarian support to the President of the Central African Republic?
The Minister of State, Foreign and Commonwealth Office (Grant Shapps)
My hon. Friend is right and we fully support President Catherine Samba-Panza and her interim Government. It is striking to note that a country the size of France has a population of just 4.6 million, meaning that there is little infrastructure and almost no state outside the capital. None the less, the UK is leading with £58 million of contributions to date.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
May I draw the Foreign Secretary’s attention to the worrying situation of my constituent Rebecca Prosser? She was working in the Strait of Malacca on a documentary about piracy for Wall to Wall productions. She had the right visa for Singapore and Malaysia, but it had not yet been authorised for Indonesia. She was arrested in May and has been detained there ever since. I am grateful for the opportunity to meet the Minister and I have met the Indonesian ambassador, but my constituent is on trial right now. She is a hard-working, law-abiding young woman who has committed a visa breach. Will the Foreign Office do everything it can to support her, and at least have a consular presence in the courtroom where she is on trial?
Mr Swire
The right hon. and learned Lady came to see me about this matter, and quite rightly so. I personally raised their case with the Indonesian Foreign Minister at the UN General Assembly in September. She knows that immigration offences are taken very seriously in Indonesia. The trial is progressing at the moment. As I said to her at the time, their lawyers judge that a low media profile is the best way of bringing this immigration case to a conclusion, so it is probably better not to say more than that at the moment.
Andrew Bridgen (North West Leicestershire) (Con)
T7. Will the Minister update the House on progress on the issue of the letttori in Italy, following the recent Pontignano conference?
Mr Lidington
I discussed this issue in the margins of the Pontignano conference, and we continue to press Italian Ministers to take action to remedy this injustice that has persisted for far too long.
Phil Wilson (Sedgefield) (Lab)
Can the Minister guarantee that in the EU negotiations there will be no dilution of employment laws?
Mr Philip Hammond
In the negotiations, we are seeking to ensure that the EU is focused on greater competitiveness, but we also recognise the EU’s important role in protecting employment rights.
Dr Phillip Lee (Bracknell) (Con)
T8. Will the Foreign Secretary outline how many ISIL fighters remain in Iraq, and what would be required to remove that murderous organisation from that country?
Mr Hammond
It is estimated that there are 10,000 to 13,000 active ISIL fighters in Iraq. We always said, at the beginning of the intervention last summer, that it would probably take three years to defeat ISIL militarily. I spoke to General John Allen, the US President’s special envoy on this subject, just a few weeks ago. His view is that that remains correct, and we still have another two years to go to a military solution in Iraq.
Andy Slaughter (Hammersmith) (Lab)
Will the Foreign Secretary update the House on the case of Karl Andree and what representations have been made since the cancellation of the Saudi prison contract last week; and perhaps also on the case of Ali Mohammed al-Nimr, about whom the Leader of the Opposition has again written to the Prime Minister?
Mr Hammond
As I have said on many occasions previously when I have been asked to comment in the House on these judicial matters in Saudi Arabia, our judgment is that we achieve most by speaking privately but regularly to our Saudi interlocutors. Let me say to the hon. Gentleman that I do not expect Mr Andree to receive the lashings that he has been sentenced to, and I do not expect Mr al-Nimr to be executed.
Fiona Bruce (Congleton) (Con)
T9. What representations have been made by Ministers to the Government of China and to the Chinese ambassador in London on the human rights situation there, particularly with regard to the recent arrest and detention of a substantial number of lawyers and rights campaigners?
Mr Hammond
The Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for East Devon (Mr Swire), met human rights defenders last week to discuss these specific issues. We raise human rights issues regularly in our meetings with our Chinese counterparts. We also have a formal UK-China human rights dialogue—twice a year, with formal meetings—committed to nothing but the discussion of human rights issues of concern.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Vice is an online news service based in Shoreditch. Recently, three of its journalists were arrested in Turkey. Thanks partly to the intervention of the Foreign Office, the two British citizens were released from jail, but Mohammed Rasool, an Iraqi citizen, is still in jail 50 days later. Will the Foreign Secretary undertake to take this matter up with the Turkish Government, and, generally, the press freedom needed in that country?
Mr Lidington
We do, as the hon. Lady knows, regularly discuss with Turkish Ministers concerns about human rights, including freedom of the press. She will also know that we, like other countries, do not lobby on behalf of citizens who are nationals of other states. It is for their Governments to take the lead in doing that.
Sir Alan Duncan (Rutland and Melton) (Con)
We have today seen the well-worn exchange of differing opinions on Israel and Palestine. Whatever the tit-for-tat arguments might be, does the Foreign Secretary accept that the fundamental moral principle beneath all this is that Israel’s annexation of its neighbours’ land through settlement building is illegal, and that there is no place, either in this argument or in this House, for those who will not publicly admit to that principle?
Mr Philip Hammond
I am not going to define who can and who cannot take part in the argument, but we believe that settlement building breaches international law and that it is essential that we do not allow the facts on the ground to make impossible a two-state solution, which we all fervently hope will be the ultimate solution to the Palestine question.
Ms Margaret Ritchie (South Down) (SDLP)
As part of ongoing discussions and negotiations with the European Commission, will the Foreign Secretary and the Secretary of State for Environment, Food and Rural Affairs ensure that the European maritime and fisheries fund is approved as quickly as possible in order to underpin fishing communities throughout the UK?
Mr Lidington
I know how important this issue is to the hon. Lady’s constituents, and I shall make sure I discuss it with my opposite number in the Department for Environment, Food and Rural Affairs so that we can continue to make those representations.
Mr David Burrowes (Enfield, Southgate) (Con)
Given the momentum for Turkish accession to the EU, will the Foreign Secretary confirm that the reunification of Cyprus will be a significant condition? Amid all the other challenges, this one is surmountable, given the increasing confidence and wider benefits, not just for Cyprus but for the wider region.
Mr Philip Hammond
I visited Cyprus a couple of months ago, and I am committed to going there again next month. I have been keeping in touch with both the Greek Cypriots and Mr Akinci, the Turkish Cypriot leader, whom I spoke to a couple of weeks ago. I am cautiously optimistic that we are seeing an alignment in Cyprus that may make a settlement possible—I do not want to over-enthuse about this, but many people think we now have a chance, the like of which we have not seen for decades.
Mr Mark Hendrick (Preston) (Lab/Co-op)
Will the Foreign Secretary give us his assessment of the current strength, effectiveness and numbers of the Free Syrian Army, a subject on which he has been very quiet recently? We want to get rid of ISIL and Assad, but there has been no mention of the FSA.
Mr Hammond
There are many groups, running into the thousands, operating in Syria, and they form together in various alliances and umbrella organisations. The non-ISIL, non-al-Nusra part of the opposition probably has a fighting strength of about 80,000 soldiers deployed across the country. That is my latest estimate.
Several hon. Members rose—
Mr Speaker
Order. I am sorry to disappoint remaining colleagues, but as usual demand has outstripped supply.
Steel Industry
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Kevin Brennan (Cardiff West) (Lab)
(Urgent Question): To ask the Secretary of State for Business, Innovation and Skills if he will make a statement on the action the Government are taking to secure the future of the steel industry.
The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
The steel industry across Europe and around the world is facing challenges on a scale unprecedented in recent history, and today we have had further devastating news of redundancies, this time at Tata. So let me begin by saying something to the people of Scunthorpe and Redcar and anyone else living in a community where the local economy is built on steel. I know that the current situation is unbearably difficult and that you are deeply worried about your future and the future of your families, but I assure you that the Government are doing and will continue to do everything within their power to support you in the weeks, months and years ahead. For decades, the United Kingdom has prospered on the back of your industry. We will not abandon you now, in your time of greatest need.
There is no straightforward solution to any of the complex issues involved, but the Government have no intention of simply standing by. We have already announced a package worth up to £80 million to support people who have lost their jobs as a result of SSI’s liquidation and to mitigate the impacts on the local economy; we have asked Amanda Skelton, chief executive of Redcar and Cleveland Council, to chair a local taskforce; we have ensured that money reaches workers’ pockets quickly via the redundancy payments service; we have brought workers and opportunities together at a jobs fair at which more than 1,000 vacancies were showcased by more than 50 local employers; we have provided additional flexibilities to local further education colleges to allow people to take up training to enhance their job prospects; and we have set aside money to fund those proposals from the taskforce that will make an immediate and lasting impact on the local economy.
We will do what we can to soften the blow of any further redundancies among steelworkers—including, of course, those in Scunthorpe. Jobcentre Plus and rapid response support will naturally be available, and we are setting up a taskforce that Liz Redfern of North Lincolnshire council has agreed to chair. I will carefully consider what the taskforce proposes by way of additional support that may be necessary.
Alongside our immediate help for individuals who are laid off, we are taking steps to ensure a future for Britain’s steel industry in an exceptionally difficult market. Excess capacity in global steel is enormous—more than 570 million tonnes last year, almost 50 times the UK’s annual production. The price of steel slab has halved in the past year alone. In the three years since SSI restarted production at Redcar, the plant has lost more than £600 million.
There are limits to what the Government can do in response. No Government can change the price of steel in the global market; no Government can dictate foreign exchange rates; and no Government can simply disregard international regulations on free trade and state aid—regulations that are regularly used to protect British workers and British industry.
To identify where progress can be made, I hosted on Friday a top-level summit with key players from the UK steel industry. Bringing together industry leaders, trade unions, Members of Parliament and senior figures from government, the summit created a framework for action that will help us to support steelworkers now and in the future.
First, we will drive up the number of public procurement contracts won by UK steel manufacturers and their partners through fair and open competition. This Government are committed to a major programme of infrastructure spending. I am determined that the UK steel industry should play a central role in its delivery. The new public contracts regulations give us more scope to offer greater flexibility around how we include social and environmental considerations in our procurement activities. We intend to help other departments and business to take full advantage of these flexibilities, building on what we learned from projects such as Crossrail.
Secondly, we will consider what lessons can be learned from other countries in the EU and beyond. This will include the resilience of the steel sector in competitor countries and market share of national manufacturers.
Thirdly, we will look at what government can do to boost productivity and cut production costs. This includes addressing energy and environmental costs, regulation, skills and training. An extensive review of business rates is already under way, and the Government will look very closely at all proposals.
These steps will come on top of the action we have already taken. For example, we have paid out more than £50 million in compensation to energy-intensive industries in the steel sector. We also plan to offer further compensation in respect of feed-in tariffs and the renewables obligation. This constitutes state aid, which must be approved by the European Commission. The approval process is under way, but it is taking longer than anticipated, and longer than I would like. My Department is working closely with the Commission to answer its concerns and impress upon it the importance of prompt approval. I also plan to meet European Commissioners next week to reinforce our concerns about unfair trade issues and gain their support for urgent action. We have already voted to support extensions of duties on wire rod. We will demand action wherever there is evidence of unfair trade.
Since Victorian times, British steel has helped to make Britain great. In 2015, it is vital that all of Britain comes together to forge a stronger future for the men and women to whom this country owes so much.
Several hon. Members rose—
Mr Speaker
Order. Before we proceed, let me gently say to the Secretary of State that although on a one-to-one basis I always think him a very civil fellow, it is a considerable discourtesy or incompetence—or both—for a Secretary of State to take twice the length of time allocated for answering an urgent question. If the right hon. Gentleman judges that he has more material that he wishes to share with the House, which of itself could be very helpful, that is fine—but the implication of that is blindingly obvious: the right hon. Gentleman should offer to deliver an oral statement of up to 10 minutes. What he should not do is fail to communicate with me in advance, ignore the convention and greatly exceed his allotted time. It is, I am afraid, discourteous and incompetent—and it must not happen again.
Kevin Brennan (Cardiff West) (Lab)
We would have welcomed a statement from the Secretary of State. Today he has brought more devastating news for British steelworkers at Cambuslang, Motherwell and Scunthorpe and concerns for workers employed by Caparo, following the devastating news of the hard closure of the Redcar plant last week. May I, on behalf of the Opposition, convey our solidarity with those who have been affected—the individuals concerned, their trade unions, their families and their communities—and ask the Government to do all they can to work with every agency and jurisdiction to support them?
Let me say first to the Secretary of State that it does not help him to continue the spin about the £80 million. The Minister for Small Business, Industry and Enterprise admitted last week that it was £50 million, and even that is questionable. Spinning does not help the workers one little bit.
Let me further say to the Secretary of State that all Opposition Members understand the real and difficult problems facing the steel industry. Some of us have worked in the industry ourselves, or have family members involved in it. We know about the heat of the steel plant and the whiff of the coke ovens. We understand all too well that the industry faces huge challenges, not least as a result of not being allowed to operate on a level playing field. No one is trying to minimise those challenges. What we cannot understand is why Ministers do not appear even to have a view on what represents a minimum credible steelmaking capacity in Britain’s long-term strategic interests.
The overwhelming impression given by the Secretary of State and his colleagues is that, despite their high-flown rhetoric about northern powerhouses and the march of the makers, they seem content to allow Britain’s entire steelmaking capacity to disappear in the face of blatant Chinese dumping. Will the Secretary of State tell the House—and we need a direct answer to this, so I hope the Minister will stop chuntering—whether he believes that the price of the Chinese steel that is being dumped on our shores reflects the true cost of producing it? If not, what is he doing about it? Even if the workers producing steel plate at Scunthorpe offered to work for nothing, that Chinese price could not be matched.
While the Chinese President is riding down the Mall in a gilded state coach, British workers are being laid off because our Government are not standing up for them. What is the Secretary of State doing to ensure a level playing field so that the British steel industry can have a future? Will he immediately carry out the five emergency actions for which the industry called at the steel summit? He mentioned three actions in his statement, but I fear that they may be too little, too late. Why has he so far been so reluctant to defend the British steel industry during this crisis, when it is so important to our strategic national interests? Will he tell us now whether the Government even have a position on what represents the minimum credible steelmaking capacity in Britain’s strategic interests? If they do, what is it?
Notwithstanding the Secretary of State’s well-advertised laissez-faire views, will he now reverse his refusal even to accept that the Government need an industrial strategy, and stand up for Britain?
Sajid Javid
It is a shame that the shadow Minister has taken this attitude. He has decided that he wants to play politics with a very, very serious situation, and that is a real shame. I could stand here and talk about the massive job losses—thousands—during Labour’s time in government. I could talk about the decline in manufacturing. But that would be wrong, because now is a time when people in the industry—producers, manufacturers, trade unions and others—want to see politicians come together and deal with long-standing challenges to the industry.
The shadow Minister asked a number of questions. First, he asked whether we would do everything we could for the workers and their families who are affected. Of course we will. We have already announced a support package for the workers in Redcar, and I have talked about the taskforce that is being set up in Scunthorpe. We will listen to local people and locally led taskforces who come forward with proposals and ideas about what more we can do to support those areas, and any other area that may be affected.
The shadow Minister talked about China, and I referred to overcapacity. China is obviously one of the main countries with overcapacity in the market, but there are others. A recession in Brazil is leading to more steel in the market and there is overcapacity in Russia, Turkey and many other countries. The problem goes much wider than just China and requires EU-wide action. We have already voted for action and we will do so again whenever we are presented with evidence. As I said earlier, next week I will go to Brussels to meet the relevant Commissioners and push for much quicker urgent action. I am sure that the shadow Minister supports that.
The hon. Gentleman also talked about the industry’s suggested actions. UK Steel has five key suggestions and when we had the summit on Friday with many members of the industry—producers, manufacturers, trade unions, Members of Parliament, local leaders and others—we went through each of the actions one by one and set out exactly what we can do. I hope that the shadow Minister can take the same attitude that people took in the summit and understand that although there are some things that the British Government can do, and that where we can we are doing them right away, there are other things, such as action against unfair trade, state aid issues and so on, on which we must work with our partners in the EU. We cannot be a country that sets out to break the rules. I know that the shadow Minister is not suggesting that we break international obligations and rules, but I hope that he has had an opportunity to reflect on his attitude so that he can work much more constructively.
Michael Fabricant (Lichfield) (Con)
What consideration is my right hon. Friend giving to the creation of jobs in areas that have been struck by the closure of steelworks? In particular, I am thinking of the creation of new enterprise zones with capital allowances such as the Teesside advanced manufacturing park, which could create 2,000 new jobs near Redcar.
Sajid Javid
My hon. Friend is absolutely right. That is exactly the kind of response that can help with the impact on the ground in the affected areas. Part of the support package for Redcar is about ensuring that there are funds available to help local businesses that come forward with plans to create jobs.
Marion Fellows (Motherwell and Wishaw) (SNP)
It is absolutely disgraceful that the Secretary of State did not mention Dalzell works or Clydebridge in his opening remarks as steelmaking is iconic in Lanarkshire, but I will move on.
Today’s news is not unexpected, but the announcement by Tata will affect people across my constituency, not just the steelworkers but the local newsagents, crane drivers, lorry drivers, caterers and cleaners. Although Lanarkshire has seen grave blows to steelmaking over the years, I must tell the House that we are not finished yet. The Scottish Government have already set up a taskforce to help and the First Minister has pledged to leave no stone unturned in her efforts to keep these plants open. We need more action from the UK Government. Will the Secretary of State please speak to the Prime Minister, especially after the summit on Friday attended by my hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier), and ask him to speak to China and to address energy prices now, not in April? Will he ask the Prime Minister why he did not address the issue of steel with the European Council? Finally, to echo what has already been said, when will we have an industrial strategy to move things forward?
Sajid Javid
I am pleased to tell the hon. Lady that, as the Prime Minister confirmed in the House yesterday, we will raise the question of steel with Chinese counterparts during the state visit. Understandably, she talked about the impact in Scotland of the job losses and concerns about the industry. She is right to do so. She will know that these issues are UK-wide, including high energy costs and unfair trade, and we will work with the Scottish Government on any of those issues if they come forward with proposals or ideas. She rightly refers to the taskforce being set up in Scotland, which is very good, and the Secretary of State for Scotland has offered to join it, which could be a step forward.
Mr Alan Mak (Havant) (Con)
Will the Secretary of State confirm that although restrictive EU state aid rules prevent the Government from intervening directly in the steel industry, the Government’s efforts to support communities such as Redcar at this difficult time represent strong and decisive action?
Sajid Javid
Yes. My hon. Friend will be aware of the action we have announced to help workers and their families in Redcar with the job losses that have been announced. If there are any more, we will look into taking similar supportive action.
Mr Iain Wright (Hartlepool) (Lab)
Caparo Industries’ entering administration is another major blow for the steel industry on top of the blow after blow it has sustained daily. That will be particularly felt in Hartlepool, where 200 people are employed by the company, which pumps millions of pounds into the local economy. Yesterday, the Minister for Small Business, Industry and Enterprise launched the metals strategy with the vision of increasing gross value added by 50% and making the steel industry the principal supplier to the UK’s infrastructure projects by 2030. What is the Secretary of State doing to bridge the gap between the short-term existential threat to the industry, with companies, skills and jobs dropping like ninepins day after day, and that long-term vision? Frankly, if he does not take urgent action now—within days—there will not be a British steel industry left by the end of the year, let alone 2030.
Sajid Javid
The hon. Gentleman is quite right to mention Caparo Industries and the news that came out in the past 24 hours about its administration. That could clearly have a significant impact on communities in West Bromwich, Wolverhampton and elsewhere. As for having a longer term focus, the metals strategy—I believe that the hon. Gentleman was at the launch yesterday—is just one of our responses. We are ensuring that we listen to industry, work with the relevant sector councils and get full support not only for the large companies but for companies all the way down the supply chain as regards steel and other British manufactured products.
David Mowat (Warrington South) (Con)
This morning, according to the Department of Energy and Climate Change website, the price of electricity for large industrial users in the UK was 9p per kWh. In France and Germany, that price is 4p per kWh. That differential is such that the blast furnaces in France and Germany are not under the same pressure as those in this country. Does the Secretary of State agree that we must breach that gap and will he further agree that Labour needs to consider the fact that at every vote on differential energy prices in the last Parliament it was on the wrong side of the argument?
Sajid Javid
My hon. Friend highlights that there have been some long-running challenges not just for the steel industry but for industries that are large users of electricity. The challenge has happened under successive Governments, but he is absolutely right to raise the question of competitiveness. He will know that £50 million of compensation has already been paid directly to such industries as a result of some of the action we have taken, and once we get EU approval, which I hope will be very soon, we can pay for a lot more compensation and help.
Nic Dakin (Scunthorpe) (Lab)
I thank the Secretary of State for his warm words of support for the steelworkers and their families in my constituency who are coming to grips with this dreadful news today. However, we have been having warm words from this Government for more than four years while we have been saying that action is needed. We need action from the Government now on business rates, on energy costs, as the hon. Member for Warrington South (David Mowat) has just pointed out, and on Chinese dumping. Will the Secretary of State act? By requesting urgent action, I mean action before Christmas.
Sajid Javid
I thank the hon. Gentleman for joining the summit on Friday. By being there, I hope he now realises that there are areas where action can be, and is being, taken, but I hope he will appreciate that some of the areas we have talked about today, such as further energy compensation and unfair trade, require working with our EU partners. I know he understands that and I am more than happy to reassure him, and will continue to show him directly, just how seriously we are taking this issue by making sure we respond as quickly as possible.
Martin Vickers (Cleethorpes) (Con)
I echo the words of my neighbour, the hon. Member for Scunthorpe (Nic Dakin). The news this morning is a hammer blow to the economy of northern Lincolnshire and many of my constituents will be affected by it. Can the Secretary of State elaborate a little more on the taskforce that has been established under North Lincolnshire council’s leadership? What Government resources will be made available to it? Echoing the earlier words about enterprise zones, an application, sponsored by both North and North East Lincolnshire councils and the LEP, is already in for enterprise zones in the area. An early decision would be helpful.
Sajid Javid
I will speak to my colleagues and push for an early decision, as my hon. Friend has suggested. On the taskforce, as he will appreciate, it has just been set up. The chair has been appointed. I want to make sure we listen to the taskforce and local leaders about what is required and how we can help. I understand that the first taskforce meeting is taking place tomorrow, so no time is being lost. We will be represented on that taskforce and listening carefully.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
The Secretary of State has referred on a number of occasions to the state aid situation. I do not understand why, as a BIS official admitted at the steel summit on Friday, this was not a top priority for UK state aid clearance with the European Commission. The official also admitted that it would not make any difference now because we were so close to getting a decision. Why was it not at the top of our priorities, and why does the Secretary of State not get on a train to Brussels and stand over officials until they approve it and get the money out to the industry that needs it?
Sajid Javid
The hon. Gentleman raises an important issue about state aid, but he knows as well as anyone else that this process is not under the complete control of the UK Government. We of course made it a priority, and we made that clear in the summit. It is a priority, it remains a priority and we are making progress, but I am the first to admit that the process is too slow. We are doing everything we can to speed it up, including meeting commissioners directly.
Stephen Hammond (Wimbledon) (Con)
In a world of excess supply, it is understandable that there is real concern about dumping and other restrictive practices. What steps is the Secretary of State taking to ensure that those practices do not become endemic in this market?
Sajid Javid
My hon. Friend is absolutely right to emphasise this. We have already taken a lead on this in the European Union. In recent votes we have voted for action wherever evidence has come forward, and I am glad that action has been taken, but clearly there is more to do. That is one reason why I will be visiting commissioners in Brussels next week to push for that action much more promptly.
Anna Turley (Redcar) (Lab/Co-op)
One of the many insults the Redcar workforce have had to endure recently is the theft of their pension payments. Following action by the Community union, I understand that the issue of missing employee pension contributions is being tackled. What are the Government doing to ensure that the workers receive the missing employer contributions, and will the Secretary of State promise me here today that this will not be yet another entitlement that is disgracefully pinched from the £80 million support package, like the redundancy payments?
Sajid Javid
I thank the hon. Lady for her question, for taking part in the steel summit on Friday, and for the constructive way in which she has helped workers in her constituency and highlighted wider issues around the steel sector.
I know the hon. Lady welcomes the support we have already provided. I am happy to repeat that at the moment the advice is that the £80 million of support for Redcar workers and their families who are affected by this will go a long way to help the local community and local economy, but if more is required and the taskforce comes forward with a proposal, we will look at that.
On employer contributions to pension plans, we are happy to try to help in any way we can. I know the hon. Lady has provided some information on this and I think there is more coming. We will take a close look at that.
Mark Spencer (Sherwood) (Con)
I thank the Secretary of State for the efforts he is making along with the Minister for Small Business, Industry and Enterprise. Can he give us an idea of the size and scale of Government procurement of UK steel over the coming months and how rapidly that will be rolled out?
Sajid Javid
The Government have already identified in their national infrastructure pipeline over 500 major infrastructure projects, some of them very large, such as HS2. We are the first country in the EU to change the rules on procurement to allow us to take social and environmental issues into account, which I think ultimately gives us more flexibility. We can start to take immediate advantage of that, and my right hon. Friend the Minister for the Cabinet Office and Paymaster General will help to take that forward.
Neil Gray (Airdrie and Shotts) (SNP)
My heart goes out to the steelworkers and their families both north and south of the border impacted by this announcement. I welcome the establishment of the Scottish steel taskforce this morning to address these issues, but it is a disgrace that the Business Secretary did not once mention Scotland in his reply to the urgent question.
May I ask the Business Secretary why the Prime Minister did not raise the steel issue at the European Council last week? The Business Secretary did not answer the question from my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows). Would the Prime Minister not be better served working with our partners in Europe to save jobs, rather than falling out with them to save his own?
Sajid Javid
I am sure the hon. Gentleman has heard me talk about the challenges facing the industry; these are UK-wide challenges and of course that includes Scotland. When it comes to us—whether the Prime Minister, me or other Ministers—talking to our EU partners, we have had a number of conversations and taken action, for example by voting in the EU and the relevant EU Councils for action on unfair trade. We will, of course, continue working with the EU, because that is what is required, and when the EU does take action, it will be a lot more meaningful than if individual countries try to take action.
Tom Pursglove (Corby) (Con)
We need a steel industry in this country not least because it is imperative for our national security and I am grateful to Ministers for the interest they have shown in this issue. At the steel summit the Secretary of State committed to setting up three working groups. When will those groups first meet and how quickly will they report? On the additional energy compensation to which he referred, I urge him to shoot first and ask questions later.
Sajid Javid
I thank my hon. Friend for taking part in the steel summit and his contributions. These working groups have already been set up and each and every one of them has begun work. In fact, I can announce which Ministers will be chairing and leading the work for each group: it is the Minister for the Cabinet Office and Paymaster General on public procurement, the Minister for Small Business, Industry and Enterprise on international comparisons, and the Commercial Secretary on competitiveness and productivity. All these working groups will have their first meetings later this week.
Andy McDonald (Middlesbrough) (Lab)
It is good to see the Secretary of State here on this occasion. Has he initiated an anti-dumping investigation pursuant to the World Trade Organisation agreement, and if so, what stage is it at? If he has not, why not, and when is he going to start to stand up for Britain?
Sajid Javid
The hon. Gentleman knows that we have already started taking action. As I have said, we have voted for action at the EU. We have in fact led the way on certain products. He will also know that the process is EU-led in terms of investigations. We have provided evidence where we found it. If he is aware of any stakeholders that have evidence that he thinks we may not have, I would like to see it.
Bob Blackman (Harrow East) (Con)
I congratulate my right hon. Friend and his team on their prompt and compassionate action on this problem and on dealing with this challenge. What consideration has he given to potentially pre-ordering steel for infrastructure projects, particularly on issues of national security?
Sajid Javid
My hon. Friend makes a good suggestion. As part of our approach to procurement, that is exactly what we are looking at. One thing that came out of the summit was that the industry understandably wants certainty about future demand. There is a commitment from the Government on major infrastructure projects involving HS2, aviation capacity, civil nuclear power and Trident, and if that kind of commitment could be more cross-party, it would help to provide that certainty.
Sammy Wilson (East Antrim) (DUP)
The crisis in the steel industry has been caused not only by the fall in world demand but by the increase in the costs imposed on producers in the UK because of green energy policies that have put electricity prices up by twice those of our competitors. Can the Minister really justify fiscal policies such as the carbon floor price, which are designed to cut carbon dioxide emissions, while we are exporting jobs to countries that are more interested in the health of their economy than in King Canute’s attempts to change the world’s climate?
Sajid Javid
The hon. Gentleman is absolutely right to raise this matter, which goes to the heart of one of the competitiveness issues facing the industry—namely, the relatively high energy costs. Some of those costs are imposed here domestically, and some are imposed directly through EU policies. Where we can take action, such as through the compensation package, we are doing so. I hope I can assure him that we want to pay more of the compensation that we have already announced as quickly as possible. That is why we want to get EU approval as quickly as possible.
Mr Peter Bone (Wellingborough) (Con)
I really do not think that this is a party political issue, as illustrated by the fact that we have had a Backbench Business Committee debate on the matter, which led to the steel summit in Rotherham. Will the Secretary of State answer the question put to him by my hon. Friend the Member for Corby (Tom Pursglove)? He urged him to shoot first and ask questions later. Let us put in place what we think is right, and worry about whether the EU agrees with it afterwards. We need to do this now; otherwise, there might not be a steel industry left to worry about.
Sajid Javid
I understand my hon. Friend’s point, but he will know that the rules on state aid, unfair trade and compensation exist to protect British industry as well. Indeed, British industry, including steel manufacturers, would be the first to complain if other countries were violating those rules. Frankly, if we are going to complain about others violating the rules, we need to have clean hands ourselves.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
If the Secretary of State really believed what he was saying today, he would have made an oral statement instead of having to be dragged here yet again to answer an urgent question from the Opposition Benches. Why is he again raising the issue of £80 million for Redcar? It is not £80 million, as he knows all too well, because his own Prime Minister has blocked access for the entire sector to get hold of EU globalisation adjustment funding, of which £5 million could have been accessed by the sector to help the 5,200 workers who are directly affected. More than that, the Secretary of State knows that our EU and US allies have personally taken action against Chinese dumping. Act now, or we might not have an industry left!
Sajid Javid
I hope that the hon. Gentleman has welcomed the written ministerial statement that we issued today. Coming to the House to respond to this urgent question gives us a further opportunity to debate the matter, as we have done here before. What matters most, however, is action, as he suggests. [Interruption.] When it comes to action, he will know that for the first time ever, a British Government have taken action in terms of supporting duties by the EU. As I have said, we will take further action, and we will not hesitate to do so once the evidence is there.
Jeremy Lefroy (Stafford) (Con)
The steel industry is a vital national interest. It is also vital for many of our communities around the country, and I encourage the Secretary of State to maintain a laser-like focus on it throughout the coming years. Will he also look at another issue that the steel industry has raised—namely, the quality of the steel, particularly structural steel? There is no point in buying cheap steel and putting it into buildings, only for them to develop problems in 20 years’ time. Let us buy British steel of the right quality.
Sajid Javid
My hon. Friend is absolutely right to raise that point. I agree with him wholeheartedly about the importance of the steel industry to the economy as a whole and to our manufacturing base. It is without question a vital national asset, as he says. The important issue of quality must be considered alongside the question of markings and of ensuring that the quality is properly tested. Those issues came up in the taskforce, and we will be looking at them very closely.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
I welcome today’s announcement of the £100 million Chinese investment by SinoFortone in the London Paramount theme park, but our Chinese partners need to know that this country is more than just a theme park. We need a steel industry and a manufacturing strategy. Will the Secretary of State explain what talks he is having this week with visiting Chinese officials on dumping, on state aid and on environmental regulation? When will he stand up for Britain?
Sajid Javid
This week, there will also be announcements on further incoming business from China to Britain, and on opportunities for British companies to export to China, worth a total of more than £25 billion to the British economy. That will help to sustain thousands and thousands of jobs throughout the country, including in the hon. Gentleman’s own constituency. The Prime Minister said yesterday that, when he sits down with Chinese Ministers, officials and others, the issue of unfair trade will be discussed.
Paul Flynn (Newport West) (Lab)
As a former steelworker of 31 years’ standing, may I say that Chinese dumping and Government neglect are killing the British steel industry while the Government are simultaneously gifting future nuclear jobs to China? Is not the posture of this Government towards China today that of a supplicant fawning spaniel licking the hand that beats it?
Sajid Javid
I am sure that the hon. Gentleman wants to be reassured that we will bring up the issue of unfair trade with China. We will do so.
Mr Dennis Skinner (Bolsover) (Lab)
Is not the Minister one of the people who, at the general election a few months ago, campaigned as a representative of the workers? Well, now he has got a job and he has to prove that. The closures are spreading like wildfire across the United Kingdom. It started at Redcar and we thought it was a little disturbance, but over the past 10 days more and more closures have been forecast. He is now in the Government, and it is his job either to stop this carnage or to give way to someone who can make a fist of it.
Sajid Javid
I hope that, when the hon. Gentleman was sitting on these Benches supporting a Labour Government, he made similar noises about the halving of our manufacturing base. I hope that it was made clear in the statement today, and in my answers to other questions, that we are taking action where we can and that we will not hesitate to do so.
Mr Speaker
The hon. Member for Bolsover (Mr Skinner) is many things, but he has never been accused of being what might be called a silent lamb. I think we are clear about that.
Alex Cunningham (Stockton North) (Lab)
Steel is one of our foundation industries, and it can still be saved. Will the Minister examine the European material from the North East of England Member of the European Parliament, Judith Kirton-Darling, to see just how the state can properly intervene? Will he do that before Teesside and other parts of the UK follow the same path to ruin as Ravenscraig in central Scotland, where the community has still not recovered, 25 years later?
Sajid Javid
That is a good suggestion, and we would be quite happy to meet her.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
It is with a sad heart that I have to stand here today and talk about possible closures at the Clydebridge works in my constituency and the Dalzell works in the constituency of my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows). My thoughts are with all the steelworkers throughout the UK. We must do everything we can for the workers. There is never a good time for job losses; that is especially true so close to Christmas. We welcome the Scottish Government’s action to set up a Scottish steel taskforce, but we need to know what the UK Government are going to do. For months on end, MPs on both sides of the Chamber have been asking for action to save the steel industry in the UK. I am glad to hear that the three working groups are up and running, but what are the Government going to do about the dumping and about the high energy costs? When are they going to start listening to the Members in this Chamber?
Sajid Javid
May I thank the hon. Lady for taking part in the steel summit on Friday? She will know that one thing we talked about was support for workers, and I welcome the creation of a taskforce in Scotland. As I said, we will support that and help in any way we can. She is absolutely right to emphasise that we must do everything we can for the workers who have been affected and their families, and that is certainly the way that we will move forward.
Angela Smith (Penistone and Stocksbridge) (Lab)
Clearly, urgent action is needed to stem the flow of job losses in the steel industry, and what the Business Secretary has had to say today is woefully inadequate. What is even more inexplicable is his refusal to commit to a long-term strategy for the future of the industry. Elsewhere in government there has been a commitment to a 25-year strategy to secure the future of food and farming, so why can he not do the same for steel?
Sajid Javid
I thank the hon. Lady for joining the steel summit on Friday. We collectively discussed the issue of strategies, procurement and pipeline, and the whole supply chain. I hope she will be reassured that since that meeting we have already, for example, set out a metal strategy, which has steel as a very important part of it.
Jenny Chapman (Darlington) (Lab)
The Minister has used many words about action, getting things done and taskforces, but from my constituents’ point of view this does not look like action at all—it looks like disinterest. Five asks came out of the steel summit. Does he even know what they were? What is his response to those asks?
Sajid Javid
This is an opportunity to remind the hon. Lady of action that has already been taken—for example, the compensation of more than £50 million already provided to the steel industry for higher energy costs, and our becoming the first of all 28 EU member states to adopt new procurement rules, which will give us the kind of flexibility that I know she wants to see.
Stephen Kinnock (Aberavon) (Lab)
The Secretary of State will be aware that the hard closure of the Redcar steelworks will cost hundreds of millions of pounds to secure the assets that are there, and the continued bad news on closures will cost hundreds of millions of pounds more, potentially running into billions. Has he shared this information with the Chancellor of the Exchequer? Does the Chancellor understand the impact this will have on his much vaunted deficit reduction plans?
Sajid Javid
Of course the sad closure of the steelworks—the coking facilities—at Redcar is well known and understood throughout the Government, and every Department that needs to be involved in providing support and help is involved.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The steel industry is a key strategic sector for the Welsh economy—indeed, Tata Steel is considered by the Welsh Government to be an anchor company. What representations has the Secretary of State received from Welsh Ministers on the current crisis? What discussions are planned to co-ordinate Government action to ensure that all levers are used to preserve Welsh jobs?
Sajid Javid
The hon. Gentleman makes a very important point, and steel is obviously hugely important to Wales in so many ways. Edwina Hart, the Minister from the Welsh Government, was at the steel summit and played a very constructive role, and she will be working with us going forward.
Phil Wilson (Sedgefield) (Lab)
Will the Secretary of State tell the House what he is doing to map out the problems facing the companies in the supply chain? Does he know who they are, where they are and how many people they employ? What more can he do to help them out?
Sajid Javid
On this issue, a number of very good suggestions were made by the industry, trade unions and others at the taskforce. One related to certain industries that are now, thankfully, going through a huge growth phase, such as the automotive industry, which is a big user of British metals, including steel. We will be working closely with each of those industries to see how we can hard-wire the requirement for British products and British steel into their products.
Ian C. Lucas (Wrexham) (Lab)
Caparo Wire in Wrexham is one of the businesses threatened by the news of the past 24 hours. If the Secretary of State really believes that the UK needs a strategically based steel industry for our defence purposes, how big should that industry be? Will he identify where and how he is going to retain capacity within the industry, which is under immediate threat?
Sajid Javid
On capacity for the British steel industry, we have, unfortunately, seen a steady decline under successive Governments. What we need now is to provide more certainty to steel producers, be it in relation to energy costs, their concerns about unfair trade or the supply chain, so that they can build their plans for the future. That is what we will be helping them to do.
Greg Mulholland (Leeds North West) (LD)
The first thoughts of those of us on the Liberal Democrat Benches are of course with those affected by this devastating news. I must bring to the attention of the Secretary of State his predecessor’s comments in last week’s Standard, where he said that it is clear where the focus of Government attention is when all the focus during the Chinese visit is on currency convertability, to help the banking sector and not on dealing with this problem of the dumping of Chinese steel, which is affecting British manufacturing. Will he give an assurance now that the Prime Minister will raise this specifically with the Chinese premier today?
Sajid Javid
First, let me tell the hon. Gentleman that alongside the Chinese visit this week we will have an announcement of more than £20 billion of business deals which will support jobs throughout the country, including in his constituency—I know he will welcome that. On his specific question about whether the Prime Minister will raise the issue of steel with the Chinese, the answer is yes, he will.
Paramilitary Groups (Northern Ireland)
(9 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
With permission, Mr Speaker, I would like to make a statement on the assessment of the structure, roles and purpose of paramilitary organisations in Northern Ireland, which I am publishing today and copies of which I am placing in the Library. Before I turn to the assessment, it is worth reminding the House of the phenomenal progress that has been made in Northern Ireland over the past 20 years. We have moved on from a time when terrorism was an almost daily fact of life to one where the overwhelming majority have completely rejected violence as a means of trying to secure political ends. The political settlement, which sees people who were once enemies working together for the good of the whole community, has transformed life for the better. However, as the murders of Gerard Davison and Kevin McGuigan have highlighted, there are still serious legacy issues that need to be addressed, and they include the structure, role and purpose of paramilitary groups.
I commissioned an assessment of those matters following the statement in August by the Police Service of Northern Ireland that a line of inquiry in relation to the murder of Kevin McGuigan was the involvement of members of the Provisional IRA. The assessment has been jointly drafted by the PSNI and MI5, drawing on current intelligence, and has been reviewed by three independent figures, Lord Carlile, QC, Rosalie Flanagan and Stephen Shaw, QC. The three reviewers have confirmed today that the PSNI and MI5 engaged fully with them, consistent with their duties and constraints, and that the assessments are, in their words, “fair and balanced”, “evidence based” and “credible”. They state that they are
“satisfied that the assessments meet all the requirements placed upon us”.
I wish to thank the PSNI, MI5, and the independent reviewers for carrying out this important work within the timeframe I gave them.
I would first like to set out the Government’s position on paramilitary organisations in Northern Ireland: paramilitary organisations have no place in a democratic society. They were never justified in the past, they are not justified today and they should disband. These organisations brought misery and suffering throughout the 30 years of the troubles. Together, they were responsible for more than 3,000 murders, and thousands more have been injured. Only last week a service was held to mark the 25th anniversary of the IRA murder of that great champion of freedom and democracy, Ian Gow. Today the thoughts of the House should be with all those who suffered directly at the hands of paramilitary organisations. We should also be mindful of the fact that, thanks in large part to the efforts of the police and our armed forces, along with the determination of the overwhelming majority of people across these islands, the future of Northern Ireland will only ever be determined by democracy and consent.
The assessment sets out the position in respect of those organisations that declared ceasefires in order to support and facilitate the political process. It does not cover in any detail the threat posed by dissident republican groupings, which is the subject of separate, regular reports that I make to this House. The assessment does, though, confirm that dissident republicans remain a severe threat and that, at any given time, a terrorist attack from them is highly likely. For our part, the Government will always give the police and security services the fullest possible backing in their efforts to keep the people in Northern Ireland safe and secure.
The assessment confirms that all the main paramilitary groups operating during the troubles are still in existence, including the Ulster Volunteer Force, the Red Hand Commando, the Ulster Defence Association, the Provisional IRA and the Irish National Liberation Army.
On structures, the assessment finds that
“the majority of paramilitary organisations in this report still have leadership structures”
and
“organise themselves along militaristic lines.”
It goes on to say:
“These labels make the groups look more prepared for a campaign of violence than they are”
and that
“in the highly unlikely event that the groups are minded to return to terrorism, we judge they would be unable to resurrect the capability demonstrated at their peak.”
On the role of these groups, the assessment concludes that
“none of these groups is planning or conducting terrorist attacks”,
although some INLA members have provided help to dissident republican terrorists.
The report also states that
“members of these paramilitary groups continue to engage in violent activity, both directed by local leadership and conducted without sanction.”
It says that
“members of all groups have carried out murders since the 1998 Belfast Agreement.”
In addition, the assessment makes it clear that
“members of these paramilitary groups, to different degrees, are also involved in other serious criminal activity.”
That includes:
“large scale smuggling operations, fuel laundering, drug dealing and extortion.”
On weapons, the report says that
“although the majority of paramilitary weapons were decommissioned, some were not.”
On the purpose of these groups, it concludes that
“it is our firm assessment that the leaderships of the main paramilitary groups are committed to peaceful means to achieve their political objectives”
but that
“we judge that individual members of paramilitary groups with a legacy of violent activity still represent a threat to national security.”
The report is in no doubt that these groups
“cause serious harm to the communities in which they are embedded and undermine support for policing.”
On the individual groups, the assessment confirms that the
“structures of the UVF remain in existence and that there are some indications of recruitment.”
It states that
“the UVF’s leadership has attempted to steer its membership towards peaceful initiatives and to carve out a new constructive role in representing the loyalist community.”
However, the assessment goes on to confirm that
“a larger number of members, including some senior figures, are extensively involved in organised crime.”
UVF members are also involved in paramilitary assaults.
In respect of the UDA, the assessment concludes that while its structures remain in existence they have “become increasingly fragmented” and are split into “discrete geographical areas” that “act almost completely autonomously.”
The assessment states that
“with the support of some leadership figures there are UDA members who have continued attempts to steer the group into positive community based activism.”
Others, however, remain engaged in criminality and violence with individual members and some senior figures involved in organised crime, including
“drug dealing, robbery, extortion, and the distribution of counterfeit and contraband goods.”
There is also involvement in paramilitary style assaults, street disorder and violent protest.
In respect of the Provisional IRA, the assessment says:
“The structures of PIRA remain in existence in a much reduced form”
including
“a senior leadership, the ‘Provisional Army Council’ and some ‘departments’.”
The authors of the report do not believe that the group is actively recruiting. They state that, although decommissioning took place between 2001 and 2005, PIRA continues to have access to some weapons. However, the assessment judges
“that PIRA has not conducted organised procurement of new weaponry in the period since the last IMC report of 2011.”
While the assessment states that
“PIRA members believe that the PAC oversees both PIRA and Sinn Fein with an overarching strategy”,
it judges that
“this has a wholly political focus.”
The report points out that
“individual PIRA members remain involved in criminal activity, such as large scale smuggling, and there have been isolated incidents of violence, including murders.”
In conclusion, the report says:
“The PIRA of the Troubles era is well beyond recall. It is our firm assessment that PIRA’s leadership remains committed to the peace process and its aim of achieving a united Ireland by political means. The group is not involved in targeting or conducting terrorist attacks against the state.”
That is a direct quote from the assessment.
I will not seek to hide from the House that much of the assessment makes uncomfortable reading. These organisations should never have existed in the first place and, 21 years after the first ceasefires, it is clearly unacceptable that they still exist today.
For all that the assessment judges the leaderships of the main paramilitary groups to be committed to peaceful means, such groupings have no place in a democratic society. Members of those groups continue to exert a malign influence, which, as the assessment puts it
“harms communities and damages the financial prosperity and reputation of Northern Ireland.”
Inevitably, a document of this kind does not provide all the answers, but I hope that it will assist in identifying the nature and scale of the problem and in framing the debate about the way forward. Working with the main political parties, and society more broadly, we need a strategy to lead us to the point where these organisations no longer exist and their influence is removed from Northern Ireland once and for all. That is one of the two main goals of the talks that I am chairing at Stormont and it is an outcome to which all parties say they are committed.
The other goal is to secure the implementation of the Stormont House agreement. I believe that those talks represent the best chance of making progress on both these vital issues and of finding a way forward that builds a brighter, more secure future for everyone in Northern Ireland. We all now need to engage intensively in the talks in the days ahead, and I commend this statement to the House.
Vernon Coaker (Gedling) (Lab)
I thank the Secretary of State for advance sight of her statement and for her usual courtesy. May I also join her in thanking the members of the independent panel for their serious report, which I know will be read by the families of the victims? Those families and those victims are very much in our thoughts today.
Does the Secretary of State agree that at the heart of the undeniable progress that has been made in Northern Ireland is trust? I am talking about trust in the institutions, trust in the democratic process and, crucially, trust between parties and politicians. Above all, there is a belief in the principle of the rule of law. It is that core principle that has to be paramount. It is a principle that has to be at the centre of the continuing progress in Northern Ireland, and we should not forget that the work of the Police Service of Northern Ireland remains crucial to that.
The current political crisis in Northern Ireland was sparked by allegations surrounding the murder of Kevin McGuigan, following the murder of Gerard Davison. Will the Secretary of State tell the House what the report says about those murders and the extent of any paramilitary activity? In order to reach its conclusion, the panel will have had access to sensitive intelligence. Will she confirm that the panel has obtained all the intelligence for which it has asked? Crucially, will the Secretary of State tell us whether she believes that the assessment of the independent panel and its report today provides a basis for an end to the political crisis in Northern Ireland? If she does, what happens now and how will progress be made? Will she be convening further talks? If not, what does she expect to happen and what will she do?
Will the Secretary of State also update the House on the current situation with respect to the Stormont House agreement and when she intends to publish the Bill?
The reaction of the Northern Ireland parties to the panel’s conclusions is obviously of huge importance. Has the Secretary of State had any preliminary discussion with the parties on this matter? It is also important to know the view of the Irish Government. Will she say what discussions she has had with them?
Paramilitary activity has no place in Northern Ireland. The vast majority of the people do not want it and neither do their politicians. Does she agree that it is for the police to enforce the law? They should, of course, be accountable, but their independence is crucial. No paramilitary activity is acceptable, whether it is carried out by remnants of the IRA or loyalist paramilitaries. Will the right hon. Lady tell us what measures, if any, she intends to take as a result of the report? Much of the media focus has been on the IRA, but what is her view of loyalist paramilitaries? Does she believe, for example, that the establishment of the Loyalist Community Council recently was a good thing?
Is not one of the crucial conclusions of the report that
“none of these groups is planning or conducting terrorist attacks”?
Does the Secretary of State agree that, as the report states,
“the existence and cohesion of these groups since their ceasefire has played an important role in enabling the transition from extreme violence to political progress”?
If so, what does that mean for the future? Can she confirm that, as the report says, it is individual members of paramilitary groups who pose the real threat? Although much of the focus is rightly on threats to national security, is it not disgraceful and unacceptable for any individuals or groups to be involved in what the report describes as
“large scale smuggling operations, fuel laundering, drug dealing and extortion of local business”?
It is surely right, therefore, that we in this House restate our support for the work of the PSNI in tackling these issues.
There can be no doubt that once again hugely difficult issues have arisen in Northern Ireland—issues that are an immense challenge to the politicians of Northern Ireland and to all of us who seek to support them as they emerge from the horror of the past. We know that time and again politicians in Northern Ireland have risen to that challenge. They have found a way forward. They have dealt with seemingly intractable problems. Is it not time again for all of us to restate the fundamentals of the agreements that have brought us to where we are, and to reassert the principles of trust, sensitivity and mutual respect on which so much progress has been made, and the primacy of the rule of law? So many people have said to me that they do not want their children or grandchildren to suffer as they have done. Let us all find a way once again to ensure that that aspiration remains a reality.
Mrs Villiers
I agree with the shadow Secretary of State that trust between political parties is crucial in making progress in Northern Ireland and crucial to the effective functioning of devolved government. I wholeheartedly agree that belief in the rule of law and support for that concept is crucial in Northern Ireland, just as it is everywhere else in our country. Like the hon. Gentleman, I believe that the PSNI does a hugely important job in tackling not just the terrorism of the dissident republicans, but the criminality from the groupings about which I have been speaking today.
In relation to the case of Kevin McGuigan, the assessment confirms that the view of the two organisations, the PSNI and MI5, which compiled the report, is that the Chief Constable’s statement in August remains valid, so the situation in relation to the Kevin McGuigan case continues to be as set out by the PSNI in August.
On the question of access by the panel to classified and sensitive intelligence, yes, members of the panel were shown classified material and they had access to individuals from MI5 and the PSNI to challenge them on the process by which the assessment and the report had been compiled.
The shadow Secretary of State asked whether I believe the assessment can provide a basis to move forward. Yes, I do. As I said in my statement, I do not for a moment say that it answers all the questions in relation to paramilitary organisations. There is now a pressing need in the talks for the parties together to establish what is the best way to grapple with the continuing problems associated with the existence of paramilitary organisations, but I hope the publication of the assessment will inform the decisions that will need to be made in the coming days by the leaders of Northern Ireland.
In response to the question about my discussions on these matters, I have had extensive discussions with the five main parties in Northern Ireland and with the Irish Government as part of the talks process and beyond that. On the hon. Gentleman’s question about the establishment of the Loyalist Community Council, I welcome initiatives designed to move groups away from criminality, but this initiative must be judged on its results.
I echo the shadow Secretary of State. It is correct to highlight the conclusion in the assessment that none of the groups under consideration is planning terrorist attacks. He referred to the role these groups might have played in the transition of their members from a violent past to a peaceful future. I acknowledge that the picture is mixed, but there are some aspects of the assessment that are not completely negative.
That covers most of the hon. Gentleman’s questions. I close by saying that I agree with him that it is unacceptable for individuals, whether they are in paramilitary organisations or not, to be involved in disgraceful activity such as the fuel laundering and smuggling that I outlined today.
Mr Laurence Robertson (Tewkesbury) (Con)
The report makes for depressing reading in some ways. Has the Secretary of State had the chance to assess whether any of the money from the fuel smuggling, extortion and so forth finds its way into the political process? Does she agree that the work of these criminals is no reason to bring the institutions down, provided that the police and the other agencies have sufficient resources to track these people down and stamp out their poisonous activities? Are sufficient resources going to these agencies so that they can do exactly that?
Mrs Villiers
Yes, in some ways the assessment makes for depressing reading but, as I said to the hon. Member for Gedling (Vernon Coaker), the assessment is that the statement of the Chief Constable remains valid. He emphasised in that statement that the criminality appears to be by members for personal gain and to pursue personal agendas, so there is no evidence of funds being diverted for political purposes. On police resources, it is important that the police have the resources they need to tackle criminality and terrorism. That is one of the reasons why the UK Government have provided additional security funding, and it is why we need to resolve the budget questions around the Northern Ireland Executive and implement welfare reform so that it has resources for its priorities, such as policing.
Deidre Brock (Edinburgh North and Leith) (SNP)
I thank the Secretary of State for advance notice of her statement. That is much appreciated.
I and my party very much welcome the assessment of the review panel, showing that there is little likelihood of a return to the levels of violence that we saw during the troubles. So many people have worked on that over the years and the peace has been hard won. It is very satisfying to note that, in the main, the intent among the parties and organisations is to keep that peace.
There are, of course, the concerns already mentioned about the ongoing criminality and the damage that can be done to communities by that. The police and security services, as mentioned, will require ongoing support in addressing that. I note, though, that the report is clear that the concerns relate to both sides of the debate. We can perhaps now leave aside the idea that one side maintains readiness and the other does not. Both sides, it seems, continue to operate at a lower level than they did previously. I offer whatever help I and my party can provide in dealing with the issues outlined.
In the light of the report and the other developments, including the recent development in the investigation of the murder of Kevin McGuigan, is the Secretary of State confident that the talks to put the Stormont House agreement back on track can now succeed? Does she have any indication that all the governing parties are ready to return to their ministerial posts in Stormont? In relation to her analysis of what will be required to address the criminality mentioned in the report, does the Secretary of State believe—I realise that this question has already been raised—that sufficient resources are available to the police and the security services to tackle it?
Mrs Villiers
I, too, welcome the assessment’s confirmation that the intelligence services do not believe that any of these paramilitary organisations are preparing for a return to terrorism. The hon. Lady is also right to highlight the fact that the problem of criminality is common across the different organisations. She asked whether I am confident that the talks will succeed. It is difficult to say, because there are still some significant gaps between the parties, and the debate over the financial sustainability measures, which are crucial if we are to return to successful devolved government, continues to be difficult to resolve. However, I believe that all five parties participating in the talks want to find a way through and to make devolution work, so I have some hope that we might have a successful outcome, although it is not guaranteed.
Mr Owen Paterson (North Shropshire) (Con)
I thank the Secretary of State for her statement, particularly her tribute to our military and security forces, who defended the rule of law through some very difficult decades and created the conditions in which the talks could take place. Does she agree that we cannot have a normal political process in Northern Ireland while those engaged in political activity have links to shadowy organisations that might either go to the grotesque end of murdering Kevin McGuigan, or indulge in money-raising activity that is wholly illegal, such as racketeering, money laundering and fuel smuggling? The answer is absolutely to bear down on every one of those criminal activities, regardless of where that might lead and any potential political embarrassment.
Mrs Villiers
I agree that it is vital that Northern Ireland moves to a situation in which paramilitary groups are part of its past, not its present or its future. It is entirely unacceptable for those organisations still to exist, and the involvement of their members in such serious criminal acts must be a matter of grave concern. It is vital that the police follow the evidence wherever it leads them. Bearing down on the criminal activities of those individuals is how we will help Northern Ireland to move forward.
Mr Nigel Dodds (Belfast North) (DUP)
Our party sought this assessment, and it comes as a result of the pressure that we were determined to exert, whatever the criticisms or brickbats that that brought us. We therefore welcome its publication today, setting out the clear, factual position regarding paramilitaries in Northern Ireland. However, the report demonstrates the scale of the work that lies ahead in the talks process. It states that the IRA is committed to the peace process, and it recognises the lack of recruitment, procurement of weapons and so on. Nevertheless, it clearly sets out the continuing existence of its paramilitary structures—that applies to all the organisations that were looked at—and illegal activity by its members. That is totally unacceptable, and it is beyond high time that it was ended in all its forms—terrorism and criminality.
With regard to the account of loyalist groups, although there are no direct implications for devolved government, it is essential that transformation takes place in that regard, too. In that context, will the Secretary of State welcome the willingness of the leadership of those groups to move forward, as publicised last week? Will she work with us, and all those committed to peaceful and democratic means, to end once and for all—this must be the outcome of the talks process—all forms of paramilitarism in Northern Ireland?
Mrs Villiers
I can give the right hon. Gentleman that commitment. I think it is vital that we find a way to end all forms of paramilitarism in Northern Ireland. I also agree that it is crucial that the talks currently underway succeed. All the parties need to engage intensively on this matter and on the Stormont House agreement, because without resolution of those questions it is difficult to see how we can have an effective and functioning Executive delivering on their priorities. It was very important that the assessment was produced and that we have further facts in the public domain, but I acknowledge his point that the scale of the task is great. We must not underestimate that, which is another reason why all the parties need to engage in the talks with determination to find a way forward.
Dr Andrew Murrison (South West Wiltshire) (Con)
I congratulate my right hon. Friend on her statement and the panel on its assessment, which offers partial reassurance, but does she agree that that reassurance must be qualified by the fact that, unlike state actors, paramilitaries do not obligingly leave an audit trail that can easily be assessed by intelligence services, however excellent they are?
Mrs Villiers
Naturally, with criminal and paramilitary activity it is not easy to get an entirely clear picture. Of course, a key element of the talks will be deciding what further process of verification is needed. There has been considerable discussion of reviving a body similar to the Independent Monitoring Commission. I think that is a useful point for discussion, and I am sure that the parties will be considering it in the coming days.
Tom Elliott (Fermanagh and South Tyrone) (UUP)
I thank the Secretary of State for her statement. I know that she has tried to put as positive a spin as possible on the report, but it confirms that the report by the Chief Constable of the PSNI two months ago was accurate, that the IRA is still in place, that IRA members murdered Kevin McGuigan and that they are still involved in paramilitary and criminal activity. It actually goes further and gives more information, indicating that the IRA army council is still in place and that it oversees the IRA and Sinn Féin’s overarching strategy. Will she now indicate whether Sinn Féin accepts that the IRA is still in place, and does she accept that the IRA and Sinn Féin continue to be inextricably linked?
Mrs Villiers
It will not surprise the hon. Gentleman to hear that I am unable to speak for Sinn Féin—no doubt it will provide its own response to the report—but I also take issue with him, because I am not trying to put any spin on the assessment. Today of all days, we need people to read the report and consider it objectively. Yes, there is a great deal in it to be very concerned about, but we need to use it as an opportunity to reflect on how we deal with the problem and on what more needs to be done to ensure that Northern Ireland makes progress. I have acknowledged that the situation is serious and that the task will not be easy, but I think that it is a task that can be achieved. Northern Ireland’s leaders have shown in the past that they are capable of grappling with this very difficult kind of issue.
Bob Stewart (Beckenham) (Con)
When I was the intelligence officer in Londonderry, the discipline among paramilitary groups such as the Ulster Defence Association, the Ulster Volunteer Force, the Irish National Liberation Army and the Provisional IRA was hugely effective. The independent reviewers have clearly suggested that the leadership of such organisations are not necessarily in control of what their members are doing. I suggest that our security services should be putting huge efforts into dislocating and separating these maverick members of paramilitary organisations from their leadership, who say that they have nothing to do with the upsurge in violence.
Mrs Villiers
It is certainly clear from the assessment that in many cases the leadership of the various organisations do not control or sanction what their members get up to, but I can assure my hon. Friend that Northern Ireland has an outstanding police service, supported by the intelligence services, and they will pursue crime wherever they find it. They do a fantastic job. They will pursue the individuals responsible for the sorts of crimes outlined in the report with as much vigour and determination as they pursue anyone else involved in wrongdoing in Northern Ireland.
Lady Hermon (North Down) (Ind)
I am very grateful indeed to the Secretary of State for making her statement to the House. I am relieved that, with regard to the Provisional IRA:
“The PSNI and MI5 do not believe the group is actively recruiting.”
However, what I am worried about, and very curious about, is how much seepage there is from the Provisional IRA to dissident republicans. Is there a high or low level of seepage? What is her assessment?
Mrs Villiers
I am sure that the hon. Lady will accept that these are very sensitive matters and that it is not appropriate for me to go beyond the assessment. Naturally, the risk of seepage between the Provisional IRA and dissident republican groups is always a risk about which our intelligence services and the PSNI are acutely aware. One of the reasons these groupings remain a threat to national security is the danger that their expertise might find its way into the hands of dissident republicans. That is a risk that we all need to be aware of.
Andrew Stephenson (Pendle) (Con)
I welcome what my right hon. Friend has said and the work of the panel. Given the information we now have, does she believe that there should be a continuing role for such assessments going into the future?
Mrs Villiers
Almost all the parties have made it clear that part of the solution on paramilitary organisations is an ongoing process of verification that is demonstrably independent, so that is likely to be part of a successful outcome to cross-party talks.
Mark Durkan (Foyle) (SDLP)
Does the Secretary of State agree that the assessment proves that there is a need for a whole community approach to making sure that we eradicate all traces of malignant paramilitarism? Does she also agree that alongside that we need a whole enforcement approach by policing and revenue channels against any level of criminality? We have to be absolutely clear that no level of crime can be treated as par for the course in a peace process. We welcome the predisposition towards peace, but we cannot accept a predilection towards crime from the members of these groups.
Mrs Villiers
I agree with all of that. We do need a whole community approach to resolving this problem, and we do need a whole enforcement approach. I pay tribute to the work of groups such as the Organised Crime Task Force, which co-ordinates all the organisations working on organised crime. I wholeheartedly agree with the hon. Gentleman that there is no tolerable level of criminality. Anyone responsible for criminal activity should be pursued by the police and brought to justice.
Tom Tugendhat (Tonbridge and Malling) (Con)
May I remind my right hon. Friend that this is not a Northern Ireland problem but a UK problem? The offence of paramilitary violence that has been the scourge of our lives for more than 50 years in these islands has affected some of our families directly, in all parts of the House. I urge her to maintain the pressure that she has so rightly placed on the criminal actions of a few, and to encourage the PSNI, which has been extremely courageous in its work these past years, to continue its work.
Mrs Villiers
I agree with my hon. Friend that this is a UK-wide issue. He is right to remind us all that victims and survivors of the troubles are not confined to the population of Northern Ireland; many of them live in Great Britain. Indeed, there are also people elsewhere in the world who share the pain of those who suffered directly at the hands of these terrorist organisations in their violent past.
Conor McGinn (St Helens North) (Lab)
I thank the Secretary of State for her statement and commend my hon. Friend the Member for Gedling (Vernon Coaker) for his response. The Secretary of State said that she wants to see the full implementation of the Stormont House agreement, and I wholeheartedly share her sentiments and support her in that. Is it the Government’s position that they wish to see agreement between all the parties before legislating on the Stormont House agreement, and how long does she anticipate it will take to get that agreement?
Mrs Villiers
We have had some good discussions in the talks on the technical aspects of the legislation needed to deliver the institutions on the past. We hope to introduce that legislation soon. It is important that the Stormont House agreement is implemented in full. The parties have the opportunity to get that process back on the road, and I hope that they will engage intensively in the talks in the days to come.
Bob Blackman (Harrow East) (Con)
I congratulate my right hon. Friend on her statement. Clearly, this is a delicate balancing act. In her assessment, has she considered whether any of the parties have breached any of the commitments they made at the Good Friday agreement or at the Stormont House agreement and have, as such, vacated their position as part of the overall strategy for Northern Ireland?
Mrs Villiers
For clarification, the assessment in relation to the paramilitary organisations does not indicate that those organisations are no longer on ceasefire. However, I think that my hon. Friend’s question was primarily about the Stormont House agreement. As the House will be aware, the major blockage on the Stormont House agreement is that the two nationalist parties, having signed up at Stormont castle to welfare reform with top-ups from the block grant, then withdrew their support. That is an instance where two of the parties signed up to something and are not currently supporting it, but I hope we can find a way to get their support back in the days to come.
Jim Shannon (Strangford) (DUP)
As the Secretary of State has indicated, dissident republicans are very active and deadly. The PSNI is on a high alert. Army units have been sent to the Province to give assistance to the PSNI. The terrorist threat is at a severe level in Northern Ireland. The law-abiding overwhelming majority of Northern Ireland citizens are sick to the back teeth of this cancer in our society. Does she agree that only by taking a ruthless and uncompromising approach to paramilitary activity can we have a real chance to heal the scars on the face of Northern Ireland once and for all?
Mrs Villiers
We certainly need an uncompromising approach to pursuing criminality wherever it is found. It is also important to harness the activities of wider society. One of the problems in getting convictions for things like paramilitary assaults is that people feel afraid to come forward and give evidence. We need to reflect on what more can be done to give them the confidence to confront these individuals in their communities and to come forward and give evidence in court when those individuals commit crimes.
James Cleverly (Braintree) (Con)
The assessment makes it clear that the time of large-scale mass violence by paramilitaries is a thing of the past, but there is a danger, as the years from that period to now extend, that people will romanticise that period of violence and that people who formally or informally associate themselves with paramilitary groups will take independent violent action. What steps is my right hon. Friend’s Department taking to ensure that this romanticisation is nipped in the bud and that people who aspire to relive what they perhaps believe to be some glorious bygone era have their minds set straight and do not embark on individual acts of violence?
Mrs Villiers
My hon. Friend makes an important point. There is a tendency among some to try to rewrite history. That is something that this Government will never support and will always firmly oppose. There is no possible means by which one could romanticise a campaign that saw thousands of people murdered. That is at the heart of our approach to the institutions on the past to be created under the Stormont House agreement. They must be balanced, objective, fair and impartial to make sure that we establish all the facts about the history of the troubles, and do not enable anyone to seek to rewrite the history of the troubles and to draw some wholly unacceptable form of equivalence between terrorism and police officers.
Sammy Wilson (East Antrim) (DUP)
The report indicates that individual IRA members remain involved in criminal activity and describes a range of acts, from smuggling right up to murder. What it does not say is that those people are defended by Sinn Féin political representatives who eulogise them, discourage people from giving evidence against them, and make excuses for their activities. Does the Secretary of State agree that one of the biggest impediments to making devolution work in Northern Ireland is the ambivalence of Sinn Féin’s political representatives to the criminality of their associates?
Mrs Villiers
I can provide the hon. Gentleman with at least a degree of reassurance on that. Sinn Féin has always been very clear with me that it condemns criminal acts and criminality. It has certainly done that in relation to whoever was responsible for the murder of Kevin McGuigan.
Kevin Foster (Torbay) (Con)
I thank my right hon. Friend for her statement. I think it is safe to say that it would always be naive to believe that these organisations, after so many years of killing and terrorising, would just disappear. Does she agree that the biggest issue is that while they might not be planning to launch terrorist attacks against the state, they are still encouraging a culture of criminality, including murder and extortion, that terrorises local communities, and that there is no way we can have a peaceful Northern Ireland for its people if these organisations remain?
Mrs Villiers
My hon. Friend puts his points very well. It is worth recalling that some paramilitary assaults have involved teenagers—young people—and in some instances such assaults are child abuse. There is a real brutality to some of the cases we have seen in Northern Ireland in recent years. That is another reason why it is vital that we see an end to paramilitary activity in Northern Ireland.
Ms Margaret Ritchie (South Down) (SDLP)
I thank the Secretary of State for her statement. Paramilitary action was never justified at any stage, whether now or in the past. All those murders and all that violence and terrorism were totally unjustified and put people in a great state of peril.
Will the Secretary of State outline what the paramilitary organisations could do to assist in alleviating the problems and anguish experienced by victims, and those who have lost loved ones either through the bullet or the bomb, who are anxious that the Governments and the paramilitary organisations resolve those issues to provide full truth and accountability?
Mrs Villiers
I wholeheartedly agree that the terrorist activities of those groups was never justified, and I pay tribute to the role played by the hon. Lady’s party and the other parties in Northern Ireland that stood out against terrorism throughout the 30 years of the troubles. The crucial way forward for those groupings is to cease involvement in criminality. Their members should stop their criminal activities, and it is vital that the police continue to do all they can to pursue anyone who continues to be involved in such activity.
Danny Kinahan (South Antrim) (UUP)
May I thank the Secretary of State and others both for their work on the report and for all the work that goes into everything for us in Northern Ireland? On PIRA, page 11 mentions the continued existence of senior leadership, the provisional army council and some departments. I assume that similar departments—which suggest to me a department of knee-capping or of smuggling—exist in other paramilitary organisations. The Secretary of State has said that she will take an uncompromising approach in future, so will she make sure that all political parties employ no one who is linked to such organisations?
Mrs Villiers
As I have said on a number of occasions, anyone involved in criminal activity should expect to face justice, and the police will pursue anyone involved in such activities. On the organisational structures, the assessment provides further information beyond what the Chief Constable was able to share in his statement. Parties and individuals, however, will continue to have questions about the organisations and how they are run and structured. That is another reason why a formal ongoing verification process to try to move us forward towards resolving the problems once and for all will be an important part of a successful outcome to the talks.
David Simpson (Upper Bann) (DUP)
I do not think it comes as much of a surprise to any Member that structures are still in place. Security forces personnel to whom I have spoken are concerned that members of the Provisional IRA who have bomb-building experience have moved to dissident organisations and that that is why there have been a number of under-car booby trap bombs in the past few weeks and months. I am sure that the Secretary of State and the security forces are investigating that.
Mrs Villiers
The security forces have placed a huge priority on seeking to prevent the dissident republican groupings from carrying out lethal attacks. In recent days there have been two examples of attacks on the state by those groupings. It is crucial that the PSNI and its security partners both north and south of the border continue to do all they can to keep people in Northern Ireland safe from the terrorist threat from dissident republicans, and I am confident that they will do that.
Gavin Robinson (Belfast East) (DUP)
Last but not least, I was very pleased to hear the Secretary of State say that the Government will always give the police and the security services the fullest possible backing in their efforts to keep the people of Northern Ireland safe and secure. On Thursday we learned of a murder attempt on a member of the armed forces in the constituency of my right hon. Friend the Member for Belfast North (Mr Dodds), and on Friday there was an attempted murder of PSNI colleagues in my constituency of Belfast East.
The Secretary of State will know that, sadly, extremism still exists on the fringes of our society, yet we discovered yesterday that Northern Ireland is specifically excluded from the Government’s counter-extremism strategy. What discussions has the Secretary of State had with the Home Secretary on that, and what assistance does she believe the strategy could give to the righteous fight against extremism in Northern Ireland and across the UK?
Mrs Villiers
I have discussed this important matter with the Home Secretary on a number of occasions. I draw the hon. Gentleman’s attention to the part of the report that makes it clear that the UK Government are open to extending the strategy to Northern Ireland in the future. Given the particular circumstances, we do not think that is appropriate just now, but we are happy to work with the devolved bodies to share best practice and do all we can to counter extremism in whatever form it comes.
Victims of Crime Etc (Rights, Entitlements and Related Matters)
Keir Starmer (Holborn and St Pancras) (Lab)
I beg to move,
That leave be given to bring in a Bill to make further provision about the duties and responsibilities of the Victims’ Commissioner and about the Victims’ Code; to require victims’ services plans for each police service area; to establish a duty to report suspected child abuse by those working in regulated activities, a code of practice on the recording of allegations, a right of appeal by victims against a decision to cease a criminal investigation, and standards for the review of open or reopened homicide cases; to make provision about court procedures relating to vulnerable victims and witnesses; and for connected purposes.
Leave to introduce a similar Bill, called the Victims (Bill of Rights) Bill, was given on 4 March, but that Bill fell because of the general election. As with that Bill, I am glad to inform the House that my proposed Bill has cross-party support, for which I am very grateful. I should also indicate that the Bill does not extend to Scotland.
Although significant improvements have been made to our criminal justice system in the past 20 years, there is growing consensus that it does not serve victims well. Some of the problems are obvious. Many victims, particularly victims of personal or sexual violence, lack the confidence to come forward and report crime, lack adequate support if they do so, and face an unacceptable ordeal in the court room if their case gets that far. The idea of telling many strangers, many times, about an experience of sexual degradation and abuse causes many such victims to feel intense and understandable distress. It takes real courage to come forward. The response of those charged with delivering criminal justice to those who do come forward dictates the likelihood that other victims will report. Yet when they do come forward, victims of crime regularly complain that communication and treatment are consistently poor across all criminal justice agencies.
There are many such examples. The case of Claire Waxman, who is sitting in the Gallery, involved long-term stalking and harassment. I am grateful to her and to Harry Fletcher, who is sitting alongside her, for their help in preparing this Bill.
All involved in delivering criminal justice, including the police, prosecutors and the judiciary, agree that the situation needs to improve, but the question is: how? There have been plenty of codes, charters and guidance, and they have moved things on, albeit painfully slowly, and without any real legal teeth the effectiveness of such changes will always be patchy.
Likewise, at a time of tight pressure on the criminal justice system, there is a danger that services to victims will come a poor second to operational priorities. Most services provided to a section of the public are regulated, quality assured and monitored, but that is not the case for victims’ services. There is simply no framework around the provision of those services. As a result of the lack of overall co-ordination, the services provided are fragmented and of varying quality. Existing discrete legal protections—such as restraining orders, special measures or witness anonymity—provide essential safeguards, but there is no legal regime promoting and protecting victims’ rights from the beginning to the end of their engagement with the criminal justice system.
The “Code of Practice for Victims of Crime”, more generally known as the victims code, was a significant and positive development when it was first published in 2005 and it should be supported, but although its provisions remain important, they are not directly enforceable and they require clarification and strengthening in places. Similarly, the role of the Victims’ Commissioner has great potential, but it has insufficient powers, has been unfilled for considerable periods in recent years and is under-resourced.
Against that background, the conclusion that victims’ rights will only be taken seriously if and when they are enshrined in law is now inescapable. If the Bill is brought in, it will offer a real opportunity for change, progress and improvement. As I have said, it has received cross-party support, as evidenced by the names of the supporters to whom I hope to refer shortly. I believe that this is an issue, like the stalking and domestic violence campaigns, on which this House is united, rather than divided. We want change because victims of crime deserve better, and because such improvement will enhance our criminal justice system. I commend the Bill to the House.
Question put and agreed to.
Ordered,
That Keir Starmer, Tim Loughton, Sarah Champion, Jenny Chapman, Sir Edward Garnier, Mr Barry Sheerman, Caroline Lucas and Liz Saville Roberts present the Bill.
Keir Starmer accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 4 December, and to be printed (Bill 80).
Opposition Day
Tax Credits
(9 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:59 - The House divided: - Ayes: 295 / Noes: 317 - Question accordingly negatived.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I beg to move,
That this House calls on the Government to reverse its decision to cut tax credits, which is due to come into effect in April 2016.
Today’s debate is incredibly important, but it is a shame that we have to hold it at all. It is deeply disappointing for the 3 million families across the UK who are set to lose an average of £1,300 from April that the Government have not taken the opportunity to step back, do the right thing and rethink these unfair proposals. The Conservatives omitted to mention these unfair proposals in their manifesto. Indeed, given another chance today to stop the changes—in the Welfare Reform and Work Public Bill Committee—they chose to vote against doing so.
Last night, we heard the latest arguments in favour of the cuts, which are already backfiring. The Government are seeking to make this a binary choice between cutting the incomes of the working poor and funding nurses, when in fact many of those in receipt of tax credits are our nurses, teaching assistants, care workers, civil servants and so many others who work day and night to keep our public services and our economy moving.
David Rutley (Macclesfield) (Con)
The decision to seek to reverse these reforms is an important one, but when was the hon. Lady made aware of it—on the Labour side? [Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. We will not have shouting from the Back Benches. Nobody will ignore anyone in this Chamber. We will have a measured debate on an important subject.
Seema Malhotra
I do not think I even need to respond to that intervention. The hon. Gentleman is seeking to trivialise this debate. We have been very clear about what we would do and about what we are calling on the Government and his party to do. His constituents will be watching him today and asking: who he is standing up for—his constituents or his party?
Several hon. Members rose—
Seema Malhotra
I will make some more progress and then give way.
These cuts will also hit the self-employed and those who run our local businesses. It is bizarre for the Government to take £1,300 off each family by highlighting how much more they have already taken in tax credits. Today, it has become even clearer that the Government have chosen to balance the books on the backs of the poor. The Chancellor has made this a debate about taking from the non-working poor or from the working poor, rather than a choice recognising that, in tough economic times, it is fairer that those who have more should contribute more.
Andrew Gwynne (Denton and Reddish) (Lab)
The £1,300 that my hon. Friend cites is of course an average. Many working people in my constituency will get clobbered by a lot more than £1,300 a year. Is not the really serious point that only in April the Prime Minister said on TV—in the studios—that he would not cut tax credits?
Seema Malhotra
My hon. Friend is absolutely right. It is not on the basis of one occasion that we are saying that the Government have changed their mind or have not told the truth; they have not told the truth on this measure step by step since it was first introduced in the Budget. They have tried to hide the impact on hard-working families across Britain. My hon. Friend is absolutely right that the £1,300 figure is an average, and many families are set to lose much more.
Chris Philp (Croydon South) (Con)
The hon. Lady will be aware that the Conservative manifesto made it very clear there would be £12 billion of welfare savings, so this was clearly flagged up. Will she explain where, if she opposes the measure, she will find the savings—which other benefit would she cut, or which tax would she raise?
Seema Malhotra
Perhaps the hon. Gentleman needs to talk to the Prime Minister about why he said on “Question Time” during the election that he would not cut tax credits. That is a conversation for him to have with the Prime Minister.
Barbara Keeley (Worsley and Eccles South) (Lab)
The hon. Member for Croydon South (Chris Philp) talks about the Conservative manifesto, but the manifesto cannot have outlined that 689,000 carers might be affected. Those who care 35 hours a week and then try to work 16 hours on the national minimum wage will be hit. What do Conservative Members have to say about that?
Seema Malhotra
My hon. Friend makes her point incredibly well. It is those who are working so hard to support us in every sphere—in our public services and the economy—who will be hit the hardest by this move. I hope that the Government will change their mind today. I will make some more progress before I take further interventions.
The Chancellor says that he wants a low-welfare, low-tax, high-wage economy—this may come as a surprise, but of course we all do—but what he says and what he does are two different things.
Seema Malhotra
I will give way in a moment.
The Chancellor decides to cut tax credits at the same time as cutting income tax and inheritance tax for some of the wealthiest in our society. His failure to grow wages in the last Parliament not only led to a drop in living standards, but meant that tax receipts were lower than they would otherwise have been. In addition, as the Institute for Fiscal Studies has highlighted, welfare spending was virtually unchanged during the last Parliament because of the growth in tax credit payments and the explosion in housing benefit payments caused by his low-wage economy. Indeed, the number of people earning less than the living wage has risen by 45% since 2009. The Government may seek to hide what they are doing and to make this a debate about the Labour party, but it is a debate about the quality of life for millions of families who are working hard to make ends meet.
Gareth Johnson (Dartford) (Con)
I will give the hon. Lady another opportunity to answer the question. If she were to reverse these reforms, how would she pay for it—would she raise taxes, cut spending or simply borrow more money?
Seema Malhotra
Perhaps the hon. Gentleman has not read any blogs or listened to any media in the last two days. We have been on the media repeatedly and have explained very clearly that we would do that through long-term growth, making sure that we invest in high skills and increased—[Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I cannot hear the hon. Lady, so I assume that nobody else can hear her. This is a debate and we must be able to hear the opening speeches. Everyone will have a chance to shout in their own four or five minutes.
Seema Malhotra
Thank you, Madam Deputy Speaker. I hope that the hon. Member for Dartford (Gareth Johnson) heard my answer. Perhaps his constituents will also be asking whether he has heard them. I am sure they are wondering who he will stand up for today.
Seema Malhotra
I will give way in a moment if I can make some more progress.
It is shocking that the Government continue to avoid telling the truth about these changes, including the Prime Minister, to whom I wrote last week, asking him to clarify his comments that after all the Government’s changes a family where one earner is on the minimum wage will be £2,400 better off. He is yet to be clear about how he reached that conclusion, how many families will gain in the way he suggests or what assessment he makes of the analysis by the Institute for Fiscal Studies, the Resolution Foundation, Barnardo’s and so many others who are against these changes.
The Chancellor chose either not to perform or not to publish an impact assessment of these changes for the Commons—a move that was criticised in no uncertain terms by the Social Security Advisory Committee. There are only two ways to interpret that: the Government either do not want to know or do not want to tell.
Stella Creasy (Walthamstow) (Lab/Co-op)
My hon. Friend talks about the impact of these changes. Let me give her one simple example from my Walthamstow constituency of a working mum. When her tax credits were delayed, we had to refer her to a food bank because they were literally the difference between being on the breadline and having bread. Does my hon. Friend agree that that will happen to working people across the country if these changes go ahead?
Seema Malhotra
My hon. Friend is absolutely right. She highlights, too, the impact of the Government’s appalling administrative processes on our constituents. They are left trying to make ends meet and having to go to food banks. More than 60% of the use of food banks is due to issues with benefits and benefits administration.
Lucy Frazer
After an intervention, the hon. Lady asked whether Government Members had been listening to the media. I listened to an interview she gave on Radio 4 this morning. She gave only two examples of changes that she would make to the tax system. One related to inheritance tax and the other was to raise the tax threshold to 50p. In 2017-18, that would raise only £270 million. Where would she get the other £4.2 billion?
Seema Malhotra
I thank the hon. and learned Lady for her comments. Perhaps she will say what she is doing for the 6,300 families in her constituency who will be affected by these changes. Perhaps she should speak to those in her party who have raised serious concerns about the changes, including Lord Tebbit.
Before the debate on the statutory instrument in September, the Government chose either not to perform or not to publish an impact assessment of these changes, so one was not available for the debate in the Commons. The Exchequer Secretary seemed to suggest that they had done that, when clearly they had not. The distributional analysis that the Chancellor finally submitted to the Secondary Legislation Scrutiny Committee in the other place last week has been described by my right hon. Friend the Member for Birkenhead (Frank Field), the Chair of the Work and Pensions Committee, as a “sleight of hand” and an attempt to “bamboozle”.
Seema Malhotra
I will make a little more progress first.
It is worth reminding hon. Members exactly what the Government propose to do with these changes. First, they will effectively halve the threshold at which claimants start to see their tax credits award tapered away, from £6,420 a year to £3,850. Secondly, they will increase the rate at which the award is tapered away to zero. That means that for every pound that is earned above the threshold, their award will be tapered away by 48p. Previously, the rate was 41p. House of Commons figures show that a family with two children and two parents who earn the minimum wage will see a fall in their income of more than £1,800 next year. By the end of the Parliament, that family will lose a devastating £7,700.
Catherine West (Hornsey and Wood Green) (Lab)
Does my hon. Friend agree that this amounts to nothing less than a penalty for those in work? Such a work penalty is typical of this Government.
Seema Malhotra
My hon. Friend is absolutely right. The Conservative party claims to be there for the workers, but it is going against everything that hard-working families are doing to make ends meet. It is time for the Government to rethink what they are doing and stand up for those they pretended to stand up for at the time of the election.
Seema Malhotra
I will give way in a moment.
A family with one earner on the minimum wage will be more than £1,500 worse off next year and almost £7,000 worse off over the Parliament.
The claim that we have heard most is that working families should not be concerned because the minimum wage will see significant increases in the next few years. As the Institute for Fiscal Studies has made abundantly clear, the claim that those increases will close the gap is arithmetically impossible. Paul Johnson, the director of the IFS, summed it up:
“The key fact is that the increase in the minimum wage simply cannot provide full compensation for the majority of losses that will be experienced by tax credit recipients”.
He said:
“Unequivocally, tax credit recipients in work will be made worse off by the measures in the budget on average.”
Andy Slaughter (Hammersmith) (Lab)
There are 4,200 working families in my constituency who will be affected. Given that the Prime Minister said before the election that he would not cut tax credits, does my hon. Friend think that this House and the other place would be right to vote down the proposals?
Seema Malhotra
My hon. Friend is absolutely right. I hope that Government Members will make that decision today.
The IFS has found that, as a result of all the tax and benefit changes in the summer Budget, by 2020, households with incomes in the second, third and fourth deciles will be worse off by £1,250, £860 and £530 respectively. Indeed, the Resolution Foundation’s recent report showed that the changes are likely to result in 200,000 more children being pushed into poverty at a time when the Welfare and Work Bill is effectively erasing Labour’s Child Poverty Act 2010, the duty in it to eradicate child poverty by 2020 and the measures to monitor child poverty. Perhaps a Government Member would like to ask their own Front Benchers a question about that.
Seema Malhotra
Perhaps the hon. Gentleman should ask what will happen to the 4,500 working families in his constituency who are set to see an average cut in their household income of more than £1,300. What impact will that have on whether they can keep their home, put food on the table or afford clothes for their children? I suspect that he will have a lot to answer for in his constituency.
A million single parents who are in work are set to be £1,000 a year worse off and 1.5 million married women will be £600 poorer.
Seema Malhotra
I will in a moment.
These cuts will also hit the self-employed who are on tax credits. Since 2010, self-employment has grown at twice the rate of overall employment. We know that, on average, self-employed people earn 40% to 50% less than those who are in regular employment.
Seema Malhotra
I will in a moment.
This weekend, The Observer included the case of somebody in Manchester who is self-employed. He expects his tax credits to be reduced to virtually nothing from next April. I hope that in his response, the Exchequer Secretary will be straight about what these changes mean for the self-employed.
Kwasi Kwarteng
I thank my constituency neighbour for giving way. We have heard an impressive array of statistics, but does the hon. Lady have one proposal for reducing the deficit?
Seema Malhotra
That is absolutely incredible. We have answered that point in the media and in articles, and I do not need to keep going over that ground. The hon. Gentleman might want to respond to the 3,000 families in his constituency who will be hit by these changes, and say how he will reply to institutions that have done hard research into these matters. The Government have chosen to carry out no impact assessment for what has been described as an “array of statistics”. This debate is about people’s lives, and the hon. Gentleman should stand up for his constituents, just as Labour Members will do when voting in the Lobby tonight—[Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The hon. Lady is clearly not giving way and hon. Members are wasting time in the debate.
Seema Malhotra
It is clear that the Conservative party is in disarray. Lord Tebbit, the hon. Members for Uxbridge and South Ruislip (Boris Johnson) and for Telford (Lucy Allan), and others, are calling for reforms, or for the Chancellor to think again.
Lucy Allan (Telford) (Con)
Does the hon. Lady agree that taxpayers’ money should be targeted at those most in need, and not used routinely to top up low pay?
Seema Malhotra
I think that comment represents a misunderstanding about what tax credits are supposed to help with. I hope that the hon. Lady’s Government will be more successful this Parliament in increasing wages—hopefully to a level where people start to come off tax credits—but they do not have a very good record to date. As I said, the number of people earning less than the living wage has risen by more than 45% since 2009.
Clive Efford (Eltham) (Lab)
In their interventions so far, Conservative Members have already conceded the argument. They started by saying that low-paid workers were going to be better off, and that Britain needs a pay rise and will get one. They have conceded that argument, but now it is all about choices and how tough it will be to balance the books. They have lost the argument.
Seema Malhotra
My hon. Friend is right, and as far as the public are concerned Conservative Members have lost the argument. It is now time for their constituents to ensure that they support the changes that we propose, and that they hold the Government to account at the next election.
The right hon. Member for Haltemprice and Howden (Mr Davis) has described the use of a statutory instrument as an attempt to avoid scrutiny, and on 6 October he said:
“The Government has to balance the books, but the burden shouldn’t be on the poorest…I hope this doesn’t turn out to be our poll tax.”
Even the Bow Group, which perhaps speaks for several Conservative Members who may not be able to speak today, has said:
“Tax Credit cuts could damage Britain’s entrepreneurial economy and the Conservative Party’s claim to be the workers party”.
Caroline Lucas (Brighton, Pavilion) (Green)
The hon. Lady is making a powerful case. In my constituency more than 4,500 families will be affected, in particular because of sky-high private sector rents. Does she agree that people will be hit particularly hard when cuts combine with the fact that Governments have not taken action to bring down rents in the private sector?
Seema Malhotra
The hon. Lady is right, and cuts are being made without any recognition of rising rents and the cost of living that affects household budgets. We cannot make such a move without thinking about the impact on family budgets, particularly of rents.
Several hon. Members rose—
Seema Malhotra
I will continue for a moment and then I will give way.
New House of Commons Library analysis that we have published today shows that at least £0.5 billion will be lost to the London economy if cuts to tax credits come into effect, and that will hit nearly 410,000 low and middle-income working families in London. In my borough of Hounslow, 13,500 working families will be affected, and the local economy will be hit by about £17.5 million of reduced purchasing power if the cuts come into effect.
Angela Rayner (Ashton-under-Lyne) (Lab)
I know from many conversations that I have held with Conservative Members that they agree that aspiration is key. I was on tax credits before coming to this place, and I also benefited from further education, so I plead with hon. Members to consider that. Does my hon. Friend agree that by cutting tax credits and further education the Government are preventing people like me from having those aspirations?
Seema Malhotra
My hon. Friend makes a powerful point and indicates through her own story how this anti-aspiration measure will hit families that are working hard not just for themselves, but to give their children a chance in the future. As they continue to struggle, these cuts will impact on those children, and it is projected that 200,000 more children will be moved into poverty.
I am conscious that many Members want to speak, so in conclusion I will say that this measure is set to hit the poorest the hardest. The Prime Minister is fond of saying that he supports those who work hard and do the right thing. His Conservative election manifesto stated:
“The British character is renewed every day by the millions who work hard, raise their families and care for those who need help, do the right thing and make this country what it is.”
He also said:
“We are fixing the economy so that everyone feels the benefit”,
but at the moment that could not be further from the truth. Far from being the party of the common ground or of workers, this move shows that the Government are no longer interested even in knowing how families are set to be hit by the choices they make. This decision is not just poor politics but poor economics, and families are concerned about what the impact will be as they struggle with paying the rent or their mortgage, and with putting food on the table at a time when food bank use continues to rise. The problem of low pay in the UK persists, and changes to tax credits are about to make things much worse. With 6 million people not earning enough to cover the basic costs of living, tackling in-work poverty is crucial, but we should not do that by making matters worse and hitting those who need help the most.
The Government have chosen to introduce these changes without even a transition plan, and when cross-Benchers and bishops start to express concern in the other place, we hear reports that No. 10 will threaten to suspend the other place if Members table and win a fatal motion. There is a chance today for every Member of the House to do the right thing and stand up for their constituents, by putting families in their constituency first and their party second. I urge Conservative Members to vote with us in the Aye Lobby today.
The Exchequer Secretary to the Treasury (Damian Hinds)
Protecting working people’s economic security is, and always has been, a priority for this Government. We are passionate about that, because we believe in people being allowed to meet their potential and fulfil their aspirations from wherever they come in life. Our mission is to get wages up, tax down, and welfare under control. The reforms to tax credits must be understood as part of a wider package of reforms that includes an increase to the personal allowance, increased childcare provision for working families, and of course the national living wage.
Next April the legal minimum pay for a full-time worker will be £1,300 higher than it was the year before. We have done that at a time when businesses have created record numbers of jobs—1,000 a day and 2 million in total, and the highest rates that we have ever reached. Coupled with strongly rising wages, more hours on offer and low inflation, our policy is delivering security and prosperity for working households up and down the country. That is what the country deserves and that is what we are doing.
Helen Goodman (Bishop Auckland) (Lab)
Is the Minister aware of the fact that average incomes will reach their pre-recession point only in 2017, after seven years of this vile Tory Government?
Damian Hinds
As a matter of fact, living standards have this year reached beyond their pre-crisis point, or indeed any prior year.
We can make lasting economic reforms only because we have taken the tough decisions to get this country back on its feet after the financial crisis that crashed into Labour’s structural deficit, which was among the highest in the developed world. Some choose to indulge in a game of “What if we had unlimited money?” We face facts. In 2010, the Government inherited a deficit of £153 billion. That is almost £6,000 for every household in the country. Our budget deficit was 10.2% of GDP. For every £4 the Government were spending, £1 was borrowed. That could not be allowed to go on, because when Governments lose control of the national finances, those who lose the most are generally those who have the least.
Sir Edward Leigh (Gainsborough) (Con)
The Minister is making some excellent points and I fully support his desire to reduce the deficit and reform tax credit. This is a listening Government, so I just wonder whether, in the coming weeks as we consider the impact of the reform and in terms of compassion, it might be worth looking at tweaking the child tax credit—or the marriage allowance, which is very low—to try to soften the blow. I do not expect the Minister to answer now, but that is surely worth considering.
Damian Hinds
As I will come on to outline, the Government are doing a number of things that have some offset against what is happening on tax credits.
Sir Oliver Heald (North East Hertfordshire) (Con)
Does the Minister not agree that the Opposition have completely ignored the background, which is that at the moment wages are rising at a rate of 3.5%? We are seeing wages rising. The policy is working and it would be wrong in those circumstances to continue to subsidise and act as a drag on wages by using tax credits in the way they have been used.
Damian Hinds
As a result of this Government’s strong economic management, we are indeed seeing strong wage growth coupled with strong employment growth. This is the right time to make lasting economic reform.
On the deficit, much progress has been made, but this year we are still having to borrow £3,300 for every household in the land. To tackle a deficit of that proportion requires all income groups to share the burden. I agree with the hon. Member for Feltham and Heston (Seema Malhotra) that it is right that those with the broadest shoulders should bear the most.
Dr Liam Fox (North Somerset) (Con)
To put this issue into context, will my hon. Friend confirm that the average taxpayer is paying £1,900 extra in tax this year just for the cost of Government debt interest? Is not the only way to reduce this debt tax on ordinary taxpayers to get rid of the deficit and pay down the debt, something which the Labour party seems incapable of grasping?
Damian Hinds
It is indeed an extraordinary amount. For every month we fail to deal with the deficit, not only would we be racking up more debts for all our children but we would be incurring greater interest charges in the here and now, which means money not spent on other essential services.
Lady Hermon (North Down) (Ind)
I am grateful to the Minister for giving way, although I am not quite sure he will be so grateful when he hears my question. I have to admit—in fact, I am embarrassed to say—that I voted with the Government on the cut to tax credits. I did so on the clear basis and understanding that there would be mitigation in the Chancellor’s autumn statement of the worst effects of the cuts to tax credits. The Minister cannot imagine my anger as I listened to his party’s conference, and the Prime Minister and the Chancellor ruled out any such mitigation. I will be voting with the Opposition this evening, unless the Minister tells this House today what mitigation the Chancellor will guarantee in his autumn statement. I give the Minister the opportunity to persuade me to change my mind.
Damian Hinds
The hon. Lady, who is a veteran and very experienced in the House, will know I cannot pre-empt anything in the Chancellor’s autumn statement on this or on any other subject. She was right to vote with the Government on the statutory instrument. As I will be outlining in my remarks today, this is a reform package of measures for working people. It is the right thing to do for the future of those families and the future of our country.
Frank Field (Birkenhead) (Lab)
Nobody expects the Minister to be able to provide an answer on what will be in the autumn—or November—statement, but can he confirm that the figures that the Prime Minister uses to say that eight out of 10 people will be better off as a result of the Government measures include all of us and large numbers of other people, while the two out of 10 who will not be better off are all those claiming tax credits? Will he confirm that when we go into the next general election all the current 3.2 million tax credit claimants will not be better off as a result of the measures he has announced?
Damian Hinds
I hesitate to use a double negative, but I cannot say they will not be better off. Many, many people will be better off. On the specific point of the eight in 10, that refers first to financial year 2017-18, and, as the right hon. Gentleman will know, to all working families. Obviously, the precise impact of the different measures—tax credits, national living wage, income tax personal allowance, childcare, social rents and all the other different elements—will vary with precise circumstances, but many, many families will be considerably better off. The hon. Member for Feltham and Heston herself was good enough to cite one such example of one particular type of family being £2,440 better off by 2020.
Several hon. Members rose—
Damian Hinds
I must make some progress.
The tax credit reforms are an important part of fiscal rebalancing, but they are only one part. On the same day that the tax credits lower threshold and higher taper rate take effect, we are reforming dividend tax and pensions relief for those on high incomes, and initiating a further clampdown on tax avoidance. Those are three measures among a set that also includes: the end of permanent non-dom status, restrictions on landlords’ tax relief and the continuation of a top rate of tax that is higher than it was in 4,718 of the 4,753 days the Labour party was in office. If we look at how the burden of deficit reduction is spread through society, the simple fact is this: the distribution of spending among income groups is constant between 2010 and 2017, while the burden of tax has shifted towards the best-off.
Graham Evans
Does my hon. Friend agree with the former Labour Chancellor of the Exchequer, Alistair Darling, who said that subsidising lower wages in the way that tax credits do was never, ever the intention?
Damian Hinds
My hon. Friend brings me on, quite handily, to my very next point. When tax credits first came in, their aim was entirely noble, but they quickly soared out of control. The total cost more than trebled between 1999 and 2010, ending up costing £30 billion in 2010. Scandalously, while spending spiralled under the previous Government, in-work poverty actually rose by 20%. Now, we can kick a problem down the road or we can do something about it. We chose to do something about it. Our reforms do not abolish tax credit or anything close.
Owen Smith (Pontypridd) (Lab)
Will the Minister confirm that the average tax credit bill to the Exchequer under Labour was £22 billion, whereas under the Conservative party, it has been £30 billion? So it has gone up on this Government’s watch.
Damian Hinds
I heard the hon. Gentleman make this extraordinary point on “Newsnight” last night. He talks about an average. If we have an upwards curve, and we draw a line through it, of course it is going to be lower in the middle than at the end. The point is the bill kept on rising—
Damian Hinds
Will the hon. Gentleman let me answer? The point is it kept on rising, with particular spikes just before 2003 and 2010.
Chris Philp
Does the Minister share my astonishment that despite being asked four or five times, his opposite number failed to say how the Opposition would fund this £4 billion? Does that not demonstrate that Labour cannot be trusted with our public finances?
Damian Hinds
I am afraid I could not put it better than my hon. Friend, and I will not try.
Under these reforms, fully half of families will still be eligible for tax credits, and the total cost will come down only to what it was as recently as 2008. They will focus support on the lowest incomes, while taking those on higher incomes off tax credits altogether.
Catherine West
How would the Minister, on behalf of a party that says it is on the side of working families, explain this change to the 2.7 million children affected? It is a disgrace.
Damian Hinds
Today’s bills will be paid at some point. We believe that the challenges for this generation should be dealt with by this generation, and we believe we need to get our finances under control and eliminate the deficit, and not just pass on the problem to our children and grandchildren.
Dawn Butler (Brent Central) (Lab)
Does the Minister think that the 1% pay cap on public sector workers contradicts the Government’s policy for a high-wage economy?
Damian Hinds
I do not deny that pay restraint in the public sector is difficult, but that 1% restraint has also protected 200,000 jobs in the public sector, which is an important aim. In addition, since 2007-08, pay in the public sector has risen faster than in the private.
Several hon. Members rose—
Damian Hinds
I keep saying I must make some progress. For the moment, I think I must mean it.
These reforms of tax credits go hand in hand with the new settlement for working Britain that my right hon. Friend the Chancellor set out in the last Budget. At the same time, we are introducing radical measures to put more cash where it belongs—in the pockets of hard-working people. Our increases to the tax-free personal allowance mean that a typical basic rate taxpayer—
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The Minister has just said he intends to make progress. Many people wish to make speeches today. If they continue to jump up and interrupt him and still wish to make a speech later, they will be disappointed.
Damian Hinds
I am grateful, Madam Deputy Speaker.
Our increases to the tax-free personal allowance mean that a typical basic rate taxpayer has seen their income tax bill cut by £825 since 2010. We are adding a further £80 next year and a further £40 the year after.
Kwasi Kwarteng
Will the Minister explain to the House how increasing the personal allowance has helped the very people the Labour party is claiming will be affected by this cut?
Damian Hinds
We believe in taking people out of tax, where possible, and enabling them to keep more of the money they have earned.
Naz Shah (Bradford West) (Lab)
In my constituency, more than 31,000 children will be affected by these tax credit changes. How many more children will the Minister’s cuts push into poverty?
Damian Hinds
We are making these necessary changes for the future of all sorts of families, but more than anybody for the sake of our children. The hon. Lady will know that the best way to address poverty is through work, and that is what we have been doing. She will also know the statistics—that where a child is in poverty and a parent moves into work, in 75% of cases they move out of poverty as a result, and that where a parent moves from part-time to full-time work, 75% of children also move out of poverty.
From next April, we will have the national living wage, which by 2020, when it will be worth more than £9 an hour, will mean over £5,000 more in gross full-time pay for someone on the minimum wage today.
Helen Whately (Faversham and Mid Kent) (Con)
Does my hon. Friend share my frustration that the Labour party does not seem to understand that tax credits involve the taxpayer subsidising businesses paying low wages, which has to change?
Damian Hinds
As always, my hon. Friend is correct, and she brings me on to my next point. Already, more than 200 firms, including some of our biggest employers, have announced they intend to pay staff at or above the national living wage before it comes into effect, which has helped to push private sector wage growth to 4.4%, according to latest figures, at a time of low or no inflation.
Then there are the wider things we have done on living costs. We have frozen council tax and fuel duty. On childcare, we have already introduced 15 hours for the 40% most disadvantaged two-year-olds, which is just through its first full year of operation and still ramping up. From 2017, there will be 30 hours for working families with three and four-year-olds, and just the additional 15 hours will be worth £2,500 per child per year.
Andrew Gwynne
The Minister can cut the waffle. To many of my constituents, this is a matter of trust. Why does he think the Prime Minister, on 30 April, toured the television studios and told an audience at “Question Time” that he would not cut tax credits? It was seven days before the general election. Does he think that had anything to do with it?
Damian Hinds
The statutory instrument does not affect the level of child tax credits. The hon. Gentleman, being a keen student of these matters, will know about the taper for tax credit awards and the stacking effect of the different elements, but the child tax credit, as the Prime Minister said, is not being changed.
Several hon. Members rose—
Damian Hinds
I am conscious of time and know that many people want to speak.
Perhaps most important is the wider effect of the national living wage. The independent Office for Budget Responsibility estimates that as the national living wage imposes upward pressure further up the scale, 6 million people will get a pay rise. That effect starts now, but it will continue rising right up to the end of the decade. We are not just talking about a lower welfare, lower tax, higher wage economy; we are seeing it happen.
Owen Smith
The Minister has made the point repeatedly that the new national minimum wage is meant to offset the reduction in tax credits. What proportion of those on tax credits are currently on the national minimum wage? I suspect I will not get the answer, so I will tell him. It is 25%.
Damian Hinds
The hon. Gentleman’s intervention is timely. Had he been listening—that might sound as I did not mean it to sound—he would have heard me talk about the wider effects of the national living wage. It affects not just people on the national minimum wage, but a much wider distribution. Most economists estimate that it would extend about 25% up the income scale.
Damian Hinds
It does answer the question. The hon. Gentleman was suggesting that this proportion would not benefit from a national living wage, which is incorrect. A lot of people who are not on today’s minimum wage will also benefit to a sum of about—[Interruption.] I am asked how many—the estimate is that about 6 million people will benefit directly or indirectly.
Mr Chuka Umunna (Streatham) (Lab)
Let me ask the Minister about the subsidy point. We can all agree on the context that we need to reconfigure our labour market. Almost 6 million people are not earning a wage that they can live on. Ultimately, yes, a subsidy going to employers is not desirable, but surely the issue here is the order in which we transform our economy. The fact is that through a properly prosecuted industrial strategy—something that we have obviously not seen in our steel industry—it is possible to reconfigure the labour market. That should come first—before taking away the tax credits and support from people who are not earning enough. Ultimately, that is the difference between the two sides.
Damian Hinds
The harsh reality that we face is that we have a budget deficit equivalent to £3,300 for every household in the country. We need to take firm action on that now. It is right, as I said earlier, that the burden is spread right throughout society, but it is also right to shift the burden towards the upper end, which is what has happened with the tax burden.
Andrew Percy (Brigg and Goole) (Con)
The Minister will know that many Conservative Members, including me, are concerned about these changes. I will not, however, vote with the Opposition because of the nature of the vote and its non-binding effect. However, further to the reference point—[Interruption.] If a few more Labour Members had turned up at the original vote, we might have won. Let me take the Minister back to the point made by the hon. Member for North Down (Lady Hermon). Will he confirm that the autumn statement offers the opportunity for the Government to mitigate some of these effects, whether it be through a change to the order or through other tax changes? Can he confirm to me and many others on the Government side who are concerned that the Treasury is looking at other things that can be done to help this group of people?
Damian Hinds
There are a number of mitigating elements involved in the package. We have been talking about the national living wage, and there are major—[Interruption.] These things are all new. There are major extensions to childcare provision. We have reductions in social rents, and increases in the income tax personal allowance.
Several hon. Members rose—
Damian Hinds
Before I conclude—I am very conscious of the time—I want to address a couple of points about poverty. The best route out of poverty is employment. We have created the conditions for the private sector to create record numbers of jobs—over 2 million since 2010. The best way to target in-work poverty is, first, by helping people move up the hours scale and, secondly, by increasing wages. We are seeing wages rise strongly, and we are seeing living standards rising by 3.1%, year on year.
Several hon. Members rose—
Damian Hinds
I am not giving way again, as many people want to speak and I am coming towards the end of my remarks.
The number of people in in-work poverty is 200,000 lower than it was at its peak in 2008-09. Let me remind Members of the surest way to create poverty and to dash the aspirations of working families up and down the country. It is to lose control of the public finances. We are making sure that that never happens again. We are driving down the deficit; we have set out the path towards surplus; and through our Charter for Budget Responsibility, we are making sure that we insulate ourselves against any future shocks the world economy might throw at us. We do all this while delivering a new settlement for working Britain—one where decent wages are not subsidised by the public purse, but met by employers; one that says to employers, “You can have very competitive tax, but you must pay your people properly”; one that allows hard-working people to keep more of the money they earn; and one that offers a way out of reliance on benefits and top-ups through work that pays.
Those have not been easy decisions to make, but we face a £3,300 per household deficit, and if we reduce the level of state support people are inevitably affected. But tough decisions become necessary decisions when we are working towards the most important and the most progressive goal of all—economic security for working Britain in an uncertain world. Our new settlement for working Britain is an integral part of that. We will continue down the path of economic security, stability and opportunity for working Britain.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
I am pleased to have the opportunity to debate tax credits today, particularly in light of the wholly inadequate time we had to debate tax credit changes on 15 September in connection with the statutory instrument. Would it not have been better if the proposed changes were made part of the Finance Bill so that they could have been properly scrutinised and debated and so that many Conservative MPs would not have been made deeply unhappy about what their Government have done?
During the week of the tax credit debate, a damning report from the House of Commons Library was published on the effect on many people of the changes consequential on these proposals. Let me state that the Scottish National party wholly opposes the changes to tax credits, which are nothing less than an attack on low-income families in this country.
The Prime Minister told his party conference that he wants a “war on poverty”. I would tell the Government that actions speak louder than conference rhetoric when cutting tax credits is going to increase poverty, particularly child poverty. The reality is that this is not a war on poverty, it is a war against the poor. All of us came into politics to make a difference. I say to the Government and to all Conservative Members that they should examine their consciences. Do they want to push through these cuts that will damage millions of families, increasing inequality in this country?
Chris Philp
Will the hon. Gentleman confirm that it is now the policy of the SNP to use the new tax-raising powers shortly to be introduced to increase income tax in Scotland in a year or two’s time to increase tax credits in Scotland?
Ian Blackford
I find that extraordinary. We fought in the general election on delivering home rule to Scotland, which meant full fiscal autonomy. Given the damage that the hon. Gentleman and the Conservatives are going to do to hundreds of thousands of families in Scotland, they should give us the power over our economy and over welfare so that we can protect people in Scotland from the damage they are going to do.
We hear that individual Tory MPs have been summoned to speak to the Prime Minister and Chancellor to be straightened out. I appeal to them not to be bought off. They should do the right thing and support today’s motion. This is a Government who cut inheritance tax for those wealthy enough to have £1 million-plus properties and punish those on low incomes. “All in this together”?—well, we can reflect on that line.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
Will my hon. Friend reflect on the fact that the Government have also refused to close what is called “the Mayfair loophole”, allowing more than 8,000 people earning more than £1 million a year to pay only 28% tax, while hammering the poor?
Ian Blackford
My hon. Friend is absolutely correct. We have seen growing inequality over the course of the last few years, and the Budget will only increase it.
Ian Blackford
Let me make a little progress, and then I will.
Let us look at the facts of the matter. In Scotland, more than 500,000 children are in families that rely on tax credits, 350,000 of which are from the more than 200,000 low-income families who will be hit by these changes. If we take the UK as a whole, the Library tells us that 3.3 million in-work families received tax credits in April 2015, of whom 2.7 million had children. The Library tells us that the average negative impact in the reduction of the tax credit award in 2016-17 will be £1,300. As the Library puts it, the changes to tax credits will deliver savings of £4.4 billion in 2016-17. Of course, that is one way to put it; in reality, it is £4.4 billion that will be taken out of the pockets of the poor and the majority of working families, and £4.4 billion-worth of spending that will be taken out of local economies.
Michelle Thomson (Edinburgh West) (Ind)
Do not people in lower income groups tend, in general terms, to spend money in their local communities, and will the cuts not therefore remove potential investment and growth from those communities?
Ian Blackford
Indeed, and I shall be saying more about that a little later. You do not fix the deficit by taking spending out of the economy. The point is that those hard-working families who receive tax credits tend to spend every penny that they get, injecting money into the local economy, paying tax, and so on.
Imran Hussain
The hon. Gentleman has rightly referred to inequality. Does he accept that these cuts will disproportionately affect the BME communities, thus increasing racial inequality?
Ian Blackford
That, too, is a very reasonable point. I think that what the Government are doing will pose real dangers to the cohesion of society.
Dr Andrew Murrison (South West Wiltshire) (Con)
Will the hon. Gentleman give way?
Ian Blackford
I will make a little progress, but then I will happily give way again.
The House of Commons document also states:
“There is no transitional protection for existing families on tax credits.”
Let us just dwell on that statement. The harsh winds of a winter chill are brought to you by Her Majesty’s Government—or, as we might put it, Ebenezer Cameron. I do not believe that any of us came into this place to put our hands on our hearts and say that we want to do this to hard-working families. We have it in our power to stop it today. Just imagine the letters dropping through constituents’ letter boxes, telling them about the massive cuts that are about to afflict them, and for what purpose! We must pause, reflect, and change course. Today is the opportunity that the House needs to recognise that we have got this one wrong. We need to be brave, be bold, and collectively do the right thing.
Let us stop and think about this for a minute. Low-income families, on average, will lose £1,300 a year. Let us now look more specifically at a single-earner couple with two children, working a 35-hour week on the minimum wage. That couple will see their tax credit award fall by £1,853 in 2016-17. The impact of the so-called national living wage will only modestly offset the impact of a fall in tax credit income, and the net family income will fall by £1,525.
James Cleverly (Braintree) (Con)
Will the hon. Gentleman concede that the parties represented on his side of the House have made a series of apocalyptic predictions about the British economy since the 2010 general election, and that, one after another, those apocalyptic predictions have been proved wrong? Why should we believe your predictions now?
Ian Blackford
We are not making any apocalyptic predictions about the economy. What we are talking about is the impact on hard-working families. We want to see investment in our economy. We want to see investment in innovation and skills, improving productivity and improving the living standards of all, in Scotland and elsewhere. We want to work with you so that we can improve those things.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Will my hon. Friend give way?
Ian Blackford
I will give way in a second, but I want to make a little bit of progress.
Let me pose this question to Conservative Members. What will you say next year to constituents, hard-working, decent folk, many of whom will have voted for you, and who have just seen their incomes cut by more than £1,000? Are you going to tell them that their hard work is paying dividends—that for them, work is paying? You do not have an answer, because there isn’t one. The policy is wrong, and you have the opportunity to change it: to do the right thing for the country, and to do the right thing for hard-working families in your constituencies.
Andrew Percy
As the hon. Gentleman knows, he is making many points with which I agree. I know that he is keen to be honest with the House, but will he be clear about one thing? Tonight’s vote will not overturn the changes in tax credits, although a vote in the other place may do so at some point in the future. Today’s debate is a good opportunity for us to express our concerns, but I do not want the hon. Gentleman to lead anyone who is watching it to believe that the vote will be on tax credits. Even if the motion is passed, it will make no difference. Will the hon. Gentleman be clear about that, please?
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Before the hon. Member for Ross, Skye and Lochaber responds to that intervention, I must tell him that he has been talking quite a lot about “you”. I am sure that he does not mean the Chair. Perhaps it would work rather better if he addressed the Minister.
Ian Blackford
Thank you very much for those wise words, Madam Deputy Speaker.
I agree with the hon. Member for Brigg and Goole (Andrew Percy) that what the House has today is an opportunity to send a message to the Government that they ought to reflect on what has been proposed. I think that they have made an honest mistake. I hope that it is an honest mistake, that we can reflect on it, and that we will not punish people in the way that the tax credit changes will do.
Ian Blackford
I want to make some more progress, because I know that many other Members want to speak.
I mentioned that constituents would be coming to you, and asked what answer you would give them. I think that what we must do is the right thing: the right thing for hard-working families in all our constituencies.
Several hon. Members rose—
Ian Blackford
I am going to make some progress.
Every Member of Parliament should look up the online House of Commons paper, which contains a link to the number of tax credit recipients by constituency. Any Members who support the Government’s proposals can see exactly how many of their constituents will be affected by them. We remember Mrs Thatcher saying, back in the day, that there was no alternative. That, of course, was nonsense. We also heard that there was no such thing as society. That sort of behaviour should be a thing of the past. There has to be social cohesion. We have to demonstrate that we want to help people out of poverty, not remove a ladder that would take them out of it.
I know what people in my constituency are saying. They do not like this. It is seen as mean-spirited. It is punishing the poor: ordinary, hard-working folk. There is no excuse for it, and we can stop it. There will be a massive impact on families, and we know that the end result will push families with children into poverty. We hear—and we have heard it in the Chamber today—that many Tory Members have voiced concerns at the impact of the changes. We should say to the Government, “You need to listen to those of us on this side of the House, as well as some of your own voices that are reacting to the impact of what you are doing.”
Rebecca Pow (Taunton Deane) (Con)
You asked just now—not you, Madam Deputy Speaker—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I am not having this any more. I have let a lot of people get away with it today, but this is an important debate, and we must observe the rules of the House. Just say “the honourable Gentleman”!
Rebecca Pow
Thank you so much, Madam Deputy Speaker. I remembered as soon as I had said it that I should not have said it. Apologies, Madam Deputy Speaker.
The hon. Gentleman asked just now what it was that we wanted in our constituencies. What we really want is a better future for everyone. We do not want people to be hard done by. Will the hon. Gentleman comment on this? We want more jobs, a better future, more money and better childcare, all of which the Minister has outlined today.
Ian Blackford
We all want a better future. We all want more jobs, and better-paid jobs. But the point is—the point that we cannot get away from—that you do not do that by punishing those who are in work, and who will be pushed into poverty. As the Government have often said, work must pay. You cannot do what you are doing and be consistent with your own objectives.
Deidre Brock (Edinburgh North and Leith) (SNP)
Does my hon. Friend agree that although it is of course indefensible for the Government to pick up the tab for employers who refuse to pay their staff decent wages, cutting the support from the working poor will not force wages up? A strong labour market will, as will rigorous enforcement of a genuine living wage and ending zero-hours contracts.
Ian Blackford
Absolutely. I hope that we will go on and have a robust debate about productivity in this country and about skills and innovation, because driving investment into the economy will drive wages up and negate the need for tax credits. None of us has a fundamental desire to see the long-term existence of tax credits, but they can only be removed when wages are driven up. What we cannot do is what the Government are doing and cut tax credits ahead of increases in wages.
Ian Blackford
I am going to make some progress, because I am aware of the time.
One has to ask about the moral compass of a Government who want to increase the inheritance tax threshold while the poorest in our society are being squeezed to such an extent. One nation, they tell us, but whose nation is that? It is not a country in which we want to live. Perhaps from an economic point of view we need to ask where the logic is in this policy. We are told that it is about getting the deficit down, but taking cash out of the pockets of the poorest means taking cash out of the economy and depressing economic activity. Those on low incomes tend to spend what money they have. This provision does not fix the deficit; it takes spending—[Interruption.] That is patronising? I will tell Government Members who is being patronised, and that is poor people in this country.
Let us make it clear, as we did during the election in Scotland, that we want to get the deficit down but that this is not the way to do it—[Hon. Members: “How?”] Members ask how we will do that, and I am happy to give them an answer since they have given me the opportunity. I remind them that we won the election in Scotland, with 56 MPs returned for the SNP, and we had a progressive message that we delivered to the people of Scotland of investing in our country by increasing spending by a modest 0.5% per annum that would have delivered additional spending in the UK of £140 billion and would have reduced the deficit to 2% of national income by the end of the decade. That is a much more responsible way to deal with the future of our country.
There is a philosophical question of whether effective support through tax credits for employers paying low wages excuses those employers from paying a real living wage that offers dignity for work. I would argue that we all want to reach a situation in which work pays, to the extent that those in work have a decent standard of living. The SNP has been championing a real living wage as a response to dealing with poverty and that would mean that hard-working families would become financially sustainable, driving up tax revenues, reducing the deficit, enhancing economic activity and, ultimately, leading to an enhanced fiscal position. The desire to make work pay, which the SNP fully supports through the idea of the living wage—the real living wage, not the Tory construct—has to go hand in hand with an environment that encourages productivity, but we know that that has not happened for the past eight years, with productivity flatlining and even the OBR’s forecast for the next four years showing only limited recovery in productivity. We cannot have sustained growth in wages unless we have growth in productivity.
Ian Blackford
No, I am going to make some progress.
We need a national debate about how we can strengthen and drive sustainable economic growth, driving up living standards and making work pay. We can only reach a high wage economy with investment in skills, innovation and business. That is not happening, and its absence is why we need the safety net of tax credits. That is why the Government must reconsider what they have voted through.
The Resolution Foundation has shown that the so-called living wage will boost wages by £4.5 billion by 2020, nowhere near the impact of the £13 billion of cuts to various working age benefits. It cannot be acceptable that working people pay such a price. We need to cut inequality, not drive it, which is what the Government are doing.
Let us come back to the example of the family losing £1,525 of their income next year. What will the Government say to such families when they are faced with difficult choices? Family budgets are already tight and something has to give.
Ian Blackford
I will not give way just now.
Just imagine what will happen when someone living hand to mouth faces an unexpected problem. Perhaps over the winter the central heating boiler will need to be fixed or a fridge will need to be replaced. What will Members say to their constituents when they knock on the surgery door? Where is the compassionate Conservatism we used to talk about? When their voters have their income cut by more than £1,500, all those problems will mean difficult choices. That is why this issue needs re-examining. I am appealing to the Government to listen to the many voices raising legitimate concerns.
The Government talk about being a one nation Government, but if that is their desire they cannot square it with the rise in inequality that will be accelerated through these measures. We know that a report published by the Resolution Foundation on 7 October estimates that the tax and benefit changes will push a further 200,000 children into poverty in 2016. Is that really a price worth paying? We cannot accept that that can be right. This is not just a question of the 200,000 who will fall into poverty next year; the figure will increase to 600,000 by 2020.
Alex Chalk
The hon. Gentleman has talked four or five times about doing the right thing, but is it not important to recognise that that includes doing the right thing by the next generation, which stands to be saddled with billions of pounds of debt that cannot be paid back?
Ian Blackford
Of course we need to make sure we are doing the right thing for people today and for the next generation, but that comes back to what I explained to the House: the position the SNP had at the general election—a responsible position of investing today and for tomorrow, a responsible position of dealing with the deficit but investing in the future of the country.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
Does my hon. Friend agree that part of the problem in making today’s children suffer in the short term is that child poverty has enormous long-term consequences?
Ian Blackford
My hon. Friend is absolutely correct. We must ensure that we deal effectively with child poverty in this country, but these measures will constrain that effort.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
On Friday a lady called Edith came to my surgery to complain about her daughter’s situation. She is a nursery assistant earning £8 an hour. She works 30 hours a week and cannot work any longer because she has school-age children. Edith was mortified about the effect of the cut in working tax credits on her daughter and her family’s welfare. What does the hon. Gentleman think the Prime Minister should say to people like Edith up and down the land as to how they can trust his word in the future?
Ian Blackford
The sad reality is that I do not think the Prime Minister has anything to say to Edith in the hon. Gentleman’s constituency. That is why I am appealing to hon. Members on both sides of the House to reflect on the damage that these measures will do to Edith and others. We are having a good debate today.
Several hon. Members rose—
Ian Blackford
I want to finish off as I have spoken for quite some time.
Perhaps it is little wonder that the Government want to redefine poverty. The numbers being pushed into poverty are frightening. It is not a price that a civilised society can pay.
In conclusion, I am grateful that we are having this debate today, but it must not end here. I would plead with the Government to change course before it is too late. These millions of families should not be affected by these tax credit changes. I hope the Government act, but failure to do so would demonstrate yet again that we need full powers over Scotland’s welfare system to be in Scottish hands, not the hands of the Chancellor and the Work and Pensions Secretary.
There is a clear contrast, with a Tory Government in Westminster attacking the poor and a Scottish Government using their powers to protect the poorest and most vulnerable in our society. The Scottish Government have invested £100 million to ensure no one pays the bedroom tax and invested £40 million to protect council tax benefit. That is a caring, compassionate Scottish Government. If Westminster wants to punish the poor, it should give Scotland powers over tax and spending so that we can protect our own people from this heartless Conservative Government.
Mr Kenneth Clarke (Rushcliffe) (Con)
I shall endeavour to give a brief speech, but I think this is a rather big occasion.
We have reached a stage six months into the new Parliament where we are defining the issues in terms of how we are going to conduct the responsible management of the economy over the rest of the Parliament and achieve the healthy, long-term recovery that, as my hon. Friend the Member for Cheltenham (Alex Chalk) has just said, we are trying to give to benefit our children and grandchildren, and not just ourselves.
We won the election because, I think, we were regarded as more credible on economic policy. People had not always agreed with what we had done, but they realised we would take the necessary difficult decisions to keep the country on course with an economy in the process of recovering.
The Labour party has still not woken up to the fact that it lost the election because it was not credible on the economy and was simply presenting an uncertain collection of rather populist proposals that did not add up to a responsible future. That has been illustrated today. Labour Members are having a very enjoyable time because at this difficult stage for them they have found something they can all oppose. They have found nothing they can all support and they can present no alternative, but they are enjoying opposing on a populist basis what has been put forward. I would exempt from that the hon. Member for Streatham (Mr Umunna), a former shadow Secretary of State and briefly a contender for the leadership of the Labour party, who has just left his seat, because he made an intervention conceding that he was against taxpayers subsidising pay, but the message was, “Make us virtuous, but not yet.” He was quite happy to go along for the time-being with this flawed system until some uncertain date in the future.
The Scottish nationalists appear simply to be taking the view that this is a good popular occasion on which to give a harrowing description of the consequences of these proposals, and to imply that they are a deliberate attack on the poor that has been chosen by the class enemy on this side of the House. Fortunately, however, I see no prospect of the Scottish National party getting a UK majority—however successful it might be electorally—and of having responsibility for the economy on which my constituents are dependent.
The starting point, as usual in these debates, is that in modern Britain there is a wide community of interest in where we are all going. We all think that the economy should be managed to boost the overall prosperity of the country. At the same time, however, we live in a society in which we have to seek to alleviate poverty, to ensure that people are helped when they work hard to help themselves and to ensure that we have a system whereby we can provide a decent income for those people who are so vulnerable or so unlucky that they are unable to support themselves without help. That is the starting point, and that is why we have a welfare state and a welfare system.
My second point is that I have always thought that tax credits were one of the most flawed innovations to be brought into our welfare system. The idea was taken from the Clinton Administration in the United States and applied slightly differently here. It might have had some worthy intentions behind it, along the lines of providing negative income tax, but I always suspected that it was in fact introduced for politically populist reasons. The new Government could be seen to be giving money to add to the pay of a wide section of the population, and we have had that system ever since.
Several hon. Members rose—
Mr Clarke
I will give way in a moment, but I want to make some progress. I do not want to speak for long, as lots of Members want to speak. Let me just finish my outline, then I will start to give way.
When tax credits were introduced, the then Government were confined by their election promise to stick to the spending and tax programme that they had inherited, because of the deficit. I seem to recall—I have not looked this up—that they therefore introduced them by means of a device that treated them not as public expenditure but as a tax change. Indeed, I seem to recall being assured on the Floor of the House by the then Chancellor of the Exchequer, when I expressed my disbelief, that they constituted negative expenditure.
That is why the payments became the responsibility of the Treasury and were described as tax credits. The Treasury is—or was—very good at collecting money from people who do not want to pay it, but with great respect to my old Department, which I greatly admire, it was not particularly suited to handing out benefits to people on low incomes with any degree of reliability or accuracy. I still get constituency cases relating to tax credits, because the system is based on forecasting someone’s income based on the previous year, but lots of people do not notify precisely all the changes in their arrangements. Ever since the system started, one feature of it has been that perfectly ordinary working people get demands to repay thousands of pounds that have been paid to them in error. I think that the level of error has come down, but at one point it was staggering, with a very high proportion of claimants being given bills by the Treasury that they could not afford to pay.
These measures were usually introduced on the eve of an election, so that even more members of a grateful public could receive yet more money on top of their pay. More importantly, it rapidly became clear that a lot of this money was subsidising employers, who found that they could hold down incomes. This was happening at a time when the economy was coming out of a recession, and they could therefore hire all the staff they needed, with the taxpayer subsidising their pay.
Given the objectives that we are all agreed on, and that it is quite obvious that we need welfare reform—although Labour Members are unable to think of any at the moment—I cannot think of a more obvious target for such reform than the tax credit system. I approve of the Government’s choice in that regard. Of course, electoral bribes are always difficult to reverse, but I shall explain in a moment why this is a good time to make substantial progress towards getting rid of this dreadful mistake, which the last Labour Government should never have introduced.
Mr David Lammy (Tottenham) (Lab)
The right hon. and learned Gentleman makes an important point about the nature of the benefit and the difficulties some people experience in paying it back a year later. Does he accept, however, that the system of family credit was introduced by Margaret Thatcher, and that Eleanor Rathbone fought for family allowances back in 1929? There has broadly been a cross-party consensus that the welfare state has to deal with those on low incomes, particularly those who are working.
Mr Clarke
Of course the Government have a duty to look after those of all kinds who are below subsistence income—that is what we have the welfare state for. I used to support family allowances with some vigour, because in those days we had persuaded the then Government to pay it to the mother, and a high proportion of women—there probably are still some in this position—did not know what their husbands earned and it was right to pay a benefit for the children directly to them; it was a kind of social reform. I did agree with the current Government that the time had come to end it for higher-rate taxpayers—again, it was a general subsidy. Various attempts were made to do a negative income tax, but we never succeeded in finding one—I tried over the years, talking with Chancellors and also when I was Chancellor. What has been introduced—tax credit—was a Clinton invention, altered by the Labour Government, and it has never worked properly, for the reasons I have given.
Several hon. Members rose—
Mr Clarke
I do not want to take as long as the Front Benchers, so I will make a little progress.
Why do this now? There is never going to be a better time again to make more substantial progress in loosening our dependence on this subsidy to pay. I will not repeat what the Minister said admirably from the Dispatch Box about all the other things that are being done in more sensible areas, where we support the income and help with the expenditure of working families. That of course has to be key. That is the alleviation that everybody is demanding of what is bound to be difficult when we move forward. I am not naive. Politically, I point out to my Conservative colleagues that this is early in a Parliament, six months in, and my guess is that if we do not take this decision now, everybody will run for the hills if we decide we are going to do it in two years’ time. If we are looking, as a governing party should do, to what we are going to be able to show to the public by way of a successful economy when we next face them in five years’ time, we will see that now is the time to take the necessary decisions to get on with this.
More substantially, as has been mentioned by, among others, my hon. and learned Friend the Member for North East Hertfordshire (Sir Oliver Heald), the former Solicitor-General, the employment situation is extraordinarily strong. This is the time to do it, because we are never going to get all the full compensating reactions in the labour market if we do not get them at a time when employment is at a record-breaking high, unemployment is very low and real incomes are rising at an amazing 3% a year.
In all the figures that keep being cited about what will happen to those who lose tax credit, there is one great incalculable, although people have tried to estimate it: what will employers do as they realise that their staff are losing their tax credit? We have already seen various firms lining up to say that they are going to pay my right hon. Friend the Chancellor’s living wage, some straightaway. That is because the labour market has changed, they do not want demoralised staff and they want to race ahead of the Government and say that they are giving a big pay rise. I accept that not everybody will be able to do that, but I think that employers, finding that the subsidy of tax credit is being drained away again, are in a better position now than they have been for years to say, “Perhaps we are going to have to give—perhaps we ought to give—a reasonable pay rise to the staff working for us because we can no longer rely on the Government setting in behind us.” Again, if we do not do it when the employment market is so strong, we will never do it at all—now is the time.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I thank the right hon. and learned Gentleman for giving way, because I agree with an awful lot of his analysis of the problems caused by the whole system of tax credits. The difficulty is that we do not start with a blank sheet of paper. The fact is that the cuts are in the here and now, whereas the possible increase in wages will come only in the future. Can he really see any employer giving somebody a wage rise because they have just had a third child who will not be eligible now for tax credits?
Mr Clarke
Quite a lot of low-paying employers will realise the effect on the morale of their staff, some of whom will tell them that they are losing their tax credits. I am not naive and know that this will not mean that nobody loses. Not everyone will be able to do that. The downsides of the change—my hon. Friends on the Front Bench explained the upsides that will affect a lot of these working families—may not be totally eliminated, but there will be fewer problems now if we go ahead with this. I have already said that getting rid of electoral bribes, which most parties have given over the years, always proves to be terribly difficult. I have seen some dreadful things introduced and then nobody has the nerve to vote against them. Perhaps I should not worry. I receive a free bus pass, free television on which I do not pay a licence, and a winter fuel allowance to save me from winter poverty. I know that I was meant to say to the previous Labour Government, “God bless you, Mr Brown. You are a worthy man, and I shall vote for you from now on.” My political views are more complicated than that. Tax credits were about the Labour Government bumping up people’s income on the eve of an election.
Several hon. Members rose—
Mr Clarke
No, now is the time to get on.
I will conclude by turning to the rather big question of the £4 billion that will be lost by this motion. We are having a cheery knockabout argument and £4 billion is going out the window, and neither the Labour party nor the Scottish National Party can agree on any credible explanation of what they will do about that. They will borrow the money; that is what they did and that is what they will do.
I think that the right hon. Member for Birkenhead (Frank Field) is trying to catch your eye, Madam Deputy Speaker. He tried to produce some alleviation; at least he is halfway there. I think his changes save only £2 billion, so another £2 billion must be found from somewhere else. Perhaps he will address that when he speaks.
More importantly, there is talk of Labour and Liberal peers in the House of Lords voting down the measure. That is really quite a startling constitutional innovation. They use technical arguments, saying that it is a statutory instrument, and that it was not in the manifesto. Well, Budget measures are not in manifestos, so that is not a relevant argument. If the Upper House decides that it will not accept the supremacy of this House when the Government set tax and spending matters, I advise all Members in this House of all political parties to take that extremely seriously. It is irresponsible and it should not be done. We do not want a repeat of what happened in 1911. Personally, I will become a fervent advocate of reform of the House of Lords, as I always have been, all over again if they start doing that.
Pay should be set by employers once we get back to a healthy and normal world. We cannot have a system where we all have a party political argument about how much subsidy the Government will give to employers for selective members of the population. We do need welfare reform, and tax credits are one of the best candidates for such a reform. The Treasury should never have been paying out on welfare. We cannot get rid of it, but it is time to make some great progress. If this matter gets lost, the path of steady recovery that we have been on, as we lead the way in the western world towards a much more balanced, sustainable and modern economy, will be seriously damaged. I support my hon. Friend the Exchequer Secretary to the Treasury, and I hope that we will reject the motion.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. Before I call the Chair of the Select Committee, I point out that we have less than three hours left and more than 50 Members wishing to catch my eye. Dropping the speech limit down to two or three minutes seems ridiculous at this stage. There will also be a maiden speech following the contribution of the Chair of the Select Committee, and I do not want to impose a limit until after that. Can we please keep interventions to an absolute minimum and speeches as short as possible, so that I can put the time limit on as late as possible? With that, I call Frank Field.
Frank Field (Birkenhead) (Lab)
I am immensely grateful, Madam Deputy Speaker. It is a pleasure to follow the right hon. and learned Member for Rushcliffe (Mr Clarke). Like him, I will set the scene, but much more briefly, I hope.
The record shows that even when it was not popular on the Labour Benches, I spoke about the need to reduce the deficit, so I do not come here as a Johnny-come-lately who has suddenly discovered when we are not in government that that is a crucial aspect of economic stability. Similarly, when I pleaded in this place, on both sides of the Chamber, not to build up the tax credit strategy, I never got one Conservative Member to help me to divide the House so that we could show our disapproval of a method which, in the long run, has the consequences that the right hon. and learned Gentleman explained to us—that if we subsidise wages by that means, there is an effect on employers in the long run. Most employers, like individuals, are rational creatures. Why should they increase the wages of the lowest paid when taxpayers will do the job for them? That is the setting.
I make three pleas to the House. Although it would be tremendous news if a large number of Conservative Members, or even if one or two, joined us in the Lobby this evening, we should not raise our hopes too high. When we were in government, it was almost a capital offence to vote with the Opposition on such motions.
Frank Field
No, I shall accept the plea of the Chair for brevity as 50 Members wish to speak.
There has been a cross-Bench appeal today to the Backbench Business Committee, which you used to chair with distinction, Madam Deputy Speaker, for a debate on this. We could soon have that debate and views could be expressed when Members were not voting on a motion from a particular party. We would then see what this House genuinely believes about these changes. For many Government Members this is a crunch point, although I would make the charge that the Government are wearing lightly the pledge that they made so much of before the election, to such good effect on our Benches during the election and immediately afterwards, that theirs was the party of the strivers.
The Chancellor painted the picture of people on very low wages getting up in the morning and passing the drawn curtains of families on welfare. That was a deadly campaign which had its effect. If I were a low-paid worker, I would have paid some attention to a party that was making a specific pledge to protect strivers. That is why I think there is such unease on the Government Back Benches today. Those on the Treasury Bench may now wear that pledge lightly, but a number of Conservative Members fought an election campaign believing that they were going to be the party that protects strivers.
Maybe today is not the right moment for those Conservative Members to feel able to express that view in the Lobby, but I hope that before long we will have such an opportunity, and the Government will see how seriously some of their own Back Benchers took the pledge that they would be on the side of people on very low wages who, often against their own interest, get up and make a contribution—all too often a very valuable contribution—to our society.
In a statement after the election, the same man who made the plea to the country to accept the Conservatives as the party that protects strivers introduced welfare reforms which are the largest-ever cut in provision for any group, let alone for those in work. In a moment I will pick up the point that the right hon. and learned Member for Rushcliffe made about the timing of that. Maybe tonight will not be the point at which Members cross over, but I hope—this is my first plea—that we will soon have a motion that we own as Back Benchers, in which we can in a civilised way express our views about supporting strivers .
I want to return to the point made by the Prime Minister, which the Minister so ably defended today—an almost impossible brief. I compliment him on that, and I compliment him also on the work that he is doing in the other place with the Cross Benchers, trying to persuade people not to vote as they wish to vote. The crucial piece of information that the Government will not provide is this: of the 3.2 million tax credit claimants who will be, on average, £1,300 a year worse off as a result of these changes, how many will still be worse off at the end of this Parliament, when the Government will have to face the electorate, despite all the welcome changes they are introducing on childcare and so on? Before we have that debate, when people will vote with a seriousness of intent that they might not have today—this is my second plea—will the Government please produce those data so that we will have accuracy, rather than having to rely on the snapshot we have from the figures that they have produced?
The Government are saying that everything will change. We know that many of those who might be better off by the end of this Parliament—one hopes that they will be—might not be in the years towards 2020, but how many will, in fact, still be losing out in 2020, 2019 and 2018, despite the Government’s welcome changes to the national minimum wage? I think that in the long term that has revolutionary implications for how we view welfare, because I agree with the right hon. and learned Member for Rushcliffe that we have lulled ourselves, without fully appreciating it, into using welfare as a way of compensating for the failures of capitalism, and we should not have done so. The pressure should be on employers to raise productivity and pay decent wages.
My third plea will be as brief as my first and second. The Government are holding the line at the moment. When Gordon Brown introduced that ludicrous, vicious little policy of abolishing the 10p tax rate, he did so simply to catch out the then Leader of the Opposition. He threw it in at the very end of his Budget statement so that he could then crow about it, but it would have massively affected some of the poorest people in this country, particularly women workers. The Government were going to hold the line right up until they faced a defeat of the Budget—not a debate like today’s, but the Budget. At that point, all of a sudden the coffers were opened and taxpayers’ money was spat out— almost vomited out—to almost every group bar the 10p group.
I can guarantee that the Government will come forward with “tweaking” measures, as we have already heard them called. I urge Tory Members not to let them get away with tweaking the national insurance or tax thresholds, because many of our constituents who will be worse off as a result of these tax credit changes will not be compensated in any way, let alone fully, if any tweaking is spread over the 30 million of us who work, compared with the 3.2 million who will be made worse off immediately as a result of this move.
I welcome today’s debate and, unlike the right hon. and learned Gentleman, am rather pleased that we on the Opposition side are all together on a subject. If we are to be taken seriously, we have to say where we would like the £4.5 billion to come from if it is not to come from the very group of the electorate that we admire most: the strivers who get up every morning to work for a fraction of what we get as Members of Parliament but who still turn up, and who have been so badly treated by this Government and by this measure.
Heidi Allen (South Cambridgeshire) (Con)
Why today? Why have I chosen today, and this debate, to break what I hoped might be the habit of a lifetime in resisting the urge to make a maiden speech? My friends and colleagues will know that I have been trying flipping hard to avoid doing it.
It is not because I did not want to thank my predecessor for the long and dedicated service he gave to South Cambridgeshire and to the Government, though I must admit that sometimes his shoes do feel incredibly roomy for these small feet. Andrew Lansley absolutely deserves our praise, and he will be rightly rewarded next week when he takes his seat in the House of Lords. It is not because I did not want to shout from the rooftops about my constituency. I am certain that I bore everyone rigid about the economic miracle that is South Cambridgeshire; I am so, so proud to represent its people.
It is because today I can sit on my hands no longer. My decision to become an MP is a very, very recent one. It was the Tottenham riots of 2011 that shook me from my comfort zone. Night after night, my television showed me a country that was falling apart—my country—with social breakdown and an economy on the verge of collapse. I felt so strongly that I had to step forward and lend a hand. Today, I feel that way again. So I picked a team—the blue team. I believed they were the party who could bring us back from the brink, and we have started to do that. This Government have taken tough but prudent decisions and employment has reached levels never seen before. Britain is back, and I am immensely proud of this Government for their role in that. So I hope that I will see again those gems of prudence and wise judgment that drew me to the Conservative party, before it is too late.
Too late for what? Too late to stop us getting things wrong, and the timing wrong, on changes to tax credits. Believe me when I say that I entirely agree with the principle that tax credits should not be used to subsidise wages. It is not sustainable and it sends the wrong message about the kind of country and the kind of people that we want to be. Because I know that tax credits do need to change, I cannot support the black and white motion that is in front of us today. I am sorry, but I believe that the Opposition are wrong to say that we must not touch tax credits. However, a detailed debate about them does need to be had, and I am far from being the only Member on the Government Benches who recognises that. It is right that people are encouraged to strive for self-reliance and to find work that pays for their independence from the state, but I worry that our single-minded determination to reach a budget surplus is betraying who we are. I know that true Conservatives have compassion running through their veins.
I have refrained from making a speech so far because sadly most days I feel that Members on both sides of the House are firmly married to their positions regardless of the debate, and so, frankly, why prolong the agony? Why sit in the Chamber for hours when I know I could be concentrating on helping my constituents with immediate needs now? But today is different. Today, every Conservative Member who knows who we really are has a duty to remind those who have forgotten. We are the party of the working person—the person who leaves for work while it is still dark, who strives to provide for themselves and their family with pride: a pride that says, “I will go to work. Even though I still can’t quite make ends meet, I will still go to work, because to work is to have pride, and to have pride is to be British.”
I am not interested in the colour of the Government who created a bloated welfare state—that is in the past. I do not care whose fault it is, but I do know one thing: it is not the fault of the recipients of tax credits. It is the responsibility of Government, whoever they may be—those who set and change policy and those who set the rules by which these families live. If we want to change those rules, we have to support the people through that change. This is not a spreadsheet exercise. This is not a Budget document on a piece of paper. We are talking about real people—working people.
Yes, the income tax threshold has risen and will continue to rise, and that is fantastic. The minimum wage is increasing—brilliant! I am so proud of my Government that they have made this happen. But the timing of changes to tax credits is not concurrent. When we talk about moving towards the ideal goal of a lower-welfare, lower-tax, higher-wage economy, that is right, but I also hear us talking about the financial impact on people “over the Parliament”—that is the phrase I hear. But people on the breadline cannot wait for the Parliament to pass along. Many live hand to mouth every day.
I suspect that you and I could weather such a transition period, Madam Deputy Speaker—we could pull in our belts—but many of the families affected by the proposed changes do not have that luxury. Choosing whether to eat or heat is not a luxury. That is the reality.
Conservatives pride themselves on cutting their cloth according to their means, but what if there is no cloth left to cut? How many of us really know what it feels like? How many of us have walked in those shoes?
To expect people to immediately find more hours or better-paid work suggests, I am afraid, a level of naivety about the skills of some of our people. Also, are we out of touch with the economies and environments of some of our towns and cities? We can support people to get there, and I believe that can be done relatively quickly, but not overnight. That is the crux of the debate and the part that many of us on the Conservative Benches cannot reconcile.
I became an MP to stand up for the vulnerable, to lead the way for those too tired to find it for themselves. That is the role of Government, too. My first loyalty is to those people and it is to them that I now speak. To suggest that some Conservative Members may challenge the Government’s approach only because they fear for their seats is offensive. This is not about retaining votes.
Change is not always a sign of weakness; it can show strength. Did the British public, who were so concerned about immigration before the election, condemn us when we reacted to the photograph of that little Syrian boy? No, they told us to open our arms. When the International Monetary Fund decried our economic plan for not being fast enough and not showing enough growth, we remained steadfast in our belief that slow growth was sustainable. So too must be these changes.
Our debt has been falling consistently while those who need protection have been protected. Is now really the time to change that successful strategy? I would not be embarrassed even once—never mind five times—if we decided to review our approach.
Yes, being in government does mean making tough decisions, but tough decisions must also be strategic. One of the greatest challenges facing my South Cambridgeshire constituency is the affordability of housing. A constituency does not function—a country and its economy do not function—if the people who run the engine cannot afford to operate it. We need every teaching assistant, care worker, cleaner and shop worker to secure this economic recovery. To pull ourselves out of debt, we should not be forcing those working families into it.
The Prime Minister has asked us to ensure that everything we do passes the family test. Cutting tax credits before wages rise does not achieve that. Showing children that their parents will be better off not working at all does not achieve that. Sending a message to the poorest and most vulnerable in our society that we do not care does not achieve that, either.
I believe that the pace of these reforms is too hard and too fast. As the proposals stand, too many people will be adversely affected. Something must give. For those of us proud enough to call ourselves compassionate Conservatives, it must not be the backs of the working families we purport to serve.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. I am very sorry to say that I am going to impose a five-minute speech limit from now on.
Mr Roger Godsiff (Birmingham, Hall Green) (Lab)
May I first congratulate the hon. Member for South Cambridgeshire (Heidi Allen) on her remarkable, thoughtful and excellent speech? I am astonished that she will not be in the same Division Lobby as Labour Members tonight, but I congratulate her nevertheless.
A lot of my constituents are low-paid workers. Many are paid the minimum wage. They work very long hours. Some have two or even three jobs in order to have enough money to feed their families and pay the bills. Even then, some of those families cannot afford to put food on the table seven days a week and have to endure the humiliation of going to food banks with their families. These low-paid workers are not shirkers or skivers, and they are not lazy or feckless. As a matter of interest, they are not the people who caused the financial and banking crisis in 2008, which led to so much damage to the economy and cost the taxpayer billions of pounds to pay off the gambling debts. To go back to what the Conservatives said at the last election, if the curtains of the houses of those workers are drawn at 7 or 8 o’clock in the morning, it is not because they are skiving or being lazy; it is because they only got home from work after midnight.
These are the people in my constituency who rely on working tax credits to top up their poverty pay and who will suffer if these tax credit changes go through. The only crime—I do not consider it a crime—they have committed is that they are poor. I never thought that poverty was a crime. Most of them would like to get better jobs. Unfortunately, they cannot. These are the people that the House will penalise for working hard to try to sustain their families.
It is not just the working poor who will suffer; as has been said, so will self-employed people. I want to share with the House a constituent’s letter to me, because it encapsulates the problems facing self-employed people. Let us call the lady Isabella. She says:
“I’m writing to ask you to complain as strongly as you can about the upcoming tax credit cuts and to ask what I should do. I run my own business with my husband which is growing year on year but we still only earn a small amount, our family has an income of £13,000. Last year my business turned over nearly £50,000. I receive the full amount of tax credit and it is a life saver and allows us to grow our business and become useful members of society. We have won awards for our work...and we work long hours…to try and make the business become a success.”
She says she does not have a pension, but hopes the business will grow because that will be her pension. If the changes take place, her family will lose £1,700 a year, which, as a self-employed person, she says will make life virtually impossible on the income that she and her husband are making. She asks what she should do and whether the Government want her to close down her business. She says:
“Am I not exactly the sort of person this government purports to be celebrating and supporting?”
Do the Government want her to close down her business and join the ranks of the unemployed?
Maggie Throup (Erewash) (Con)
I am delighted to speak in this debate as it gives me the opportunity to speak up for the hard-working families I meet on the doorsteps of Erewash. My constituents tell me that they want a fair welfare system, one that is there for the most vulnerable in our society and provides a safety net when things do not work out. They tell me that when they pay their taxes, they want the money to be spent on the NHS, education and social care, not on subsidising employers who think they can get away with paying just the bare minimum wage. They also tell me they want to be paid a fair wage for the work they do and do not want to be dependent on state handouts. The people of Erewash are a proud people and I am proud of them.
That reflects the way in which I was brought up. My parents did not expect handouts from the state, but looked for ways to boost the household income. My dad worked hard during the day and took on a second job in the evening. Even when my mum was entitled to attendance allowance in her later years, she did not want to claim it because she thought that someone else would need it more.
The tax credit system is so complex that it is not fit for purpose. I am sure that my casework is no different from that of other hon. Members. Time and again, residents who receive tax credits get a pay rise and inform HMRC, but then find that they rack up huge debts with HMRC. Those people tell me that they would much rather earn more money than have to claim tax credits. That is exactly the environment that the Government’s changes are bringing about. We are introducing a national living wage between now and 2020, and are continuing to increase the income tax threshold.
Maggie Throup
We are short of time, so I will move on.
When we include the extra childcare that is being provided by Government, virtually zero inflation and mortgage rates at an all-time low, it can easily be seen that we are putting families at the heart of our welfare changes. I also believe that we are putting women at the heart of our changes. The extra free childcare will allow more women to get back into work, and those who are already in work will be able to do more hours. That will definitely boost family incomes. Wrongly in my opinion, women tend to be in lower-paid jobs, partly owing to the sacrifices that they make to bring up their families. The introduction of the national living wage and the increases in the income tax threshold will disproportionately benefit working women.
I am not saying that everything is perfect. We need to continue to narrow the skills gap between men and women. That is why I am backing a project spearheaded by the Erewash Partnership in my constituency, which aims to help women to set up their own business and realise their dreams. Some may question why we need women-only support. It is well recognised that some women lack self-confidence when it comes to going it alone in business and having the self-belief that they can do it. The support is tailored to meet those specific needs and it is working.
I want to finish by reminding people of the principle that was set out by John Bird, who founded The Big Issue: it is far more effective to offer a hand up than a handout. The culture of tax credits has become too much of a handout, rather than a hand up. I am confident that the proposed changes will create the hand up that Erewash residents want and deserve.
Stella Creasy (Walthamstow) (Lab/Co-op)
I am pleased to follow the hon. Member for Erewash (Maggie Throup) because I see a very different situation. I genuinely believe that the different situations that we see and the consequences of the tax credit cuts that the Government are introducing speak volumes about the choices that the British people face.
I want to take up the challenge set by the right hon. and learned Member for Rushcliffe (Mr Clarke). He rightly said that those of us on this side of the House are not an Opposition. I agree with him: we are an alternative. I want to set out what being an alternative means and why we would take different decisions on tax credits.
First and foremost, as my hon. Friend the Member for Streatham (Mr Umunna) pointed out—I am sad he is not here—the order in which change happens is crucial to the impact that it has. There is general agreement in the House that we all want to see a higher wage, lower welfare economy and higher productivity. Surely the test of every change the Government make should be whether it will achieve those things. The simple answer is that this change will not.
The evidence from the Institute for Fiscal Studies shows that none of the Government’s changes to mitigate the impact of the cuts will raise family living standards. As the right hon. and learned Member for Rushcliffe pointed out, employers are raising wages. I am a little more cynical than him and suspect that they are doing so because changes in the law are coming, rather than out of benign munificence and a recognition of the benefits to productivity of paying a higher wage.
Nevertheless, the order in which the Government are undertaking the changes will make all the difference to the people in this country. They could decide to change the order and introduce the so-called living wage first, then look at the tax credit cuts. That would make a difference because of one matter that was sorely absent from the Exchequer Secretary’s contribution. I am surprised that he did not mention it, given that he used to be an expert on it. He is presiding over an economy in which personal debt is rising at an alarming rate. The Minister looks quizzical. He says that the burden of the Government’s changes is being distributed equally, but the burden of personal debt is not equally distributed in this country, as we see at first hand in our communities. We see families for whom borrowing on a credit card or from friends and family, or taking out a payday loan, is the only way that they can make ends meet.
Louise Haigh (Sheffield, Heeley) (Lab)
My hon. Friend is making a fantastic speech and I, too, am confused about why the Minister is looking so perplexed. The Office for Budget Responsibility stated that because of measures introduced in the Chancellor’s Budget, unsecured borrowing will rise by £45 billion by the next election. My hon. Friend’s point is pertinent to the debate.
Stella Creasy
The Minister kept talking about the amount of public debt that he wanted to attribute to each household, but average unsecured personal debt is now £10,000 per household. Given the vulnerability to which families are exposed when they have that level of unsecured debt, will the changes make it more or less likely that such personal debt will rise? No one in the House would argue that the changes as currently constituted will not lead to a rise in personal debt to families, and we know the consequences of that. I pay tribute to the hon. Member for South Cambridgeshire (Heidi Allen) who honestly and openly set out the consequences of debt. She explained the worries she has when she sees families who are struggling with debt, and Labour Members share those concerns.
Suella Fernandes (Fareham) (Con)
I applaud the hon. Lady’s passion but she is missing the context. The changes are part of a package that include a national minimum wage, 30 hours of free childcare, and a lock on tax rises. Taking that into account, wages and personal income will rise—does she not see that?
Stella Creasy
I beg the hon. Lady to read research from the independent Institute for Fiscal Studies that shows that none of those changes will compensate for the difference in income. I ask her to look into her heart and consider whether families in her constituency will end up borrowing because they find that there is even more month at the end of their money as a result of these changes and the way they are being introduced.
I understand the point raised by the right hon. and learned Member for Rushcliffe but there are alternative choices. We all want the deficit to go down—some of us do not want to see Governments borrowing from banks anymore—and we recognise the problems in our economy. Some of us are deeply concerned about the consequences for families of having that level of personal debt hanging over their heads. When interest rates rise—and they will—a 2% increase will lead to an extra £1,000 a year in interest payments alone that families will have to find. Families in other constituencies might have £1,000 hanging around, but not those in my constituency. With one third of people in this country having no savings at all, the changes as they stand will eat not into people’s savings or borrowings, but into their debt. That is the consequence we are facing and we need alternative ways to deal with that.
Let me offer some alternative ideas for how we could cut the cake and reduce this country’s debt. The Government could make changes to inheritance tax, although I recognise that Conservative Members do not like that idea. Alternatively, let us look at capital gains tax. The Chancellor made great play of putting capital gains tax on the sale of commercial property, but he left open a loophole for residential property. Were the Government to close that gap, none of these changes would need to take place.
Debt is a problem in itself. This Government are paying out £10 billion in public finance initiative debt repayments. Were they to get serious about renegotiating PFI debt—they would receive support for that from those on the Opposition Benches—we could save that money. The speech by the hon. Member for South Cambridgeshire was powerful because there are always choices to be made. Labour Members would make different choices and put first those people for whom £10,000 of unsecured personal debt means not only suffering the indignity of going to a food bank or going hungry every day, but that they cannot make long-term choices for their family’s future, or even entertain the idea of getting on the housing ladder. They will not be able to pay the social care costs that the hon. Member for Erewash spoke about, or let their children go into further or higher education, because they simply cannot afford it. We see the potential that will be wasted as a result.
We want to make choices that will help those families, help the economy to be more productive, and help this country truly to bounce back, but that is not the choice being made by the Government tonight. I urge Government Members who recognise the debt held in their communities and understand that this measure will make it worse not better, to think again and to work with us on when and how these changes come in and how we can make sure everyone benefits from a higher wage, higher productivity economy. I promise them that the families in trouble who are coming to them now need and deserve nothing less.
Johnny Mercer (Plymouth, Moor View) (Con)
I wanted to speak in this debate because I believe it is important to add my voice, for what it is worth, from the Government Benches and from a first-time Conservative seat, on the tax credit reforms.
I represent part of the great city of Plymouth, which has for some time been a stronghold of the Opposition in recent elections. Indeed, my seat was once the domain of the Leader of the Opposition, such was the political landscape in our history. However, Plymouth is changing. We may have at times benefited from the nuances of being almost entirely state-dependent for our income, but the modernisation of the dockyard has had a profound effect on the demographics and outlook for our city. We now have second and third-order effects of long-term state dependency visible in generations of our residents.
In recent years, we have seen real benefits as the fundamentals of our local economy have changed. That resilient yet ever-evolving Janner character has seen us become a haven for marine science in the south-west, with companies such as MSubs, which was visited by the Chancellor in his last stop in the city. We have some genuine world leaders in hi-tech manufacturing and our charity sector is something that those of us who call Plymouth home are extraordinarily proud of. We have three fine higher education institutions. We are home to the world’s most adaptive and resilient fighting force in 3 Commando Brigade. We are a city that cares, regardless of background, and I look forward to turbo-charging this agenda in the years ahead.
As times have changed, so has the vote. On the Government Benches, we do not think it is right that people should be better off on a life on benefits than those with young families who work hard and contribute to the system. The welfare state is a truly remarkable thing: a system that makes me proud to be British, and a system that provides a safety net to those who need it and security for those who fall. The harsh reality, however, is that the system failed in places like Plymouth. In places like Plymouth, the system offered a life on benefits with income up to £26,000 for a family of four, such as my own. We cannot blame people for one minute for seeking this way of life, but we can look at the system that encouraged it. That is what my party is rightly doing.
I must urge caution with respect to these specific changes to tax credits. We all take individual journeys to this House, but mine was very clearly to represent my constituents above all else and to do what is right by my city. If I am to truly follow through on this, it would be remiss of me not to recount the extraordinary levels of feeling in Plymouth last weekend. This bright, vibrant, exciting and predominantly blue collar city, where in the last general election we saw lots of new and first-time Conservative voters, has serious objections to the tax credit reforms. It is my duty to represent them here in the people’s Parliament where they, and no one else, have sent me to work.
There is a general understanding out there for welfare reform. The policies are, in my experience, very welcome to many in a city that many people would see as entirely failed by the Labour party. Those of us at the coalface every weekend trying to help, encourage, gently persuade and even inspire a generation of young people, feel emboldened by the drive towards self-sustainability and independence of the Government’s reforms. However, my duty—again, I seek not to bang on to those far more experienced and capable in this House—and indeed our duty is to shout for our most vulnerable: the 10% I talked about the other night in the armed forces mental health debate in this House: those who, through no fault of their own, find themselves on the fringes of society, and who, but for a bit of bad luck and a couple of wrong decisions, could be any one of us.
I stand here as a compassionate Conservative, and unashamedly so. There is a good reason why I was not a member of this party before I decided to stand as an MP last year, but I have no doubt at all that the party is changing. I am proud of our current Prime Minister for the direction he is taking us in. I am one of those who thought that one of the Prime Minister’s bravest moves was to bring in same-sex marriage. I would have struggled to be here today without his personal stewardship, and, when we are winning in places like Plymouth, it is clear for all to see.
It is clear to me that Plymouth's view is that, while welfare, and by extension tax credits, must be reformed, these measures must be supported by mechanisms that protect our hardest hit, with precision targeting and strong messaging. I today urge the Chancellor to provide something—anything—that might mitigate the harshest effects of this policy on our most vulnerable. There are people far more intelligent than me who will provide data and statistical analyses in favour of or against the argument. Indeed, they have done just that. I seek not to go against their carefully considered arguments, but British politics is at a crossroads.
I seek not to denigrate Opposition Members, some of whom I know personally and have deep admiration and respect for, but we have an entirely chaotic Opposition who have so completely lost their roots in the traditional British left as to provide no stable for almost anyone in their right mind who has Britain’s best interests at heart. We must seize the opportunity to welcome to our stable people from all previous political backgrounds. Let us look again, work harder and find a way of bringing this overdeveloped and harmful tax credits system back under control, but let us do it in a way that looks after what should be our core vote.
Jim Dowd (Lewisham West and Penge) (Lab)
I say to the hon. Members for Plymouth, Moor View (Johnny Mercer) and for South Cambridgeshire (Heidi Allen) that it is never easy to make a speech with which most of those on the same Benches disagree. I have been in that position myself, so I commend them on their fortitude.
I want to talk about the effect these proposals would have on my constituency. Paradoxically, 60% of my constituency is in Lewisham, one of the poorest boroughs in London, and 40% is in Bromley, one of the richest. Lewisham is not the richest, but it is not the poorest either—that honour, if an honour it be, resides elsewhere—but it does have the highest proportion of any of the 32 London boroughs of people above the benefits level but below average earnings. They are the working poor, and they will be the hardest hit, should these proposals go forward. Lewisham also has the highest proportion of people working outside their borough, so travel costs are a factor for those attempting to work their way out of dependency.
I do not accept the false dichotomy, which some people presented, between strivers and shirkers, but the people who will suffer the most under these proposals would fall into any category definition of “strivers”. Almost 25% of families in my constituency receive tax credits; 8,600 families will be affected, while 5,500 in-work families will lose up to £1,300 from next April, according to the Library. The total loss to some of the most vulnerable people in the constituency will be something over £7 million. Strangely enough, my constituency is better off than the other Lewisham constituencies. Those of my hon. Friends the Members for Lewisham East (Heidi Alexander) and for Lewisham, Deptford (Vicky Foxcroft) have far higher numbers than mine, so the effect across the borough as a whole can be imagined.
The Government argue that the increase in the minimum wage, which they try to describe as a living wage though it is nothing of the sort, to £9 an hour by 2020 will offset the cuts. It will do nothing of the kind. The most pernicious element of these proposals is the decision to take money away from people from next April while not paying the so-called compensation until four years later. As others have said, it is not just the nature of the proposals but their vicious timing that will do such damage to so many people.
The Government say, “Let us enable people to keep more of their own money, rather than taking it off them and then giving it back”. As a general proposition, I think that is fairly sound, and it is arguably a more efficient way of running the economy, but it ignores the nature and efficacy of a progressive tax system: the Government raise taxes from those who can afford it to pay for infrastructure and other schemes, but also to ensure a minimum standard of living across the country through a benefits system that is an integral part of the welfare state—although I accept that a balance will always need to be struck between taxation and expenditure.
Some Government Members, such as the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr Clarke), who is no longer in his seat, and others, almost made it sound like the tax credits system was such a liability that it should be abolished altogether. That was their import, but they are wrong. The tax credits system is not there to subsidise poor employers—we are united across the House on that point; it is a crucial taper between the world of benefits reliance and the world of work. Without it, the option would not be for people to be in better-paid employment, but to be in unemployment. That would be the reality.
There is a case for reform of the system, and my right hon. Friend the Member for Birkenhead (Frank Field) along with many others has done a great deal of work in this area. While new claimants can be treated separately, there must be transitional protections for some of the hardest-working and most vulnerable families in the country.
Graham Evans (Weaver Vale) (Con)
I am grateful to you, Madam Deputy Speaker, for calling me to speak in this important debate.
Britain is home to 1% of the world’s population and accounts for 4% of the world’s gross domestic product and 7% of the world’s welfare spending. Tax credit expenditure more than trebled in real terms in the decade between 2000 and 2010. In fact, Britain has the highest expenditure on family cash benefits in the world. In 2011, we were spending twice as much as the OECD average. Without sound public finances, there can be no economic security for working families, and the country cannot pay for the hospitals and schools that people rely on.
Those who suffer most when the Government run unsustainable deficits are not the richest, but the very poorest. As the Prime Minister made clear in a speech at Ormiston Bolingbroke in Weaver Vale, there is nothing progressive about burdening our children or paying more in debt interest than we spend on schools. There is nothing progressive about debt.
George Kerevan (East Lothian) (SNP)
Surely the hon. Gentleman is aware that a central portion of the national debt is owned by the Treasury and that we pay a substantial part of the interest payments to ourselves.
Graham Evans
I am grateful to the hon. Gentleman for his intervention, but I have to say that I have a vested interest as I have three young children. Is he saying that we should increase our debt? Should the debt of £1.3 trillion be £2 trillion, £3 trillion or £4 trillion? How much more debt does he think this country should leave to our children to pay back?
Graham Evans
Or should it be £5 trillion, £6 trillion or £7 trillion? I will give way again to the hon. Gentleman so he can tell me.
George Kerevan
The SNP is more than willing and happy to reduce the national debt year by year and annual borrowing year by year, but I say again that something over a third of the national debt is actually owned by the Treasury, so he cannot go on saying that interest payments go to somebody else; they go to ourselves to fund hospitals, for example.
Graham Evans
The hon. Gentleman is saying that the Scottish National party is happy to increase the national debt. That is the message: the national debt is going to go up. That is what socialism does and what socialists say. They are not concerned about the national debt, which is currently £1.4 trillion and getting higher. We can hear the message coming through loud and clear from the SNP.
Tax credits cost £l billion in their first full year, but have since risen to an estimated £30 billion over the last year, yet over the same period in-work poverty rose by 20%. The status quo on tax credits is clearly not working. Indeed, the former Labour Chancellor of the Exchequer, Alistair Darling, said that tax credits were
“subsiding low wages in a way that was never intended.”
It is vital to address the root causes of low pay rather than simply continuing endlessly to subsidise low pay through the benefit system. Reforming tax credits is crucial to achieving a sustainable welfare system that is fair both to the most vulnerable in society and to hard-working taxpayers who have to pay for it.
These reforms do not stand in isolation, but are part of a joined-up, wider offer to working people by this Government. With the announcement of the introduction of a new living wage by my right hon. Friend the Chancellor during his summer Budget, and the strides taken to raise the personal allowance, people will not only earn more but keep more of what they earn. It always pays to work.
On top of that, we doubled the number of free childcare hours of which parents can take advantage to 30, introduced tax-free childcare and froze fuel duty, saving a family £10 every time they fill up their tank.
Melanie Onn (Great Grimsby) (Lab)
The hon. Gentleman is talking about how people working on low pay should be grateful for the so-called living wage. Let me make the point again that this is not a living wage: it is not £7.85; it is not enough for people to live on. Let me provide an example. On the basis of changes to the tax credit threshold and the taper, a medical secretary with two children earning £22,236 a year can be expected to be £2,109 a year, or £40 a week, worse off in 2016 than in 2015. Will the hon. Gentleman comment on that?
Graham Evans
What I will say is that employers must step up to the plate. They must pay higher rises—rising salaries. The living wage will rise to £9 during the term of the present Parliament, and because the Government have increased the personal allowance, people will earn £12,500 before paying any tax whatsoever.
The combination of those changes will make eight out of 10 working families better off. A typical family in which someone is working full time on the minimum wage will be £2,400 a year better off by the end of this Parliament. By 2020, the annual income of a single parent with one child working 35 hours a week and receiving the current national minimum wage will have increased by more than £1,500.
Poverty can be left behind only through work. The reforms of tax credits focus support on the families on the lowest incomes, while favouring support for working families through the tax system and earnings growth rather than through benefits. They will move Britain from a high welfare, high tax, low wage economy to a lower welfare, lower tax and higher wage economy.
Mhairi Black (Paisley and Renfrewshire South) (SNP)
I congratulate the hon. Member for South Cambridgeshire (Heidi Allen) on her honest and, if I may say so, rather courageous maiden speech. It was a pleasure to listen to.
I will begin with a rather strange declaration, which is that I agree with the Conservatives. I, too, believe that “work should pay”. The sad reality is, however, that in Scotland, more than 60% of children in poverty come from families who are in work. We have already heard that the proposed cuts will hit those in work the hardest, with in-work families losing, on average, £1,300 in 2016-17. We have heard, multiple times, how that financial gap will be filled with the introduction of the new so-called national living wage; but it is not a living wage. It falls 65p short of the real living wage, which, outside London, sits at £7.85 per hour. It should therefore be referred to as what it is: a new minimum wage.
If we look across the board at the families, both in and out of work, who will be affected by the cuts, we see that, on average, households will lose roughly £750 as a result of social security cuts, while households that will benefit from the new minimum wage will gain only £200 from it. That means that the new minimum wage will compensate for only 26% of the total losses created by cuts in tax credits.
I know how much the Government like to talk about financial “black holes”, especially when it comes to the SNP, but the reality is that if they proceed with their proposals they will create a financial black hole of £550 for roughly 8.4 million people in this United Kingdom. It is clear from the figures that their policy serves no purpose other than to push more and more people into poverty, and, in particular, to push more children into poverty. In Scotland, more than half a million children are currently in families who rely on tax credits, and 350,000 of those children are from more than 200,000 low-income families who will be hit by these changes.
Chris Philp
I have listened carefully to what the hon. Lady has said so far. Will she answer a question that her colleague the hon. Member for Ross, Skye and Lochaber (Ian Blackford) did not answer earlier? Does she support the decision by the SNP Government in Holyrood to use their new income tax-raising powers, in the next year or so, to increase Scottish income tax and increase tax credits?
Mhairi Black
There are two points to be made in response to that intervention. First, it is worth remembering that 85% of power over welfare remains at Westminster. Tax credit is a reserved issue. Secondly, I think that the use of the income powers highlights a deficiency in the initial argument. If there is a need for the Scottish Government to top up benefits, surely there must have been a fault in the benefits to begin with.
Patricia Gibson
Does my hon. Friend agree that politics is always about choice? Notwithstanding the rhetoric from the Conservatives about balancing the books, they could choose not to spend £100 billion on Trident. They could choose not to raise the threshold of inheritance tax. They could choose to close the Mayfair tax loophole completely, rather than balancing the books on the backs of the working poor.
Mhairi Black
I completely agree with my hon. Friend.
The House of Commons Library also tells us that the proposed changes will deliver savings of £4.4 billion in 2016-17, but that means that the Government will be taking £4.4 billion out of the pockets of the poorest people in this country. If people qualify for tax credits in the first place, it is clear that their wages are considered inadequate to live on. Given that we can cite credible evidence that the new minimum wage will not compensate for the loss of income created by the cuts, we can conclude only that they exist purely for ideological purposes and to continue the madness of austerity. As was pointed out earlier, we know that when the average person has money in their pockets they spend it. By taking £4.4 billion out of their pockets, we are taking money out of local economies, further tightening the economy and increasing the pressure placed on ordinary people.
The third and final point that leads me to believe that the Government should abandon these tax credit cuts is the two child policy. Are we really saying that people should count themselves lucky if they qualify for tax credits only for their first two children? In Scotland, 54% of families have only one child and poorer families are no different, so this aspect of the policy serves only to perpetuate the myth and the stereotype that the poorest in society have lots of children that they cannot afford. Not only that, but are we really making the disgraceful proposal to our citizens that, as our Government are so compassionate, we might consider helping them if they have a third child so long as they have been raped? Is that where we are now setting the bar for providing decent opportunities for our children—only if they are the product of rape? Forget the fact that that is a moral outrage from the get go; it is also completely unsustainable. How does someone qualify? Does there have to be a conviction for rape? Or could there just be a claim? This is completely unrealistic. What further damage will it do to women who have suffered a heinous sexual attack if we make them have to relive that attack by giving evidence to ministerial bodies?
Fundamentally, this is an ill-thought-out, illogical and harmful proposal. Even the Adam Smith Institute has just this afternoon called on the Government to remove these proposals. I am therefore proud to say that I will support the motion tonight and that the Government should abandon their current course of action immediately.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. The list of speakers seems to be growing rather than shrinking and almost 40 Members still want to speak, so before I call the next speaker I shall drop the time limit down to three minutes in the hope we can get as many in as possible.
Peter Aldous (Waveney) (Con)
The Government are pursuing the right strategic approach by moving from supporting working families through the benefit system to encouraging earnings growth and providing support through the tax system, but they need to think carefully about how they implement the policy to ensure that working families on low wages are not hit hard and unfairly. I urge them to address these worries before the changes to working tax credits come into effect next April.
The Government are doing the right thing by putting in place policies that in the long term will enable us to move to a high-skills, high-wage and low-welfare economy that is not concentrated in one place—London and the south-east—but offers opportunities for all across the country. The decline which these policies will address has taken place in many parts of the country, including my constituency of Waveney, over the past 30 or 40 years. They will not work overnight. They will need time and they might need to be refocused, redesigned and rebooted.
In the short term, there is a need for other policy initiatives to ensure that the removal of working tax credits does not indiscriminately and punitively hit those on low wages. My concern is that over the next four years the welcome initiatives that have been made so far will not on their own be enough to prevent working families on low incomes from facing significant reductions in income that could cause real hardship. They are the hard-working families doing the right thing that we can all say we support.
Since 2010, the coalition Government’s and this Government’s stewardship of the economy has helped to create a record number of jobs and has stimulated a genuine and seemingly sustainable growth in wages. That has improved the economic outlook and will enable people to increase the hours they work and move on to better paid jobs. However, such opportunities are not available evenly across the country; they are in some places, but not in others. The Government must do more to support working families as they pursue this right but difficult policy. Phasing in a reduction in employee national insurance contributions should be considered, as should changes to universal credit. Universal credit has the advantage of simplicity, but it could be made more flexible.
The Government are doing the right thing, but this policy must be introduced with more support for those who are also doing the right thing and looking to work more. That is something that I, as a one nation Conservative, ask the Government to do.
Ruth Cadbury (Brentford and Isleworth) (Lab)
The Conservative party promised no cuts to tax credits and said people should always be better off in work, and we agree with that, yet the Government are reneging on those commitments. Some 7,300 working families with children were in receipt of tax credits in my constituency at April 2015 and all will experience an income cut in April 2016. Those with more than two children will be particularly badly hit.
One couple who came to see me in my surgery on Friday will face a cut in their annual income of more than £1,500 a year, and that includes the change in the personal allowance. The couple obtained the figure from the “entitled to” calculator on the direct.gov website. He is a primary school teacher earning £26,500—well above the minimum wage—and as a public servant has little expectation of a pay rise above 1%. His partner has had pregnancy-related health complications so she is not working. They are expecting their first child. They said to me that they
“feel extremely disappointed that an honest young couple who have a child on the way and have never claimed a thing do not get any help.”
It is not right that a second-year primary teacher is struggling to make ends meet and that low and middle-income earners like this man face the brunt of Government cuts yet again.
I do not dispute that employers should pay decent wages so that working families are less dependent on the taxpayer to make up the difference, and that we should strive to be a high-skill, high-wage economy, but until the wages of the lowest-paid rise, the Government should not withdraw the benefits that allow working families to feed their children and ensure that people can heat their homes and are able to afford to travel to work.
The Resolution Foundation calculates that cuts to tax credits and universal credit next April will create an “overnight shock” to family incomes, plunging around 200,000 families into poverty, mostly working households. The so-called national living wage is not a living wage and will simply not compensate these families for their loss of income. Middle and low-income families will continue to need support, not spin.
The Government justify these cuts by saying that they need to make savings in public funds, but where is the assessment of the cost to the public purse of these drastic cuts to the income of so many low-income families? What about the greater risk of people being forced into unemployment and the additional cost to the taxpayer from that? What about the additional cost to the country of children arriving at school hungry and unable to learn? What about the greater chance of long-term illness from cold homes, and the costs of increased personal debt that my hon. Friend the Member for Walthamstow (Stella Creasy) described so clearly? Where is the assessment of the impact on local economies of these changes—the loss of £4.6 billion in the next financial year? Money spent by low-income people is spent in their community, not on playing the stock market.
Marcus Fysh (Yeovil) (Con)
The Conservative party is the party of jobs, opportunities and higher wages, not of borrowing for ever until we go bust. There is nothing whatever compassionate about running out of money. My right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) made some very good points, not least that, given the conditions, this is a good time for employers to deal with the subsidy that has built up.
In Australia during the crisis the Government authorised the payment of $900—about £500—as a tax credit, as an absolute emergency measure to keep the economy from going into recession, and there was an almighty argument and stink over whether that was even possible.
Gordon Brown instigated a system that spends thousands of pounds per person every year. He bumped the figure up ahead of elections time and again, and the welfare system got out of control. This was indeed a bribe, and it was made with borrowed money. That is not fair on the general taxpayer. We are the party that wants to reform this system. This is about reducing our deficit and not burdening our children. All our children will be paying for this for ever more unless we reform the system now. It is also worth remembering that the tax credit system is one of the reasons that migration from the EU has been sucked in so hard since 2005, and if we want to deal with that, we must address this issue.
This is the party of incentives. We want to make the future better and enable businesses to create jobs that will pay better wages in order to give people the opportunities they need if their families are to get on. That is why we have a major infrastructure programme in the south-west. We have heard Opposition Members ask what we are going to invest in. Well, we are investing a lot. We are going to make a major difference to people in my constituency and in the south-west. These moves will enable a much broader-based rise in wages, which I look forward to. I believe that we should incentivise people even further in the next phase, and it has been suggested a few times that we should look at the national insurance system. We could raise the national insurance threshold much further, right up to the point at which income tax is collected. That reform would make work pay even more.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Thank you, Mr Speaker, for giving me the opportunity to contribute to today’s debate. During the recent general election campaign, I spoke to many families across the Merthyr Tydfil and Rhymney constituency who were already struggling to make ends meet and, in some cases, struggling to put food on the table or to heat their homes. Since the election, we have heard from the Conservatives that they are on the side of working families and want to make work pay. In recent weeks, however, I have visited food banks in my constituency and seen at first hand how the demand for support from our food banks is increasing, not decreasing. It is also deeply worrying that in many cases, food bank support is reportedly being provided to people who are in work rather than out of work.
If the Government continue with their severe cuts to tax credits and do not alter course, it will cause absolute misery for many families in my constituency and many other areas across the country. These measures have been described as the largest cut to family incomes ever implemented by a Government. Is that an achievement that the Conservative party wishes to aspire to?
We are talking about working families. These are the people whom the Government say they want to help, yet the tax credit cuts would completely pull the rug out from under them, causing misery and hardship on an unprecedented scale. The cuts will mean that work pays less, which will undoubtedly lead to further debt and to families being unable to afford their basic living and housing costs. The cuts will also lead to further direct and indirect financial pressures on local authorities, which are already struggling to cope with massive cuts to budgets and services.
The changes will hit working families, with 3.2 million low-paid workers losing out next year. Information released by Barnardo’s highlights that a lone parent working full time on the minimum wage—the new so-called national living wage—for 37 hours a week will lose around £1,200 a year as a result of these changes, even after accounting for the increase in the minimum wage. That cannot be fair, and these measures will not support working families as the Government say they want to do. The combination of the Government’s public sector pay policy and the changes to the tax credit threshold and the taper will mean that hundreds of thousands of public sector workers will have less income in 2016, 2017, 2018, 2019 and 2020 than they do in 2015. Again, can that be fair?
I say to Conservative Members that these measures will hurt working people, particularly the most vulnerable across our country. That will include not only 4,900 families in my constituency but families in all constituencies, including those represented by Conservative MPs. I urge Conservative Members to support the motion, to show that they are truly on the side of working families, and not to condemn more children into poverty.
Kwasi Kwarteng (Spelthorne) (Con)
I am very much obliged to you, Mr Speaker, for being able to speak in this debate. We have heard lots of passionate speeches and many well-argued speeches, but I wish to start by referring to the one made by my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke). He said that when we look at the election, we see that there was a clear choice between the Conservative party and other parties on economic credibility. It is on that rock of economic credibility that this Government are doing something that is difficult but essentially the right thing. Opposition Members have to outline where they are going to find the £4.4 billion of savings, and they have not done so in any way.
Kwasi Kwarteng
I am not going to give way. [Interruption.] I am not frightened of the hon. Lady, but I realise that I have limited time. I am not frightened—
Kwasi Kwarteng
I am not frightened with respect to this debate, but perhaps in other ways I should be.
The Opposition parties have a number of questions to answer. Where are they going to find the savings? More broadly, most of us agree that this system of tax credits subsidises employers, so is that subsidy to them to be paid year in, year out until kingdom come? Do we want to keep doing this for the foreseeable future, perhaps in perpetuity, or should we try to reform it and impose some conditions on employers to increase wages and share general increases in prosperity? The Government are doing the right thing. Clearly, this is a difficult decision. We cannot kid ourselves that some of these choices are easy, because they are not, but that is why we have been given the mandate—to do difficult things. If it were easy, we would have done it already and we would not have a problem. This is the right thing to do.
As other Conservative Members have observed, the conditions could not be more propitious to institute a reform of this kind. We have rising incomes and rising wages, and unemployment has fallen. I recall that in the last Parliament the doomsayers were saying that we would hit 5 million unemployed, but that never happened. We have good labour conditions and this is exactly the right time to bring about a reform of this nature. The last thing I would say is that although we engage in pantomime, Punch and Judy politics, this idea that the Government have done nothing for working people is ridiculous. We have to stress the fact that the national living wage has been introduced and the personal allowance has been trebled, and we also have to consider the doubling of free childcare for working parents with three and four-year-olds. This is a good comprehensive measure that helps people.
Sammy Wilson (East Antrim) (DUP)
First, let me say that I do not think many people disagree with the analysis that has been made about tax credits. The question is: will the Government’s approach and the timing of their reduction solve the problem and avoid the difficulties that have been identified?
Let me deal with the three arguments put forward by the hon. Member for Spelthorne (Kwasi Kwarteng), the first of which was that Government credibility is at stake. In a democracy, it is not just the credibility of the Government that is important, but the fairness of the policies they are undertaking. They might argue that they are dealing with the deficit and taking tough action, and that those are good things, but those affected must also feel that they are being treated fairly. I do not believe there is fairness in this policy, because it does affect those people at the lower wage end of the economy. As has been said, we are talking about the strivers in society—the people who want to make a contribution and yet find themselves undermined.
Jim Shannon (Strangford) (DUP)
My hon. Friend has mentioned the issue of those who are going to be hit hardest. Some 300,000 more children will be put into poverty, as has been confirmed by the children’s charities. Does he share their concerns?
Sammy Wilson
My hon. Friend makes an important point. In Northern Ireland, 33,000 of those who will be affected have two or more children, and the impact is likely to be about £2,500 per year on them. The issue of fairness is therefore important.
The second point that the hon. Member for Spelthorne made was that this was the right time. The right hon. and learned Member for Rushcliffe (Mr Clarke) argued that the economy is buoyant, but that is not true in all sectors, or in all regions. There are many places where the labour market will not push up wages and where there is not the competition for employers to say, “We will have to hold on to workers by pushing up their wages to the national living wage or beyond.” It is not the right time in many parts or in many sectors of the economy. As the Office for Budget Responsibility has said—as has the Adam Smith Institute, which is hardly a hotbed of left-wing subversives who want to wreck the Government’s policy—the policy will price thousands of workers out of the labour market.
Finally, the safety nets that exist are not there for everybody. For example, the national living wage will not apply to a large group of people in society—to those who are under the age of 25. The new approach to housing benefit will not help those who are in the private rented sector, so they will face housing costs. The childcare costs will not apply right across the board. We will find similar things if we go through many of the other safety nets that the Government say they have put in place. For all the reasons that I have mentioned, this is an unfair change in policy.
Some Members have asked, “What is the alternative?” May I just say that I served as Finance Minister in Northern Ireland, and we had to find 5% cuts in the middle of a financial year, and then 3% cuts every year for four years? There is enough room in a budget of £400 billion to find the changes that are required to fund the phasing in of these kinds of changes. We do not have time to discuss that today, but suggestions have already been made. If this is a policy that the Government want to pursue, the real challenge is to find ways of introducing it humanely, fairly and effectively.
Robert Jenrick (Newark) (Con)
Much has been said today, but I wish to concentrate on two points. First, we must accept that tax credits are a failed policy. I do not think that anyone has any credibility in this debate unless they accept that the policy is a massive failure of the previous Labour Government. Even if we are generous to Gordon Brown—and there is no reason why we should be—and we adjust for prices, this is a policy that should have cost £6 billion and has ended up costing £28 billion. No economy can afford such a bill. It is wasteful. It is a byzantine merry-go-round of recycled money that has “misdirected”—to use the jargon—at least £10 billion in fraud and error. As has been said, it has enabled many employers, including some of our largest companies, to pay their staff less in the full knowledge that the state would top up weekly incomes. In doing so, the policy has depressed wages. I know that all too well from my constituency where the toxic combination of out-of-control immigration and out-of-control welfare has meant that there has been little, if any, pressure on some of my largest employers to increase wages in the past 10 or 20 years, and it is an increase that the working people of Newark want to see and to which this Government are committed.
Several hon. Members rose—
Robert Jenrick
I will not give way, because time is pressing.
The second question we must ask is: are we willing to put this back in the box labelled “too difficult”, or is this generation of Members of Parliament willing to take the matter on? Do we want to kick this can down the road for future MPs and constituents to deal with, or do we have the guts to take it on? Of course it is not easy. No welfare reform is painless, and any boondoggles given away before general elections are, by their nature, the most difficult things to retract, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) has said. This matter is important, because it cuts to the core of what we are here for. Are we, as Members of Parliament, elected here to leave our children and grandchildren a state that is in worse repair, less competitive and more dependent on China? I have just been to hear the President of China speak a few moments ago. I want a country that can stand on its own in the world, pay its way and ensure that work pays, where millions of working people, including 4,000 or 5,000 of my constituents—
Robert Jenrick
I will not, as time is against me.
I want a country where 4,000 or 5,000 of my own constituents are not reliant on welfare, but have the dignity of a job that pays.
Siobhain McDonagh (Mitcham and Morden) (Lab)
I shall speak on behalf of more than half the population who have not yet been mentioned specifically. The cuts that we are discussing today will have a gendered impact, significantly affecting women much more than men. Capital and wealth continue to be concentrated in the hands of men, who tend to earn more. By contrast, women are most adversely affected by cuts to social security as they have to rely on it more. For instance, women are far more likely to be single parents, and 42% of single parents in the UK live in relative poverty after housing costs. Of those, 90% are women. Women also work as mothers and carers for elderly relatives, and when in work they are more likely to work part-time in the most underpaid, undervalued but important sectors—catering, cleaning and social care.
The Fawcett Society has shown that 62% of workers paid below the living wage are women. The considerable gender pay gap of 19% stubbornly continues. Tax credits are therefore a lifeline for women in low paid work and the women’s budget group has demonstrated that these cuts will undermine advances in gender equality. Although the majority of people gaining from tax credit cuts will be men, who will benefit by £1.5 billion a year by 2020, most of those losing out from tax credits will be women, who will lose £5.8 billion a year by 2020.
The advances made in helping those on low pay are about to be rolled back by a party that claims to represent the interests of working people, but in practice does no such thing. The cuts are not inevitable. They are made off the back of tax cuts for multinational businesses and others, which overwhelmingly benefit the most affluent. May I suggest, from the party of Siobhain McDonagh, that if the Government are looking for a compensating saving for ameliorating the situation of the poorest families, they should look at the mortgage tax relief given to buy-to-let landlords. In the Budget the Chancellor cut it back to the basic tax rate. If the Government want £2 billion more, they should cut it a bit more, help the housing market in London and make sure that poor families and poor women do not lose out.
Kevin Hollinrake (Thirsk and Malton) (Con)
“We should measure welfare’s success by how many people leave welfare, not by how many are added”—so said Ronald Reagan. In 2010 nine out of 10 families in the UK were on welfare. We do not need more welfare; we need more jobs, and better jobs which will pay a national living wage of £9 by 2020, ahead of the estimated living wage at that time.
We have record employment in the UK. Britons have more opportunity and more jobs. During the last Parliament, we created more jobs than were created in the rest of the European Union combined. What we have not discussed in this debate is the effect of the whole package of these reforms—universal credit, tax thresholds, child care and the national living wage. They create an incentive, enabling people to do more work. All those estimates from the IFS and the Adam Smith Institute have not taken into account people’s potential to go out and work more.
Graham Jones
I find the hon. Gentleman’s comments bizarre. This matter is close to home for me. My son and his wife are on tax credits. He does over 40 hours a week, and she is retraining and doing 12-hour bank shifts. I have a granddaughter who is going to suffer a cut of more than £100. Can the hon. Gentleman explain to me how they can retrain any more than they are, where they are going to get extra hours when they are both doing nearly 50 hours, and the impact that that has on my granddaughter? The hon. Gentleman is out of touch.
Kevin Hollinrake
Wages have been subsidised for employers for too long. It is a crazy, convoluted system in which people pay tax and then it is returned to them in welfare. How can that be right? Employers should value their workforce and pay them more. Of course we need to look carefully at the consequences of these changes, but without the reforms in the previous Parliament the tax credits bill would have been £40 billion. We cannot afford that. We have to balance the books, and employers have to take up the slack.
We are still losing £73 billion a year in this country, so we must balance the books, and we can do that by building a new culture. What do I say to an employer in my constituency who employs hundreds of workers? He says that on a Friday night, when the shout for overtime goes up, it is the overseas workers who step forward. We need to build the right culture. The culture in my house was built by my parents, who worked all the hours God sent, not to line their pockets, but to benefit the next generation and set the right example for them.
Freud, distilling the learning from his life’s work, said that happiness depends on two things: love and work. Over the previous Parliament, 700,000 workless families went back to work. We need better jobs, we need to balance the books, and we need to build a new aspirational culture in which work pays.
Dawn Butler (Brent Central) (Lab)
I congratulate the hon. Member for South Cambridgeshire (Heidi Allen) on her passionate maiden speech—Government Front Benchers were visibly cringing with each word.
Michelle Dorrell, who appeared on the BBC’s “Question Time” last week, is one of the one in four people who now regret voting Tory. With tears in her eyes, she explained that she felt she had been misled by the Government. They are taking from the poor and making them suffer, and it is a false economy. On 19 April 2015 the right hon. Member for Surrey Heath (Michael Gove) said of tax credits,
“we are going to freeze them for two years; we are not going to cut them”.
The spirit of deception goes on. The minimum wage has been renamed the living wage. Ministers claim that the cuts in tax credits will be offset by the increase in the minimum wage. Like all good cons, there is a grain of truth in that, because the cuts could be offset, but not until 2020. The cliché about hard-working families who did not cause the crash having to pay for it is unfortunately true. In Brent, 64% of families receive tax credits, which means 13,600 households will be affected by these changes. We know that there is a problem when The Sun—not a left-leaning newspaper in anyone’s imagination—starts a campaign about the cuts.
Conservative MPs have an opportunity tonight to listen to their conscience, vote with us and send a message to their Front Benchers that this is not right and this is not fair. If you fail to do that, shame on you.
Several hon. Members rose—
Mr Speaker
Order. I gently remind the House that there is no shame on my part in these matters. Members should not keep using the word “you” as though it is somehow my policy. Neither is it my policy, nor is it not my policy; it is the Government’s policy.
Luke Hall (Thornbury and Yate) (Con)
Thank you, Mr Speaker, for giving me the opportunity to speak in this debate. I will keep my remarks brief, because I know that a number of colleagues wish to speak.
Specific reforms announced in the Budget should be discussed in the context of the new deal announced by the Chancellor. The problem is that some Members of the House want to pick and choose the elements of that new deal, welcoming the extra spending but never endorsing any of the difficult decisions that the Government have had to take. The current situation is this: Britain is home to 1% of the world’s population, generates 4% of the world’s income, but pays out 7% of the world’s welfare spending. We are currently spending more on family benefits than Germany, France or Sweden.
This Government were elected six months ago with a mandate—an instruction—to balance our books and to reform welfare, as stated in our manifesto. I have listened to Opposition Members, but we have to seek to avoid the mistakes of the past. Spending on tax credits more than trebled under Labour in 10 years, while in-work poverty rose by 20%. In 2010, 90% of families were eligible for tax credits—a disproportionate amount. After these budgetary changes, that will be reduced to five in 10, a much more sustainable number. Ultimately, these changes will return tax credit spending to pre-crisis levels—the level under the Labour Government in 2007-08—and deliver £4.4 billion of savings in 2016. That money can be invested in our national health service.
Luke Hall
I will not give way because time is short.
Where do we go from here? We can either run a high welfare, high tax, low pay economy or continue with the job of reforming our economy to have high pay, low tax and lower welfare. Controlling welfare spending is part of this Government’s wider offer to working people. We are raising the personal allowance so that by the end of this Parliament people will not have to pay anything on the first £12,500 they earn. We are introducing 30 hours of free childcare for working parents—tax-free childcare worth another £2,000 a year. We are freezing fuel duty and introducing the new national living wage. These reforms cannot be viewed in isolation. They form part of this Government’s new wider deal with the British people, supporting people into work and ensuring that we deal with our debts now rather than burdening our children, grandchildren and great-grandchildren with more debt than they can ever hope to repay. That is why I will support the Government this evening.
Paula Sherriff (Dewsbury) (Lab)
I look at this debate as someone who, perhaps unlike some Conservative Members who have spoken, did an ordinary job on an ordinary wage before I came to this House. Many of the people I worked alongside in the NHS relied on tax credits to make work pay and now find themselves caught in a pincer between the Government’s pay cuts and the work penalty. More than 13,000 children in my constituency are in families supported by tax credits—over two thirds of all families with children in Dewsbury and Mirfield. Literally thousands of the people I represent are now fearful for their future.
Clive Lewis (Norwich South) (Lab)
My hon. Friend is not alone. In my constituency, 4,000 working parents will be affected by the working tax credit cuts, as will 6,700 children. This is, in effect, a work penalty. I ask her to support me in telling Conservative Members, “You are not the party of working people, and shame on you.”
Paula Sherriff
I thank my hon. Friend for his intervention. I absolutely agree that this is clearly a work penalty— to think that the Conservatives wanted to rebrand themselves as the party of working people, but instead we have this penalty.
A cleaner in my constituency with one child earning just over £13,000 a year will now lose nearly £2,000 of it. That, quite simply, is the reality of these cuts. As for the so-called national living wage, there is one simple problem: it is not actually enough to live on. That is why we had tax credits in the first place, and why the Living Wage Foundation takes account of them when it calculates the real living wage.
If the Conservatives were serious about an economy based on fair pay for decent work, they would be doing the opposite of what they propose in the Trade Union Bill and making sure that working people genuinely get their share of the wealth they create. The real winners will be the Tories’ paymasters in big businesses, because the most profitable companies in Britain will get the cut in corporation tax—not to mention the millionaires. We know what they really think of ordinary working people in Britain because the Minister for Employment said it herself in a book called “Britannia Unchained”:
“the British are among the worst idlers in the world”
who
“prefer a lie-in to hard work.”
If they thought that these cuts were so necessary and so reasonable, why did they not mention them before the election? Instead, we saw exactly the opposite, with the Prime Minister categorically denying on national television that any such changes would be made. We used to say, “You can’t trust the Tories with the NHS”; now we know that you cannot trust them, full stop.
Chris Philp (Croydon South) (Con)
At the heart of this debate lie two different views of how we should combat poverty. The first is that the state should do so exclusively through the welfare system, and the second is that the real way out of poverty is through hard work for proper, honest, decent wages.
I agree with Alistair Darling, the former Chancellor of the Exchequer, who has said that the unintended consequence of tax credits has been to subsidise employers who do not pay their staff enough to live on. I hope that Members on both sides of the House can agree that employers and companies that do not pay their staff a decent wage and enough to live on are behaving in a deplorable and completely unfair way. I welcome the introduction of the living wage, which moves us towards a point where people can live on their wages.
As a corollary and consequence of the introduction of the national living wage, I think that productivity will increase as well, because employers who pay low wages have no incentive to invest in IT and machinery.
The proposal begins to move the balance away from a reliance on tax credits towards a reliance on fair wages. I understand the points that Members on both sides of the House have made about the effect of tax credit reductions on particular individuals, but while many of the analyses we have heard, including those by Unison and the IFS, take into account the national living wage and the tax threshold increase, they do not take into account extra childcare or the removal of the fuel duty escalator, which means it now costs £10 less every time we fill up the tank. Nor do they take into account the 1% reduction in social and council rents or the fact that wages are going up by 3% while inflation is zero.
The living wage will directly affect 3 million people and a further 3 million people on slightly higher wages will benefit from a ripple effect. In fact, 200 companies, including Morrisons and Lidl, have already adopted the national living wage.
Labour Members, particularly the shadow Chief Secretary, have completely failed to answer repeated questions about where the £4 billion would come from if not from this measure. The hon. Member for Feltham and Heston (Seema Malhotra) did not suggest a single idea. The SNP has not taken up the challenge, but it could increase income tax.
Dr Whiteford
I tabled amendments in this House to devolve universal credit, which is exactly where tax credits sit, and they were rejected by the hon. Gentleman and his colleagues.
Chris Philp
In a year or two the Scottish Government will assume powers to vary income tax and it will be entirely at their discretion to raise it to fund tax credits, so we will find out very shortly whether they really plan to use those powers.
I am conscious that time is short, so I shall conclude. The measures shift the engine of prosperity creation away from the state and towards work and pay. I welcome the proposals and will support them this evening.
Neil Gray (Airdrie and Shotts) (SNP)
I and my SNP colleagues oppose the UK Government’s continued attack on low-income and vulnerable working families. It will have a devastating impact on the majority of the 11,300 children from more than 6,000 families in Airdrie and Shotts who are in receipt of tax credits.
The very first lines of the July report by the Institute for Fiscal Studies state:
“A package of changes to the tax, tax credit and benefit system has been announced for implementation in the current parliament…These will reduce household incomes significantly, particularly for those towards the bottom of the income distribution.”
Alan Brown (Kilmarnock and Loudoun) (SNP)
Is my hon. Friend aware that the Tory manifesto mentioned tax credits only twice and that it did not mention the scale of the proposed cuts? Conservative Members are lining up to say that they have a mandate to cut tax credits, but they have no such mandate, especially considering that fewer than one in four of the electorate voted for this Government.
Neil Gray
I agree with my hon. Friend that the Government do not have a mandate to implement these tax credit cuts. That is not what the people who voted Conservative voted for.
The changes are fundamentally regressive. They disproportionately target those in low-income households and punish them for this Government’s ideological obsession with austerity, which is failing socially and economically.
Neil Gray
No, I will not.
An International Monetary Fund report in June highlighted the fact that reducing income inequality not only leads to reduced poverty, but boosts growth. By extension, the policy of cutting tax credits, which will increase income inequality and drive more of our citizens into poverty, will, in fact, harm growth and therefore harm the Government’s apparent aim of reducing the deficit.
I absolutely agree that we need to make work pay. I believe in a fair day’s pay for a fair day’s work. I also believe that work should be a means to escape poverty, but 60% of children now living in poverty in Scotland live in working households. It was puzzling to me to see how cutting tax credits could possibly achieve the goals of making work pay and eradicating poverty.
The Government have absolutely no mandate for these tax credit cuts, as I have said, but I welcome the minimum wage rise that was announced in the Budget. Why, however, are the Government attempting to sabotage and undermine the real living wage campaign by giving their minimum wage the same label, especially when the Chancellor is giving once with one hand and taking twice back with the other?
The House of Commons Library has calculated the cumulative impact of the summer Budget on a single-earner couple with two children where the singer earner works 35 hours per week and earns the minimum wage. The Library’s independent analysis shows that a family in that situation will be £1,500 per annum worse off in 2016-17—the year all these changes will start to take effect—and more than £2,000 per annum worse off by 2020-21. How on earth can that be described as making work pay? The Government cannot reduce the deficit by waging a war on the backs of those who are least able to pay, and as the IMF has demonstrated, it makes little economic sense to do so.
I find it morally and socially reprehensible that these tax credit changes are being forced through by the Government without a mandate to do so. I hope that Ministers will look at this matter very carefully, and that compassionate Conservative Back Benchers will keep that in mind when the Division bell goes this evening, as they consider the full consequences of these shameful tax credit cuts.
Jeremy Quin (Horsham) (Con)
It is a pleasure to follow the hon. Member for Airdrie and Shotts (Neil Gray). He said that the tax credits change was not why the electorate voted Conservative. I am not quite certain how he knows that.
Jeremy Quin
I did indeed watch “Question Time” the other night. I sincerely hope that the reports in the press that the lady concerned had misunderstood her exact situation and will not be affected by these cuts is the case. I put it to the hon. Gentleman that Government Members have a better understanding of why people voted Conservative: they did so to sort out the mess of the past few years.
The Chancellor is right to continue the process of reform. As my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) said—this was echoed by my hon. Friend the Member for Spelthorne (Kwasi Kwarteng)—now is the optimal time to put forward sensible, necessary reforms: there is a strong economic backdrop, UK employment is at a record high and the economy is growing faster than anywhere else in Europe. These reforms are a package of measures that cannot be viewed in isolation.
Richard Graham (Gloucester) (Con)
My hon. Friend is quite right to mention that the changes are part of a package, which includes higher tax-free allowances, lower social housing rents and wage rises that are significantly higher than inflation. Does he agree that we still have not seen a full assessment of the impact of all those changes or of the tax credit changes in research by either Parliament or the IFS?
Jeremy Quin
I am grateful to my hon. Friend for drawing the House’s attention to the many factors that are mitigating the tax credit reforms, including the national living wage, the fuel escalator—my hon. Friend the Member for Croydon South (Chris Philp) referred to that—and the doubling of free childcare provision. As a colleague of mine on the Work and Pensions Committee, my hon. Friend the Member for Gloucester (Richard Graham) will be well aware that it is going to look at some of the detail of how the reforms may affect people. I look forward to engaging with him on that, as well as with the right hon. Member for Birkenhead (Frank Field) and others.
I recognise that there are concerns. However, I urge all hon. Members to remember that we are dealing not with a static environment, but with the most dynamic economy we have known for many years. The positive reforms that the Chancellor is making will have a pronounced ripple effect. Morrisons, Costa Coffee, Sainsbury’s and Ikea are among 200 firms that have already increased pay to meet the national living wage or move above it.
Jeremy Quin
I apologise, but I have given way twice and other people want to speak.
Those pay increases are only part of the story. The ripple effect will continue as those who are on the national living wage see others coming on to it and the pay differentials kick in.
Jeremy Quin
I have already given way to the SNP and will not do so again.
There is currently a 4% increase in wages against a flat inflationary background. The reforms, taken overall, will deliver for working people. We will continue to deliver a vibrant economy. The Government will ensure that this generation covers the debts that have been incurred, rather than endlessly passing the buck into the future.
Alex Cunningham (Stockton North) (Lab)
This morning on BBC Tees, I debated the issue of tax credits with a Conservative councillor who stood unsuccessfully at the general election. He used an expression that summed up the total lack of understanding among Government Members of how people can be in work but in need of some state support. He referred to people as being “exposed” to the process, as if it was some kind of risk. I understand that that expression might be used by a City person in relation to investments or by a chief executive about a project that his company plans to undertake. In both cases, I am sure that they would develop a plan to mitigate the risk of failure. The millions of people who will be affected by the tax credit cuts are not exposed to a risk that they have the power to mitigate. Rather, they are having cuts to their income imposed on them and there is little, if anything, that most of them can do about it.
Barbara Keeley
One group that will be hit is family carers who receive carer’s allowance and work 16 hours on the minimum wage to supplement their benefit of £62. There are 689,000 carers in that position. Carers UK says that all carers who claim carer’s allowance and working tax credit will lose out under the tax credit proposals. I know that my hon. Friend cares about these things, but it seems that Government Members do not.
Alex Cunningham
I am grateful to my hon. Friend for that intervention. She does tremendous work in respect of carers and I understand exactly what she is saying.
My hon. Friend will be interested in the case of my constituent Linda Harper, whose medical needs mean that she requires help and support in some areas of her life. Despite needing the unpaid care of her husband, who also has a job, Linda’s determination recently saw her battle against her condition to open her own craft store in the local town centre. Although the business does not yet turn a profit, she is succeeding in building a customer base and is contributing to the community by running classes, teaching others the skills of her craft and hosting social groups that add value to the lives of those who participate.
Linda represents the attitudes that the Conservative Government claim they want to promote. She is hard working, persevering and enterprising. Let us not forget that the Conservative manifesto at the general election promised to improve the lives of
“the millions who work hard, raise their families, care for those who need help, who do the right thing”.
Yet, when the Government’s changes come into effect, Linda estimates that she stands to lose £2,000 a year. Paying her mortgage and putting food on the table will become significantly harder and the viability of her businesses will be severely challenged.
The Government say that their demand for employers to pay people more and their tax cuts will help to restore the money that people lose from their tax credits. That is absolute nonsense. I put the following questions to the Minister. What will happen to public sector workers and self-employed people on low incomes? How can the employees of local authorities, health trusts and other public sector employers make up their income by increasing pay when the Government have said that they cannot give increases beyond 1%? How will a person who relies on tax credits and who earns less than £10,000 a year benefit from an increase in the tax threshold? How will a self-employed person with earnings of £6,000 a year give themselves a pay rise to fill the gap in their income caused by the loss of tax credits? How will a small business fulfil the Government’s promise of higher wages when it is already struggling to survive? The answers are simple: public sector workers will continue to see drastic cuts to their incomes and standard of living; self-employed individuals will be left to their own devices; and small businesses will pay people off because they cannot afford to keep them.
I am alarmed to hear that, despite the reservations of many Conservative Members, the Prime Minister and the Chancellor have no intention of halting these cuts. Perhaps the 70 or so Conservative Members whose majorities are smaller than the number of people in their constituencies who claim tax credits will have more to say about that in future. Several million people hope so.
Maria Caulfield (Lewes) (Con)
I am grateful to be able to speak on this difficult and contentious issue. It is important to consider all the arguments, including economic ones, for why these changes are necessary. Only last week we debated the charter for budget responsibility, and there was unanimous support among Conservative Members for running a surplus in normal times, so that if we again strike a period of economic slowdown, we will have money for our vital services. Many Labour Members acknowledged and agreed with that. We must tackle the country’s deficit and debt, and to achieve that we must reduce public spending.
Maria Caulfield
I will not. Tackling welfare spending is key to achieving that reduction, and we cannot tackle the country’s deficit and debt by leaving welfare spending as it is. The UK is currently home to 1% of the world’s population, yet it accounts for 7% of the world’s spending on welfare. That is clearly not sustainable. If we do not save £12 billion a year by reducing the welfare bill—including £4.3 billion from changes to tax credits—where will we find those savings? From the NHS budget? By cutting social care spending or reducing the education budget? Labour Members could not give one answer when asked how they would reduce the deficit. There is no easy answer—if there were, we would be doing it.
Currently, taxpayers—many of whom earn just above the tax credit limit—are subsidising employers who pay low wages, and that must end. It cannot be right that someone who gets up early, goes to work, works long hours and comes home late does not earn enough to do without welfare in the form of tax credits. Instead of fighting to preserve tax credits, perhaps Labour Members should fight harder to increase wages.
I dispute many of the figures that have been distributed by opponents of these changes. If we look at the facts and take into account all the changes in the recent Budget—including the increase in free childcare, the freezing of fuel duty, VAT and national insurance, the increase in tax thresholds, and the reduction in social housing rents—a typical family will be about £2,400 better off by 2020. As we have heard, pay is already up by 3% this year, and more than 200 firms have committed to paying the living wage. Having come from a poor background and struggled through hard economic times, I firmly believe that the way out of poverty is through work—
Imran Hussain (Bradford East) (Lab)
Time is short so I will focus on two areas: the effects of the changes to tax credits on my constituency, and the disproportionate effect of those changes on black and minority ethnic communities.
In my constituency these cuts will be devastating. Areas that are already impoverished and where many depend on tax credits will suffer far more than richer areas. Some 15,500 families in Bradford East receive tax credits, and 13,700 of those have children—four times as many as in the Chancellor’s seat. He does not understand the effect that these cuts will have, and he never will.
More than 5,000 families in Bradford East have three or more children. Bradford East already has above average unemployment and high levels of deprivation by any measure, and thousands of children live in families that are to be made significantly worse off. Families will have to make heart-breaking decisions about whether to pay the gas or electricity bill, or whether to buy food. Thousands of children living in families dependent on food banks; thousands of children being forced to live in ever-worsening poverty and despair—that is the reality of these proposals.
In terms of racial discrimination, the effects of the proposals are truly shocking. Government data show that tax credits constitute, on average, 2% of weekly household income for white households. That rises to 6% for black households and a further 10% for households of Pakistani or Bangladeshi heritage. These families are often already in poverty because of poor wages. According to Omar Khan, director of the Runnymede Trust, an independent think-tank focusing on race equality, these cuts
“Will inevitably increase racial inequalities and probably increase rates of child poverty”.
Will the Minister tell me what this will mean for my constituency, with its large Pakistani and Bangladeshi population? What will this mean for the local economy, where poverty and despair will be further fuelled? What will this mean for local businesses, for the local corner shop whose customers are being squeezed harder and harder? I have to ask myself: is it the Government’s intention to create ghettoes in our cities? The cumulative effects of the cuts will not only have a shocking impact on Bradford’s families from all backgrounds; it will have a devastating effect on our local economy. I cannot see what is fair about any of that, I cannot see what is northern powerhouse about any of that, and I certainly cannot see how we are all in it together.
Jeremy Lefroy (Stafford) (Con)
Many of those who have spoken, and indeed the Chancellor himself, are quite right to say that we have to view all the measures put forward as a package—not just the effects of the tax credit changes, but the many other measures that have been spoken about. I would like to make three points: on timing, predictability and the concept of scarcity.
On timing, the measures will come in at different times. It is vital that their timing should be synchronised. It is not there at the moment and I therefore ask that the timing of the introduction of the various changes to tax credits be looked at. I fully agree that we need reductions in the tax credit bills, but it is the timing that will bring great problems to many families.
On predictability, families want to know what their income is going to be. They want a reasonable measure of forewarning, so they can talk and negotiate with their employers, and plan their future. If their income is going to be reduced, they need time to do that.
Barbara Keeley
The hon. Gentleman is making a good point about timing. I raised a point earlier about carers. Carers who work 16 hours a week on the minimum wage will lose their tax credits. They cannot change that, they cannot plan for that and they cannot find any way out of that. What does the hon. Gentleman think about that in relation to the 689,000 carers?
Jeremy Lefroy
The hon. Lady must have read my notes, because I was going to come to that and say precisely that this is the other major issue. Those on fixed incomes do not have the ability to go out and work the two or three extra hours a week to cover the cost of the changes to tax credits. Full-time carers are not the only example, but they are the most obvious. I entirely agree with her.
Scarcity might seem a rather arcane concept to introduce, but studies have shown that for those who find sudden scarcity imposed on them economically, the costs are very great. The inflation rate for people on lower rates of pay is considerably higher than for those on higher rates of pay. If they suddenly receive a lower income—perhaps a cut of 10% or more—their costs will actually rise, because they will be unable to make the decisions to buy in bulk or in advance that they were otherwise able to make.
Finally, I am not one of those who does not want to eliminate the deficit. I absolutely do. If we have a change in timing—as I urge the Government to consider, including in relation to carers—we will need to find extra sources of revenue and we will have to take that on the chin. In particular, I have written to the Treasury to ask it to consider various income tax and corporation tax reliefs.
Clive Efford (Eltham) (Lab)
It is clear from what we have heard that the Government Benches are divided. We have heard from some Conservative Members that tax credits have failed—clearly they see this as unfinished business, so people on tax credits ought to fear there is more to come—but we have heard from others who are concerned about their constituents, and I would urge them not to ignore this opportunity to register their opposition to what their Front-Bench team are asking them to do.
This is about the choices we make and the priorities we have. We could reverse the inheritance or corporation tax cuts to reduce the impact on people on tax credits, or we could cut the nearly £2 billion that people earning more than £1 million will share in tax cuts. They will be £61,000 a year better off. People earning more than £2 million a year will be £250,000 a year better off. Come the next general election, they will have gained £1.25 million in tax cuts, but over the same period, a cleaner earning £13,500 will have lost £6,800, a patient transport driver on £17,800 will have lost more than £8,000, and a medical secretary on £22,200 will have lost £9,400. These people are strivers, they are hard workers, yet the Tory party is cutting their incomes. That is the choice people have made.
Several hon. Members rose—
Clive Efford
There is no mandate for this. The Tory party was asked before the general election, when it said it would cut £12 billion—
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. We can only have one Member on their feet at once. We cannot have the whole Chamber trying to get in at once.
Clive Efford
I am taking my time, Mr Deputy Speaker.
The Prime Minister and others were asked specifically, “Will you cut tax credits?”, and the answer was no.
Yasmin Qureshi (Bolton South East) (Lab)
I agree with everything my hon. Friend is saying. Does he agree that this cut is being imposed because the Conservative party, for ideological reasons, does not like poor or working people, and only wants to help and enrich the rich people?
Clive Efford
Absolutely.
If I were to accuse people of lying, Mr Deputy Speaker, you would rightly rule me out of order, but the people out there will have to make up their own minds. When the Justice Secretary went on to Martha Kearney’s programme, he was specifically asked what the Government would do on tax credits, and he said, “No, we’re going to freeze them for two years.” I do not know what the definition of a lie is, but I know that people outside the House will make up their own minds—although we cannot use that language in here.
We know the Conservatives have lost the argument. This started at the autumn statement when the Chancellor said, “Britain deserves a pay increase, and Britain is going to get a pay increase”, but Government Members did not know when they cheered him that he was going to cut tax credits and make people worse off. Even the increase in the national minimum wage—it is not a national living wage, it is a Tory living wage—will be wiped out for those on it by the cut to tax credits.
I say to those who are upset about these proposals: it is not good enough just to have a chat in private with the Chancellor or the Prime Minister. This is where they represent their constituents—here in the House of Commons—and if they do not agree with what their Front-Bench team are telling them to do, they should join us in the Lobby tonight to vote against what the Government are doing to people on tax credits.
Mr Alan Mak (Havant) (Con)
This is a Government on the side of hard-working people, elected with a mandate and a majority to transform our country from a high-welfare, high-tax, low-wage economy to a low-welfare, low-tax, high-wage economy. The reforms brought in and passed through this House must be viewed in the wider context of the summer Budget and the broader package of help for working people. Conservative Members believe the best route for working people is to let them keep more of the money they earn. All Members should welcome our new national living wage—a pay rise for 2.5 million people—while income tax, national insurance and VAT have been frozen.
Stephen Timms
The national living wage is being phased in over five years. Surely the tax credit cuts should be phased in over the same period, rather than taking huge ill effect next April.
Mr Mak
This is a national minimum wage that gives 2.5 million hard-working people a salary rise, which is the right approach. We have also increased the tax-free personal allowance and doubled free childcare for working people, while the fuel duty has been cut and council tax has been frozen as well. These reforms are all linked: they go hand in hand; they should not be seen or analysed in isolation. As many hon. Members have said, these are all part of a coherent, long-term economic plan, and it is simply not acceptable to deliver higher wages through the national living wage while at the same time leaving tax credits unreformed when they are such an important part of our reform package.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Will the hon. Gentleman give way?
Mr Mak
No.
The hard truth is that our tax credit system is unaffordable and unsustainable. It required deep reform to make it fair to the working people who pay for it. As I said to the shadow Chief Secretary, the original tax credit cost the Government £1.1 billion; today, it costs £30 billion. We spend more on family benefits than France, Germany and Sweden. Our reforms focus tax credits on the people they were meant to help—the very poorest and those in the lowest possible income brackets. In 2010, tax credits intended to support the lowest income brackets were instead available to nine out of 10 families; under our reformed and properly focused system, it is still available to five out of 10 families—a fairer and much more sustainable approach. These changes to tax credits are not necessarily easy, but they are fair and right. They return real-terms spending on the tax credit system to the level we had in 2007-08.
We must also consider these reforms in the wider economic context in which they sit. The deficit was halved over the last Parliament, but there is still more work to do. We need further savings in spending to make sure that Britain can live within its means. These tax credits go towards 50% of the total savings we are aiming for in this Parliament. They are substantial and important, and deserve our support. As many hon. Members have said, we must not leave our children and grandchildren with ever more debt. The only welfare system that is credible is a welfare system that is sustainable and affordable as part of our long-term plan to save our economy.
This Government can be proud of the fact that we have gone further than any other Government in introducing a living wage of £9 an hour. Some 2.5 million people will have a direct pay rise in their pay packets. At the same time, business has been incentivised to pay workers more. We have heard from the Exchequer Secretary how more than 200 businesses are already making these reforms.
Opposition Members opposed our welfare cap, and they opposed our fiscal charter—eventually. The only welfare system that is sustainable and credible is one that is affordable. We were elected on a mandate to transform our economy, and our reforms put that mantra into practice. I urge all Members to reject the Opposition motion.
Carolyn Harris (Swansea East) (Lab)
We have already heard from our hon. Friends and colleagues about the impact of these misguided cuts to tax credits. It is right that we repeat the figures—4 million families, 7.5 million children. That is the math of who will be affected by this policy, and we must never lose sight of that.
Clive Lewis
Has my hon. Friend any idea of the extra number of children who will be pushed into poverty because of this Government’s proposed work penalty?
Carolyn Harris
I shall mention it later in my speech, but I believe that there will be more than 200,000 by 2016, with the potential to rise to more than 600,000 with the culmination of the benefit and tax changes.
Both Barnardo’s and the Child Poverty Action Group believe that 3.2 million low-paid workers will lose, on average, £1,350 next year. Those being hit are the ones who are in work. This Government are forever telling us that work is the route out of poverty and that they will support those who do the right thing. Ministers tell us in the media, ad infinitum, that they will stand up for “hard-working families”. Well, they are not standing up for those families. According to the House of Commons Library’s analysis of the cuts, more than 580,000 of Britain’s poorest working families, earning between £3,850 and £6,420 a year, face losing 48p for every £1 that they earn as a result of the removal of tax credits.
I urge the Government to think again. It is not too late to do a turnaround. In fact, it would be the morally right thing to do.
Several hon. Members rose—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am going to introduce a two-minute limit, so that everyone will have a chance to speak.
Suella Fernandes (Fareham) (Con)
All of us who are here today share a belief in the welfare state. In a country like ours, it is right that we offer help to the most needy, and that there should be a safety net for those in difficult circumstances, but under the Labour Government the welfare system became immensely unfair in its discrepancies.
Today’s debate goes to the heart of who we are as a country and what we stand for as a people. It is about more than Treasury statistics: it is about real people. That is why I am proud to support these tax reforms as part of a package set out by the Chancellor. They are fundamentally the right thing to do if we are honour the true notions of what welfare is, and what it is to work.
I want to look back at history—
Ian Blackford
Would the hon. Lady like to comment on what was said this afternoon by the Adam Smith Institute, whose views are often quoted by the Conservative Government? It said that
“working tax credits are the best form of welfare we have, and cutting them would be a huge mistake”.
Suella Fernandes
I disagree with that comment, assuming that it has been rightly attributed. I believe that tax credits have distorted the very notion of what welfare was supposed to be. Let us look back to welfare’s genesis in the Beveridge report, which was published 73 years ago, in 1942. Opposition Members tend to claim a monopoly on William Beveridge, but he was not the socialist Robin Hood whom they so often cite. He was an economist, versed in the principles of contribution and industry, and his principles were very clear. They were about taking responsibility, alongside the state’s establishment of a “national minimum”. They were about ensuring that the most vulnerable were looked after, while also ensuring that the nation remained fiscally viable. We have drifted away from that concept of welfare—that it should provide occasional and temporary support for those in unemployment, sickness and retirement. We now have a system whereby the state is subsidising low pay, and that cannot be right. This Government are introducing reforms, and restoring the principle that welfare should be the safety net that it was intended to be.
I want to make three main points. First, the tax credit system has allowed business to act in a way that is both unpalatable and bad for the economy, facilitating the underpayment of workers and sanctioning chronic under-training and under-investment in those workers. If a business knows that low wages will be topped up by the state, what is the point in investing in them, providing extra training and more scales and promotion? The business people I meet in my constituency are crying out for more skilled work forces. Secondly, the deployment of the tax credit system was chronically dysfunctional, and very confusing for many people. Lastly, the Conservative party is nothing without social justice. This measure will restore social justice to the heart of our economic principles, and I commend it wholeheartedly to the House.
Peter Kyle (Hove) (Lab)
I want to make three points in the time that I have. First, I want to explain why Labour used tax credits to start with.
It is extraordinary for Labour Members to hear the party that opposed the minimum wage say that we are not supporting the living wage. If, when we implemented the minimum wage, the Conservatives had been fighting on the other side and said that we were not doing enough and it was not high enough, the dynamic of the argument about poverty in work would have been completely and fundamentally different. Every single measure that the Labour party tried to implement to tackle in-work poverty was opposed by Conservative Members. We implemented the minimum wage, and in the first 10 years of the Labour Government the bottom 20% got richer faster than the top 20%. We lifted 1 million children out of poverty, but the Resolution Foundation has said today another 200,000 will be plunged back in as a direct result of the Chancellor’s Budget.
Secondly, Government Members have been pointing at Opposition Members today and saying that we do not support the aspiration to replace tax credits with wages. That is fundamentally wrong, as my hon. Friend the Member for Streatham (Mr Umunna), my right hon. Friend the Member for Birkenhead (Frank Field) and many others have proved. It is the right thing to do, but the Government are implementing it in the wrong way.
Thirdly, this change will have a fundamental negative impact on vulnerable people and on communities. Each of us has people in our constituencies who turn to us in their hour of need with problems with tax credits. We know how vulnerable they are and the Government’s policy will do nothing more than make poor people vulnerable people. It is wrong.
Huw Merriman (Bexhill and Battle) (Con)
I have the greatest concern for anyone who loses out and finds that these measures have an impact on their household budget. I came into this place not to reduce incomes but to see them increase. However, in making good our manifesto commitment, savings in Government spending were always going to have to be made, with a proportion of our population unfortunately being affected by the need to make them.
Ultimately, I feel that it is right to introduce this measure to reduce tax credits for the following reasons. First, it moves the country away from a position in which Government and taxpayers subsidise the wage bills of employers, acting as a disincentive to pay rises. Secondly, as a cost-saving measure it moves the country to a position where the books are balanced and we can reduce the interest bill on Government debt.
Huw Merriman
I will not give way just now.
In 1998, the amount spent by the Labour Government on tax credits was £6 billion. That figure rocketed to £30 billion by 2010. Three of our largest supermarket chains have employees who claim tax credits to the tune of almost £800 million. I contend that it is not for Government or taxpayers as a whole to contribute a portion of pay, but for employers to pay staff all their wages and to pay them properly. Of course, the Government can and should act to incentivise pay—by reducing tax for the employer and employee and not by paying a contribution to the wage packet.
As for balancing the books, last week the House debated the motion for fiscal responsibility and as a result the Government have pledged to deliver a surplus by 2020 and through normal times. This measure is essential to meet that task. I recognise that we need to help those the measure will impact on and I am glad that the Government are doing so in a number of ways, which I shall not repeat. I recognise that these measures do not mitigate the cost of the tax credit changes in full. If they did, the reduction in Government spending would not be delivered, the surplus would remain out of reach and the Government interest bill would continue to be wasted.
Jess Phillips (Birmingham, Yardley) (Lab)
I rise to beg Members on the Government Benches to think very hard about how they vote tonight. When I say that I am begging, I mean it. I am begging for 24,000 children in Birmingham, Yardley who will be hit by this change. By way of comparison, I did a quick search on Rightmove this lunchtime and found that from the hundreds and hundreds of homes available for sale in my constituency only four would benefit from the inheritance tax cut—just four. That means four people winning and 24,000 children losing, and the four people winning have to be dead before they win, so they are not very thankful. This is supposed to be a one nation Government. One nation? For the people in Birmingham, Yardley it looks like the people on the Government Benches are only looking after the same old people.
I feel the need to declare that my name is Jess and I relied on benefits. When I was 23, after the birth of my first baby 10 years ago, my husband and I received child tax credits. Our household income was £19,000. Without tax credits, I would never have been able to afford the childcare for my young son. The top-up meant that I could do small bits of paid and voluntary work and the tax credits helped me to go to work and begin to build a career.
I have heard all the well-rehearsed arguments from Government Members about how they are increasing wages and I welcome those increases, I really do, but in my case that would have made no difference because I was 23 and they are not offering a pay rise to anyone under 25. If the Government wish to brand the increases in minimum wage as a living wage, they must also accept that those who do not receive it cannot afford to live. That is the simple problem with that branding. So, will the Government ensure that any parent aged 25 and under is not affected by these changes, or are they willing to tell me that those families in their constituencies do not deserve to be able to live?
Antoinette Sandbach (Eddisbury) (Con)
One of the things my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) did not mention was the income tax threshold when tax credits were introduced. Low earners who were earning just above £4,615 would have paid 20% tax on that income. I have heard the pleas from Opposition Members about allowing wages to increase before these tax credit changes take effect, but the changes in the personal tax allowance between 2003 and now mean that there is, in effect, an extra £1,197 in a family’s pocket if they earn up to the income tax threshold. That is the difference between paying tax on £4,615 as opposed to the current level of £10,000. That benefit cuts across all low earners. The important statistic that has not been quoted from the Library research is that between 58% and 64% of adults earning near the minimum wage do not receive tax credits or benefits, yet those earners, who very often are women, do receive the benefit of not paying that 20% on their income because of the rise in the income tax threshold.
My right hon. and learned Friend also described the introduction of the system and the complicated overpayments. I was a single parent when those changes were introduced. I did not claim because I spent my working days sorting out the debts of people who were claiming and who had built up huge arrears with Her Majesty’s Revenue and Customs.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
I want to spend the short time I have focusing on the disproportionate effect these tax credit cuts will have on the black and minority ethnic communities. Some 88% of these communities are based in the poorest boroughs in the country. They tend to have larger families and these families are often sustained by people who have part-time jobs. Fresh from my Royal Statistical Society training this morning, let me give some statistics that are staggering. A recent survey found that 5% of white men had part-time jobs, as opposed to 12% of black African men and 35% of men of Bangladeshi origin. When this lifeline is taken away from these communities, racial inequality in our society will widen. When the Government talk about looking after families, they are not talking about looking after families from the BME communities.
We must also look at these cuts in context. We cannot view them in isolation. Hampstead and Kilburn has a housing bubble and rents are soaring higher than ever. If we couple that with taking away tax credits from people who are working, we have to ask how people will survive. Six out of 10 of my constituents are paying £288 a week for a studio flat. Are we allowing the ethnic cleansing of London? Don’t take these credits away. Join us in voting against these cuts; whether it is the Mayor of London, “ConservativeHome”, or The Sun, we must oppose these draconian measures.
Wes Streeting (Ilford North) (Lab)
I rise to speak on behalf of the 12,800 working families and the 26,000 children across Ilford who will be affected by these cuts, and I issue the following challenge to Conservative Members. This evening’s vote is crucial for a simple reason: their Whips are busy in the other place telling peers they are railing against the democratic will of this House of Commons, but when we listen to the fantastic and courageous speech of the hon. Member for South Cambridgeshire (Heidi Allen) and see the nods of many of her colleagues, we know that the majority of Members in this House do not support these changes. Peers are absolutely within their rights to put a stop to them in the House of Lords, and we expect nothing less. What a terrible indictment it is of this Chamber that it is the unelected House that is standing up for the interests of ordinary working families up and down this country! What happened to the party of the workers? What happened to the Tories’ failed modernisation project? It is already dead in the water. This is a Prime Minister who speaks from the centre but is a prisoner of the right.
When we have a grand coalition ranging from The Sun newspaper to my good friend the cycling socialist Owen Jones telling us that this is a work penalty that will hit the people who work hard, who get up early and who strive to earn every penny they can, we know there is a problem. This is not a benefit; it is a well-targeted tax rebate. It works better than what the Government are doing with the tax threshold, because that benefits the wealthiest. Tax credits target support effectively to the people who are doing exactly what we ask them to do: they are willing to work hard for low pay and they play by the rules. The least we can do is support them.
This is a terrible measure. It is a shameful measure, and Conservative Members know it. I ask them to show the courage that the hon. Member for South Cambridgeshire (Heidi Allen) showed, not only on the Floor of the House but in the voting Lobby this evening, because it is crucial that Members of the unelected House know that they have a majority of elected Members on their side and on the side of low-paid working people in Britain.
Helen Goodman (Bishop Auckland) (Lab)
I am delighted to follow my hon. Friend the Member for Ilford North (Wes Streeting). Once again, we have a Budget from this Chancellor that was very shiny on the day he presented it but that is unravelling under closer inspection. The Treasury Select Committee took evidence on a number of the issues that people have raised today, and I want to tell colleagues on both sides of the House what we found. First, on work incentives, which Conservative Members have made much of in the debate, the taper has moved from 41p to 48p, but the effective marginal tax rate for a lone parent will increase to 93%. That means that for every extra pound she earns, she will take home only 7p. Compare that with the banker who will take home 60p in every pound.
The second problem relates to the interaction between the tax credits and the minimum wage. Many hon. Members have spoken about the sequencing. The national minimum wage gains will not, in the main, go to the tax credit losers. Half the cash gains from the national minimum wage will go to people in the top half of the income distribution. Sir Stephen Nickell from the independent Office for Budget Responsibility told the Select Committee:
“It has been known for ages that the proportion of people in receipt of minimum wage who live in poor households is very small. It used to be 14%...In other words, minimum wage as a method of relieving poverty is completely hopeless because most people on the minimum wage do not live in poor households.”
I urge Conservative Members to look at the evidence and to think again.
Melanie Onn (Great Grimsby) (Lab)
I congratulate the hon. Member for South Cambridgeshire (Heidi Allen) on her excellent maiden speech.
Prices have risen faster than wages during the vast majority of this Government’s time in office. Working people in Grimsby have seen their earnings fall by more than £2,700 since 2010. Today, one in three of my constituents earn less than the real living wage of £7.85 an hour. Grimsby desperately needs a pay rise, but what this Government are doing instead is cutting people’s incomes by at least another £1,300 a year. People simply cannot cope with a further reduction in their incomes.
The Government say that people simply need to work harder for a few more hours a week in order not to lose out, but for many, that is completely unrealistic. Many people in my constituency do not have that option; some are already working two or three jobs just to make up the hours. Conservative Members were given a mandate by their constituents based on their party’s manifesto and on what the Prime Minister said during the election campaign. They do not have a mandate to cut tax credits; in fact, they have a mandate not to cut them. What does it say about the regard in which Conservative Members hold the voters of this country if, just five months later, they walk through the Lobby and do precisely the opposite of what the Prime Minister promised?
The irony is that I agree with what Ministers have been saying: we do need a higher-wage economy, with less being paid out in welfare as a result. We need to support and help to grow the industries of the future, but the Government are doing the opposite. Three of the UK’s solar energy companies have entered administration in the past two weeks, the green deal has been scrapped and investor confidence in the wind energy sector is drying up. The Government have failed to make any real attempt to save the thousands of jobs being lost in the steel industry. That shows what is actually developing under the Conservatives: an economy in which more and more jobs pay less than the real living wage.
Patricia Gibson (North Ayrshire and Arran) (SNP)
As has been pointed out, this measure is very much part of the overall narrative of this Government. They have enthusiastically embraced both austerity measures that harm the poorest and the most vulnerable households in our constituencies while giving tax breaks to the better-off, and a series of ideological measures that can only increase inequality.
Scottish National party Members believe in progressive taxation, but these changes are not progressive. They are regressive, taking proportionately more from lower-income households than from rich ones. These changes will significantly reduce the incomes of more than 200,000 households in Scotland—that is 200,000 households where choices have to be made between eating and heating, and where families have to decide whether they will have to go to the food bank again this week. If the Government want to make cuts, I suggest they are made to the £100 billion being spent on Trident. If the Government want to make cuts, I suggest they do not increase tax breaks in respect of inheritance tax thresholds.
As the youngest of eight children to a widowed mother, I grew up in deep poverty—I know what it is like. I know what it does to aspiration and to motivation, and I know how corrosive it can be to every area of life. I suspect that if more Government Members had lived the life that I have lived, they would not be supporting this measure tonight. I do not want any child in Scotland to grow up in more poverty than they are already in. I do not want any child in the UK growing up in poverty. Far from the mantra of “making work pay”, this measure punishes the working poor. I ask the Government to consider the impact of this measure on our poorest families; they should consider the impact on our households and on our most vulnerable children. Anyone who truly believes in a fairer society must reject this measure. Anyone who supports this measure tonight should hang their head in shame.
Mark Durkan (Foyle) (SDLP)
This measure is not just a penalty against work; it is also a penalty against parenthood. Clearly there is a divergence of view in this House. Conservative Members have a view about how policy should support family and children that is at complete variance with mine. We heard from the Chancellor on the day of the Budget that
“we on the Conservative Benches know that the wish to pass something on to your children is about the most basic, human and natural aspiration there is.”—[Official Report, 8 July 2015; Vol. 598, c. 330.]
Feeding children is an even more basic aspiration than that, as is nurturing children and giving them warmth when they need it. We are talking about somebody being able to aspire to work to bring home food to their children and support to their family. These are the people who are going to be hit by the measures the Conservatives are introducing, because it is the people working very hard and trying to do the best by their children and for their neighbours who will be betrayed by this measure.
I do not accept the nonsense we heard from Conservative Members, with some exceptions, who were more or less trying to tell us that low-paid workers should now be the acceptable casualties of a dogmatic imperative of austerity —they should not. Nor do I accept the somewhere-over-the-rainbow nonsense that some Conservative Members were giving us that, “It is all going to work out well. It will go so swimmingly and people are going to be so much better off when they see what they are going to get.” Clearly the way these measures have been brought forward will mean that people are going to suffer in the meantime. People will also lose jobs as well as lose income, because some of us are hearing from employers in some sectors that they will not be able to give the pay increases without doing damage to the payroll that they currently have.
Conservative Members need to realise that labels they put on this and all the clichés they come up with are not going to give buying power to the money they are leaving people with. Clichés will not be hard currency to support families who are being driven into poverty.
Louise Haigh (Sheffield, Heeley) (Lab)
It has been astonishing to hear Conservative Members stick to their desperate defence of their indefensible policy of slashing tax credits for millions of families when they know that they are neither economically justifiable, nor socially defensible. These cuts are just one more example of the Government’s policy of moving public debt, which originated in the financial sector, off their books and on to the lowest-paid and middle earners, who simply cannot afford it. Rather than moving away from an economy based on debt, which the Chancellor said that he wanted to do, he has in fact created one.
Unlike this Government, I believe that economic common sense and social solidarity not only go hand in hand, but are the bedrock of a healthy and functioning society. We cannot have a healthy functioning economy if our fiscal policy is to transfer debt from the public purse on to the unemployed, the lowest paid and middle income individuals and families, and if secured debt becomes unsecured and unaffordable. The Chancellor should know where that leads because the Governor of the Bank of England has spelled it out for him.
Over the summer, Mark Carney warned that household debt was one reason why the recession was deep and the recovery so grudging. If enough people are highly indebted, that can have big macroeconomic impacts, so that lending standards become irresponsible to reckless. Those are some of the same risk factors that led to the global credit crunch in 2007. The structural flaws remain, but we now have one very clear difference. We have a Chancellor who is exacerbating the structural flaws by heaping public debt on to the low paid, and who acts without regard to the personal economic nightmare he is visiting on the homes of working families. That is why the Labour party is so fundamentally opposed to these measures.
An inclusive and healthy economy cannot be built while we are hurting working people. It can only be built by investing in them and supporting them. Our party believes in that to our soul, so while the Tory party spends millions on branding itself as the party of working people, those working people who have been let down by the Prime Minister will know that the Labour party is working for them.
Barbara Keeley (Worsley and Eccles South) (Lab)
In my constituency, there are around 8,000 families with children claiming tax credits, 5,000 working families, and almost 10,000 children. We know from the Library briefing that they will lose more than £100 a month, but some families will lose more. One of my constituents, a mother with a disabled child, has worked out that her family will lose £200 a month from the tax credit cuts. Instead of just sitting there, perhaps Government Members can tell me how, if they back these changes, such families will manage? I do not think that they will manage. Another constituent, a single mother, told me that she uses tax credits to pay for school uniform, food and travel expenses. Those are the things that will suffer.
Earlier, I mentioned the impact that these tax credit cuts will have on the incomes of many thousands of unpaid carers who juggle care and work, particularly those who claim carer’s allowance and working tax credits. Carers UK told me that all carers who are claiming carer’s allowance and working tax credits will lose under the current proposals, even taking into account the introduction of the so-called national living wage.
Tax credit cuts will make it more difficult for working carers to balance work and care and that will hit their standard of living. They do not deserve that. Last week the Minister for Community and Social Care told me that he did not think that carers’ invaluable contribution to society had ever been better recognised. Is that hit to the income and living standard of working carers what he means by recognition? I hope the Minister will tell us when he responds what consideration the Government will now give to protecting working carers on low incomes from these unfair, savage tax credit cuts. Those cuts will hit families with disabled children. They will hit carers and millions of working people. I urge Government Members, the few who have managed to stay for this debate, to rethink this deeply unfair policy change.
Hywel Williams (Arfon) (PC)
When tax credits were first brought in, people were often overpaid. They would then receive a demand for an end-of-year repayment. I fought many of those cases, but Her Majesty’s Revenue and Customs would engineer the perfect excuse. Deep in its standard letter demanding repayments was this astonishing sentence:
“Even though we told you that your assessment was correct, it was not reasonable for you to believe it.”
That is how I view the Chancellor’s proposals—even though he tells me that there will not be any problems, it is not reasonable for me to believe him.
I have no problem in principle with removing low wage subsidies so long as we ensure a decent living wage; family support to make up for the variation in income when people have families of different sizes; proper affordable childcare provision available universally, particularly in deprived and rural areas, which are currently very poorly served; and support for small businesses to enable them to earn and to pay a living wage.
When tax credits were introduced, I asked the then Labour Treasury Minister what pilots had been carried out. Essentially, she said that none had been carried out. I fear that we are in that same position with these proposals. We know what happened then: chaos, over- payments, underpayments, misery to families and the damage to the Government’s reputation. The impact of these changes has not been thoroughly assessed, and I fear that we will all regret that at our leisure.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
I know that this Government and this Chancellor in particular are fond of political cross-dressing, but robbing 6,500 children in 3,500 hard-working families in my constituency of £1,300 a year makes a mockery of all that—and that is in an affluent west London suburban constituency where the average property price is over £500,000. The Prime Minister pledged during the election campaign not to cut tax credits, but the fact that he is doing this only months after the election is not just a concern to the Opposition; it brings politics into disrepute.
We have heard about the so-called compensation that will come from the national living wage. It is not a living wage, and it is compensation for only 26% of people. Politicians like to go on about hard choices, but this is about whether to penalise people who are doing right and playing by the rules, or to give a tax cut to the 60,000 wealthiest estates at the expense of 200,000 working families. Some 6,500 families in Ealing Central and Acton are a chunk of 3 million families across the country. The fact that the notices informing them of the changes will arrive just before Christmas is deeply immoral. It shows the Scrooge-like attitude of this Government.
I have had dozens of emails about the cuts, both around the time of the emergency, that is the crisis, budget and now. I urge Members in suburban London seats like mine—the Comptroller of Her Majesty's Household, the hon. Member for Croydon Central (Gavin Barwell), the hon. Member for Harrow East (Bob Blackman), the right hon. Member for Carshalton and Wallington (Tom Brake), whom I can see, and the hon. Member for Twickenham (Dr Mathias), constituencies where those affected by the change outweigh the majority that those Members have—to join us in the Lobby tonight.
Peter Dowd (Bootle) (Lab)
The 2015 Conservative manifesto promised to improve the lives of the millions
“who work hard, raise their families, care for those who need help, who do the right thing”.
The tax credit changes will do exactly the opposite and instead penalise them heavily. There is no hiding from that. This is not the right thing. Why do the Government not accuse all people on tax credits of being feckless? That is what they really think. They do not bother even to make an artificial distinction between the deserving and undeserving poor. They do not care. If people are poor, deserving or otherwise, they do not care.
From what I can see, that is what those on the Government Benches think. They want urgent action to tackle the burden of tax credit expenditure, but take a mañana approach to tackling the issue of low pay. Some Conservative Members have expressed concern, but that is as far as it goes. Hand wringing, tutting, head shaking—conscience salved. But Conservative Members will be reminded time and again of their support for these proposals. It might get a bit tedious, but so be it.
The Chancellor says the changes are fair, so let me give a few facts. Facts can be stubborn. First, during this Parliament cumulative income loss will be between £6,000 and £9,500. Secondly, 3.2 million hard-working families will be hit. Thirdly, the changes will mean less pay, with some low income families keeping just 3p of every extra pound. Fourthly, child poverty will increase. Fifthly, the cuts are not compensated by other changes and have not been impact assessed. This is dreadful and the Government should think again.
Marie Rimmer (St Helens South and Whiston) (Lab)
Hon. Members should be aware that it is a disgraceful, shameful example of very poor governance when a Government attempt to cut £4.4 billion from the poorest people in society by a statutory instrument. It has taken the Opposition to call for this debate and to ask for the reversal of this decision.
Areas of my constituency have been recorded as suffering from the highest levels of employment deprivation and the sixth highest income deprivation affecting children in England. My constituency has some 7,900 families with children claiming tax credits, and many are unemployed. Some 5,800 working families claim tax credits. Many of those are on the minimum wage, with two parents working and two children. They are set to lose more than £1,800 next year and £7,700 over the life of this Parliament.
Other families with one earner will lose more than £1,500 a year, or more than £7,000 over the life of this Parliament. Some 4,800 working families with children in my constituency claim tax credits, and 8,300 children in those working families benefit as a result. Many of the schools in my constituency have been forced to introduce free breakfast provision, with hundreds of children taking it up. They have done so to improve levels of concentration and learning. If our children are to get out of poverty, they need to be educated, but first they need full stomachs.
I call on Conservative Members to examine their consciences and not to involve themselves in this further attack on the poorest people in society.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
I have some basic points to make, because so much has already been said in this debate. Constituents of mine have urged me to speak today because of the poverty they are now experiencing. They are having to go to food banks in order to feed their children, and they feel ashamed about that. They are working extremely hard to make ends meet every day, working for every penny, yet they feel that they are being punished by this Government.
I urge Conservative Members please to consider the impact that these changes will have on hard-working families, those that the Government say they are responsive to and care about. That is absolutely imperative, not just for my constituents but for people across the UK. These tax credit cuts are unfair to hard-working families in Scotland and across the UK. I urge Conservative Members to listen to everybody’s views tonight, take account of their constituents, who I am sure are hurting just as much as ours, and pay attention when we speak about these crucial issues that our constituents are informing us about.
We really must take account of those who are trying their hardest to get on that first rung of life and to protect their families and those nearest and dearest. I therefore urge the Government to vote against this measure by supporting the motion and ensure that the most vulnerable in our society, including the disabled, are protected.
Owen Smith (Pontypridd) (Lab)
We have heard from more than 50 Members in this extraordinary debate, which I think is a measure of how vital it has been, and how much we need to understand properly the full impact of the changes that the Government are proposing. Running through so many of the speeches has been the message that politics is always about choices: what are we going to prioritise; who are we going to stand up for; and what, as the hon. Member for South Cambridgeshire (Heidi Allen) said in her brave and heartfelt speech, do we stand for? This debate has laid bare those fundamental choices.
The simple question that the Government must face tonight, and the simple question that will be asked right across Britain, is this: is the Conservative party what it says it is? Is it a party for the workers, with the interests of the workers at its heart, or is it a party that has its own self-interest at its heart and that is set tonight to dock the pay of workers across Britain? It cannot be both—even this most Janus-faced of Governments cannot turn both ways at once. It cannot be the party of workers while cutting workers’ pay. Each Conservative Member will need to answer for how they vote this evening, because there is no plausible defence for a policy that will take, on average, £1,300 from the pockets of working families, and with 70% of the losses falling on working mothers. It is a Tory tax on workers, and a Tory tax on working mums.
How do the Government justify that? As we have heard from successive speakers today, they say that the tax credits bill has gone up and that it has to be cut. Well, it has gone up on the Tories’ watch. They say that the minimum wage increase will compensate, but let us have none of this nonsense about a bogus living wage.
The Chief Secretary to the Treasury (Greg Hands)
Let me tell the hon. Gentleman that under the previous Labour Government the tax credit bill went up from £10 billion to some £30 billion and is now down to £25 billion, so I am afraid that it has not gone up on our watch. [Interruption.]
Owen Smith
I have heard this several times over the past few weeks—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I presume that Conservative Members would want to hear their own Front Bencher, and I am sure that the rest of us would like to hear the Labour Front Bencher now.
Owen Smith
I am grateful to you, Mr Deputy Speaker.
I have heard this nonsense from the Government several times; I heard it from the Exchequer Secretary earlier today. The truth is that when this variation of tax and child credits came in in 2003-04, the original bill was £19 billion. It went up to about £23 billion under Labour, and then in 2009, after the crash, it went up to £29 billion. Under the Chief Secretary’s Government, it has been £30 billion each year, so the largest bill we have paid for tax credits has been under the Tories. Why is that? It is because the low-welfare, low-tax, high-wage economy that he talks about is a myth—the Tories have failed to deliver it. Instead, we have a tax credit system that is a vital lifeline for working people on low and middle incomes who have relied on it to make ends meet over the past few years and still rely on it. The Tories will be pulling the rug out from under those people if they persist with this policy tonight. They know that none of the measures they have talked about—the personal income tax rise or the childcare provision—will offset the vast losses we have seen. It is an absolute con, just as it was a con from the Prime Minister when he told the country that he was not going to cut any tax credits.
I would like to be able to point to a Government impact assessment that would tell us the truth of this, but it is so thin it is barely worth mentioning. It is about as useful and reliable as a Volkswagen engine test. However, we have not needed an assessment because we have had one from the Chief Secretary’s own Back Benchers. Successive Back Benchers have stood up today and offered their view—their impact assessment—of what this Government are going to do to our constituents, and to Conservative constituents, across this country. I referred earlier to the hon. Member for South Cambridgeshire (Heidi Allen), who made a scintillating speech. I will quote a few words for the delectation of the Chief Secretary. She said that these measures were “betraying who we are”—that is, who the Conservatives are. She said that they would lead to working people having to choose between heating and eating.
The hon. Member for Plymouth, Moor View (Johnny Mercer) gave another excellent speech in which he said that his blue-collar city opposes these reforms. He pleaded with his Front Benchers, as a compassionate Conservative, to think again. The hon. Member for Stafford (Jeremy Lefroy) talked about the impact we would see on carers and on people on low incomes. The hon. Member for Waveney (Peter Aldous) said that as a one-nation Conservative he could not support these reforms without significant mitigation. We heard interventions from the hon. Members for Gainsborough (Sir Edward Leigh) and for Brigg and Goole (Andrew Percy). Those are just some of the Conservative Members who are opposed to these measures.
Greg Hands
The hon. Gentleman has not mentioned the right hon. Member for Birkenhead (Frank Field), the Chairman of the Select Committee, who called on his own hon. Friends to take more action on the £4.4 billion savings gap that has arisen as a result of Labour deciding that it is against these reforms.
Owen Smith
Let me start with that number of 4.4 billion, because about 4.4 thousand of the Chief Secretary’s constituents will be hit by these changes. The real question he should be answering is what he says to his constituents about the cut they are going to have. He mentions my right hon. Friend the Member for Birkenhead (Frank Field), who of course spoke with great eloquence and knowledge. The crucial thing he said was, “Think again. Mitigate these measures. Understand that your mitigation measures are not going to work or offset the losses.”
Frank Field
What I said in my speech was that I hoped we would soon be able to debate a motion of the House, and that is what will happen when we have a full day’s debate on Thursday week. I also said that that is when we should make proposals for how to pay for it. I did not say we should do that in today’s debate.
Owen Smith
I am grateful to my right hon. Friend for his eloquent intervention. He reports accurately his own words, even if the Chief Secretary did not.
Let me be clear: tonight’s vote may not be a binding vote, but it does allow Members on both sides of the House to send a message to Conservative Front Benchers. These measures are a tax on working people.
The Government say that the national minimum wage increase, welcome though it is, will offset the changes, but it will not for a cleaner who is on £13,500, who will lose £7,000 over the term of this Parliament, or for a secretary with two children who is on £22,000, who will lose £9,500. Those are not small sums of money; for those people on low and middle incomes, they are enormous sums of money. It ill becomes the Government to dismiss, with the stroke of a pen, the concerns not only of their own Back Benchers, but of this country’s ordinary working people.
Too many Labour Members—far too many for me to list them all—have spoken today with great passion and conviction about their knowledge of their constituencies, the contents of their postbags and how the proposal will affect their people. The Government should read their speeches and listen carefully to the views of Members.
It is not just the Opposition who oppose the proposal. The Mayor of London—the hon. Member for Uxbridge and South Ruislip (Boris Johnson)—and the bloke who is going to fail to succeed him on behalf of the Tories are both opposed to it. For heaven’s sake, even the Bow Group—I thought it had disappeared in 1980, before the right hon. and learned Member for Rushcliffe (Mr Clarke) was Chancellor of the Exchequer—says that the proposal represents a crisis for entrepreneurial Britain and that it will hit the self-employed. The Adam Smith Institute, the Murdoch press and, from what I have seen, most Tory Back Benchers are also opposed to it.
I urge the Government to think again; to look to their conscience and understand the damage they are going to do to the working people of this country; and to please vote with us tonight and offer some solutions in the forthcoming autumn statement.
The Chief Secretary to the Treasury (Greg Hands)
We have had a heated debate, with a great deal of misinformation from Opposition Members. Time is very short.
There are two principal reasons for reforming tax credits. First, they no longer meet the objectives for which they were originally designed. Secondly, they are unaffordable at their present level.
Greg Hands
I will not be giving way for a while.
Tax credits were introduced to help those on the very lowest incomes—a noble aim and one that we support—but the system spiralled out of control. Spending on tax credits more than trebled in real terms under Labour. By 2010, nine in 10 families with children, including MPs, were eligible for tax credits. Even now, the figure is six in 10, and the latest reforms will bring it down to five in 10.
It is not even as if Labour’s spending worked: following the introduction of tax credits, in-work poverty rose by some 20%. Members need not take just my word for that; I am going to quote in detail Alistair Darling, who has been referred to this evening and who was one of my predecessors as Chief Secretary at a time when the modern tax credit system was being planned. He was interviewed this summer for an article in The Spectator entitled, “Alistair Darling: why I changed my mind on tax credits”. Crucially, it appeared after the summer Budget introduced by the Chancellor. The Spectator asked him:
“So your tax credits had the unintended consequence of keeping low wages down?”
“Undoubtedly,” replied Darling. The last Labour Chancellor said:
“Well, undoubtedly… I think it was a good policy when it was introduced”.
He went on:
“As Keynes famously said: when the facts change, you change your mind.”
Owen Smith
I am really enjoying the Chief Secretary reading excerpts from The Spectator, but will he answer the fundamental question? Will he confirm that 3 million people in this country will be £1,300 on average worse off as a result of these changes? Let us not hear about the past; he should tell us about the future.
Greg Hands
I can confirm that we have got down the cost per household of the budget deficit from about £6,000 per household per annum to about £3,500 per household per annum. Those sort of figures show what reforms we are introducing.
Greg Hands
I will not give way at the moment.
Alistair Darling went on:
“One of the unintended consequences is that we are now subsidising lower wages in a way that was never intended.”
Like us, he was not calling for the end of tax credits. He made it clear:
“That is not an argument for scrapping tax credits, it is an argument for making sure that you adjust the system. And it’s also an argument for making sure that we do our level best to drive up those levels of wages”.
We recognise that as well.
The second reason is that the deficit the Government inherited in 2010 was equivalent to about £6,000 for every household in the country. That was being added to the national debt every year. It is now down to £3,300 per annum. Then, we were borrowing £1 for every £4 we spent. We have got that down to £1 for every £10. The world was beginning to doubt our ability to pay our way.
Greg Hands
I will not give way.
This Government’s mandate is to get our spending down, run a surplus and get our national debt down, and these reforms are a crucial part of that. That is what we were elected to do, and that is what the House agreed just last week. In particular, our general election mandate is to make reforms to reduce the welfare bill by £12 billion.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I am struggling to hear the Minister. I wish to hear what the Minister has to say. Has the Minister given way?
Greg Hands
No, I am not giving way. I have just said I was not giving way. [Interruption.] I gave way to the hon. Gentleman as well.
Our reforms to tax credits will account for £4.4 billion in the next financial year. This is the key question for the Opposition, which they have ducked during the last five hours of debate: if they do not want to reform tax credits, where will that money come from? Will they borrow more and saddle our children with still higher debt, or will they cut other services, such as schools or the NHS? I ask the Opposition: what would they do?
Greg Hands
I am not going to give way. I thank my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), who told us:
“This is the time to do it”.
Greg Hands
I thank my colleagues from across the country for their thoughtful speeches.
In conclusion, the reforms must be considered as part of a package—the tax credit reforms, the big rise in the personal allowance and a £9 an hour national living wage by the end of this Parliament. The changes we are putting in place will deliver a new settlement for working people, one where they keep more of the money they have earned, where work pays and where employers pay decent wages without requiring them to be topped up by the state. Under Labour, tax credit spending doubled; we are bringing it back to the spending levels of 2007-08.
These reforms are necessary and fair, and will deliver a lasting settlement. I urge Members to vote—
Ms Rosie Winterton (Doncaster Central) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question accordingly put.
Wes Streeting (Ilford North) (Lab)
On a point of order, Mr Deputy Speaker. I was wondering whether it was disorderly or simply discourteous that in his winding-up speech the Chief Secretary to the Treasury neglected to congratulate the hon. Member for South Cambridgeshire (Heidi Allen) on her maiden speech.
Mr Deputy Speaker (Mr Lindsay Hoyle)
If that was the case, I am sure it was not deliberate. No hon. Member would miss out a maiden speech.
Business without Debate
Delegated Legislation
Mr Deputy Speaker (Mr Lindsay Hoyle)
With the leave of the House, we shall take motions 3 and 4 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Modern Slavery
That the draft Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015, which were laid before this House on 7 September, be approved.
International Development
That the draft Asian Infrastructure Investment Bank (Initial Capital Contribution) Order 2015, which was laid before this House on 7 September, be approved.—(Margot James.)
Question agreed to.
Business of the House
Ordered,
That, at the sitting on Thursday 22 October, the Speaker shall put the questions necessary to dispose of proceedings on the motion in the name of Chris Grayling relating to Standing Orders (Public business) not later than 4.00pm; such questions shall include the questions on any amendments selected by the Speaker which may then be moved; proceedings may continue, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Margot James.)
Mr Deputy Speaker
We now come to the Adjournment debate. May we please have fewer conversations, and will Members quickly clear the Chamber?
Cosmetic Surgery
(9 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Kevan Jones (North Durham) (Lab)
I would like to raise the case of my constituent, Mrs Dawn Knight, who lives in Kip Hill in my constituency. Mrs Knight is one of the 45,000 people in the UK who undergo cosmetic surgery each year. In 2012, she underwent a cosmetic procedure on her eyes. The operation was arranged by a company called The Hospital Group and the surgery was done by an Italian doctor called Arnaldo Paganelli. During the surgery, he removed too much skin from her lower eye lids, and as a result, the inner parts of her eyes, usually covered, are now exposed to the air. Following this botched surgery, she must now apply artificial teardrops into her eyes every two hours to minimise the pain. On the advice of specialists at the Royal Victoria infirmary in Newcastle, she must also tape her left eye closed every night when she goes to sleep to avoid further damage. While she sleeps, she must apply a thick ointment in both eyes, leaving her unable to see until it is washed out in the morning. Doctors have warned her that this serious condition might result in loss of sight altogether.
This incompetent procedure has left Mrs Knight with serious health problems and a life-changing condition, but her troubles did not cease there. A fight to get the mistake corrected and compensation for her distress have thrown up major questions about the operation of The Hospital Group and the regulation of cosmetic surgery in the UK. The Hospital Group’s website claims to run the world’s largest plastic surgery facility at its private hospital in Birmingham. It also claims to have General Medical Council-registered surgeons. Anyone looking at its adverts or website will conclude that it is running a hospital similar to a local NHS hospital, but it is not. As Mrs Knight found when she complained, she had entered into a contract not with The Hospital Group but directly with Dr Paganelli.
Jim Shannon (Strangford) (DUP)
Last Wednesday in Parliament, there was a public meeting at which constituents from across the UK registered their concerns about cosmetic surgery, particularly eye operations. Many people have found themselves in a similar position to Mrs Knight. Last year, 100,000 cosmetic surgery operations were performed in the UK. Is it not time for full and robust regulation to monitor and reflect the risk attached to all cosmetic surgery?
Mr Jones
The hon. Gentleman makes an important point. This is not just about Mrs Knight; it is about many more such cases, and I will be talking later about exactly the need for more regulation and information in this area.
Although The Hospital Group tries to give the impression it is a hospital, it is, in effect, a facilities, management and brokerage company for individuals wishing to undergo cosmetic procedures. The Hospital Group is very good at self-promotion. It even has celebrity endorsements from individuals such as Kerry Katona. I think the celebrities who appear on the website need to examine their consciences about being associated with this organisation. Clearly, their endorsements are encouraging young people to undergo these procedures, forcing people into the hands of a company that I think is, frankly, completely irresponsible. The sale of after-care packages is emphasised. In Mrs Knight’s case, hers cost £3,500, but she found that this means nothing when things go wrong. It would appear that once The Hospital Group has people’s money, it is not much interested if things go wrong.
Having tried to pursue a case against The Hospital Group, Mrs Knight then tried to pursue Dr Paganelli for redress, only to find that he is bankrupt, lives in Italy and flies into the UK to operate on behalf of The Hospital Group. What astounds me is that he is still doing this today, working in hospitals or clinics that are run by The Hospital Group, as we speak. The Hospital Group’s response is that it is nothing to do with them. Dr Paganelli was uninsured and The Hospital Group says that it is the patient’s responsibility to check whether the surgeon is General Medical Council-registered and holds insurance. If we look on the website today, however, we find the words:
“Book a free consultation today, with our GMC registered surgeons!”,
giving the impression that all the surgeons have been vetted by this organisation when that is clearly not the case. Despite this, Dr Paganelli remains licensed by the GMC, meaning that he is deemed fit and suitable to continue to operate in this country, even though he holds no insurance and if things go wrong, patients have no redress against him.
Having examined this case and the others to which the hon. Member for Strangford (Jim Shannon) referred, it would appear that a plumber who comes to fix someone’s kitchen sink is more heavily regulated than someone who is allowed to operate on your body. The current law allows any qualified doctor—not just surgeons—to perform cosmetic surgery, without having additional training or qualifications. My right hon. Friend the Member for Cynon Valley (Ann Clwyd) has raised many issues about GPs who have undertaken cosmetic surgery without any formal training. Clearly, there needs to be more robust regulation of these private companies, which stand to make a fortune out of the misery experienced by people such as my constituent Mrs Knight.
The Royal College of Surgeons believes that the GMC needs to be given new legal powers formally to recognise additional qualifications or credentials, and I fully support that call. These should be displayed publicly so that people know that the doctors are properly registered and have gone through the necessary training. Will this solve malpractice and eradicate the problem of cosmetic surgery overnight? No, it will not, but it will at least ensure that some type of regulation is in place. It would be an important and significant start, and it would allow patients and employers such as The Hospital Group to tell competent cosmetic surgeons from cowboys, or indeed from anyone who has limited or no recognised experience in cosmetic procedures.
There has not been inaction in this area. Legislation was drafted by the Law Commission at the request of the Department of Health in 2014, following Sir Bruce Keogh’s recommendations in the wake of the PIP scandal. The coalition Government failed to find the parliamentary time to take it forward in 2014. You will remember, Mr Deputy Speaker, that at that time the Order Paper was not exactly overflowing with legislation, so we need to answer the question why this was not brought forward. Both the RCS and the GMC are keen to bring in these changes. Again, the Government have failed to include such legislation in the Queen’s Speech. I ask the Minister to explain why that is the case, and when the Government intend to introduce such legislation. As I have said, it would have the support of both the Royal College of Surgeons and the General Medical Council, but it would also have cross-party support in the House.
May I also ask the Minister about the cost to the NHS? In Mrs Knight’s case, the cost of putting right the mistakes made by Dr Paganelli will have to be picked up by the NHS. As the hon. Member for Strangford said, this affects a large number of people, and the NHS is having to treat them at great expense because of the actions of organisations such as The Hospital Group and individuals such as Dr Paganelli. Is it right for the taxpayer to pick up the bill while those organisations and individuals are making absolute fortunes out of people’s misery? I do not think it is. We need to look into how the NHS can recover the cost of the treatment that Mrs Knight and others are undergoing at the taxpayer’s expense.
Jim Shannon
Some of the people who were at the meeting on Wednesday told horrifying stories about the ways in which in which the surgery had affected them. Some of them had partially lost their eyesight. There was the depression, there was the trauma, and there were all the other side effects of what had happened to them. Despite all that, however, some of the people who carried out those operations continue to perform this surgery. People are experiencing life-changing medical conditions. Something must be done, and perhaps the Minister needs to tell us that tonight.
Mr Jones
The hon. Gentleman has made a very good point. It is not just a question of the initial cost. Some people will need lifelong treatment, which will be very expensive for the taxpayer. I think that there should be a mechanism enabling the taxpayer to recover some of the cost from private companies and individuals when things go wrong.
I am also concerned about the issue of regulation. These organisations produce a great many glossy brochures, set up websites and have celebrity endorsements, but it is clear that some of the people who undergo cosmetic surgery need counselling beforehand, and there is no legal or other requirement to ensure that they receive it. Surgery that may be seen as life-changing—and, in some cases, is, for the wrong reasons—may also not be appropriate for some of those involved. They are mainly women, but, according to various reports that I have read, an increasing number of men are undergoing these procedures. They are not right for everyone, and I think that counselling and advice should be a key part of the process before anyone is convinced about going under the knife. The companies involved clearly exert a great deal of pressure to ensure that a steady flow of people enables them to make the money that they do make.
Let me finally ask the Minister about The Hospital Group itself. It gives the impression that it is a hospital group providing healthcare services, but it is clear that it is actually a facilities management company brokering details between patient and surgeon. Its material is very misleading. For instance, its website deliberately states that its surgeons are GMC-registered. It even refers to the Care Quality Commission as though that gave it the stamp of approval, and provided some type of guarantee. A misleading impression is being given.
I ask the Minister to examine the way in which The Hospital Group in particular, but other groups as well, uses terminology. I think that the average man or woman in the street may get the wrong impression from the CQC symbol or the reference to the GMC registration. The fact that when things go wrong they find that The Hospital Group wants nothing to do with it, and it is up to them to decide what to do, is another matter. That is not the impression given by the misleading publicity—deliberately so, I think—that is put out.
My constituent’s case is one of many that have highlighted the need for regulation. The legislation is there and we should press forward as a matter of urgency because if we do not more people will suffer. If there is one thing that my constituent, Mrs Knight, wants, it is that other people should avoid the awful experiences that she has gone through because of the negligence and greed for profit of both The Hospital Group and Dr Paganelli.
The Parliamentary Under-Secretary of State for Health (Ben Gummer)
I thank the hon. Member for North Durham (Mr Jones)for securing this debate on what is clearly an extremely distressing case for his constituent and an unfortunate one more generally. I want to pick up on the specific issues he raised to do with his constituent’s case before talking about the generality of the regulation of cosmetic surgery.
The hon. Gentleman pointed out the failure of his constituent’s doctor to have insurance and he will be pleased to know that, as of July 2014, new legislation required all surgeons providing cosmetic interventions to provide insurance and proper cover. A failure to do so would render them liable to undergo the fitness to practise tests conducted by the GMC. Those doctors operating outside the UK but in the EU who would have a temporary ability to operate in this country under the directive on mutual recognition of professional qualifications would still, under GMC regulations, be required to provide evidence of insurance cover. That legislation was brought into effect in August, which was clearly too late in the case of his constituent.
Mr Kevan Jones
Will the Minister look specifically into the case of Dr Paganelli, as I understand that he is still practising in this country?
Ben Gummer
I will certainly look into that case, as it does not sound right. I cannot trespass on the realms of the GMC, but I will inquire into the specific case outlined by the hon. Gentleman.
The hon. Gentleman makes a valid point about the cost to the NHS and this is not the only area in which we have considered and continue to consider cost recovery for the NHS. It can be difficult as sometimes the cost of legal action outweighs the cost of recovery and it is not something that the service is used to doing. I am keen to explore it further, but in the context of the action we are taking, which I shall come on to, I hope that the hon. Gentleman will understand the need to take this bit by bit so that we get the process right. In principle, I certainly agree that if organisations cause a cost to fall on the NHS, as in this case, there is a good argument for seeing whether that cost can be recovered.
That takes me on to another part of the hon. Gentleman’s speech that was particularly striking, about the celebrity endorsements in this case. It is not for me to make policy announcements in an Adjournment debate, nor would I want to in the case of celebrity endorsements, but I agree with the hon. Gentleman that people should think carefully about how they endorse cosmetic surgery. It is a serious intervention and if anyone seeks to glamorise something to which careful thought should be given, people and the organisations using those endorsements should treat them with extreme care.
I would point the organisation that the hon. Gentleman is dealing with and everyone else towards the code of conduct in advertising, the Committee of Advertising Practice and the Broadcast Committee of Advertising Practice, which drew up guidance in October 2013, especially on protecting children and young people. I think it would be appropriate to make sure the organisation of which he speaks is complying with the spirit as well as the letter of that guidance, and if not I will certainly help him to ask whether anything more can be done on that.
The hon. Gentleman raises the issue of counselling. Any reputable organisation should seek to ensure that people undertake procedures only when they need to do so and have been properly counselled on the consequences of their actions so that they can make an informed decision. The Government believe that that should happen in every case for cosmetic surgery. There should be an informed decision, taken with serious thought.
Finally, on the issues to do with The Hospital Group the hon. Gentleman raised, I cannot speak without further advice, but there clearly seem to be questions about trading standards, which he raised. I hope that I and my officials will be able to meet him to look carefully at this case, to make sure if The Hospital Group is misrepresenting its position apropos its surgeons and those it seeks to represent, it is not besmirching an industry which more widely does take its duties and the way it represents itself seriously.
Jim Shannon
The hon. Member for North Durham (Mr Jones) has raised a topical issue of which we are all aware. Many people have had botched operations. Has the Minister’s Department been able to quantify how many? Optimax was one of the groups involved with a lot of the operations for laser surgery. People thought that was safe, but it was obviously not safe for all. Has the Department been able to quantify the numbers and therefore take action?
Ben Gummer
I am afraid I do not have an answer to the hon. Gentleman’s question, but I will make sure we write to him if such figures exist, although I suspect they may not. Let me inquire, and then I shall reply to his question.
Let me turn to the broader policy issues to which the hon. Member for North Durham referred. He referred to Sir Bruce Keogh’s review. It began in January 2012 after the PIP breast implant scandal. It covered the rapidly growing non-surgical cosmetic market. He published that review in 2013 and it highlighted the rapid growth of cosmetic interventions, and suggested safeguards among 40 recommendations to protect patients. The aim of those was to improve how surgical and non-surgical interventions were done, to set standards for training practitioners and surgeons and for how supervision from regulated healthcare professionals can support self-regulation of the industry, and to improve the quality of the information clients have to ensure they are able to make informed decisions about their treatment. The Government published their response in 2014.
By the time of the publication the Government had already started work on a number of the recommendations. To address the issue of proper training for cosmetic practitioners, the Royal College of Surgeons set up an inter- specialty committee with representation from the relevant specialty associations and professional organisations including plastic surgery, ear nose and throat, oral and maxillofacial surgery, breast surgery, urology, the Royal College of Obstetricians and Gynaecologists, the Royal College of Ophthalmologists, the General Medical Council and the Care Quality Commission. The committee also includes patient and provider representation, and representatives from the devolved Administrations are invited as observers.
The committee established three sub-groups which are taking forward the work to implement the recommendations. They cover standards for training and certification, clinical quality and outcomes, and patient information. The committee is also in the process of developing an overarching framework for certification to improve the safety and delivery of cosmetic surgery. Individuals performing cosmetic surgery will be expected to practise within their field of specialty training. The framework for certification takes into account equivalence for non-UK-based surgeons.
Holly Lynch (Halifax) (Lab)
I thank the Minister for giving way, and I thank my hon. Friend the Member for North Durham (Mr Jones) for bringing this important debate to the Chamber. PIP has been mentioned, along with the regulations that are in place in this country. I want to ask how we need to work with our European neighbours to ensure that we get the regulation right. We have heard about doctors coming from Italy to practise in this country, for example, and we know how PIP, which started in France, has impacted on patients in the UK. What work is the Minister doing to ensure that we co-operate across Europe to close any loopholes in this area?
Ben Gummer
The hon. Lady has touched on a complicated and diverse subject. I will happily talk to her when we have more time about what the Department is doing and what we are doing within the European Union to ensure the transferability of qualifications. A considerable amount of work is being done, and the GMC has tightened up a whole number of areas to ensure that we allow only the highest quality of practice in this country, while allowing people to travel through the European Union to practise using their qualifications.
I want to turn now to training for non-surgical interventions. We asked Health Education England to develop a new qualification framework for providers of non-surgical cosmetic interventions, and for those required to be responsible prescribers, that could apply to all practitioners regardless of previous training and professional background. Health Education England has now completed its review of the qualification requirements and will publish its recommendations shortly.
The issue of breast implants initiated the review by Sir Bruce Keogh. The review placed particular importance on systems that can precisely identify the complete cohort of patients in which a specific implant has been used. It recognised that being able to monitor the device implementation and performance for clinical outcomes and tracing of patients at risk of device failure was an important safety issue. There has been a range of responses, involving the Medicines and Healthcare Products Regulatory Agency, the Health and Social Care Information Centre, the Committee of Advertising Practice and the Broadcast Committee of Advertising Practice, and a whole series of recommendations has been enacted following the review.
Turning to legislation, we know that there are examples of high-quality surgical and non-surgical intervention, as I am sure the hon. Member for North Durham would agree, and it is those standards that we must make universal. I am aware of the arguments in favour of legislation as a way of reaching those standards—for example, through the statutory regulation of the non-surgical sector or new powers for the GMC. However, it does not follow that we must depend on legislation alone to meet the fundamental objectives of the Keogh review. Much has been achieved already and there is much more to do.
I know that the hon. Gentleman understands the pressure of competing priorities on parliamentary time. The calendar for legislation is full at the moment, as he knows, but we now have an opportunity to review and monitor the impact of non-legislative action before confirming whether new legislation would add significant value to safeguards for people choosing cosmetic procedures. We will continue to be advised on that by Sir Bruce and others as the safeguarding framework continues to develop. I can give the hon. Gentleman a personal assurance that I will ensure that the review of the non-legislative remedies is thorough, and that if it is found wanting, we will immediately look again at the subject with a view to taking further action.
We are grateful for the support of the Royal College of Surgeons and its partners and for the extremely thorough work that they have done so far. We are also grateful to the General Medical Council and the Care Quality Commission. In the light of the continuing work that I have outlined, I hope that the hon. Gentleman will agree that we are in a far better position now than we were before Sir Bruce’s review to help to protect the public and ensure proper training and oversight of non-surgical as well as surgical cosmetic interventions.
On the specific questions that the hon. Gentleman raised about his constituent, I commit to returning to him with an answer on the doctor he mentioned and the insurance that he will be required to have. I will also give him a specific answer on the cost to the NHS and any work that we might do on cost recovery, and on the specific guidance on the advertising of surgical procedures. I hope also to be able to get to the bottom of the nature of the sales techniques and the claims made by the hospital that he has mentioned, to ensure that it is practising in accordance with the standards that would be expected of a decent, reasonable organisation doing what it purports to do. I thank the hon. Gentleman very much for bringing this case to the Government’s attention.
draft Renewables Obligation order 2015
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
I beg to move,
That the Committee has considered the draft Renewables Obligation Order 2015.
The renewables obligation is a long-standing mechanism for supporting renewable electricity generation in the United Kingdom. The RO places an annual obligation on licensed UK electricity suppliers to source a specified proportion of the electricity they provide to customers from eligible renewable sources. The scheme is administered by Ofgem, which issues RO certificates to electricity generators in relation to the amount of eligible renewable electricity they generate. Generators then sell their certificates to suppliers, which use them towards meeting their obligation. Since it was introduced in 2002, the RO has played a key part in increasing the level of renewable electricity from 2.9% of total UK generation in 2002 to more than 25% in the second quarter of 2015. It supports around 22 GW of accredited capacity.
The RO scheme has been subject to a number of changes in recent years. The draft order revokes, consolidates and re-enacts the Renewables Obligation Order 2009 and the orders that have amended it since it came into force on 1 April 2009. It also makes consequential amendments to the Renewables Obligation Closure (Amendment) Order 2015. This consolidation simplifies and brings together in one document the main legislation underpinning the RO, making it more accessible to those who use it, including the Government and renewable industry stakeholders.
The order also implements outstanding policy decisions on the RO consulted on in 2013 and 2014. The changes focus on three areas: strengthening the sustainability of biomass electricity generation; providing for biomass conversion projects with an investment contract to regain eligibility for support under the RO in certain circumstances; and providing for the transfer of biomass co-firing and conversion projects to the capacity market mechanism.
A draft of the order was published for a three-week technical consultation on 24 March 2015. Comments were received from 18 respondents, mainly representing the biomass sector. The majority of responses focused on the detail of how the biomass sustainability land criteria had been incorporated in the draft order. We have carefully considered all the points raised and have taken them into account where appropriate.
The first set of new measures in the draft order is aimed at strengthening biomass sustainability criteria. The Government are committed to achieving a sustainable and cost-effective bioenergy deployment that drives carbon savings, minimises the environmental risks and makes best use of the biomass resource available for energy and non-energy purposes. Currently, there are mandatory sustainability criteria in the RO for the use of bioliquids, which transpose certain requirements in the renewables energy directive.
Since April 2014, generating stations with a capacity of 1 MW and above, using solid or gaseous biomass, have been required to report on whether they meet greenhouse gas emissions and land use criteria. The draft order consolidates previous changes and makes compliance with the greenhouse gas emissions and land criteria mandatory for generating stations using solid or gaseous biomass in order to receive support under the RO. The measure will ensure that renewable generation from home-grown or imported solid or gaseous biomass receives financial support only if that biomass delivers genuine greenhouse gas emissions savings compared with fossil fuel, and if it is sourced from land that is sustainably managed, not from land with a high biodiversity value or carbon stocks.
Biomass power generation is already required to meet a greenhouse gas savings target of at least 60% compared with the EU fossil fuel average, and that target will become tighter in 2020 and in 2025. The draft order introduces a new methodology for calculating an annual average greenhouse gas emissions figure for all biomass used by a generating station, excluding certain types of waste. The purpose of the calculation is to ensure that generators are not penalised if an individual biomass consignment exceeds the greenhouse gas target due to circumstances beyond their control, such as bad weather increasing transport distances. That is subject to the provision that each individual consignment of biomass must not exceed an overall ceiling. The provision prevents mixing extremely high emission consignments with lower emission consignments as a means of washing through fuel consignments with an unacceptably high greenhouse gas value.
The draft order requires generators using wood fuel to comply with specific land criteria, derived from the timber standard for heat and electricity, which draws on the principles set under the Government’s timber procurement policy. Some exemptions are introduced for certain low risk categories of wood such as arboricultural residues and material removed from non-forest land for ecological reasons.
The criteria were developed following engagement with interest groups and were consulted on in August 2013 and in 2014. They take into account a range of social, economic and environmental issues, including protecting biodiversity, land use rights, sustainable harvesting and regeneration rates.
The order also makes minor technical adjustments to the sustainability criteria for non-wood fuel biomass that correspond to the land criteria for bioliquids, for example to implement recent EU legislation. It amends the reporting requirements for wood fuel to enable the Government to monitor more effectively the use of different types of wood by the bioenergy sector, as well as making the reporting provisions more workable for industry.
Ofgem will regulate compliance with the mandatory greenhouse gas and land criteria. Generating stations using biomass that have a capacity greater than or equal to 1 MW must prepare and submit an annual sustainability assurance report compiled by a third party auditor or verifier. Equivalent sustainability criteria are included in the first bioenergy contracts for difference, which were awarded in 2014, and are comparable to those set out in the renewable heat incentive scheme regulations, with some differences to account for the smaller scale nature of the heat market and the fact that most biomass supported under the renewable heat incentive is expected to come from UK sources.
The draft order also implements the final element of renewables obligation to contracts for difference transition policy. The first competitive contract for difference auction for renewables support, which was completed earlier this year, has allowed us to support low-carbon electricity projects at a lower cost to the consumer. The order provides for a biomass conversion unit or station that previously entered into an investment contract under the financial investment decision enabling for renewables—FIDeR—process to regain its eligibility for support under the renewables obligation, including conversion-level support if the contract is terminated for a permitted termination event such as the failure to secure, or a delay in securing, state aid approval from the European Union.
That specific transition measure is necessary because the investment contract process commenced in 2014, ahead of the rest of the electricity market reform, and contracts were awarded ahead of state aid clearance. It aims to provide the assurance and comfort needed to encourage ongoing investment, safeguard security of electricity supply and ensure value for money for consumers.
The draft order also provides for combustion units to bid into the capacity market and leave the renewables obligation if successful in that bid. The purpose of the capacity market is to ensure that there is sufficient investment in the overall level of reliable capacity—both supply and demand sides—needed to ensure secure electricity supplies. It will bring forward investment at least cost to consumers by allowing the market to set a price for capacity competitively. The first capacity market auction was held at the end of last year for delivery of capacity in 2018-19.
Biomass co-firing or conversion stations or units that wish to transfer from the renewables obligation into the capacity market can claim support under the renewables obligation until the last day before the first day of the delivery year under their capacity market agreement as long as they have given a capacity market transfer notice to Ofgem. That will ensure that all stations that are primarily coal-firers, but have at some point claimed low levels of biomass co-firing renewable obligation certificates and remain accredited under the renewables obligation, have a chance to enter the capacity market.
In addition, a biomass co-firing unit or station can withdraw from its capacity market agreement to convert fully under the renewables obligation before the first day of the delivery year under its capacity agreement or before closure of the renewables obligation to new generating capacity from 1 April 2017, whichever is earlier. Those provisions will come into effect one month after the rest of the order to allow time for generators who have already signed a capacity market agreement to complete and present to Ofgem the required capacity market transfer notice.
The renewables obligation has played a key part in delivering our renewable energy goals. With some exceptions, the renewables obligation scheme will remain open to new capacity until 31 March 2017 to allow a period of transition to the contract for difference and capacity market schemes, which are expected to provide support for large-scale renewables in a more cost-effective and targeted way. The consolidation and changes set out in the order will keep us on a firm path as we complete that transition.
I am sure that members of the Committee will appreciate the value and importance of introducing mandatory biomass sustainability requirements, which, put simply, mean that generators will receive support under the renewables obligation only for using biomass that comes from a sustainable source and delivers real greenhouse gas savings. The policies in the order relating to regaining support under the renewables obligation following termination of an investment contract in certain circumstances, and moving between the capacity market and the renewables obligation, will ensure a smooth and fair transition for generators and consumers alike.
These measures will provide the certainty needed to maintain investment in the technologies we need to keep the lights on, as well as to deliver our low-carbon goals at the lowest cost to the consumer.
Dr Alan Whitehead (Southampton, Test) (Lab)
It is a pleasure to serve under your chairmanship, Mr Wilson. The order is not particularly controversial. Indeed, I thank the Minister for her exhaustive exposition of what is in it, because that saves me the task of attempting to go through its pages myself. I think the whole Committee is grateful for her guided tour of the main details.
However, the details give rise to one or two questions. In particular, there is the emergence in the order of a consolidation of not strictly previous regulations, but newer regulations that relate to the sustainability of biomass. I welcome that move. My understanding is that those changes will, among other things, ensure a genuine approach to sustainability throughout the chain of biomass procurement, transport and production. Will the Minister confirm that that is her understanding of what the order does? I would be grateful for that.
As the Minister outlined, certain biomass producers will now be able to opt to enter into the capacity market at a certain stage after the initial operation of their plant has commenced under the renewables obligation. I do not know whether she has investigated this, but I am slightly concerned about the extent to which that way of doing things affects the Department’s required estimates of the necessary capacity to be procured at the beginning of a capacity auction cycle. Will the opt-in process, described on the basis of coming into being at a certain period after the opting-in process has been decided, materially affect those calculations, possibly on a relatively unplanned basis, or are mechanisms already in place or being considered that will make that process more stable as far as capacity requirements are concerned?
Other than that, the order is essentially an updating and consolidation of regulations relating to the renewables obligation certificate. The previous serious consolidation, the 2009 regulations, have been comprehensively updated in that process. As the Minister pointed out, the order was subject to a consultation. It is good news that there was a consultation, and we might say that it was good rather than bad news that only 18 responses were received. They were dealt with in the response to the consultation and led to some minor corrections in the subsequent iteration of the draft order, which is before us today.
That is not the end of the matter. Since the consultation closed, material differences in the RO’s operation were announced, namely its closure to onshore wind a year earlier in March 2016, which was announced on 18 June. Since the order before us differs from that put to consultation only in respect of minor changes in the light of that consultation, to all intents and purposes it is as if onshore wind is still within the RO’s terms, at least until the closure of the entire RO in March 2017.
By and large, the order does not mention onshore wind, unlike some other technologies eligible for the RO. That is not because someone has gone through and airbrushed onshore wind out of the order. That would not be possible, because they would have had to do so before the alleged mandate for eviscerating onshore wind passed in front of the British electorate, and that would plainly point to the subsequent reasoning about the basis for the aforementioned evisceration being a little disingenuous—I am sure that that is not the case.
The 2009 order does not mention onshore wind either, but, as a defined generator, its presence is all over it. Therefore, does its soon-to-be-confirmed absence from 2016 mean that any part of the order will have to be rewritten? Onshore wind certainly featured strongly in the Renewables Obligation Closure Order 2014, to which this order makes minor amendments. The 2014 order established beyond doubt, by specifying a date, that the RO would come to an end in March 2017, or, to put it another way, it would continue with wind—both onshore and offshore—until that point.
This question is complicated by the events in another place, where the Government are seeking to place a similarly definite end date for onshore wind on the statute book in the Energy Bill. In the other place, however, Ministers are tabling fairly complex amendments to the Bill, including to end dates, which spare those plants that have gained accreditation and planning but are having difficulties in obtaining funding owing to, among other things, the understandable uncertainty caused by that whole dreadful farrago. They are saving those plants from the axe during a grace period—not the grace period of one year taking plants up to March 2017 as originally announced, but a new grace period of approximately nine months after assumed Royal Assent in March next year. I am not quite sure where the provisions of the order stand in relation to the shifting sands of projects buried, partly dug up—
The Chair
Order. Dr Whitehead, will you start to clarify why this is actually relevant to the order?
Dr Whitehead
Yes, indeed, Mr Wilson. I am coming to that in a moment but I felt it necessary to establish the circumstances under which it is relevant. I will, of course, go with your guidance on the matter.
The fact that the status of onshore wind is now off the order in reality but remains on the order in presentation may well make a difference to the structure of the order itself. For example, schedule 5 sets out which part of a ROC plants will receive—that is, how many ROCs make a ROC dependent on the type of plant deployed. Wind gets 10 ninths of stated energy in its ROC and for energy generated post-2016, which may well apply for continuing ROCs from earlier awards—after all, the ROC market will continue in ghostly form for a number of years—but now will not exist for the generation commenced in 2016. That has to make a difference to the overall calculation of the number of ROCs available and, hence, their value in the market during that period, although I would not know that by looking at the table or the entire order.
However, it might, to all intents and purposes, exist after all if the amendments moved in another place actually happen. Right now they have been withdrawn but I understand that they might come back next week. Will the Minister assure me that what we are asked to support today is the last word as far as the order is concerned? Will some parts of the order need to be rewritten in the light of the events in another place, soon to be coming to us? If there is any suggestion that changes may be needed, I would expect the Minister to do as her counterpart in another place has done in the light of some uncertainty about his proposals—lay the order on the table until such time as the uncertainty has passed and the definitive text can emerge.
Andrea Leadsom
I am grateful to the hon. Gentleman for his support for the order in a big-picture sense. I can assure him that the new order is intended to ensure that the whole process of biomass sustainability is assured from the beginning to the end of the process. In answer to his second point, biomass producers that enter the capacity market will be required to give advanced notice to Ofgem, so it is not expected that that will cause any problems for our assessment of the amount to auction in the capacity market. It is expected, if anything, that that will add to our ability to see the likely need for capacity in advance.
In response to the hon. Gentleman’s third question, the closure of the RO to onshore wind a year early has been taken into account in drafting the order. As he points out, it is still going through the Lords at the moment and will then be coming to the Commons. Although we have taken it into account, there is no absolute certainty but it is our expectation that the order will not need to be rewritten.
Question put and agreed to.
Immigration Bill (First sitting)
(9 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
Before we begin, I have a few points to make. Please switch electronic devices to silent mode. For some reason I have never entirely understood, tea and coffee are not allowed during the sittings. Today we will first consider the programme motion on the amendment paper, then a motion to allow us to deliberate in private about our questions before our oral evidence sessions, and then a motion to enable the reporting of witnesses’ evidence for publication. Given the time, to allow us most time for cross-examining witnesses I hope that we will be able to take the motions formally.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.30 am on Tuesday 20 October) meet—
(a) at 2.00 pm on Tuesday 20 October;
(b) at 11.30 am and 2.00 pm on Thursday 22 October;
(c) at 9.30 am and 2.00 pm on Tuesday 27 October;
(d) at 11.30 am and 2.00 pm on Thursday 29 October;
(e) at 9.30 am and 2.00 pm on Tuesday 3 November;
(f) at 11.30 am and 2.00 pm on Thursday 5 November;
(g) at 9.30 am and 2.00 pm on Tuesday 10 November;
(h) at 9.30 am and 2.00 pm on Tuesday 17 November;
(2) the Committee shall hear oral evidence in accordance with the following Table:
TABLE
Date | Time | Witness |
|---|---|---|
Tuesday 20 October | Until no later than 10.15 am | Still Human, Still Here; the Refugee Council; Scottish Refugee Council |
Tuesday 20 October | Until no later than 10.45 am | The Migration Advisory Committee |
Tuesday 20 October | Until no later than 11.25 am | The Recruitment and Employment Confederation; the National Association of Licensing and Enforcement Officers; Focus on Labour Exploitation |
Tuesday 20 October | Until no later than 2.30 pm | The Confederation of British Industry |
Tuesday 20 October | Until no later than 3.00 pm | Migration Watch UK |
Tuesday 20 October | Until no later than 3.45 pm | National Landlords Association; the Residential Landlords Association; the British Bankers Association |
Tuesday 20 October | Until no later than 4.15 pm | The Metropolitan Police; Sandwell Metropolitan Borough Council |
Tuesday 20 October | Until no later than 5.00 pm | The Children’s Society; Coram Children’s Legal Centre; the Office of the Children’s Commissioner |
Thursday 22 October | Until no later than 1.00 pm | The Immigration Law Practitioners’ Association; Manjit Gill Q.C., Colin Yeo, barrister; the Detention Forum; Migrants’ Rights Network |
Thursday 22 October | Until no later than 2.45 pm | The Local Government Association; the Association of Directors of Children’s Services |
Thursday 22 October | Until no later than 3.30 pm | The UNHCR; the British Red Cross |
Thursday 22 October | Until no later than 4.30 pm | The Joint Council for the Welfare of Immigrants; Amnesty International; the Equality and Human Rights Commission; Liberty |
(3) proceedings on consideration of the Bill in Committee shall be taken in the following order: Clauses 1 to 10; Schedule 1; Clause 11; Schedule 2; Clauses 12 to 18; Schedule 3; Clauses 19 to 27; Schedule 4; Clauses 28 and 29; Schedule 5; Clauses 30 to 34; Schedule 6; Clause 35; Schedule 7; Clause 36; Schedule 8; Clauses 37 to 50; Schedule 9; new Clauses; new Schedules; Clauses 51 to 56; remaining proceedings on the Bill;
(4) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 17 November.—(James Brokenshire.)
The Chair
On the basis of the programme motion, the deadline for amendments to be considered on 27 October, when the Committee will begin line-by-line scrutiny of the Bill, is the rise of the House on Thursday 22 October.
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(James Brokenshire.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(James Brokenshire.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room. We will now go into private session to discuss our lines of questioning, so anyone who should not be here should now please go.
The Chair
We will now hear oral evidence from Still Human Still Here, the Refugee Council and the Scottish Refugee Council. Before calling the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill and that we must stick to the timings in the programme motion that the Committee has agreed. For this session, we have until 10.15 am. Welcome to our witnesses; will you please introduce yourselves for the record?
Mike Kaye: I am Mike Kaye, the advocacy manager for Still Human Still Here.
Judith Dennis: I am Judith Dennis, policy manager at the Refugee Council.
John Wilkes: I am John Wilkes, the chief executive of the Scottish Refugee Council.
Keir Starmer (Holborn and St Pancras) (Lab)
Q 1 It is a pleasure to serve under your chairmanship, Mr Bone. This question is directed to Judith Dennis and Mike Kaye in the first instance. You have both expressed concern about the adverse consequences of the provisions on the removal of support in the Bill. Will you tell the Committee what, in headline terms, your concerns are? You have also expressed a concern that the provisions will fail to further the Government’s stated aim, so as well as the adverse consequences, will you outline how, if at all, the Bill will support the Government’s stated aim?
Judith Dennis: We think that the Bill is incompatible with the processes for families to engage with the Home Office if they want to return or have come to the end of the asylum process—these measures would not be compatible with that. The Bill will shift responsibility to local authority children’s services, which have a duty to support children in need. We do not think that it will achieve the desired outcome, partly because families will inevitably lose touch with the Home Office—there will be no incentive for them to keep engaging with the Home Office to try to resolve their situation. Indeed, when a similar measure was piloted in the past, that is what happened. Mike can probably talk more about the impact on individuals.
Mike Kaye: To take up that point, one of the Bill’s goals is to encourage the departure of refused asylum seekers with no lawful right to remain. Members of the Committee should be in no doubt that the Bill will not increase voluntary returns or forced removals. You do not need to take my word for that. We already have on the books section 9 of the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004, which allows these very measures to be put in place. The Home Office’s own review of a pilot carried out in 2005 found that a third of families absconded. The review compared the pilot with a control group of people who continued to be supported, and the number of people who absconded in the pilot was double that in the control group who were supported. The number of forced removals in the pilot was one family, as compared with nine in the control group. The Home Office’s conclusion was that it did not significantly increase voluntary returns and that it should not be used as a blanket policy. It is ironic, therefore, that 10 years on, we are trying to implement the very policy that did not work beforehand. You only have to look at other reviews that have been carried out, where Home Office staff have said, “You should keep refused asylum seekers supported because it allows them to be removed”, yet the Home Office is ignoring the advice of its own staff.
I have to say that this is really an abdication of immigration control—if Committee Members are concerned about immigration control, they should be concerned about this measure—but much worse, it is an abdication of responsibilities to children’s welfare. Bear with me, and I will explain what the impact will be on the people affected. Asylum seekers generally do not have great health. You have people who have experienced torture or who have witnessed or had traumatic experiences. The Royal College of Psychiatrists said that their mental health deteriorates on impact with the system. If they are pregnant, they are three times more likely to die than the general population—that is in general. The level of support that they are on, and most of them would be destitute, is £5 a day to meet the essential living needs of food, clothing, toiletries, transport and anything else. I am not saying that you will starve on £5 a day—you will not—but if you are on that for an extended period of time, it will have consequences for your health and wellbeing.
Currently, we have more than 3,500 asylum seekers waiting more than six months for an initial decision, and appeals are listed six months ahead. Now, if you get to the point where you cut that group off entirely from support, their health will deteriorate much faster than that of the general population. It will cause and exacerbate existing health problems. You only have to look at some of the serious case reviews from the last few years, where asylum-seeking mothers have died from health issues. Those serious case reviews have found that the removal of support was one of the exacerbating factors, so we should be in no doubt that this will have very serious consequences.
Keir Starmer
Q 2 You have mentioned the adverse consequences and the number of families in the pilot, some years ago, who disappeared off the radar. How does this compare with supported returns—family support in the return programme—in terms of achieving the Government’s aim?
Mike Kaye: As I just mentioned, one of the aims is getting people to return home, and it is less effective once you remove support, because, as Home Office staff have said, when you do not know where someone is, it is that much more difficult to locate and remove them, so the absconding rate is double once you remove support. Even if asylum seekers wish to stay in contact, and there is no incentive for them to do so, it is very difficult once they become destitute, so this does not achieve the stated goal of trying to get people to return home at the end of the process.
Keir Starmer
Q 3 Thank you. You have mentioned children and the impact on them on a number of occasions. Will you give a bit more detail on what the impact might be on local authorities if support is withdrawn for children that come within their area? How does that work and what might the consequences be for the local authority?
Judith Dennis: The local authority has a duty to all children in its area who are in need, so it will be obliged under that legislation to assess the needs of families and of those children, and to provide services accordingly. Of course, in this country, we are very proud of the Children Act in England and Wales, and the Children Acts in Scotland. We are under no illusion that local authorities will want to fulfil those duties and will want the Government to support them financially for that, but we can see from other families who have no recourse to public funds that local authorities are bearing the responsibility of providing for the children. Of course, if you are going to provide for the children, it is both morally and financially sensible to provide for the whole family, so we think there will be a great impact on local authorities.
Keir Starmer
Q 4 Following up on that, you have mentioned finances. Are there circumstances in which you envisage that it will be necessary to remove a child from a family in order for support to be provided by the local authority?
Judith Dennis: That should only be done if there are concerns about the parenting, as with other families. It is not a principle of the Children Act that we remove children from their parents and carers if they are doing a perfectly fine job of looking after them. The Children Act was brought in with that principle in mind: that families should stay together, because they are the best people to bring up their own children, and that should happen regardless of the financial difficulties they are in. That is why we have the Children Act to provide that financial support where necessary.
Keir Starmer
Q 5 Hence the local authority, in those circumstances, would step in and provide the support that is being removed under the Bill.
Judith Dennis: Indeed.
Mike Kaye: It is instructive to look at the section 9 pilot again. Barnardo’s did a review with 33 local authorities and none of them thought that section 9, which is the equivalent of what we are looking at with this clause, was compatible with the Children Act. They all had concerns about the transfer of cost to local authorities, which would not be reimbursed; the fact that they would still have to do reviews of whether the child was in need and whether human rights were being breached; and that they were opening themselves up to litigation. All those concerns are equally valid for this Bill. The Government’s intention is that local authorities will not support, but I do not see how you can square the circle with the Children Act in that respect.
Keir Starmer
Q 6 Thank you. Finally from me, there are provisions in the Bill to prevent appeals against decisions on support. Can you give some evidence as to the quality of the decisions currently being made about the support available in such circumstances?
Mike Kaye: Yes. On the Home Office’s decision-making on asylum support, just to be clear: if someone thinks that there is an obstacle to them returning—for example, they are too sick to travel or they are trying to return but their Government will not issue them with documents—the Government should provide them with support. The same is true for the Bill. In practice, that is often very restrictively interpreted. For example, even when the Iranian embassy was closed, Iranian asylum seekers who were trying to return home and could not get documents were still refused support.
If you are refused support, you can go to the asylum support tribunal. Currently, with more than 60% of cases that go to the tribunal, either the case is overturned by the tribunal, so the asylum seekers are given support; or the decision is remitted back to the Home Office because the tribunal does not think it was right; or the Home Office withdraws the decision because the tribunal thinks it is flawed. If you are getting more than 60% of decisions wrong, how can you take away that means of appeal? You are actually leaving people destitute. That decision to leave a family destitute is far too important to remove the right to appeal, especially when the vast majority of those decisions are wrong in the first place.
Keir Starmer
Q 7 Am I right that people may be left destitute on the basis of a decision that is wrong or that needs to be retaken?
Mike Kaye: Exactly right.
The Minister for Immigration (James Brokenshire)
Q 8 Mr Kaye, do you agree, in principle, that there should be an ability to take sanctions against people who have no right to be in this country and are frustrating efforts to remove them or not co-operating with a voluntary returns mechanism? Do you accept that principle as a legitimate policy response?
Mike Kaye: Absolutely. We have a system whereby we try to discover whether people meet the criteria for refugee status. It is a very tough measure. You have to prove that you are being persecuted as an individual, that your Government are unwilling or unable to protect you, and that there is no other area of your country that you can go back to and be safe. It is a high measure to prove. I fully accept that if people do not meet that and if that assessment is accurate, they need to return to their home countries.
What I have highlighted is that the measures in the Bill will not help you to return individuals who have come to the end of the process. If you really want to return people at the end of the process, you need to stay in touch with them. Quite often an equation is made between refused asylum seekers and abusive asylum seekers. That is not the case for the vast majority. Last year, the Home Office refused 70% of Iraqis, 70% of Libyans, and 65% of Afghans. I am not necessarily saying that those decisions are wrong. I am saying that you need to understand that those people at the end of the process still have a fear about returning and that is why they do not always co-operate. I take the Minister’s point that sometimes people are not co-operating because they do not want to go home and they should rightfully go home, but for an effective policy, you need to stay in touch with people to encourage them to return voluntarily return or if forced removal is to take place.
James Brokenshire
Q 9 There is obviously a distinction that can be drawn. Clearly, you are not supportive of certain aspects of the policy, but I think you have taken the principle. Can I ask about the safeguards that would operate? Am I right in saying that the provisions under section 55 of the Children Act would apply and that provisions relating to destitution would be there in terms of support?
Mike Kaye: I think it is section 55 of the Immigration Act; but this is a question for you, Minister, about something that we do not understand. You said on Second Reading that the protections in the Children Act would be retained. You said in the consultation that safeguards would be introduced for children. I do not understand how you can safeguard children from destitution when it is the explicit aim of the policy that children should not get support from statutory services, local authorities or central Government. Will you explain that to Members, because I cannot square that circle.
The Chair
Can I just jump in? I should have explained to witnesses—I apologise for not doing it at the beginning—that Ministers love these sessions. It is a time that they get to ask questions, rather than getting grilled. I want to bring some more Members in, because I have about five queueing up to ask questions.
Craig Whittaker (Calder Valley) (Con)
Q 10 Mr Kaye, are you saying that appeal rights-exhausted families who could and should leave the UK should be entitled to automatic and indefinite support, either from local authorities or the Home Office, if they do not leave?
Mike Kaye: I am saying that if you are really concerned about immigration control, if you want these families to leave, cutting off support from them not only risks the children coming to harm but impairs your ability to enforce removals or encourage voluntary return.
Craig Whittaker
Q 11 My question, though, was whether you are advocating that we provide indefinite ongoing support for people if they refuse to leave?
Mike Kaye: I think that for families with children, that is the way to have effective immigration control.
The Chair
Could I just jump in? I wonder whether Mr Wilkes and Judith Dennis would like to speak on this particular point as well, so that we hear from all three witnesses.
John Wilkes: I think that we still have to support families and those whose appeal rights are refused while engaging with them about the options for return. Taking away support does nothing to facilitate that; all it does is force them to think about what support they can get or force them to disappear from the system. There are no other families in the UK who do not have some form of entitlement to support, so I do not see why these families, who we are trying to work with on their decision—and ultimately, for people who are in that category, on their removal—should not have support. There is no evidence, from any of the other initiatives the Home Office has tried, that taking away support, particularly for families, is going to achieve the policy goal of removal. That is what the policy goal is: we need to look at other ways of achieving it.
Judith Dennis: I absolutely agree. It is frightening to think of the alternative. We are actually talking about making families destitute, so that they have no means of support. What are they going to do? I do not think that that is going to encourage them to go along to the Home Office and say, “May I sign up for voluntary return, please?” The family returns process is a better process for families, because it takes into account their complex situations and the fact that they have very difficult decisions to make, and that those decisions may take some time to come to. If you are a family who fears that their daughter is going to be subject to female genital mutilation on return, but you have not been able to prove that, you are still going to have that fear. Your fear is then, “Which is better? I’m between a rock and a hard place; I don’t know whether to stay here and take my chances. I may get exploited, I may have to live on the streets, I may have to take support from strangers and sleep in their houses and put myself in dangerous situations. Or do I take my family back to what I think is a dangerous situation”. The family returns process encourages engagement on an ongoing basis. It is a process with four stages; it is very well set out in policy. Family engagement managers are employed specifically to talk to families about those very difficult decisions that they have to make. So I do not think it is reasonable to portray these people as just sitting about, avoiding immigration control and refusing steadfastly to go back to where they came from. It is much more complex than that.
Craig Whittaker
Q 12 Down to brass tacks, then. I think what all three of you are saying is that those families who have exhausted the appeals process, should not be in the UK and should be returning home should get indefinite, automatic support ongoing. Is that what you are all saying?
John Wilkes: People should be supported while we are engaging with them about their choices. There is already a high level of destitution.
Craig Whittaker
Q 13 How far does that go, though? That is the question I am trying to get at, because at the end of the day these people are in our country illegally. How far do we expect the taxpayer to continue paying, whether it is for housing or whatever, for people who should not be in our country?
Mike Kaye: When you say indefinitely, what we are talking about is resolving that case. That is the crux of what we are trying to do—to resolve the case, by those people either returning to the country of origin or getting status in this country. When we say that you are better off supporting them, we are thinking about the taxpayer. This is not saving money, it is simply diverting the cost to the local authority and building up costs down the line. The longer someone stays in the country without your engaging with them—if you make them destitute and they then disappear—the more difficult it is to remove them later on down the line. That is one of my concerns with the measure. It is not effective for immigration control, it is certainly not effective for child protection, and you are not resolving the case; you are simply abdicating responsibility. The Government should not be doing that.
The Chair
Before we move on, let me say that seven Members want to ask questions so perhaps the witnesses could try to keep their answers a little bit shorter.
Mrs Emma Lewell-Buck (South Shields) (Lab)
Q 14 I have a quick question for Judith, going back to something that you said earlier with regard to the Children Act. Obviously, you have to have valid reasons for removing children, but most children get removed because of neglect, and if a family is left destitute they cannot feed and clothe their child. So do you not envisage child protection departments removing children on that basis if support has been withdrawn?
Judith Dennis: It would not usually be the first step. A social worker will try to resolve the issues that arise out of the family’s situation, depending on the causes and the actors who are playing each part. We have seen, from their recourse to public funds, families who are supported by local authorities. Often social workers will engage with the family to try to help them to resolve their situation. We certainly would not expect social workers to be stepping in and taking people’s children away in the first instance.
Social work ethics mean that you have to resolve the situation and try to keep families together where possible. Most of the social workers we speak to would not feel comfortable about taking people’s children away on the basis that the Government have made the family destitute and forced them to neglect the needs of their children.
Mrs Lewell-Buck
Q 15 I used to be a child protection social worker myself, so I totally get what you are saying, but social services departments are overstretched and are really sinking because the resources are not there. If they cannot fill the gap and help that family, that child will go hungry and will be neglected, and it is easier to pay for a child than to pay for the entire family, so could we see some perverse outcomes, with children being removed from their families? Is that a risk at all, do you think?
Judith Dennis: It could be, further down the line. I hope that it would not be. My understanding is that it is much more difficult and costly to take a child into care than to provide basic support such as the asylum support regime does, as has been mentioned before. The support is basic and is to avoid destitution. Taking the child into care means that you have to pay another carer to look after that child when the family are perfectly able to do so. The ethical argument and the economic argument mean that we hope we would not see that, but it is—
Mrs Lewell-Buck
There is a chance, down the line, that that could be the case. I just wanted to clear that up. Thank you.
Chloe Smith (Norwich North) (Con)
Q 16 Two quick questions from me. The first is on what happens at present to engage with these families. Mr Kaye, you were just saying that the longer we do not engage with them, the more there is a problem; yet, as I have just heard it, Ms Dennis, you were outlining the current process and saying that it was chock full of engagement. Will the panel comment on the ways in which current engagement is different from what happened under the 2005 process, which I understand hinged largely on corresponding with people rather than engaging with them, perhaps as happens at present?
Judith Dennis: The 2005 pilot took away support, or threatened people with taking away their support if they were not taking steps to remove themselves. Partly as a result of the lack of success of that programme, and of hearing from some families in parliamentary work done by various agencies about the complexity of the situation, this programme was established. There are several stages at which family conferences take place, and specialist family engagement managers who understand the process invite the families—parents and sometimes children—to meetings. They are invited to think about whether or not they want to go and they visit the family, and those kind of things. There are lots of steps. Most of the process is designed to help people think about voluntary return, because there are fewer barriers to removal if someone agrees to go rather than being forced to go. So measures that just take away support, rather than put in more support, have been found not to work, and those that put in more support have some more success.
Chloe Smith
Q 17 I suppose in what you are saying there are two types of support, in the sense of money and of engagement, and just to be clear you are—
Judith Dennis: Indeed. I would say that they need to go hand in hand.
Mike Kaye: I just draw attention to the fact that—the point that I was making—if you cut off support, you cut off all that work, because you no longer engage with that individual and they no longer engage with you. The other point that I would make is that under the Bill we are looking at—the Home Office is talking about—cutting off support to families after 28 days. That is an entirely insufficient amount of time to work with a family to get them to return home. In fact, under the voluntary return programme you would be looking at 90 days. This is for delegated powers, but it would be useful if we could get the Minister to indicate that the minimum would be 90 days.
Chloe Smith
Q 18 My second question looks back somewhat. Mr Kaye’s organisation, Still Human Still Here, in 2008 gave evidence to the Home Affairs Committee on the then draft citizenship and immigration legislative proposals. Your organisation stated:
“Government asylum support policy is leaving many refused asylum seekers destitute”—
that was clearly the then Government in 2008—and that that destitution
“results from the current statutory scheme”
of that Government. Why is it that two major British political parties, which most recently represented around two thirds of the UK population, would want to pursue such measures when they have been democratically elected?
Mike Kaye: Why would they want to—
Chloe Smith
Q 19 Why do you think that the Government—either of those Governments—respond to the electorate’s ask?
Mike Kaye: To be frank, it is a total mystery to me after 20 years how Governments can continue to do the same thing and expect a different outcome. Over 20 years Governments have basically been implementing policies that are short-term, deterrent policies, and they have not been resourcing the system to do the job properly. It is a huge frustration to me, because if Government really supported the Home Office to do the job properly, we would not be looking at a problem with asylum seekers. We have had a static number of asylum seekers for 10 years—25,000 applications—well within the realms of the Government’s ability to deal with quickly and efficiently, but we have under-resourced the system so dramatically that we have not dealt with it effectively. The measures being put forward are a repeat of measures that have failed before. We have evidence from previous Governments, all democratically elected—I do not know why we are even talking about whether they are elected or not. They all try to do the same things and, if you look at the evidence, you will see that those things have not worked. That is what is so frustrating—to look at measures in the Bill that are replicating measures that have not worked previously.
Chloe Smith
Q 20 But they are not, because the 2005 pilot was based on correspondence rather than engagement.
Mike Kaye: Talking about correspondence rather than engagement is not going to be the issue that changes whether this works or does not work.
John Wilkes: I have worked in this field for seven years now, and one of the observations that I would share is that the system has been in a state of constant churn over that seven years. Asylum is a very complicated thing—it is one of the most complicated activities that the Home Office has to do under its responsibilities—and it has had perpetual change in all sorts of aspects of the system, and I mean major organisational changes. So the system has no time to settle down and to have a coherent overview of how these things are done. Doing a pilot in one area of the system when there are things that need to be addressed in other parts of the system means that you do not get the results you need. The system needs some time to settle down and to enable a much more focused approach on the whole system. In that way, you will start to achieve better results.
Mike Kaye: If you look back over the past 20 years—I totally agree with what John is saying—what you see is different Governments setting different targets. What you are generally doing is shifting very limited resources to meet a separate target, which just creates a backlog in a different aspect of the asylum system, and you have big structural changes, which are administratively inefficient, waste time and do not deliver the end goals that you are looking for. If we want to save money, to make the system work more efficiently and to have quicker and more accurate decisions, we need to resource the whole system properly.
Anne McLaughlin (Glasgow North East) (SNP)
Q 21 My question is specifically to John Wilkes. It is about the Scottish issue. Obviously, every country has different legislation. You have been through the changes in legislation coming from this House, so I hope that you will be able to advise us about the impact of this legislation, and the challenges that that presents, in terms of Scottish legislation.
John Wilkes: One of the things we said in our evidence was that the Committee should ensure that the Immigration Bill considers whether the legislative consent process needs to be undertaken with the Scottish Parliament under the Sewel convention, which is actually going to be put into statute under clause 2 of the Scotland Bill, which is currently going through the House. We say that because the whole concept behind legislative consent is that whatever this Parliament does should have no unintended consequences on the business of the other Parliament. There are a number of aspects of the Bill, particularly on asylum support, that we feel would have an impact, in the way colleagues have identified, on local authority responsibilities and on duties to children, which are framed in different legislation in Scotland. There is the Children (Scotland) Act 1995 and the Social Work (Scotland) Act 1968, which, in Scotland, defines local authorities’ responsibilities in terms of a duty of care to people who have no other resources. We believe that one of the duties of this Bill Committee is to ensure that there are no unintended consequences. What the Home Office often says about immigration legislation is that the intention is around immigration. What Sewel also says is that you have to look at the impact of that legislation, and we think that the impact of this legislation potentially involves legislative consent considerations between the two Parliaments.
Simon Hoare (North Dorset) (Con)
Q 22 Mr Kaye, could I take you back to what I thought was the nub of your argument? You said—I think I heard you correctly—that as soon as financial support is removed, people lose contact. Can I put the other side of the coin to you? If somebody’s application is finally refused, do they not, against that backdrop, and irrespective of whether financial support is provided, run and hide, because they do not like the decision, and they do not want to leave the country? I am not persuaded that an element of financial support will, in any way, shape or form, encourage them to stay in a continuous dialogue with the Home Office and agencies while preparations for their removal are made.
Mike Kaye: Refused asylum seekers are not one homogeneous group; there are obviously lots of different people in different circumstances. Some people want to go home, and they take voluntary removal. That can take a long time; their Governments may not co-operate in providing them with documents. Others may be too sick to travel. Others should return home, but may abscond. You do not have to take my word for it; I am giving you evidence from studies that have been done. Where you have families that are supported, they generally do not abscond; they stay in touch with the authorities. If you cut off support, and you have refused asylum to a family or an individual, not only do they have no incentive to stay in touch but it will be very difficult for them to do so once they are destitute. It is the Home Office’s own staff who are saying, “Keep them supported, because then we will know where they are. We can stay in touch with them and encourage them to return home.”
Simon Hoare
Q 23 With respect to officials, we only know where people are if they want us to know where they are.
Mike Kaye: Well, I—
The Chair
I am sorry. We could go on for an hour about this, but we are really up against the clock, and I have other Members to get in. I would just like the other two witnesses to say whether they agree with the statement that has just been made.
Judith Dennis: Yes. Look at the family returns process data, look at the process, look at the engagement, talk to the family engagement managers and explore how the family returns process works and what is necessary to keep it in place and the families involved.
John Wilkes: I support Judith’s comments.
The Chair
Lovely. I think it is Paul Blomfield next—or did you have any more questions, Mr Hoare?
Simon Hoare
Q 24 I did have a few more, if time allowed. I shall try to be brief.
These questions are to all three of you, and they probably need yes or no answers. While you are supporting or advising people going through the process, do you take them to end of the telescope they do not want to look from—that is, how will a decision whereby they are not allowed to remain be implemented? Do you do that in advance on a “just in case, let’s keep all the bases squared” basis?
John Wilkes: Yes.
Judith Dennis: You need to keep faith in the system until they have had their final refusal.
Simon Hoare
So that is a no. Mr Kaye?
Mike Kaye: Yes, I think 40% of returns are voluntary. That is from Refugee Action, which is working with people to try to get them to go home.
Paul Blomfield (Sheffield Central) (Lab)
Q 25 I was in Stockholm last year on a cross-party delegation, where we were all impressed by the rate of compliance and returns under the Swedish system. I just wondered what lessons you all felt we could learn from other countries, particularly in relation to this issue of withdrawal of support, in terms of effective compliance, because that is something that we all share an interest in.
Judith Dennis: I do not know enough about the Swedish system, I am afraid. One of the things that worries me about the family returns process—
Paul Blomfield
Perhaps from other international comparisons.
Judith Dennis: One concern when families have come to the end of the asylum process is the lack of legal aid for their immigration cases. Somebody is not often either an asylum seeker or an immigrant; during their time here they may well be in both of those categories. Once their appeal rights are exhausted, they may need professional legal advice to help them pursue their case. There are families who go through the family returns process whose removal is not pursued because they are found to have a right to be there, so we need to remember that we do not always make the right decision first time.
Mike Kaye: The experience of other countries uniformly shows that you want a system that gets the decision right first time and has very little backlog, because that discourages unmeritorious claims. It also, conversely, ensures that you do not have backlogs where it becomes more difficult and, indeed, less reasonable to try to remove people, because the longer they are in the process, they more chance that they will have family obligations here; they have restarted their lives and they may actually have lived the majority of their lives here. If you want a system that works properly, it needs to be resourced to work quickly so that you get accurate and prompt decisions, and those decisions need to be implemented.
John Wilkes: The unintended consequence of backlogs is that when you get to address the backlog, what often happens is that the Home Office exercises its discretion and allows people to remain. The message that that sends to people further back in the system is that if you sit it out longer, you might get a better chance. We need to sort the system out to ensure that decisions are made right first time.
Paul Blomfield
Q 26 Briefly, is there any evidence from other countries that withdrawal of support along the lines proposed in the Bill assists compliance?
Mike Kaye: I cannot speak for other countries, but in the UK we can go right back to 1996 and look at how we have tried to use the removal of support either to reduce applications to the country or to encourage returns, and none of those attempts has worked.
Byron Davies (Gower) (Con)
Q 27 Good morning. I have heard what you have said in answer to the questions about what is proposed in the Bill. You have given your objections to what is in the Bill, so can I ask you what you think is the way forward to effect behavioural change? What is your answer to it?
Mike Kaye: My answer—I have referred to this before—is that you need to resource the system properly so that you get quick, accurate decisions and you enforce them. That is not about spending more money, because it is a spend-to-save policy. With each caseworker you employed, you would actually save money from resolving asylum cases earlier in the process. Once you reduce backlogs, you reduce incentives for people to make unmeritorious claims. You also ensure that you do not get, as John was saying, people who have been in the system for a long time whom you can no longer remove because they get other obligations to stay in this country. That reduces cost and makes the system work better, and it gives it credibility.
Byron Davies
Anyone else have a view on that?
Judith Dennis: It is important to understand that some cases are complex and some decisions will not be made right first time. You can do the majority right first time, but you need independent scrutiny and you need skilled caseworkers. There are some in the Home Office who are very good at picking up a case and seeing it through to its end, and that has not been incentivised in the past. Incentivising people to pick up a case and not to lose it until they have resolved it is needed. In addition, accept when somebody cannot be returned home, and give them leave.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Q 28 I have two very quick questions. One is for Mr Wilkes, following on from my colleague’s question. Do you think there is a danger that the Bill might contravene the Children (Scotland) Act 1995?
John Wilkes: I do think there is a risk of that. That is why I believe the Committee needs to scrutinise these things, and similarly for the provisions of the Children Act in England and Wales. I believe that is why you need to have a consideration of legislative consent, to ensure that those submissions are made about the potential impacts of that.
Gavin Newlands
Q 29 Thank you. One explanation given for the failure of a 2005 pilot of terminating support was lack of faith in the asylum process. Is there any reason to believe that people have any more faith in that process now?
Judith Dennis: Among those people whose cases are dealt with by experienced and skilled caseworkers, probably. I was very impressed during a visit to one office where a family had a range of complex reasons for being here, including some of those alluded to earlier, and the caseworker took time to understand the complex problems and tried to resolve each one. We can have faith in those people. Unfortunately, it is not really an incentivised skill.
The Chair
Order. I am afraid the time has beaten us and I must bring this session to an end. I thank the witnesses so much for coming. You can see the interest of Members and I am sure we could have gone on for longer, but thank you for coming.
Examination of Witness
Professor Sir David Metcalf gave evidence.
The Chair
Q 30 We will now hear evidence from the Migration Advisory Committee. For this session, we have until 10.45am. Will the witness please introduce himself?
Professor Metcalf: I am David Metcalf, emeritus professor at the London School of Economics. I and have been chair of the Migration Advisory Committee since it was established in 2007. The head of secretariat of MAC, Tim Harrison, is also here.
The Chair
I am grateful for that. I should warn you that this is the favourite session of the Minister because he gets to ask questions, rather than answer them. I have a horrible feeling he wants to start. Minister.
James Brokenshire
Q 31 Perhaps I could open things up for the Committee by asking an open question. Sir David, what are your thoughts on the establishment of a labour market enforcement directive, the need for greater co-ordination on enforcement, and the impact that might have on the employment market overall?
Professor Metcalf: By the way, the Minister and I are appearing this afternoon as well, so we are seeing a lot of each other today.
In a nutshell, I think the proposals are terrific but let me elaborate. My background includes, as part of the Low Pay Commission, 10 years setting the minimum wage, so I know something about the minimum wage, compliance and enforcement issues.
On the Migration Advisory Committee, particularly when we have looked at less skilled immigration, on which we published a major report in 2014, we do not stay in London; we go on visits. We have seen a lot of exploitation, in some cases bordering on slavery. That in a sense confirms the view that I had when I worked on the minimum wage that we do not have sufficient resources to do the compliance and enforcement as effectively as one would wish. For example, when we went to Wisbech in connection with the low skills report, we came across some excellent examples of joined-up government, with different agencies working together. That got us thinking that we have these very good bodies but are they working sufficiently harmoniously? In our report, we said in no uncertain terms that there were insufficient resources devoted to enforcement and that the fines and probability of prosecution were basically trivial—I do not think we used that word, but I will use it now.
In a sense, many of the employers where the gangmasters operate have no real incentives to abide by minimum standards or the minimum wage. We have a flexible labour market—I think this is a good thing because it helps our productivity and with jobs and so on, although that is a matter of debate—but we are not enforcing the minimum standards.
I think the three main proposals in the BIS-Home Office document will go a long way towards assuaging the concerns that we set out. I know that some of my other academic friends who have thought about this—possibly more than me—share that view. Just as an aside, the consultation document on labour market enforcement is excellent and I am sure that the Committee will recognise the co-operation between the Home Office and BIS. Sometimes there is tension between the Departments, but on this occasion they have produced an absolutely marvellous document.
First, you have a director of enforcement and he or she will, in a sense, set out strategy, report and be the pivotal person in an intelligence hub. They will mainly be dealing with the minimum wage with HMRC, the Gangmasters Licensing Authority and the employment agency standards inspectorate. They are the three bodies that he or she will have to engage with initially and set the strategy out for and think carefully about resource allocation.
The second proposal is a new offence of aggravated enforcement, which is in a sense between the rather minor infractions—I do not want to call them less serious—of the minimum wage rules and those that are very serious, almost slavery. Right now, we have not got anything that sits in the middle and the proposal is essentially to have one that sits in the middle. In the extreme, that might attract a two-year custodial sentence, so it is pretty serious.
The third proposal is that the Gangmasters Licensing Authority can spread out—not so much in its licensing role, but it does have considerable expertise in horticulture and agriculture and the proposal is that it could check in particular on aggravated enforcement in other sectors, such as construction, hospitality and so on. When I was an academic in this area, I wrote that there was a lack of enforcement. I have been involved with both the minimum wage and immigration in particular on the low-skilled end, and I think the proposals are really excellent.
Craig Whittaker
Q 32 For laymen like me, are you saying that the new role of the director of labour market enforcement is a good idea?
Professor Metcalf: A very good idea indeed, yes.
Craig Whittaker
Q 33 Okay. Do you think the director will provide the focus necessary to bridge the gap you say exists between the current labour market offences? You also mentioned lack of resources throughout your answer. Do you think that the Bill will bridge that gap, too?
Professor Metcalf: That is a tricky one. Successive Governments have indeed put in a bit more resources—for example, for HMRC to enforce the minimum wage—although quite whether they are sufficient is an open question. It depends on how the director works, but on the idea of them thinking through the resources required for the three different bodies, and perhaps in future health and safety, for example, and possibly bringing local authorities in as well—strategy is an overused word, but in this case it really is a strategic role. Thinking through quite what the strategy should be will go a long way towards, in your words, filling the gap with the resources. Frankly, the inspections are very resource-intensive, and I suspect we just do not have the public finances for sufficient enforcement.
As an aside, that also takes you into a point that I made in my one paragraph to you: we need to think about punishments as well.
Craig Whittaker
Q 34 In your 2014 report, “Migrants in low-skilled work”, which we have quoted several times, you talk about countries that use the International Labour Organisation labour inspection convention 81 of 1947, which seemed to be particularly effective. Will this new director bring us much closer to that working model?
Professor Metcalf: If I may say so, that is a really good question, because in some senses, what we were feeling our way towards in the “low-skilled” report was the notion of having an overall labour market inspectorate, which that ILO convention is about. What happened was the Prime Minister took up the issue of enforcement in the speech immediately after the election and set up an immigration taskforce, but on the immigration taskforce, you have different Departments who have different interests—the Treasury, with HMRC, and now the Home Office, with the Gangmasters Licensing Authority, and so on. I think it is quite understandable that the immigration taskforce—the ministerial taskforce—and probably, the Cabinet Office and so on, did not want to disrupt the machinery of Government completely and start with a blank sheet of paper and set up a new labour market inspectorate. They wanted people to get on with the job but have much more joined-up thinking and overall strategy.
We are where we are, and it may well have been that we would almost have had no labour market enforcement for the two years while we were trying to set the inspectorate up. It would be very difficult. Some of the people are not civil servants and some are, and they are located all over the place. Sticking with what we have got and trying to approach it in probably an incremental way is actually very sensible.
Sarah Champion (Rotherham) (Lab)
Q 35 Mr Bone, it is a pleasure to serve under your chairmanship. I have a couple of questions. I am a big fan of the anti-slavery commissioner. I think that in six months, he has had a big impact, precisely because he is independent and has a remit that goes across different Departments and organisations. You said that it was key that the post of director is able to work harmoniously with other Departments, but you mentioned the Health and Safety Executive and local authorities, and a lack of clarity about what the relationship would be. Do you think that ought to be fleshed out on the face of the Bill for this post to have the maximum impact?
Professor Metcalf: No, I do not think so at this stage. Doing it incrementally is really a rather good idea. The main enforcement people currently are the three in the Bill—the employment agencies, the Gangmasters Licensing Authority, and HMRC, with the minimum wage. In a sense, the new director, whoever he or she is, will have a major task to get those agencies to work in a bit more of a joined-up way. There may well be a case in the future for trying to bring in, under the same strategic role, health and safety, local authorities and on occasions, possibly the Department for Work and Pensions as well, which deal with national insurance, for example. For me, it is a major task to do what is being done, and I do not think that at this stage, it is necessary to do that, but it is possible that we might even think, three or four years down the line, when we have seen how it works, “This is three quarters of the way to a fully-fledged labour market inspectorate. Perhaps we could transform it into a labour market inspectorate and bring the other bodies in as well.” But I think this is very good—it is not a halfway house; it is a three-quarter-way house.
Sarah Champion
Q 36 You also mentioned the need for sufficient resources. Do you believe that, as things stand, the director does have sufficient resources to prevent worker exploitation?
Professor Metcalf: Probably not, but in the consultation document and, I think, in the Bill, it does not actually set out quite what the resources are.
Sarah Champion
Q 37 What do you think they should be?
Professor Metcalf: I think that successive Governments have put more resources in—certainly into HMRC, but less so with the Gangmasters Licensing Authority. One understands the difficulties with the public finances, but we probably do not have sufficient resources. In the low-skilled report, we calculated that you would get an inspection from HMRC once every 250 years and you would get a prosecution once in a million years. That suggests that we do not have enough resources. In turn, that takes you to the potential trade-off between the resources and the punishments. If you do not have sufficient resources, you may need to ensure that the punishments—certainly on occasion—are properly implemented. That is why I am in favour of the new offence of aggravated exploitation, which, in the extreme, carries a two-year jail sentence.
Sarah Champion
Q 38 Your hope was that the director would be able to set established minimum standards with employers. However, in parts of the Bill, the criminal aspect has shifted from the employer to the employee. What impact do you think that is likely to have?
Professor Metcalf: You mean on illegal working? I try, as chair of the Migration Advisory Committee, to stick to my knitting and do what we have done. Frankly, I have not thought about that very much. It is a matter for you, as the Committee, and for other people to decide what they think about illegal working.
Your point about employers is really important. I hope that the CBI, which is an excellent organisation— I know from my time on the Low Pay Commission how important the CBI was in ensuring that the minimum wage worked properly—buys into this. Occasionally, the CBI is rather hostile to regulation. In a sense, that rather surprises me, because the regulation that has been proposed here will help its members. It takes away the cowboys, as it were, and the people who do the undercutting. Therefore, your point about the effect on employers is very important. I hope that the CBI buys into this.
Rebecca Harris (Castle Point) (Con)
Q 39 What impact more generally do you feel illegal or poorly regulated workers’ protections have on the domestic, legal workforce?
Professor Metcalf: We went into that in some detail in the low-skilled report last year. It is interesting. When we went out to Wisbech and Peterborough and so on, the concerns were about the exploitation of the migrants. However, the people we spoke to were well seized of the consequences for British workers: possibly some displacement, although lots of times they would not actually want to do the jobs; and, for certain, downward pressure on the wages at the bottom end of the labour market. By properly regulating this aspect of the labour market—including immigrants and the British workforce—this will go a long way towards raising the welfare of British residents. I would have thought that this is something that we should all welcome. Our report was about immigrants, but it went into what the issue was doing to British residents. We did find evidence that it was undercutting wages. The measures will be very important to stop that.
Keir Starmer
Q 40 You described, in your evidence, the current regime as trivial in the sense of the likelihood of an intervention or a prosecution. You gave the figures of an intervention once every 250 years and a prosecution once every million years. We welcome, therefore, the director of labour market enforcement, because that provides an opportunity to bring a degree of oversight and strategic thinking. Obviously, reporting to the Home Office and to the Department for Business, Innovation and Skills is a welcome step in the right direction.
I know you have been tasked on resources a number of times. You clearly accepted that, the public finances being what they are, there may not be much by way of resources and suggested that increasing the sanction might do the same work. Is it not the reality that, with that level of intervention and prosecution, unless significant resources are put into the relevant agencies, the prospects of this raising beyond trivial to very much further up the scale are pretty limited? You can only do so much with the sentence, unless you are going to go way off the scale.
Professor Metcalf: Of course, I am exaggerating when I say once every 250 years for a visit. Of course, they will do it based on risk.
Keir Starmer
Q 41 It is targeted and intelligence-led.
Professor Metcalf: Yes. The director being the centrepiece of the intelligence hub will certainly help to ensure that the resources that are initially available to the three agencies will be used in a sensible and, I assume, most effective way. I am with you, Mr Starmer. I wish that more resources were devoted. I am not quite sure how much, but one of the roles of the new director will be to put pressure on the different arms of Government to provide more resources for this. I do not know at this stage how much more is needed to be able to increase the number of visits and inspections, albeit on the basis of risk.
Keir Starmer
Q 42 Ultimately, the pressure will have to be on the Government, because the agencies are likely to say, “We allocate our resources. We are happy to go along with the strategy but, ultimately, those are the resources we have. Therefore, we simply can’t up the number of inspections, and so on, in the way that might be strategically most advantageous.”
Professor Metcalf: Absolutely. The pressure will come via the director on to the different Ministries of Government and, ultimately, the Treasury.
Keir Starmer
Q 43 In headline terms, what do you see as the gaps? This is to co-ordinate a number of agencies, which is a good thing. What gaps are still being left?
Professor Metcalf: We need to consider where DWP, the local authorities and the Health and Safety Executive fit into the picture. They are the other main agencies and, for quite understandable reasons, they have not been included at this stage. We need to consider that.
As I have mentioned, given that we all know that we do not have the resources for enforcement, in the background we should be thinking about the penalties. If you think about the minimum wage, for example, although the penalties on the statute book are possibly large, employers are being fined only about £1,000 on average when HMRC takes them to court. These penalties do not seem to be sufficient to encourage firms that are behaving badly to obey the law.
Simon Hoare
Q 44 Given what you have just said about the importance of having the director, and taking on board the resource issue, where would you be expecting him or her to be focusing their energies in the first instance? Which sectors of the economy are most exposed to workers being exploited?
Professor Metcalf: That is an interesting and difficult question.
Simon Hoare
I know. That is why I asked it.
Professor Metcalf: There is good behaviour and bad behaviour in most sectors, but we know that hospitality is an area that is very much at risk. A lot of that is ethnic on ethnic. It is Chinese on Chinese, as it were, and Bangladeshi on Bangladeshi—I know that from the minimum wage. The big fiddles are on the hours of work—they grossly understate the hours of work to HMRC to make it look as if they are paying the minimum wage when they are not. Construction is quite a fruitful area. The reconstituted GLA will probably focus on those two sectors. In a sense, that is why I think having the director as the pivotal person for the intelligence—all those agencies know a lot about the sectors they have to get into—will help a lot. But my initial inclination would be to say construction and hospitality.
Anne McLaughlin
Q 45 Is a worker who does not have the right to work in this country—for example, a parent who is made destitute by this legislation—and who is being ruthlessly exploited, or physically or sexually abused, more or less likely to seek protection as a result of these provisions?
Professor Metcalf: I do not know all the details of the legislation, other than what I am talking about in terms of enforcement. I would hope that the director makes the enforcement issue more central to the labour market. If we enforce the minimum standards, a person in those circumstances would be more aware of the possibilities—often, particularly if they are migrants, they are not aware of them—and also more likely to go public. I would have thought that that would be quite a major component of the new director’s work. That basically follows up the question from earlier, because if you can stop the exploitation of the migrants, it is also helpful to British residents.
Paul Blomfield
Q 46 Sir David, I imagine that you would agree that labour market exploitation takes place where gangmasters and those exploiting people can create a climate of fear and intimidation. You will be aware that in the States, for example, there is a clear protocol between the Department of Labour and the Department of Homeland Security on firewalls between immigration control and labour market enforcement, to ensure the effectiveness of labour market enforcement and to create a climate in which people can properly express concerns. Is it important that we have such a firewall in the UK?
Professor Metcalf: I have never thought about that. I would need to ponder that a little. In some senses, when we went out in Wisbech, for example, we thought that having a Home Office official and somebody from the Department for Work and Pensions doing national insurance, as well as some people from the local authority and a community policeman from Latvia who spoke Latvian—the issue was about Latvians—made for a very strong enforcement team. So I am not sure, on the ground, when you do major inspections like this, that the firewall would be completely helpful, but I have not thought through the issue. I understand what you are saying in terms of the machinery of Government, but I can see that, on the ground, it would actually be quite helpful to have the different bodies.
Paul Blomfield
Q 47 Are you not concerned that those who are being exploited might be less willing to talk about their exploitation if they felt that that threatened their immigration status?
Professor Metcalf: No. I think that that would be the case. I mean, by and large, when we were dealing with this, we were dealing with A8 countries. But in terms of threatening immigration status, we do not want people to be exploited, but if their immigration status is that they should not be here, well, they should not be here.
The Chair
Time is again catching us out, so I think this will be the last question. Mims Davies.
Mims Davies (Eastleigh) (Con)
Q 48 You mentioned the construction and hospitality industries, in particular, as areas of illegal working—
Professor Metcalf: No, I did not say “illegal”.
Mims Davies
Sorry if I misunderstood that—areas where there might be more exploitation. I am just wondering about the causes. Is that about a skills gap, or is it just pure exploitation?
Professor Metcalf: A lot of it is because those sectors have very low levels of unionisation, for example. Unions have costs and benefits, but one of the things they do is to try to enforce proper minimum standards. A lot of the work in construction is done on projects; in hospitality, there are so many workplaces that is possible for the employer to be almost never on the radar. There is a combination of reasons why those sectors are prone to commit exploitation and, to use your word, to do things that are basically illegal, certainly in terms of the minimum wage. If you were to go into Chinatown and check the immigration status of the people there and the way in which wages and hours are calculated on their payslips—to the extent that any of them have payslips—you would find huge possibilities for enforcement.
The Chair
I am afraid that that brings us to the end of the time allocated for the Committee to ask questions. Thank you, Sir David. You have been an excellent witness.
Examination of Witnesses
Kevin Green, John Miley and Caroline Robinson gave evidence.
The Chair
Q 49 We will now hear oral evidence from the Recruitment and Employment Confederation, the National Association of Licensing and Enforcement Officers, and Focus on Labour Exploitation. For this session, we only have until 11.25 am. I warn the witnesses not to be surprised if the Minister asks questions, because he is allowed to do that in this session. Will the witnesses please introduce themselves?
Kevin Green: I am Kevin Green, chief executive of the Recruitment and Employment Confederation.
Caroline Robinson: Caroline Robinson, director of policy at Focus on Labour Exploitation.
John Miley: John Miley, the national chair of the National Association of Licensing and Enforcement Officers and also licensing manager at Broxtowe Borough Council in Nottinghamshire.
Keir Starmer
Q 50 May I begin with the illegal working offences in the Bill, in particular the extension of an offence to employees as well as employers, and ask the panel how they think that will impact on the power relationship between an exploiting employer and exploited employees? Secondly, do the panel think it will have any impact on the confidence of employees to come forward? If criminal cases are to be brought, it is very important that those affected come forward and give an account, and possibly give evidence. Thirdly, do the panel think that there is any evidence that the employee offence is needed, given the other offences that are already in existence? Caroline Robinson, I think you particularly expressed some views on this.
Caroline Robinson: At FLEX, we think that the offence of illegal working is extremely dangerous, for three reasons. They relate to modern slavery, in particular, which is a key focus for our organisation and a major focus of this Government, who have set out to be a world leader in tackling modern slavery.
First, we think that people will be fearful of coming forward to be referred into the UK national referral mechanism as victims of trafficking. Only last week, we were working with a victim of trafficking who is currently in a situation of trafficking in the cleaning sector, but who has an undocumented status and is very fearful of coming into the national referral mechanism. The NRM provides 45 days’ support for victims of trafficking and a potential positive conclusive grounds decision that that person has been trafficked. If, however, they are unlucky and not found to be a victim of trafficking, for whatever reason—people are extremely fearful of that—now, under this offence, they might face 51 weeks in prison. That is the first reason.
The second reason is that we know that traffickers use the threat of deportation, removal and reporting to immigration officials in order to abuse and exploit workers. We are extremely worried about this offence, which you stated yourself is an addition to existing offences that people who have overstayed or entered the country undocumented would already face penalties for under the Immigration and Asylum Act. This offence, which serves a public relations function in terms of intensifying the hostility towards migrants, will be used by exploiters to intensify that hostility, to ensure that people remain in situations of exploitation and to threaten people with removal. We heard about a situation in the fishing industry recently in which a man was being abused and was living in extremely dangerous conditions. When he asked to have better conditions and living standards, the skipper called the Home Office, took him to port and reported him for removal. The conditions that people are living in and under which people are exploited are very much related to their immigration fears.
The third reason is something that was raised a lot on Second Reading, namely the criminalisation of trafficked persons. Although the Home Secretary set out the statutory defence, which is in the Modern Slavery Act 2015, it is quite narrow in its terms. The schedules exclude a number of offences for the victims of trafficking, such as aggravated criminal damage, but if I was to leave the building in which I was held I would no longer be covered by the statutory defence in the Modern Slavery Act.
We also know that people are in different types of situation in the UK. I was interviewing trafficked persons on Friday, and a woman I spoke to, who was in the national referral mechanism, was exploited when she first came to the UK. She then managed to escape that exploitative situation on her own, and entered into various undocumented working relationships. What would the situation be in relation to her? What would it be in relation to someone who was in an undocumented working relationship when they first entered the UK and was then exploited? How does this relate? We have a number of questions in relation to that and are deeply concerned. Given that, as you said, there are offences that relate to undocumented workers already, we think the measures are entirely unnecessary and very dangerous.
Rebecca Harris
Q 51 We know migrants are quite knowledgeable—they are good about communication and about the details—so do you think that the knowledge that working in Britain would be illegal and a criminal offence might deter people and make it less likely that they would allow themselves to be trafficked in the first place? With that knowledge, they are less likely to come to this country.
Caroline Robinson: The question of whether migrants are knowledgeable about the different offence structures in the UK is an interesting one. I think a lot of myths circulate. There is a perception of marginalisation and that people are not on a par with British citizens in terms of rights. As for individual offences, and the fact that this offence is 51 weeks but the offence under the Immigration and Asylum Act is six months, I do not think that people are aware of that distinction. When you talk about imprisonment versus removal, there is certainly a fear of imprisonment among the trafficked persons that I talk to, and a real fear of officials. However, in terms of the level of detail, and this extra detail when going to countries outside the EEA area, and how that would have an impact, I think there is a distinction—
Rebecca Harris
Q 52 You do not think that it might make people less vulnerable to being trafficked if they knew in advance that this was the legal situation in Britain?
Caroline Robinson: I have been working on the field of human trafficking for 11 years now. At international policy forums, the first thing that Governments are prepared to do is put money into awareness raising and huge prevention campaigns. This Government put £2 million into a widespread awareness campaign about the modern slavery hotline, which was great, and about modern slavery. A lot of effort goes into awareness raising about the threats and the dangers that people face, yet they still come.
The Chair
Q 53 For clarity for the Committee, will the witness define what she means by trafficking? I thought trafficking meant people who were not aware and were tricked. What is your understanding of trafficking?
Caroline Robinson: Trafficking as defined in the UN human trafficking protocol involves the act, the means and the purpose, the act being to recruit, transfer or move someone into a situation, the means being to coerce, threaten or deceive and the purpose being exploitation of various forms. The act also includes harbouring, which is the retention of someone in a situation, so we and many eminent international legal scholars understand trafficking to mean when someone is held—through coercion, threat, deception—in a situation of exploitation. For our intents, and for many Governments, although not the English Government, trafficking is not a question of movement but of holding someone in that situation, and therefore trafficking could be a situation, as described on Channel 4 news last night, of Romanian workers held in an apple packing factory through threat, coercion and exploitation—not moved into the UK, but held in a harbouring situation, as set out in the UN human trafficking protocol.
The Chair
That is very helpful. Rebecca Harris, did you have anything more to say on this?
The Chair
We will go back to Keir Starmer, but I would like to hear from the other two witnesses as well.
Keir Starmer
Q 54 Can I go to the flipside of enforcement and look at protection? The role of the director of labour market enforcement has been widely welcomed, and rightly so. Most discussion so far has been about enforcement. Do the witnesses have views on the protective role of the director and whether the remit is wide enough?
Kevin Green: We certainly welcome the role. We think it will add value in terms of the whole data gathering co-ordination across Government. In terms of its role in protecting vulnerable adults, that is dependent on the resource and the way that it actually functions in reality. For us, extending the remit of the GLA in terms of it being able to investigate exploitation is important. That is welcome. I know that that is part of the consultation. Again, going to the last point, you have to be very careful about any kind of regulation for the victims of these offences, because a lot of the stuff that we see is criminal activity. A lot of legitimate businesses and recruitment agencies are infiltrated. Often, it is dependent on an individual worker being quite brave—being a whistleblower and flagging this up so that authority can be brought in. We need to be very careful that we do not demonise the people who are in vulnerable positions.
We welcome the development. We think it will move things forward. The level of protection is much more about the level of resource available across the breadth of activity that it will cover.
Caroline Robinson: I share that view about protection being linked to resources. We advocated strongly during the Modern Slavery Bill’s progress through Parliament for expanded remit and resources for the Gangmasters Licensing Authority and for an overarching labour market focus on inspection and enforcement. We welcomed the Prime Minister’s announcement on 21 May, and the measures in the Immigration Bill go some way to address that.
The point about the protective purpose of the director is very important. For us, the core purpose of that role should be the protection of vulnerable workers and the prevention of exploitation. That has been at the centre of the work of the Gangmasters Licensing Authority and has been part of its success. That authority, as we know, operates on a limited budget, so the resources are also of critical importance. On the role of the director of labour market enforcement and the labour market enforcement strategy, what most concerns us is the power of the director to hold control of the budgets, governance of those labour inspectorates and shifting budgets according to the strategy.
We know that the Gangmasters Licensing Authority is extremely stretched in its current remit and has done a great deal to ensure a level playing field in those core sectors in which it operates. If it is to be shifted into other sectors, we believe that the good work it has done in the existing sectors is under grave threat. This overarching role is a good thing, but it requires extra resources if any changes are to be made, and it definitely needs to have, as the core purpose of that role, the protection of workers and the prevention of exploitation.
John Miley: The ability of the agency to get involved in enforcement workers’ licensing is welcome. It will cut corners—that is not the right phrase. It will remove barriers for them in respect of enforcement. Currently they have to await police action for the licensing authority to attend. To be able to be a responsible authority—to be a responsible body under the Licensing Act 2003—will certainly improve that status for them.
Craig Whittaker
Q 55 Caroline, I want to come back to you and the answer you gave to my colleague earlier. You said that you were not sure that illegal immigrants are aware of the rules and regulations around countries. Most people in the UK know that when you go abroad there is a huge perception in the wide world that Britain is a light touch.
I grew up in Australia and the children of a lot of my friends I grew up with have come to the UK and know full well that they can overstay their visas without too much hassle. We have 100,000 students who overstay their visa requirements. There are also the heritage cases we know about, and the traditional open-door policy. How can you say that you are not sure whether somebody coming to this country with the intention of being an illegal immigrant is not aware of the rules and regulations?
Caroline Robinson: I was talking about specific rules and regulations and whether the distinction between six months and 51 weeks would be transferred to someone in a village in Nigeria, for example. I am not sure that I agree about the light touch. Your case about Australia is interesting. I once arrived in India without a visa and the Indian officials allowed me to leave my passport at the airport and spend my time in India, and then to return and leave.
Craig Whittaker
Q 56 We are not talking about India, we are talking about the United Kingdom and what has traditionally happened in this country. The general perception, throughout the world, not just Australia, is that we have traditionally been a light touch. That is among people who come and go just for holiday visas, for example. If you intend to come here as an illegal immigrant, surely you will have the knowledge that you can get away with far more than people who do not intend to do that in the first place.
Caroline Robinson: What I was suggesting was that it is quite a different situation for people from different countries. If you are on a holiday visa and are Australian and overstay, potentially that is a little bit different from arriving here from a country such as Nigeria and overstaying. The situation and the response might be different. That is part of what I was suggesting.
Craig Whittaker
Q 57 You do not think that the UK has been a light touch, then.
Caroline Robinson: We have had a raft of immigration legislation over many years, with controls and responses. I am not sure whether that means that people think the more immigration legislation that we have, the more of a light touch people perceive us to be. Then perhaps there is a problem with the legislation, I do not know.
Sarah Champion
Q 58 Leading on from Mr Whittaker’s question, do any of the panel believe that clause 8, the offence of illegal working, will have any impact on people illegally coming to this country?
John Miley: I am not sure. In terms of licensing, I am not sure there would be any particular effect at all, I have to say. I am not sure that there is a major problem in licensed premises; maybe more so in late-night takeaways and off-licences. I do not perceive that to affect it at all.
Sarah Champion
Q 59 Does anyone on the panel think that clause 8 will prevent illegal workers coming into the country?
Caroline Robinson: What we think will prevent people from working here undocumented is to reduce the demand for undocumented workers. To do that, we require enforcement of labour standards across the board. To be clear, the demand for undocumented workers is not because employers prefer undocumented over documented workers; it is because they cannot pay documented workers below minimum wage as easily as they can undocumented workers. They still try, and as I mentioned, Channel 4’s investigation last night showed Romanian workers being paid below minimum wage and being treated in substandard conditions, because they were under the perception that they were not entitled to the same rights as British citizens.
We know that 78% of those exploited for their labour are, in fact, documented in the UK. So the reduction in demand for undocumented labour through the enforcement of labour standards by this director of labour market enforcement is welcome, but to do that we need a labour inspectorate that is level with other labour inspectorates across the EU. To have just 0.8 inspectors per 100,000 workers at the moment leaves us quite open to abuse. We just heard from the Migration Advisory Committee, which said in its report last year on low-skilled migration that there is just one inspection by the HMRC national minimum wage inspectorate per 250 years for employers. The frequency of inspections is certainly an incentive for employers to employ undocumented workers, as the fear of being caught is low.
Sarah Champion
Q 60 My personal feeling is that clause 8 is a show pony for the Daily Mail. It will not actually make any difference to people coming into the country to work illegally. However, what is your opinion of clause 9? Do you think that it goes far enough to put the onus on employers to not employ people illegally and not exploit workers?
Kevin Green: I gave evidence to the Modern Slavery Bill Committee when that legislation was going through. One thing that is quite important is that large businesses manage their supply chains effectively and are held to account. We recognise that there was some movement towards that in the legislation, and the anti-slavery commissioner clearly has a remit to look at that. We do not think that that has gone far enough. We think that large employers, such as supermarkets, need to be very aware of what is happening throughout their supply chain and should be held to account. That is much more likely to deliver results, along with strong enforcement, than creating more legislation and regulation that is not enforced.
Sarah Champion
Q 61 Specifically, previous witnesses have spoken about takeaways and the construction industry, which would be small employers. Does clause 9 go far enough to prevent that exploitation?
Kevin Green: It is helpful, but I am not sure that it goes far enough. Think about how the supply chain works for the construction industry, with multiple small organisations working into a large developer. Hold the large developer to account, make them accountable for what activity happens in their supply chain, and I think you will drive out a lot of the bad practice that we are hearing about.
Sarah Champion
Q 62 Mr Miley, as a licensing officer, does this give you enough to go on to stop illegal practice, or would you like to see more in there?
John Miley: I think it helps. I am quite keen to ensure that the licensing authorities are not given some sort of role in this in respect of being responsible. If we are making checks on certain documentation, I do not want us to be part of the problem. If something happens and we miss a check, we do not want to be responsible for it. It is important that owners and employers are responsible. It certainly gives the enforcement agencies the opportunity to take proper action against them.
Byron Davies
Q 63 Caroline, you mentioned the extent of harbouring. You talked about the Romanian case on Channel 4. What is the extent of this, and what is the evidence?
Caroline Robinson: Of people being harboured in situations of exploitation?
Byron Davies
Yes.
Caroline Robinson: The evidence from the National Crime Agency statistics shows the range and scale of the exploitation referred into the national referral mechanism. The scientific adviser’s report to the Home Office was published last year, and estimated that there are 13,000 victims of modern slavery in the UK. If we go by the NRM stats, one third of those would be victims of labour exploitation—about 4,300 victims of labour exploitation in the UK. Those are the statistics.
Byron Davies
Q 64 What would your definition of harbouring be, out of interest?
Caroline Robinson: Harbouring was placed on the UN human trafficking protocol by the Americans at the time of the travaux préparatoires to the protocol. It was based on the definition of harbouring in US domestic law, which is about retaining individuals in a situation—keeping people in a situation and harbouring in the same situation.
Paul Blomfield
Q 65 I am keen to ensure that we learn from other countries, and I am interested to know what the panel thinks we can learn from them about effective labour market enforcement. In particular, I am interested in the line of questioning that I was pursuing earlier, which was about the relationship between immigration officers and labour market enforcement regimes. For example, in the States there are clear firewalls, which the Americans think enhance effective labour market enforcement.
John Miley: I have no view on that, I am afraid.
Caroline Robinson: FLEX has just conducted a review of other countries’ labour inspection frameworks, and we have also been looking at research; we have been conducting research as part of a pan-European project on improved identification of victims of modern slavery. That research in particular showed an interesting finding in the Netherlands, which we had previously held up as a great example of labour inspection; it has a very large labour inspectorate and has conducted work in this area in the past. However, the victims of trafficking we spoke to there said that the confused mandate of the SZW inspectorate caused problems on the ground, so that they were unwilling to come forward. That is because the inspectorate serves two functions: one, to identify undocumented workers; and, two, to identify exploitation.
The concern in our research then was that the people we had spoken to had not come forward to be identified by inspectors at the time of inspection, because of the overlap they saw between the inspectorate and the aliens police, which often conduct joint investigations; and the inspectorate has an overlapping mandate.
We are also concerned that where this overlapping mandate exists, it is quite hard to look for two things at the same time. We have our own example of that in the UK. We have the case R v. Khan, Khan and Khan, from 2010, about nine men who were held in in a restaurant by the Khan family in a situation of trafficking for labour exploitation. Those men were there for four years in situations of exploitation before they were discovered and before those perpetrators were convicted of trafficking. During that time, the judge’s report from the court said, there were regular inspections by Home Office officials. So the documents were in order, but the labour exploitation was not; those people were being held and trafficked for labour exploitation, yet regular Home Office inspections identified nothing. Eventually, they were able to seek help from family members or friends to leave that situation.
Kevin Green: Our take on it is that we are part of a global organisation of recruitment businesses called Staffing Industry Analysts. We recognise the need for strong labour enforcement, and there are lots of examples of where it works well.
One area that we would certainly flag up, and where we need to be careful, is in putting too much of an onus on business to address this issue through some kind of licensing regime. We have looked internationally and we cannot find any example of where we think this adds a huge amount of value. We think that a lot of this activity is about criminal activity, where people are trafficked and in forced labour.
We are very clear that the role is, first, to hold large organisations to account, as I have already talked about, through supply chain management, and, secondly, to have a strong inspectorate, which has the resources to investigate and bring people to bear, rather than creating a huge bureaucracy for a lot of legitimate businesses, where there is more responsibility to produce evidence, and which would add cost and complexity to legitimate businesses. What we are really doing here is trying to find the people who are undertaking this activity of forced labour and human trafficking.
The Chair
I am aware that time is getting on, and I also have quite a few Members who still want to ask questions. Undoubtedly, we could talk for a long time about the trafficking issue, but we will move on.
Minister, would you like to ask a question?
James Brokenshire
Q 66 I want to ask Mr Miley, who has expertise and experience in licensing, how he thinks the powers contemplated in the Bill could strengthen existing enforcement around standards in the licensing process, and who should be holding licences. Also, I would like to know about his experience of using closure notices, and some of those short-term measures that are currently reflected in licensing legislation and are now being contemplated in a broader sphere.
John Miley: To answer the last question first, my authority has had no particular experience of using a closure notice. We have come close to it, but we tend to try to negotiate issues out before such things has happen. It is good that the proposals reflect the current practices under the Licensing Act 2003, which will make life a lot easier for licensing authorities to utilise the situation. There is the potential for reviews of a premise’s licence if a closure notice is actually turned into a closure order, which would be quite useful.
As for general enforcement, it is difficult to quantify the real issues relating to illegal working in licensed premises. As I said before, there is the possibility that that happens in late-night refreshment houses. In ordinary licensed premises, such as public houses and restaurants, that does not tend to be the case. It also seems that the national fraud initiative has not discovered much in the way of that in the past year. It has found more in the taxi trade, which I understand will be dealt with later in an amendment to the Bill.
The Bill will give the immigration agency the ability to undertake risk-based inspections and actions without needing to get the police involved, which happens currently. I am unsure whether it will improve standards. I suspect that if people can get away with it, they will continue until they are caught. An example then needs to be made and the employer needs to be properly castigated.
James Brokenshire
Q 67 Do you have any comments on intelligence sharing and joint working with other agencies to support the work of local authorities?
John Miley: It is to be commended. Generally speaking, licensing authorities do not work in silos. They work in the broader scheme of things, and work with the police and the Security Industry Authority and more generally with immigration. Good work is currently going on in quite a lot of cases. We do an awful lot of partnership working. In fact, it is one of the cornerstones of the licensing procedures that we consult and gather information among ourselves. In Nottinghamshire, all the responsible authorities meet every six weeks. That will include the immigration authority when the Bill is passed. It is a useful evidence and information gathering and sharing process.
Kelly Tolhurst (Rochester and Strood) (Con)
Q 68 I want to explore a little more around employers who are repeat offenders. I have witnessed examples of activity from smaller businesses that have caused concern. Does clause 9 go far enough to prevent such businesses, once caught, from doing it again? Is it enough to stop people who have already caused concern for agencies?
John Miley: In terms of licensing, if enforcement action is taken and it goes to its full conclusion, there is the possibility of closing the premises down. That is quite a strong penalty, so it would potentially have the effect of stopping it.
Kevin Green: Certainly, in terms of the recruitment industry, the conduct regulations and the enforcement in BIS are pretty clear. If people are found guilty, they can be struck off or prosecuted. We actually see few examples of repeat offences.
Kelly Tolhurst
Q 69 I have been made aware that fines sometimes—
Kevin Green: In relation to what example? I am not quite sure what we are talking about.
Kelly Tolhurst
Q 70 Undocumented workers. It has not always reached a full conclusion, so there has perhaps been a view that the penalties are not stiff enough. That is why I am interested to know whether this measure is enough finally to stop people taking those decisions and using undocumented workers.
Kevin Green: My take is that we have to be very careful. There are lots of businesses, and we look at national minimum wage breaches. There are only two cases that have involved recruiters, and they were just miscalculations. Such businesses should be held to account to make sure that they put it right, and then we move on. There is a difference in holding businesses to account. Sometimes small businesses without the resource might make mistakes, and we still need to hold them to account. There is lots of regulation already in place to do that. I think some clarity about that and resource for enforcement are important, but that is very different from somebody who is actually bringing people, harbouring people—what I would call human trafficking. That is criminal activity, and we need strong clarity about the potential punishment, the right level of resource and the right level of intelligence gathering across the different agencies, where this is moving in the right direction.
One of the things that we have uncovered is that, when they find criminal activity, lots of my members will provide examples and identify areas to the GLA where they think they have been infiltrated or where they see information, bank details and telephone numbers being given from one employer—they will then whistleblow to the GLA. Those legitimate businesses need to be sure that, by whistleblowing, they are actually helping to resolve the issue. Resource for the GLA is critical in moving this forward. They need the resource to go after the people who are carrying out real exploitation so that we do not mix them up with small businesses that make the odd mistake along the way.
Chloe Smith
Q 71 I want to take Ms Robinson back to her point about defences under the Modern Slavery Act 2015, in which I take a great interest—I sat on the Public Bill Committee. I have that Act and the Criminal Damage Act 1971 in front of me because she made a specific reference to that defence. As I understand it, the defence supplied in the 2015 Act in relation to criminal damage specifically excludes criminal damage with the intent to endanger another person’s life, so it is a rather more specialist case than she might have suggested. Secondly, on Second Reading of this Bill, the Home Secretary was very clear that all those defences will continue to apply. Will Ms Robinson explain her view?
Caroline Robinson: All those defences will continue to apply. What do you mean?
Chloe Smith
Q 72 The Home Secretary said that those defences will continue to apply. I thought I heard you say earlier that the defences will not apply; the Home Secretary says that they will.
Caroline Robinson: In relation to the Immigration Bill?
Chloe Smith
Yes.
Caroline Robinson: Sorry, I was thinking about Second Reading of the Modern Slavery Act. Yes, she did say that, which is why I said it will be very interesting for organisations such as mine, and many others, as part of the Anti-Trafficking Monitoring Group to know for sure what would be the situation in the case I set out in which there is a series of events in a person’s stay in the UK. They might be exploited when they arrive and then they escape that exploitation on their own—that happens many times, including to a woman I spoke to last week—before entering undocumented work.
Secondly, what would be the situation if I was in undocumented work when I arrived in the UK and then that work deteriorated to the point of exploitation, as we know is a regular pattern in exploitative working conditions? What would happen there? Would I be offending for that work at the beginning, or would the modern slavery defence, if proved, counter that previous work? Those are the questions that remain for us. It would be brilliant to have expanded detail on that in Committee.
Mims Davies
Q 73 I want to pick up with Mr Green, and perhaps Mr Miley, how the Bill intends to improve the market regulation and enforcement of workers’ protections. Why has such a culture built up in certain sectors, and how have we allowed that? Does what is in front of you work for that culture to be broken down?
Kevin Green: In terms of exploitation in certain key industrial sectors?
Mims Davies
Yes.
Kevin Green: What we need—and many people have said this consistently—is the ability to share intelligence across multiple agencies. I think that the director of labour market enforcement is a step in the right direction. Points were made earlier—for instance, how we bring in the Health and Safety Executive and local authorities, because they are going into premises on a regular basis. Over time, that should be extended. Once there is intelligence gathering, it is about the right enforcement regime to tackle that. So, where it is potentially a minor breach, through something like the conduct regulations—there I think we have the right enforcement in place. Sometimes you really need detailed police investigations to crack a criminal activity that has been very exploitative. I think this is a step in the right direction. The additional offences, apart from the one for individuals, are probably helpful. So my answer is that I think it will be helpful in addressing some of that; but, again—as I have said consistently today—it is about the level of enforcement activity. It is very rare for us to agree with the TUC, but—
The Chair
Order. I am really sorry. I am afraid that that brings us to the end of the time allocated to ask questions. Again, I thank the excellent witnesses; we could have spent a lot longer on this.
Keir Starmer
On a point of order, Mr Bone. This afternoon we move to witnesses who deal with the landlord and renting provisions in the Bill. In an answer given orally last week, there was an assurance that the evaluation for the west midlands pilot of the scheme would be available before the Bill Committee. Since we are getting to that witness this afternoon, where is the evaluation? I would certainly benefit from reading it before I start my questioning at 3 o’clock.
The Chair
I thank the hon. and learned Member for the point of order. I will certainly make inquiries where necessary—unless the Minister wants to say anything.
James Brokenshire
I can say that, as Members may have noticed, there is a written ministerial statement on the Order Paper in relation to the right to rent scheme roll-out more generally. Alongside that, the evaluation is being published. I suspect—and can certainly talk to hon. Members outside the Committee as well—that the evaluation will be available on gov.uk well in advance of our considerations this afternoon.
The Chair
That brings us to the end of the sitting. Thank you again to the witnesses; you have the message. The Committee will meet again at 2 pm.
Immigration Bill (Second sitting)
(9 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
We now move to the fourth panel of witnesses and will hear oral evidence from the CBI until 2.30 pm. May we informally refer to you as Neil?
Neil Carberry: Absolutely.
The Chair
Q 7474 Neil, may I ask you to introduce yourself for the record?
Neil Carberry: Yes. I am Neil Carberry, the CBI’s director for employment skills and public services. For the record, I should say that I am a member of the Low Pay Commission and the council of ACAS, but all my comments today will be made purely in a CBI capacity.
The Minister for Immigration (James Brokenshire)
Q 75 Neil, thank you for coming to give evidence this afternoon. This is one of the rare occasions when I, as the Minister, get to ask some questions, so there is nothing unusual in this. On labour market enforcement, Sir David Metcalf, head of the Migration Advisory Committee, gave evidence to the Committee earlier today and commented that he hoped that the CBI would buy into the labour market enforcement director mechanism contained in the Bill. He was essentially extolling it and suggesting that the CBI should welcome it. In fairness to you, I want to put his perspective to you so that you can respond.
Neil Carberry: Ever since I was a student in the London School of Economics industrial relations department and Professor Metcalf was there, I have tried to keep him happy. The CBI’s attitude to the labour market section of this Bill is probably a good place to start. We are interested in driving out some of the appalling practices that exist in parts of our labour market. It has always been the view of CBI members that empowering enforcement officers to kick a few doors down and bring some bad guys to justice is the right thing to do. To do that effectively, you need a risk-based, intelligence-led approach. To the extent that any Government of any political colour take that up, the CBI will be supportive.
In a sense, our attitude to the labour market enforcement director is that if that is what is on the cards here, we will support that work. It is important that we ensure that people who are not able to raise their own concerns, because of the situation that they find themselves in, have some method of support from state enforcement. The labour market director will hopefully do that. Our concern is whether that work will topple too far into what we have perhaps seen in the past: tick-box approaches that actually fall more heavily on the compliant than on the non-compliant, who we would all agree need enforcement action.
James Brokenshire
Q 76 So your call is for smart enforcement, using intelligence and drawing together all the different strands of information to target more rigorously the non-compliant.
Neil Carberry: I think that is right. My understanding of the role of the director as we have seen it so far is that this individual will work across agencies. It is important that this change does not draw agencies’ attention away from their work. HMRC is still investigating every national minimum wage complaint that it hears and has also started to do some excellent intelligence-based, targeted work in key sectors. The introduction of the director will hopefully improve interaction with other authorities, but will not draw funding and work away from protecting people in areas such as payment of the national minimum wage.
James Brokenshire
Q 77 What is the CBI’s current assessment of labour market exploitation and non-payment of the minimum wage? How does your organisation seek to challenge that? In parallel with the Bill’s provisions, what role do you see the CBI playing?
Neil Carberry: Broadly, our view is that compliance with employment law in the United Kingdom is good. Largely, non-compliance is inadvertent and we have excellent systems to allow people to raise their concerns about that. There are parts of the labour market—where, I am glad to say, CBI members tend not to be found—which are more open to abuse, where there are more interlinks with people trafficking, for instance, and which are not easily policed by traditional labour market means because these companies are not traditional companies.
James Brokenshire
Q 78 And are you looking at particular sectors, or is that a more general comment about the labour market?
Neil Carberry: I would think that it clusters in three or four particular sectors, yes.
James Brokenshire
Q 79 Such as?
Neil Carberry: The obvious one would be parts of agriculture.
Sarah Champion (Rotherham) (Lab)
Q 80 I look forward to serving under your chairmanship, Mr Owen. Mr Carberry, offences are already specified in the Immigration Act 1971 that are applicable to migrants who breach their immigration conditions. Do you believe that clause 8, which creates the new criminal offence of illegal working, is necessary, and do you think that it may have unintended consequences?
Neil Carberry: What we are particularly concerned about is that any criminal offence is genuinely used to go after criminal activity. Employment law offences are typically civil offences. As I have already said, breaches are largely inadvertent, or if they are not inadvertent they are due to lack of understanding on the part of an employer. The right place to police that is through education, the tribunal system, the advice that ACAS offers and so forth. I am not a criminal lawyer. To the extent that the offence that has been created is to be used to go after employers where there is repeated, multi-faceted and exploitative treatment of workers, we are very happy for that offence to exist, so long as the businesses that are brought to justice are engaged in those steps. What worries us particularly is not the existence of the offence but the risk that there may be a general drift of employment law in the United Kingdom from the civil to the criminal, because that would be quite destructive for employee relations in general.
Sarah Champion
Q 81 Just to unpick that, do you think that actually criminalising the workers is useful in changing practice?
Neil Carberry: I think that the critical issue is the action by employers. The CBI is not taking a position on criminalisation of workers; that is not within our vires as a business organisation.
Sarah Champion
Q 82 I agree that if employers are employing people illegally, they should be accountable for that. Do you feel that the Bill goes far enough to enable that to be enforced?
Neil Carberry: I think that the critical issue is not the law in this case; it is the will to go after some of the very worst practices in the UK labour market. It is about co-operation between the police and other authorities in getting into some of these beds in sheds places and taking action. One of the lessons we have to learn from the experiment with the Gangmasters Licensing Authority is that the GLA has largely been a box-ticking licensing organisation that has increased costs on the compliant. There is relatively little evidence that the creation of a registration approach has actually done anything to prevent exploitation. From a CBI perspective, we would far rather that the Government had a strong offence, structured in a way that would stack up in the courts, and then used powers of prohibition, for instance, to drive out bad practice. Of course, that is what we had before the GLA was brought into existence—albeit that they were not heavily or effectively used.
Sarah Champion
Q 83 Finally, do you believe that the director has the remit and the resources to prevent this from being a box-ticking exercise? Would they have the authority to make the necessary changes?
Neil Carberry: That remains to be seen. The director clearly has to develop an enforcement plan, which has to be approved by the Home Secretary and the Secretary of State for Business, Innovation and Skills. I would hope that that enforcement plan was well grounded in the effective work that some of the agencies are currently doing and would therefore be resourceable from within that. I had discussions last week with the HMRC team who are looking at non-compliance with the minimum wage; they feel that they currently have the resources to continue the good work they are doing.
Craig Whittaker (Calder Valley) (Con)
Q 84 I want to turn back to the evidence given to us this morning by Professor Sir David Metcalf. When he was discussing the CBI, he said that the regulation of the labour market proposed in the Bill would take away the cowboys and help your sector. He went on to say that it would go a long way towards raising the welfare of British residents. Do you think he has applied a risk-based, intelligent approach to his assessment?
Neil Carberry: I think the proof of the pudding is in the eating when it comes to the director. On the existence of a labour market director to do this work, his assessment could well be the case. What worries us is less what is in the Bill as introduced than some of the discussion in the Government’s consultation paper last week, which seems to suggest a broadening of a licensing approach. I think that would ultimately be a doubling up regulation on the compliant and would draw away from kicking down the doors of the non-compliant. From our perspective, there is every chance that the labour market director’s role could be very beneficial to lawful companies and workers.
Craig Whittaker
Q 85 On the face of the Bill then, it is a good thing.
Neil Carberry: Yes, I think so. We have never been against effective enforcement.
Paul Blomfield (Sheffield Central) (Lab)
Q 86 You talked about parts of the labour market where abuse happens. I am conscious that many of your members might have had their reputations tarnished by unwitting involvement through supply chains. Can you share your thoughts about the Bill in the context of the most effective way of helping your members to achieve supply chain compliance?
Neil Carberry: Any answer to that question will have to take account of some of the responsibilities that companies will take on under the Modern Slavery Act 2015. I actually had a long discussion last night with some of our members about the challenges of doing that effectively—many of them are currently wrestling with that. Of course, there is a limit to what companies at one end of a supply chain can do and assure themselves of, but there is a duty to do some work, as the Act makes clear.
The most important thing is to ensure that, where companies at the top end of a supply chain suspect that something illegal is happening, they are clear about the route to take to obtain assistance from regulators and enforcers, and also that there are simple routes for enforcers to take towards targeted action. We would see that as one part of the role of the director as set out in the Bill. For instance, we would expect them to look to establish ways in which a major retailor could raise concerns effectively and then feed into an intelligence-led action.
Paul Blomfield
Q 87 You mentioned a situation in which companies at the top end of a supply chain have reason to believe that things are going wrong further down the supply chain, but the problem faced by many of your members is that it might be impossible to know what happens further down the supply chain. What more could be done to achieve effective enforcement of labour market standards down the supply chain and out of the sight of your members?
Neil Carberry: Clearly, it largely is out of the sight of our members. I will start from the test of what we want, which is something that brings an enforcement officer into the site where things are going wrong as quickly and effectively as possible, with the powers to change the situation. We know that, largely, where we find national minimum wage non-compliance, we tend to find immigration non-compliance.
The first thing is to make sure that, whichever body is resourced to do it, there is a clear thought process about where we believe this is happening in the labour market; within that, then, that there is some intelligence-gathering about where the issues might be. There should then be live discussions with businesses in the sector about what they hear and what they see; then, police and enforcement agencies should have the capacity to intervene. That much more targeted approach, I think, is the only way to protect workers who do not have the capacity to raise concerns about their own treatment, especially if they are being exploited. I would much rather see that intelligence-led, almost police-style action than anything that looks like a process for companies in the sector, because I think that some of these non-compliant organisations would just ignore that.
Paul Blomfield
Q 88 Do you think that there are sufficient resources, as the situation currently stands, to achieve the objectives you are talking about?
Neil Carberry: I mentioned HMRC’s rule earlier. I think to do it effectively, it may be necessary to look at resources for other parts of the system. Having said that, one of our biggest challenges at the moment is enforcement agencies talking to each other. A case in point is that if a business moved out of a GLA-regulated sector, the employment agency standards inspectorate would still have prohibition powers. There should be more discussion taking place about, “If this business has had a licence removed by the GLA, what is the case for prohibition more broadly via EASI?”
Anne McLaughlin (Glasgow North East) (SNP)
Q 89 Good afternoon. Do you think there is a risk of the Bill making it harder for migrant workers to access the labour market because employers are afraid that they will be breaking the law, and don’t understand how it works, so they err on the side of caution?
Neil Carberry: I think the section 8 checks that employers already do are largely embedded in companies’ operation now, so the mere existence of a non-UK passport at hiring is an issue. There is some nervousness, I think, about the fact that the quality of forgery is now very, very high, and I think businesses would welcome more support from UKBF and others on identifying forgeries when they do those checks. Broadly, we have not seen evidence of a chill effect on migrants being able to find work yet, and the performance of the UK labour market over several years now suggests that opportunities are still being created both for UK citizens and migrant workers.
Anne McLaughlin
Q 90 Would the CBI be willing to keep an eye on that? In my constituency, I have already had people coming to me who have been offered jobs and then the employers—and it is large employers—have backed off, saying that they want actual evidence; phoning the hotline is not evidence for them. I wonder whether the reason why I am getting quite a few people coming to me now is that they know that the legislation is going to change; it would be interesting to see if there was an effect once this came in.
Neil Carberry: I think the necessity of assurance for companies in hiring migrants becomes greater as the cost of getting it wrong becomes greater. I have been working on employment relations issues for the CBI for over a decade now, and the process is that every year it becomes more costly to hire migrants and more risky for companies. Particularly for some smaller and medium-sized companies, there is a concern there, and support structures for businesses are quite important.
Mims Davies (Eastleigh) (Con)
Q 91 I would like to ask about the role of the director, in terms of vulnerable workers, and more broadly whether that role could help the Government’s agenda of redressing the balance on equality issues and addressing the gender pay gap, so as to shine a broader light on these employment issues.
Neil Carberry: I refer to my earlier answer. It is really important that we keep the exploitation agenda—there is deeply unsavoury activity taking place in parts of the labour market—separate from the civil employment law agenda. If you look at the gender pay gap, Ruby McGregor-Smith’s Women’s Business Council report concluded that it is a multi-faceted issue that requires a series of actions, primarily from business but also from the education system, to address. We would be more comfortable continuing to do that work in partnership with the Government Equalities Office, Ministers and the new Select Committee on Women and Equalities, than getting too drawn into a debate, as we have already discussed, about beds and sheds and some pretty exploitative practice.
Mims Davies
Q 92 So you see them as clearly separate issues.
Neil Carberry: Where I would say there is some equalities benefit is that it is certainly true that minority ethnic workers and many women are more at risk of the kind of treatment that we are discussing.
Mims Davies
Q 93 That is my feeling, and I am on the Women and Equalities Committee, hence why I asked that question. I hear what you say, but it worries me if we completely disconnect the two.
Neil Carberry: No, this action clearly has equalities benefits.
Mims Davies
Q 94 Fantastic. Are you also able to expand on the CBI’s concerns about the apprenticeships levy? It is obviously the Government’s ambition to see apprenticeships grow. Will the levy affect your members, or the immigration skills charge? What is the impact that you see on businesses?
Neil Carberry: Apprenticeship levies are quite complex at the moment because there are two of them. They have become known in the CBI’s employment team as the big levy and the little levy. There is the large apprenticeship funding model levy, which is a deep concern for the CBI.
On the question of the skills charge, although we do not welcome additional costs, we fundamentally disagree with the idea that immigration is used to resolve skills issues and to avoid training, because companies in the UK do extensive amounts of training—more than many other large western European competitors in terms of spending.
Having said that, if there is to be a skills charge, we need to make sure that it is effectively targeted, so that the money raised does go into apprenticeships that are training people towards the levels of skills that people who came in on a visa were helping to resolve the shortage of. More broadly, it is probably preferable to us that these charges exist than that we make changes to the pay bands for tier 2 migration. Additional cost for a visa is one thing, but being unable to get a person you need at any given point because of changes to the pay bands is more of a business problem. For us, in the grand scheme of things, although we do not like it, we would rather have an immigration skills charge than a much higher entry level of pay to bring people in.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Q 95 In trying to target action against criminals who exploit workers, which is something we can all agree on, do you think the Bill blurs the lines between employment law and criminal activity?
Neil Carberry: I think that is a significant risk, less so around the role of the director than the recent discussion about expanding the role of the Gangmasters Licensing Authority. The role of the GLA so far has largely been an employment process. Since its creation the GLA has spent rather more time telling my members where the commas should be in employment contracts, which is an employment issue, than kicking down doors in parts of the country where doors need to be kicked down.
My sense is that we need to maintain that gap, for exactly the reasons that your colleague raised earlier, which are that employment law is a civil issue; most of its infraction is inadvertent or due to lack of knowledge, so it is really important that people are able to address that—there are routes for people to address that—and it is about the bit of the labour market where workers are not able to secure their rights, which should be at issue in the Bill. The CBI’s test for this Bill, in practice, when it finishes its passage, is to make sure that the actions contained within it are about addressing those issues of exploitation.
Gavin Newlands
Q 96 Do you think that it should be employers’ or the Government’s responsibility to prevent illegal working, especially given the move away from civil penalties to criminal charges?
Neil Carberry: I think employers should have a duty to ensure that their workforce have the right to work in the United Kingdom—that is probably accepted by our members—at the point of hiring. The issues that we have often faced are issues of establishing that fact in a timely fashion.
James Brokenshire
Q 97 Just to come back on that last question, what is your assessment of the level of knowledge among your members, recognising that part of the role of the labour market enforcement strategy, which the director will obviously have a key role in developing, is to focus on advice to the Secretary of State about education and training? What further steps, in practice, should be undertaken around that, and what about the role of the director in that piece?
Neil Carberry: There is an analogy here, slightly oddly, with the process of automatic enrolment in pension schemes. The Pensions Regulator for many years dealt with some very large companies, which had large defined-benefit pension schemes, kind of knew what they were doing and spent a lot of money on compliance. In many of our largest members, immigration compliance is a million pound a year commitment, because of the scale of it and the reputational risks that we have already discussed. We live in a world in which company size is gradually getting smaller, and has been for 20 or 25 years; the majority of firms are small businesses, and the majority of our members at the CBI are small businesses, often with limited HR capacity. The transition that, for instance, the Pensions Regulator had to make to talking to businesses that had never even heard of it and offering support—it is still struggling to get that right now, but progress is being made—is exactly the same transition that we need to make in this space. It really is helping smaller businesses to understand their duties and the support on offer to them that will be critical to making sure that illegal working action is effective.
James Brokenshire
Q 98 So I suppose in other words, to draw out another comment in Committee this afternoon, you are suggesting that the focus on that awareness should be at the smaller business end, the SME end, and on the some of the challenges that might reside there. Equally, I am assuming that you would not say that the larger firms themselves have no potential issues, given the supply chain elements touched on previously—who your sub-sub-contractor is, who is on a building site or has been contracted into a particular job—and the need for alertness around those sorts of elements, from a reputational as well as a legal perspective.
The Chair
Just before you answer that, we have a couple of minutes. Will any other Member wish to ask a question in that short time? No. Neil.
Neil Carberry: I agree with that. We talked earlier about the capacity of a firm to know whether it was dealing with partners who are compliant. What I would point to is that in this space we should not look for answers that look easy in Westminster but are actually ineffective on the ground. Experience with, for instance, licensing models—we are concerned about the potential for part of the Bill to create the space for the Secretary of State to dial up or dial down the extent of licensing models—is that licensing itself does not actually give a company any assurance that the licensee is compliant or not. The record of the GLA in taking away licences shows that firms behaving improperly were licensed. It is much, much better to have rigorous enforcement, intelligence-led, and then high-quality advice and support for companies that are taking action under the Modern Slavery Act 2015.
The Chair
Q 99 Okay. We are coming to the end, so if there are no further questions I will thank our witness for giving evidence today. If there is any other information that you would like to give to the Committee, please feel free to write in.
Neil Carberry: We are aware that we have not yet given you a written submission, but colleagues are preparing one that will arrive in due course.
The Chair
We look forward to receiving that. Thank you very much.
Examination of Witnesses
Lord Green of Deddington KCMG, Harry Mitchell, QC and Alanna Thomas gave evidence.
The Chair
Q 100 Good afternoon. We now move on to the fifth panel of witnesses and we are to hear oral evidence from Migration Watch UK. To remind everyone, this session will finish at 3 pm. Can I call on the witnesses to introduce themselves?
Lord Green of Deddington: I have been chairman of Migration Watch UK, which I think it is quite well known to the Committee, for the last 15 years. Harry Mitchell, QC, is my honorary legal adviser and Alanna Thomas has done a huge amount of work on the Bill.
Sarah Champion
Q 101 Thank you all for coming today. Lord Green, to give us some context, what is your estimate of the current size of the irregular migrant population in the UK?
Lord Green of Deddington: Yes, I am very glad to offer you some context, because I think we really have to see the Bill in the wider context. We realise that there are already 11 Acts of Parliament dealing with immigration and that there is a handbook of immigration law of nearly 2,000 pages. So we have that in mind, but, even so, the Bill in principle has our full support. We think it is a serious and intelligent attempt to tackle illegal immigration and the pull factors that drive it.
It has also come at a pretty opportune time. I need hardly tell you that immigration is the major issue of public concern, especially as the crisis in Syria and the middle east has led to the effective collapse of the borders of southern Europe. We have been lucky here in that, in recent years, we have had only 20,000 or 25,000 asylum claims, but I think we all remember when that number hit 80,000 and we found that there were half a million files lying around in a warehouse, which was appalling, especially for those who had genuine cases, but on any level that was appalling and must not be repeated.
In terms of context, it seems to me that we now need to get ahead of that curve, both in identifying genuine claimants and removing and deterring those who are in fact economic migrants. We think that the Bill can help in that task.
To answer your specific question about the probable size, in 2009, the LSE gave a central estimate of about 600,000. We looked at that and thought that a million was probably closer, but almost by definition it is impossible to be accurate. The conclusion to be drawn from those numbers is that it is absolutely inconceivable that the Government would introduce measures that removed a million people from the country by force. It cannot be done, would not be done and nobody would support it. That is why measures, including some of those in the Bill, are essential if we are to persuade people to make up their own minds and go home when they should.
It is worth mentioning in that context that the sheer scale of movement is not really widely understood. In any one year—I will take 2014—7.5 million tourist visas were issued. Clearly, some of those will be tempted to overstay. Business visitors: 1.7 million. Students and student visitors: 270,000 in one year. So you are looking at an enormous flow of people and no way in which you can forcibly remove them if you need to. Indeed, we do not even know who they are, or even if they are here. As you probably know, exit checks were abandoned by the Conservatives to the EU in ’94 and by Labour to the rest of the world in ’98. So for nearly 20 years, nobody— the Government, the Home Office—has the slightest idea who has gone home and who has not. We are starting from an appallingly difficult situation and, as I said, the only way to approach it is to improve the likelihood of people deciding for themselves. Also, it is necessary to tackle the difficulties that have arisen in the removal process. In my view, they are not very widely understood, and when I first heard them, I was rather surprised.
It is the case, surely, that an effective removal capability is at the basis of the credibility of the whole system. If people think that they can stay indefinitely and not be removed, of course they will do that if it is to their advantage. I am afraid that successive Governments have sort of concealed the weakness of the system by conflating various figures, but if you look at the number of immigration offenders who have been removed, in the last six years the average has been fewer than 5,000 every year compared to the numbers that I have just given you for the inflow. It will be obvious to you that work is required on this front, and I hope obvious to you that this Bill will help with that.
Sarah Champion
Q 102 To expand on that, at a practical level, you rightly said that there are 11 Acts of Parliament, and that we still do not know who is coming in and who is going out. Groups have said that if support to asylum seekers is withdrawn, there is concern that they might abscond from the system. On a practical level, what do you believe the Bill will add to existing legislation, so that we can deal with the problem? From my casework, I know that the biggest problem is that once the Home Office team has gone through the process to recognise that someone needs to be deported, it does not have the resources to deport them. On a practical level, I cannot see how the legislation will make that process more straightforward. Are there specific proposals in the Bill that will do so?
Lord Green of Deddington: Yes, and that is a very good question if I may say so. There is a huge amount to do, but I would pick out the appeal process, which has been leading to significant sources of delay, and is sometimes quite ruthlessly exploited by a bogus applicant, and is more likely to be so, and by some of the lawyers. The first-tier tribunal has considered 850,000 cases in the past seven years, so the provisions in the Bill that will provide for removal first and appeals later will be very important. Equally, it will be important that that provision is not applied when it should not be, and I am sure that you will be focused on that as a Committee. The reality, however, is that the legal system has been exploited to the disadvantage of the community as a whole.
So far, as I am sure that you know, the Government have reduced the number of kinds of appeal that you can make from 17 to four. When they applied the “removal first, appeals later” provision to foreign national offenders, they found that only 25% bothered to appeal and of the total, only 1% succeeded. Of course, foreign national offenders are likely to have a much less convincing case than many others, but if we can find a way, consistent with human rights of course, to shift the burden of appeals, we can get the whole system moving more rapidly than it has in the past. And as I said at the beginning of my evidence, now is the time to do it, because we must have a system. The Government keep talking, and rightly so, about breaking the link between people getting to Britain and believing that they can stay here indefinitely. That amounts to the fact that we must have an effective way both of differentiating between economic migrants and asylum seekers and of swiftly removing the first of those two. There is a lot to be done, and I think that the Bill will help.
James Brokenshire
Q 103 Lord Green, there has been some questioning during the course of this session about the introduction of offences relating to illegal working, in particular the creation of an illegal working offence against employees. Could you share any thoughts and comments on how we can have a firm response and crack down on illegal working in all its different forms, as well as some of the draws that entice people into migration? How would you respond to the challenge that this may somehow prevent people from coming forward who may be victims of exploitation or trafficking, for example?
Lord Green of Deddington: I will keep my answers shorter in future, Mr Chairman, but I wanted to set out some of the basic considerations.
The Chair
Sure. It was a good opening exchange.
Lord Green of Deddington: Our view is that it simply has to be an offence to work illegally in this country. I cannot see how it can be otherwise. For starters, these people are unquestionably undermining the wages of British workers or immigrant workers, for that matter—legal workers. There is no question that they are undermining the wages of legal workers.
Wages in London are lower than anywhere else in the country. Why? Because in low-paid work there is an enormous number of people who are ready to work for very little and, of course, employers know they can get illegals for even less. It has to be an offence, and it is high time that it was. As you say, there has to be a balance. As you know, the Modern Slavery Act helps in certain cases if people will come forward, but the answer probably is stronger enforcement—in other words, lean on the employers in order to squeeze out the ability to do this.
Byron Davies (Gower) (Con)
Q 104 Lord Green, in response to an earlier question, you talked about an effective removal system. Could you expand on that and tell us what you think would be an effective removal system?
Lord Green of Deddington: First, it has to be quick. It has to be fair and it has to not be under the impediment of extremely complex procedures and legislation. I think the proposal in the Bill is right in addressing that. There are other issues, of course. They probably need more resources to do it. They probably need a bigger detention estate. With all those put together, one can work on improving the removals, but, as I say, you cannot remove 1 million people. You have to make sure they want to go themselves.
Craig Whittaker
Q 105 Lord Green, you have already said there should be a duty on employers. I presume you put into the same category people such as landlords, whom the Bill specifically addresses. How can we better prevent illegal working without imposing additional burdens on business generally?
Lord Green of Deddington: I do not think you can, to be frank. There has to be a duty on employers and they have to fulfil it. They have to recognise that this is a serious matter of great public concern. It is a field in which some unscrupulous employers are making a packet at the expense of honest employers. They have to fulfil it.
Paul Blomfield
Q 106 I wonder whether I could follow up on your answer to the Minister, Lord Green. You were saying that the criminalisation of workers would be helpful in achieving labour market compliance.
Lord Green of Deddington: Sorry, I am not saying workers should be criminalised; I am saying that illegal work should be a criminal offence.
Paul Blomfield
Q 107 Effectively, the Bill criminalises undocumented workers, does it not?
Lord Green of Deddington: If they are here illegally, yes. That is the point.
Paul Blomfield
Q 108 In your evidence to the Migration Advisory Committee review of low-skilled work, you talked about the problem of fear in the workplace and of there effectively being a climate in which employees would not challenge their employers. Do you not think that creating a criminal offence assists the hand of unscrupulous and exploitative employers and gangmasters, and therefore negates the desire that we all share to achieve effective compliance in the labour market?
Lord Green of Deddington: Yes, there is clearly that possibility. You say, does it negate. I think not because the wider issue is that we must crack down on illegal employment, which is widespread. Another part of that is to enforce action against employers, very few of whom have actually been penalised.
Paul Blomfield
Q 109 I wondered whether you were hesitating because you wanted to add to that answer.
Lord Green of Deddington: No, not for the moment.
Paul Blomfield
Q 110 I wonder whether I can ask another question. Your evidence to the MAC review of low-skilled work also talked about the need for more effective enforcement of minimum wage compliance and other areas. Do you think that it is a problem that the Employment Agency Standards Inspectorate only has nine full-time staff, and do you think that more resources need to be allocated for effective enforcement?
Lord Green of Deddington: I think pretty well without question. One of the problems about expanding the legal base, it has to be done as a starting point but, if it is not then enforced, it becomes a waste of paper. If I may say so, I think that this Government have not devoted the resources that are necessary to what is an increasingly serious problem. They need to look again. The amount spent on the whole immigration system is about £750 million a year, I believe—absolute peanuts. It is one of the areas of government—I am sure that there are other areas—that needs more attention than it is getting.
Mims Davies
Q 111 I want to pick up on something that was raised this morning by the Refugee Council and Still Human Still Here. They were inferring that the reform of the support will affect asylum seekers, leaving children destitute and obviously affecting social services and local authorities. I wondered whether you had an understanding of the level of numbers that may be affected by that, and therefore the impact that could be anticipated, or whether that is in essence scaremongering?
Lord Green of Deddington: In terms of numbers, offhand I do not know. I would make a distinction between families where there are children present, which would surely affect the way in which they were handled, and those where there are no children. Where there are no children, when people come to the end of their process, they should go—end of story. We certainly should not have the taxpayer paying for them.
Rebecca Harris (Castle Point) (Con)
Q 112 Back to that point, there are two questions relating to what we were told early this morning by witnesses. On that point—namely, we were told that with a lack of resources, when people have finally lost their appeal, that would drive them further underground and they would cease to engage; it would not work and we would find that less people were leaving—can you comment on whether that is a fair assessment? Will that measure and the other measures in this Bill make it more likely that people go underground and less likely that they are going to come forward and engage, as we are told the term is, and come to the conclusion that they need to go of their own accord?
Lord Green of Deddington: Of course, it would depend very much on the individual cases. The overall statistics are very clear. First, of those who have applied for asylum—this is the average over the last 10 years, just to give you the broad scope—50% only did so when they were discovered. Secondly, when those cases were heard, 50% were granted. So the other 50% were refused, and of those only half were removed. So if you set foot in this country, as people are doing every day from Calais, and you say the word “asylum” you have a 75% chance of staying here. Of course, they know that—they have relatives, they have friends, they have mobile phones, most of them. If you are going to weight the system, which is the only thing you could do by legislation, then you have to weight it against bogus asylum seekers. That is my bottom line.
Rebecca Harris
Q 113 Thank you. That takes me back to the other point, which is about making working illegal, in particular, although it equally applies to some of the other measures in the Bill. I put it to one of our earlier witnesses that quite a lot of potential migrants—even those who might be considered to be being trafficked or abused or taken advantage of when they get here—are quite well informed about the rules and the system here, and, as you said, their chances of remaining indefinitely. Would you say that they are more likely to know that it will be illegal and more difficult to work here, and will that, along with the other measures in the Bill, stop the draw factor? We were told this morning that it was unlikely that people who come from abroad would really know what the rules were here.
Lord Green of Deddington: I do not think that we should underestimate the intelligence of people because they come here illegally. For a start, there is very strong communication within communities, whether you be a Filipina maid or a Syrian carpenter. They all have friends and relatives, and communication is extremely good; they learn very quickly and they also learn the way round the system. I would not be too bothered about that. We need a system that is sensible, firm and fair, and they will either realise that that is the case or realise that it is not.
Gavin Newlands
Q 114 I just want to ask for a quick clarification of an earlier answer to the Minister, in which you used the phrase “these people”. To be clear, can you define “these people” for the Committee?
Lord Green of Deddington: I am not sure what you are referring to.
Gavin Newlands
At the start of an answer to the Minister, you used the phrase “these people”.
Lord Green of Deddington: I do not know which answer you are referring to. Can you be a bit more specific?
Gavin Newlands
You might have been referring to asylum seekers or to migrants, but you gave the answer.
Lord Green of Deddington: I do not understand the question, I am afraid.
Gavin Newlands
You used the phrase.
Lord Green of Deddington: I use lots of phrases.
Gavin Newlands
Q 115 My main question is, to what extent do you consider that the Bill carries the risk of encouraging everyday discrimination against people who do not appear to be British?
Lord Green of Deddington: Could you say that a bit louder, please?
Gavin Newlands
To what extent do you consider that the Bill carries the risk of encouraging everyday discrimination against people who do not appear to be British?
Lord Green of Deddington: What did he say?
The Chair
Lord Green, are you having difficulty with the sound?
Lord Green of Deddington: I am, rather, yes—and, if I may say so, that slightly different accent. I did not understand the question, I am afraid.
Gavin Newlands
Do you think this Bill carries a risk that it will encourage everyday discrimination against people who do not appear to be British?
Lord Green of Deddington: Does the Bill carry the risk? Ah, sorry, yes, I understand. Some aspects of it might—you are probably thinking of the tenancy provisions. There is that possibility and it would be foolish to deny it, but you have to balance that against the absolute scandal of beds in sheds and the exploitation of people—immigrants usually, but not always—by ruthless landlords. There are tens of thousands of beds in sheds, probably more, and appalling conditions. That has to be tackled. Yes, there is a downside, as there is to any kind of change of this kind, but let us keep our eye on the ball. There is a scandal going on in relation to the housing of many people and that needs to be tackled.
Kelly Tolhurst (Rochester and Strood) (Con)
Q 116 Earlier on you mentioned some of the numbers and the applicants to stay here. To what extent do you believe that the opportunities and ease of obtaining illegal work in this country are a pull for people to continue to come here?
Lord Green of Deddington: It is a major factor, absolutely. The wages here are so much higher than in the countries from which many people come—indeed they may have no means of earning a living in those countries in current conditions. I mentioned earlier that 50% of those who apply for asylum do so only when they are discovered working—or are discovered, but they will be working when they are discovered. Clearly, from their point of view, their intention was to come and work and then, as a fall-back position, apply for asylum if arrested. So, yes, that is a major factor.
Keir Starmer (Holborn and St Pancras) (Lab)
Q 117 Mr Owen, it is a pleasure to serve under your chairmanship, and I apologise for arriving late.
I would like to ask the panel some questions about illegal working. At the moment, a number of measures can be taken in relation to both employers and employees where there is an inspection of premises and people are found to be in the country without proper status. The problem, as I understand it, has been the low rates of inspection and even lower rates of enforcement. That is the really critical issue. For that reason, steps have been taken to create a director of labour market enforcement and it is hoped there will be better strategy—streamlining and all the rest of it—but throughout those debates, and certainly when I was Director of Public Prosecutions, I cannot remember people saying that there was a problem with not having an offence that can be prosecuted. In other words, nobody has suggested, as far as I know, that there is a problem because there is not an action that can be taken against employees. There is obvious action that can be taken.
Do you know of any evidence of any cases that have not progressed because the offence of illegal working by the employee was not in place? In other words, there was an inspection, something was found to be wrong, but then there was a problem over not being able to bring a case because you did not have an offence against employees. I do not know of any evidence of that.
Lord Green of Deddington: Almost by definition it would not arise, because if there were no offence they would not be taking it further—
Keir Starmer
Q 118 No, I am sorry to interrupt you, but there are plenty of examples throughout our criminal proceedings sector where something happens and a team will have carried out an inspection or arrest and realised that they cannot proceed any further because there is no offence that fits the action they are trying to deal with. That is not uncommon. Usually the response is to legislate to fill what is seen to be a gap in the available offences. I have never seen any evidence here that it is a gap in the available offences that caused the problem. It seems to be that there are not enough resources to carry out inspections to enforce the measures that are already there.
The Chair
Can I ask for briefer answers and questions, please, if we are going to satisfy everybody on the list? Thank you.
Lord Green of Deddington: On the first point, you may well be right, but that is more for the Home Office than myself. On your second point, enforcement is essential, and it is not happening. You mentioned this director of enforcement. I think that is probably a good idea, but I would say this. The civil service is not a Meccano set; it is a plant and you cannot keep digging it up to see if it is working or not. I think we need to be careful about reorganising, organising and reorganising. On this occasion, I think there is a case for it.
Simon Hoare (North Dorset) (Con)
Lord Green, although I, too, cannot remember the context in which you used the phrase, I would like to support what Mr Newlands was saying. There was a very disparaging tone with regard to “these people”. It certainly jarred with me. On such a sensitive issue as this we all need to be careful about language.
What I did not follow in the logic of your response to an earlier question about the financial support provided to people who have had their applications refused and who have exhausted the appeal process was why there should be an exemption for those with children, or a different style of treatment for those who have children. It seems to me, and I would welcome your views, that if a parent is told that they do not have the right to remain, they are by definition responsible for the welfare of their child. If the child is going to suffer disproportionately because there is a lack of central Government or local government funding, the solution remains in their hands. They have exhausted the appeal process; they have no right to remain. Surely, to safeguard the future and wellbeing of their child or children they should return to their country of origin as quickly as possible. I did not follow the logic that you were deploying as to why there should be two separate streams merely predicated on the fact that people had children.
The Chair
Lord Green, I have one more Member, Anne, wanting to ask a question. If you do not finish your response, would you please give some written response to that?
Anne McLaughlin
I will try to be quick. In answer to an earlier question regarding asylum seekers, Lord Green, you said that they know that they have a 70% chance of staying—I am paraphrasing—and that some of them even have mobile phones. I wonder if you are aware of a detailed report from 2010 that Swansea University carried out for the Refugee Council on this very matter of whether asylum seekers set out to come to the UK. They said that the belief that many politicians have is not supported by the existing research evidence, much of which suggests that destinations are determined not by personal choices about lifestyle but by the practicalities and demands of the situation—
The Chair
Order. I am sorry to stop the hon. Lady in full flow. Lord Green, Mr Hoare and Ms McLaughlin have asked questions that are on the record, and if you could provide answers we would very much appreciate it. On behalf of the Committee I thank you for the answers you have given. If you have additional information that you want to supply to the Committee, please feel free to do so.
Examination of Witnesses
Richard Lambert, Eric Leenders and David Smith gave evidence.
The Chair
Q 119 Good afternoon. We are now hearing evidence from the sixth panel of witnesses, from the National Landlords Association, the Residential Landlords Association and the British Bankers Association. For this session we have until 3.45 pm. Could the witnesses please introduce themselves for the record?
David Smith: I am David Smith from the Residential Landlords Association, and I am the policy director.
Richard Lambert: I am Richard Lambert, chief executive officer of the National Landlords Association.
Eric Leenders: I am Eric Leenders, the executive director responsible for retail and private banking at the British Bankers Association.
Keir Starmer
Q 120 May I ask the panel—but I think probably Mr Lambert and Mr Smith in the first instance—about the provisions in the Bill dealing with the duties on landlords to carry out checks before renting to, or allowing premises to be occupied by, a person without the right immigration status? Do you have concerns about those provisions, from the perspective of the landlords, and do you have any comment about the concern of others that there could be a default position leading to discrimination—in other words, landlords being so concerned, because it is a complicated exercise and they are not entirely sure what they are doing, that it is easier simply to default to a position where you rent to somebody who is pretty obviously British, or who has a British passport?
David Smith: We have four areas of concern, so yes to your first question and, actually, yes to your second as well, but in a different way. We are concerned about the speed with which the second Bill has been brought forward when the first Act, the Immigration Act 2014, is not fully in force. It was announced only two hours ago that the pilot that has been evaluated in the west midlands will be rolled out across the country from 1 February. That pilot was held by the Immigration Minister to be a success, so we are not clear why there needs to be a set of criminal provisions on top of civil fines, which are, apparently, already effective. We would urge Parliament to take its time as it goes through implementation of the changes.
We are concerned about document discrimination—so not so much discrimination on grounds of nationality as discrimination on the grounds of people not having passports. Having a passport is far and away the simplest way to check somebody, so we are concerned that landlords, rather than just discriminating against people, will simply take the path of least resistance, especially as more pressure, potentially, is applied to them, with the possibility of ultimately going to jail. Indeed, I note from the evaluation that was published a few hours ago that one example was given, by one of the interviewees, of a situation of somebody without a passport being refused accommodation. So we are concerned about that.
We are concerned about the way in which the offences come into effect. The way the Bill is drafted, as soon as the Secretary of State has served a notice informing a landlord that they have illegal immigrants in their property, they are immediately committing the offence of having illegal immigrants in their property. It takes 28 days before you can possibly evict those people, so there are 28 days during which they are committing an offence. It has been suggested to us that the Home Office will not seek to prosecute, but it would seem to me that the only person who could give such an assurance is the person who is now filling your old job, Mr Starmer, at the CPS, the prosecuting body.
It would also be normal with offence of this type to have a provision that says that a landlord can establish a reasonable excuse—for example, if they have been severely ill or something like that—and that provision is not there.
The last thing is the air of confusion about two aspects in particular. First, the helpline has been described as a helpline, and was stated as such the other day. However, it has also been described to us as only being there to check for asylum seekers and people who do not have documentation. We would like to know which it is, and whether it will be fully funded as a helpline, so as to be effective.
The other thing that is notable from today’s announcement is that the provision is to be rolled out from 1 February, but it is not clear whether it will only apply to new tenancies commencing on or after 1 February, because it has also been stated to us in other meetings that it may apply to tenancies that are already in place on 1 February. It would be very nice to have some clarity on that, because it would be an extremely serious problem. I see that the Immigration Minister is shaking his head, which may give me the answer to that question.
Richard Lambert: We have concerns about placing this kind of responsibility on landlords, who are not trained for it and are not familiar with it. However, we have taken the view that we have to try to make sure that if this system is going to be introduced, it is as straightforward and practical as possible for landlords to operate. That has been the level of our discussions with the Home Office and other agencies throughout the past year, since the previous Act was introduced.
On concern about discrimination, we were probably more concerned about discrimination when the original policy was announced, or at least I was more concerned at that time than I am now. That is partly as a result of my going round and talking to local landlord meetings, as I do regularly. Rank and file landlords in our organisation are very worried about this issue, and those outside the pilot area are more worried than those inside it. One of the things that really comes back to me is, “How will we be able to tell if somebody is British? You can’t just look at them and say they are British. You can’t see their name and say whether or not they are British. In this day and age, you can’t even listen to their accent and say whether or not they are British.” So what we find is that landlords are moving towards the assumption that, in the same way that employers now tend to check all identities regardless of nationality, landlords will check identification, to make they cover off this particular aspect.
James Brokenshire
Q 121 I thank our witnesses for giving evidence this afternoon, and I also thank the relevant landlord bodies for their participation in the round-table sessions that we have had and will continue to have throughout the detailed implementation of the Bill.
I want to come on to one of the parts of the Bill that relates to the termination of tenancies. When landlords discover someone who is in the country illegally, they will be able to resolve that issue in a speedier fashion through the landlord and tenant legislation. Would that be welcomed by the sector?
Richard Lambert: Most definitely. Our big concern about the initial Act was what would happen once a landlord found they had a tenant who no longer had the right to rent, or who they thought had the right to rent but turned out not to have it. How could the landlord end the tenancy as quickly and as cleanly as possible, without necessarily getting into the whole court process? One of the problems with a court process is that it can be very protracted, yet the landlord is in the position of having committed an offence.
What we wanted to see was a process that moved that forward as quickly and clearly as possible. The provision in the Bill whereby the Home Secretary issues a notice once the Home Office has been informed that a tenant no longer has the right to rent achieves that. We have some concern about a power that has always been with the courts moving over to the Executive, but that is a constitutional principle for Parliament, ultimately, to decide. For our purposes, and looking at the practicalities, the power should work effectively.
David Smith: There are a couple of different points to make. First, it is generous of you to put in a provision to allow eviction of Rent Act tenants, but it is possibly not entirely necessary, as Rent Act tenants will have lived in the UK for so long that they are almost certainly entitled to stay here anyway, irrespective of how they entered the country.
The other part of it that I am a little bit more concerned about is with relation to assured shorthold tenancies and the power you have put in to evict. As I read it, it would still require an amendment to the tenancy itself for that power to be exercised, in that ground 7A can only be used inside a fixed term if it is mentioned in the tenancy agreement. So that ground for possession would require a lot of landlords to change their tenancies, which it is obviously their responsibility to do, but there is obviously a substantial piece of education that will need to be done in the sector, which I accept is our responsibility—possibly more than it is yours.
The other point is the issue of transfer of tenancies, so where there is a group of tenants, some of whom are illegal immigrants and some of whom are not, there is a power for the court to transfer the tenancy. The first point is that it is easily got around by simply issuing proceedings for some other ground for possession as well, which is relatively easy to do. The other problem about it is: how will you deal with all the other side bits that go with it—for example, tenancy deposit protection?
If a deposit is registered in one group of tenants’ names and the tenancy is transferred by the court to a different group of tenants’ names, the deposit protection schemes will need to have the deposit re-registered, and something will need to be done to deal with that contractual positon. So I am a bit concerned as to how that will work. In practice, I am afraid the mechanics are a little bit more complex in terms of shifting tenancies around between tenants.
James Brokenshire
Q 122 The detailed input given thus far has been helpful in flushing some of those issues and, no doubt, those discussions will continue.
Given the time, I should ask Mr Leenders about the banking provisions. The new provisions in clause 18 are on existing bank accounts and the ability to take action. That may be linked to some of the other issues we have touched on in the session, such as proceeds of crime legislation, linked to the employee criminal sanction that was highlighted in a previous session. Will you comment on the practicality and operation of that?
Eric Leenders: Certainly. We have some experience through the Immigration Act 2014 of implementing the required database search for new accounts that customers might want to open. That has given us some experience and some learning. The three-stage process in the Immigration Bill is broadly similar in the sense that first there is the status check, currently through CIFAS. Then there will be notification of any matches back to the Home Office, which is the three-point match, and no fuzzy logic, which gives a clear indication of those particular clients that we might need to close accounts for. The differential is the action that is then taken.
Essentially, though, as we understand it, there are two ensuing actions. First would be an instruction to close the account. We are working closely with HM Treasury officials to understand how that might work in practice—if I may, I will come back to that point. Second would be some form of freezing order through the courts that might facilitate ongoing regular payments, potentially for rent and other things, if there are subsequent actions that the individual might need to take.
In the context of closing the accounts, some of the challenges I think we find are, first, which types of accounts? We know it is individual accounts, joint accounts, additional signatories, charities and some smaller accounts, but is it all those instant access accounts or is it simply current accounts? That has been a challenge that we faced that was clarified, I think on the Floor of the House, with the Act.
There is also the treatment of balances, particularly of course for overdrafts. That has a bearing on the amount of time we would consider appropriate for actually closing the account. Currently, the default would typically would be 28 days, but, if there is an overdrawn balance, we would probably like to see that paid and the account closed quicker to lessen the propensity for that overdraft to drift up again.
I think we have a bit of an issue where there might be knowledge of a disqualification but we might not hold the qualifying account. These days we tend to have financial services across a range of providers, and the extent to which our responsibility might be to disclose to those whom we feel might hold the account, or whether we do nothing, is a moot point just now.
The granularity of disclosure once we have given notice to close the account is something that we are working on with Treasury officials. Currently we are looking at whether that should include balances, additional parties to an account or details of regular payments, which potentially would include details of the originating account for that regular payment. That is not information that we would necessarily find easy to extract from systems, so that is an additional build for us.
In the Financial Conduct Authority we have obligations to treat customers fairly. We found with the Act that there are some cohorts of consumers where actually it is quite difficult, in the sense that those with no fixed address might not have suitable matching criteria to pass through the database, so then we should call them out. That of course creates a customer service issue. Elderly consumers are another area—perhaps they have not registered on the electoral roll and therefore, again, we might need to call them out. We need to get that referral process quite slick.
We will in parallel need to implement the payments accounts directive, which has a requirement that you are familiar with to do with account opening for citizens legally resident in the European Union, which is a different definition and criterion to work through.
In terms of the pragmatics, as we envisage what we call operationalising, we would see that first wave of checks across a database—it might be as many as 120 million-something accounts, so there will be a volume of activity. Thereafter, if we were to undertake checks quarterly, say, we would be very keen just to check any additions and amendments to a register, rather than to have to sheep-dip the whole database.
The final point of course is the timeline. We have had some useful clarifications, again, from Treasury officials that suggest that the first checks might not take place until the latter stages of 2017. Typically, banks need something of the order of 18 months to implement mandatory change processes and to go through testing and assurance internally. We might be able to foreshorten that—we are talking about a period of about, say, 12 months. Whatever we can do ahead of the detail in the secondary legislation would be very helpful to us.
James Brokenshire
Q 123 Thank you for that detailed and comprehensive answer on the provisions, which is quite helpful and instructive on the level of detail that is engaged here. Just briefly, perhaps you could reflect on the provisions of the Immigration Act 2014 and their implementation. What has been the practical experience? Clearly a lot of this quite detailed analysis was engaged there as well. What has been the situation to date?
Eric Leenders: On volumes, I think we have seen about 1.9 million searches go through the CIFAS database. From that we have identified some 14,000 matches against the database, and those have been referred back to the Home Office. That has in turn identified some of these issues such as people with no fixed address or those elderly consumers. So we can draw on that experience to inform our thinking around the Bill.
We consider that the CIFAS process is working quite well. The truncated timeline was difficult, frankly; there was an element of manual processing, and with manual processing there is, unfortunately, a higher propensity to or risk of error. So that is why we called for that slightly longer timeline—to ensure that as far as possible we can automate and therefore reduce the error rate within the process.
Anne McLaughlin
Q 124 I want to talk about potential discrimination under the right to rent aspects of the Bill. Not everyone is as enlightened as Mr Lambert, and so not everyone believes that you cannot tell by a face, a name or an accent whether someone is British. I was very struck by a statement sent out by the Residential Landlords Association, which I am going to read from:
“Whilst the Residential Landlords Association condemns all acts of racism the threat of sanctions will inevitably lead many landlords to err on the side of caution and not rent to anyone whose nationality cannot be easily proved.”
How concerned are you that the Bill will allow some people to use it as an excuse for their racism and that others will inadvertently end up acting in a racist manner, not because they want to but out of fear that they may end up breaking the law if they do not?
Richard Lambert: How concerned am I that some will use it? Very. How concerned am I that some will use it inadvertently? Fairly, but our experience is that most of the concern about the provisions is from people who have not gone into the detail, are worried about what they might have to take on, are concerned that they do not have the expertise or knowledge and are very focused on the penalties, because what has been pushed hardest is not the responsibility or the practicality but the level of penalty for getting it wrong.
Having had a quick look, like my colleague, at the evaluation report that was published this morning—we had a chance to look at it before we came in here—something like 22 of the 26 landlords who responded said that it was actually relatively easy to undertake the checks and that there did not seem to be an obvious level of overt discrimination, although there is still an undertone, and in a few cases that does happen.
It is a real risk, but when I said what I did about awareness of the fact that we live in a multicultural, multiracial, multifaceted society, that was not me speaking—obviously, I believe that—but me recounting what has been said to me by landlords at local meetings around the country. They are very concerned about the practicalities of how you make this work, and they realise that you cannot make assumptions, from looking at somebody, about whether they have the right to rent or whether they are a British national. The only way is to check and to check everyone. I recall anecdotally from my colleagues on the Home Office working group on the evaluation report that the largest level of resentment coming back from tenants was from the indigenous white British population, who did not understand why they were being asked to prove the right to rent. You actually get a counter-intuitive response.
David Smith: People who will discriminate would discriminate anyway, so in a sense people who are going to actively discriminate as a result of the Bill would have been actively discriminating before. Our biggest concern is what we have chosen to call document discrimination. Of the UK indigenous populace—or however you want to describe those people—17% do not have passports. If a landlord has two people walk through his door who want to rent the same property, and one says, “I have a passport and can do the right to rent check right now,” and the other says, “I do not have a passport but will come back tomorrow with two forms of identification off the secondary list,” the landlord is technically not breaking the law by taking the first person, and in practice I am sure that he will take that first person.
Our concern is that there are groups of people who are not in possession of passports and driving licences. As a lawyer, I have many such people as clients, because I have a large client base of elderly people or people who are in care. There are substantial numbers of those people, and a lot of them are renting, increasingly in the private rental sector, as there is a change from social renting to private renting. There is a potential difficulty with providing those people with proper identification.
We have called for a much simpler document for people who are on benefits and would already have been checked to receive benefits. Local authorities could provide a single document—perhaps watermarked or stamped—that landlords could be clearly told was acceptable as a single document. At the moment those people are going to need to produce two separate documents. They may not have them to hand, or it may take time to acquire them. The benefits letter has to be signed by a named official, and named officials may be reluctant to put their names on these documents. Our concern is that groups of people who should have no reason to be concerned by this legislation at all may find themselves being put through checks that they cannot easily meet.
Craig Whittaker
Q 125 I declare an interest as per my declared interest in the Members’ register. For the record, I am probably what Mr Smith calls one of those in his sector who are amateurs and accidental landlords. One thing I know from experience, although I may be an amateur, is that the eviction process is incredibly burdensome for landlords. It is far too lengthy and hugely costly, and when you are going through the process, you do not get any rent from the tenant who is in your property. That is the current situation, whether they are an illegal immigrant or not. I cannot for the life of me understand, and neither can the members of Calderdale Landlords Association, whom I have spoken to, why on earth as an organisation you would be against something that is far better and makes it far quicker for a landlord to evict a tenant in these circumstances.
David Smith: In what sense?
Craig Whittaker
Q 126 You said very clearly that you had some real concerns around the eviction process that was being proposed. You mentioned the 28 days, for example. That is a much quicker process than what is currently in place.
David Smith: I said that my concern was that as soon as the Secretary of State had issued a notice to a landlord, they are committing an offence, and it takes 28 days before they can even begin the eviction process. During those 28 days they are committing the offence of having an illegal immigrant in their property.
Craig Whittaker
Q 127 But they are already committing an offence as the law currently stands, and the process of evicting a tenant takes much longer. What I would like to know is why on earth you are advising landlords that this element of the Bill is not particularly—
David Smith: I think there is a misunderstanding here. They are not committing an offence as the law is currently drafted, because it has not changed yet. If it were to be changed, what we are after is a situation where, provided that the landlord is proceeding diligently to carry out the eviction, they are deemed not to be committing the offence of having an illegal immigrant in their property—so they have what the Act has termed a statutory excuse. As the situation stands, as soon as the Secretary of State issues the landlord with a notification that the tenant in their property is an illegal immigrant, the landlord is instantly deemed to be committing an offence of having an illegal immigrant in their property, and they can be prosecuted for that.
Craig Whittaker
Q 128 So the new eviction process in the Bill is a good thing. Is that what you are saying?
David Smith: Yes. I have no concern about that at all.
Craig Whittaker
Q 129 Okay. Can I just ask you about document checks, which have been mentioned? I just wonder whether you guys actually understand what is going on in your sector. If you try to get accommodation from an agency, for example, as I recently did here in London, first, you have got to be there on the day to secure something, and if you cannot get down to London to physically go and see it, you will lose it. Secondly, if you do not have the checks, whether you are an illegal or a legal resident in this country, it is a very difficult process anyway, because that is what people demand. Have you considered for one minute that for the amateurs and accidental landlords that you refer to, the introduction of some form of check, as is happening in the Bill, will protect them in other ways as well as just against potential illegal immigrants?
David Smith: Well, I suppose there are two answers to that. First, the current guidance would imply that using checks in other ways might well be unlawful discrimination, because the document checks are for establishing the right to rent, so that would depend on the guidance that is issued.
Craig Whittaker
Q 130 But we have that in place anyway. If I do not have those documents to prove to an agency that I am who I am when I want to rent a property, whoever I am, guess what? I do not get the property.
Richard Lambert: To be fair, I think that that is custom and practice through tenant checking rather than a strict legal requirement. The other difficulty is that in some elements of the private rented market, lower-income people, people on benefits, vulnerable people and people who are very transient simply do not have that kind of documentation to hand.
Craig Whittaker
Q 131 Okay. Let me just ask one final question, because I think I have made my point on that one. My question is to you, Mr Lambert, because you mentioned an undercurrent of discrimination in the system. May I point out that no evidence at all from the pilot—which, okay, was only published this morning—suggests that there is a discrimination there? You said that you have heard hearsay from people you have spoken to, but may I ask whether you have any physical evidence to suggest that there might be some form of discrimination in the system?
Richard Lambert: If you read the full report, I think it mentions one or two examples in the focus group that refer to what could be interpreted as minor levels of discrimination.
Craig Whittaker
Q 132 So there is no real evidence—
Richard Lambert: That is what I am saying: there is no strong evidence of discrimination, although there is the potential there, and some minor level of concern may emerge in the focus group.
Chloe Smith
Q 133 Will the panel give us their assessment of what numbers might be involved in the area of policy that we are talking about? Do you have any assessment in particular of how many prospective tenants might present themselves to your members, or how many bank accounts in the case of Mr Leenders?
Richard Lambert: We can talk about how many households are in the private rented sector—there are about 4.4 million at the moment—and I think there is a turnover rate of about 25% to 30% a year, so we are looking at just over 1 million to 1.25 million new tenancies a year.
Chloe Smith
Q 134 Of those, do you have a sense of how many might fall under the provisions of the Bill?
Richard Lambert: None whatsoever.
David Smith: In a sense, they should all be falling under it, because landlords are required to check every new tenant, so one would assume that 1.2 million of them will require checks. How many of those people will then be found to have established the right to rent is perhaps one of the most hotly contested questions before this Committee, I would have thought.
Chloe Smith
Q 135 That is exactly what I am driving at. Could you give us your view on it?
David Smith: We have no information, clearly, as to how many unlawful immigrants there are within the private rented sector. The reality, as I think has been established before, is that landlords who are routinely and knowingly renting to illegal immigrants are probably breaking the law in a vast range of other exciting ways and are therefore intentionally well below the radar. Landlords who do not know that they are renting to illegal immigrants do not know that they are renting to illegal immigrants. Therefore, the information is extremely hard to come by.
Chloe Smith
Q 136 Just sticking with the two landlords, if I may, before coming to Mr Leenders on the same question, your organisations are membership organisations, clearly, and you know how many members you have. Do you have any sense of how many members you do not have? In other words, how many landlords are under the radar, to use your phrase?
Richard Lambert: That again is difficult to say—for under the radar. I estimate that there are probably about 100,000 landlords in all the landlord associations throughout the country—ours and the many little local landlord associations that exist. So there are probably about 1.4 million landlords who are not in landlord associations. It is then about what you mean by “under the radar”. If you mean the people who are completely illegitimate, who are renting beds in sheds and are probably landlords incidentally, because actually what they are is organised criminals and the housing element just comes in as part of that, they are more interested in prostitution, people trafficking, money laundering and so on, who knows? We could not tell that. What we do know is that there are probably about 1.3 million to 1.4 million people renting out property who are not directly engaged with our organisations or any other organisation. Our concern is always where they get their information from, how they know that what they are doing is the right thing, and how they learn about what is best practice or, indeed, about changes in the law.
David Smith: You should be aware that of landlords not in our organisations a significant number will be using letting agents who, themselves, are perhaps not always perfect either—a significant percentage of them do not fall under any professional body. A goodly percentage of them are aware of their responsibilities and will no doubt learn about them as they go forward. In a sense, there is a force multiplier effect by engaging landlord organisations, which can capture a good percentage of landlords, and by engaging letting agent organisations, which will pick up a lot of landlords who choose not to join a landlord membership body.
Chloe Smith
Q 137 Mr Leenders, any reflections?
Eric Leenders: I think we can identify 123 million instant access accounts. If we were to apply the experience from the Immigration Act of roughly 1% of searches being referred to the Home Office, that would potentially lead to a working assumption of about 1 million or 1.2 million searches being referred to the Home Office. That, in itself, surfaces an operational point about the readiness of the Home Office to deal with that volume in the initial wave of searches in the first quarter of the implementation of the Act. That is just one of those technical issues that we would like to work through. We might be able to find mitigants to that. For example, we might be able to strip out those who currently hold UK passports, but that is detail that we can work through in secondary legislation. I would not see that as a primary legislative point at all.
Sarah Champion
Q 138 I have two small, mopping-up questions. Mr Leenders, you went through the customer service and administrative burdens that the legislation puts on you, but are you largely in favour of it? Are there any unintended consequences of the legislation that we should be aware of?
Eric Leenders: We do not have a policy position on the Bill, nor did we on the Immigration Act 2014. There are some customer service points that give a little cause for concern. Referring customers with a seven-day service level agreement to the Home Office leaves them, effectively, in limbo for a period, and that customer might, quite justifiably, be entitled to an account. We do not feel that is the best experience, so we would want to work through one or two details like that. We would certainly want to have a period of testing—we are already encouraged by the Treasury giving some consideration to its own pilot exercise—presumably during the formulation of the secondary legislation, such that the customer impacts are minimised so far as possible.
Sarah Champion
Q 139 Mr Smith and Mr Lambert, I was surprised by how small the sample size was in the west midlands pilot results. Of the 67 respondents who are tenants, 60 are students. My assumption is that students are much more likely to have passports and letters of authority from their institutions. Do you believe that this is a skewed sample?
Richard Lambert: The evaluation period could have been better. It could have been a lot longer. We would have said, ideally, a year to 18 months because most tenancies last more than six months. In order to understand how this process works, you have to give it that length of time so you can see tenancies coming to an end, and limited right to remain coming to an end and you can see how that renews. It also took place at what is probably the slowest time of the year so, inevitably, there were not going to be a lot of tenancies turning over. Then there were the difficulties of contacting the population. It is interesting that in a university area, most responses to the request for tenant respondents came from students who are possibly more likely to be active in some of the social issues and more aware of these things going on.
David Smith: Students are also, to a large extent, exempt from checks. Students are nominated into accommodation by their educational institutions so any student in a hall of residence is effectively exempt from checks anyway. Given that areas around Dudley and West Bromwich are not substantial student areas—parts of my family come from the area—it is a shame that there was such a high student sample. I would have liked to have seen a sample that more adequately represented a wider spectrum of social demographic groups. We remain concerned about the effects, not so much on, for example, Members of Parliament renting homes, but on people in the lower social demographics who increasingly are coming into the private rented sector, will have difficulty with this legislation and are often driven into the arms of less salubrious landlords.
Gavin Newlands
Q 140 I know from your written evidence that you call for a clearly understood and properly resourced helpline for landlords. Will you share your members’ experiences of the helpline during the pilot? A recent written answer from the Minister, for which I am very grateful, revealed that there were two full-time equivalent staff for the helpline. Was that sufficient for your members?
David Smith: We have not had any particular feedback. We have certainly had calls to our member helpline from members. I do not know whether that means that they were not happy with what they got. We are concerned about whether the helpline will continue to be resourced as a helpline once we are talking about all of England. That is not clear yet—I am looking at the Minister to see whether he nods or shakes his head. I can tell you that we run a member helpline and that more than two people staff it. It is that simple. Two people will not be enough to cover all of England, but I am not clear about the plans for widening the helpline.
If the helpline is not adequately staffed, there is little point in having it, I suspect. We would like more online resource. I note that, in the evaluation—the guide that was published today—the Government have highlighted the European PRADO database, but it covers only EU documents, not EEA documents. My members are not familiar with Liechtenstein passports, not that they would necessarily see a great many of those. However, many members are likely to believe that countries such as Ukraine are in the EEA, which they are not. We are therefore concerned about people both ignoring countries of which they should take account, and thinking that countries that they have seen in the news recently, which are around the fringes of the EU, must be in the EU.
We are also concerned about the potential for forgery that is opened up on list B. Several documents on there are potentially prone to forgery with a laser printer and we are very worried about the risk our members run of prosecution for not being the most adept spotters of forgeries. Immigration officers frequently examine passport documents and they are highly trained in that. My members are not equipped with UV scanning lights or skilled watermark detection systems, and I am afraid that many of them would not know a watermark if you asked them about it anyway. I am therefore concerned about how they will detect the more sophisticated forgeries, and what the break point is for what they should detect. I am not worried about sellotape.
Kelly Tolhurst
Mr Smith, you mentioned earlier businesses or associations that are part of your organisation, and you said that landlords who wilfully engage in this sort of activity will fall under the radar. Do you agree that the tougher penalties in the Bill target those very people?
Simon Hoare
I wondered whether Mr Smith wanted to reflect on his comment that there were not many students in Dudley. That will come as a shock to Dudley College, which has worked closely with the University of Wolverhampton since 1999, offering, among other courses, a PGCE and a Certificate in Education post compulsory education, and has six campuses. That suggests to me that there are quite a lot of students in Dudley.
David Smith: In which case, I immediately withdraw any suggestion that Dudley is not a substantial student town, with my apologies.
Simon Hoare
So the corollary is that the baseline with the data that the evaluation mentioned is possibly a little more bona fide than you first indicated.
David Smith: It is still the case that there is a large number of student responses, and I would have liked to see data that drew on groups of people who were absolutely not students. I am prepared to accept that, yes, there may be more students in those areas than I envisaged, but that does not change my primary concern, which is that, from what I can see, having looked at the evaluation briefly, there are a lot of students in the responses. That potentially skews the data and I would like to see a study that was drawn from outside the student population, if possible.
Ms Tolhurst, I am not immediately convinced that increasing penalties in and of itself will smoke out bad landlords. Bad landlords are already subject to a raft of housing legislation with varying penalties. I do not know whether many people saw the story in The Times on Saturday, which was based on freedom of information data that my organisation obtained. They show very poor enforcement by local authorities. I do not know what level of enforcement of this legislation there will be through the Home Office. If it is actively enforced against bad landlords, then, yes, I would agree with you—if.
The Chair
That brings us to the end of the time allocated for the Committee to ask questions in this session. On behalf of the Committee, I thank the witnesses for their evidence. Again, if there is anything they feel they need to add to the answers they have given, please write to the Committee Clerks.
Examination of Witnesses
Chief Superintendent David Snelling and Stephen Gabriel gave evidence.
The Chair
Q 142 Good afternoon. We are now on the seventh panel of witnesses and we will have oral evidence from the Metropolitan police and from Sandwell Metropolitan Borough Council. This session will go until 4.15 pm.
Could the witnesses please introduce themselves for the record?
Stephen Gabriel: My name is Stephen Gabriel and I am the strategic manager at Sandwell Council with responsibility for private sector housing.
Chief Superintendent David Snelling: Good afternoon. My name is David Snelling. I am a chief superintendent from the Metropolitan police, but my role here is that I am chair of the National Police Chiefs’ Council—which has replaced ACPO—Vehicle Recovery Group.
The Solicitor General (Robert Buckland)
Q 143 I want to ask Chief Superintendent Snelling some questions about the provisions in the Bill relating to driving. An issue has been raised that somehow the progress being made by the Metropolitan police in particular in dealing with some of the problems relating to stop-and-search measures will be, in effect, hampered by the introduction of provisions relating to the search of vehicles that might be used by illegal immigrants. What do you say to that suggestion?
Chief Superintendent David Snelling: Perhaps I can give a theoretical example from an operational perspective of how this practice is most likely to be employed. It is most likely that we will have come across something by a vehicle that we would have had some reason to stop, which would then enable us to do a check on ownership of the vehicle using the police national computer. At that stage, what we would probably do then is speak to the driver and ascertain his or her details. Again, we would then again do a check on the national police computer about them, but at the same time we would also carry out a driving licence check. That would give us some indication of the type of driving licence they held, if any at all.
So, regarding what we would call the traditional stop-and-search provisions whereby we see somebody acting suspiciously in the street, we go and question them—stop and search them—our interactions would be merely reactive, following on from cause to stop a vehicle and then ascertaining other provisions about the driver from there.
The Solicitor General
Q 144 So this is intelligence-led policing, as opposed to what I will frankly describe as some of the random stops and searches that we know disproportionately disadvantage people from the black and minority ethnic communities.
Chief Superintendent David Snelling: If I were perhaps to take out some of the language from there and talk about this particular instance, yes, we would have had cause to stop a vehicle, and we would have done further checks on the driver of that vehicle, which would enable us to deal with them in whichever way is appropriate.
The Solicitor General
Q 145 On the new power relating to the detention of a vehicle relating to a person unlawfully here in the United Kingdom, how will that dovetail with existing powers to detain vehicles?
Chief Superintendent David Snelling: We have a variety of powers to detain vehicles. We have a power to stop any vehicle to ascertain ownership and driver details. What we would then do is inquire into whether the driver has authority to drive that vehicle. The power we use most often at the moment would be stopping vehicles where there is no insurance or the driver is driving otherwise than in accordance with their licence—we find a lot of people with provisional licences who are not driving with L plates. In that respect, I would see it as a staged process: we would stop the vehicle, then ascertain the circumstances of the driver.
To fall within the provisions of the Bill, we would most likely need to do a further check with the immigration authorities, which at that stage would give us reasonable grounds—whether or not you could use the term “proof” is another thing—based on a search on the immigration database, to believe that that person is driving as an illegal immigrant. That would fall within the provisions of the Act—should the Bill be made an Act of Parliament. At that stage we would have the power to seize the vehicle, as we would currently do under driving without insurance.
The Solicitor General
Q 146 So the extra dimension is then the ability to check the Home Office database?
Chief Superintendent David Snelling: Yes, that is something we would require to actually exercise the powers proposed in the Bill.
The Solicitor General
Q 147 Are you satisfied that these provisions will not cut through or cut across the excellent work being done by the police service on reforming stop and search and having a much more intelligence-led approach to it, as opposed to the random problems that we all acknowledge we saw in the past?
Chief Superintendent David Snelling: In terms of the example I have given, it is a series of steps that we can say objectively are what have led us to form the suspicion. We would be referring to an authorised database, owned by a Government agency. That should allay the view of various members of the public that we would just be, to use your terms, stopping people on speculation.
Keir Starmer
Q 148 Chief Superintendent Snelling, can I follow up on the questions about driving? You have talked us through the way in which a vehicle would be stopped at the moment, using current powers. I think a number of licences have been revoked as the result of the exercise of existing powers, and of course when you find someone in a car who is not legally allowed to be here or has an irregular immigration status, there are various enforcement actions that can be taken in any event. Have you, on behalf of the chiefs’ council or in any other capacity, asked for a further offence of driving while not having a regular immigration status? In other words, have you identified a gap in your powers that has led you to ask for further offences to be considered because you have found a problem?
Chief Superintendent David Snelling: Can I give you a short answer?
Keir Starmer
Thank you.
Chief Superintendent David Snelling: If I can slightly flesh that out—or have I been cut off by the Chair?
The Chair
No, you have not, but please be brief.
Chief Superintendent David Snelling: We have been involved in discussions with the Home Office that have proposed this power, but to the question whether we approached the Home Office, the answer is no.
Sarah Champion
Q 149 Mr Gabriel, do you believe the provisions in the Bill covering landlords and the new responsibility of landlords to effectively become immigration experts are going to put a strain on community relations and perhaps lead to more discrimination?
Stephen Gabriel: We speak to landlords on a daily basis. Some of the landlords are not saying that they feel it is an extra burden. The point was made earlier that some landlords have already been looking for and taking information such as copies of people’s passports or other forms of identification, so the good landlords would have been doing checks anyway. Also, some landlords have said that where they felt a bit nervous about asking for proof, the pilot gave them a legitimate reason to ask for and get that information before they could move further with any contracts.
A point was raised earlier about the indigenous population having access to identification, and that could be a challenge. As we know, migrants or asylum seekers who are looking for accommodation will normally come with the relevant documentation. I think there is a point around the indigenous population having the right documentation. As was raised earlier, if two people come along at the same time and one has the documentation but the other does not, the landlord is likely to go with the one who does.
Sarah Champion
Q 150 As you said, good landlords are going to welcome this because it gives them more support to ask for documents to prove legitimacy and protect their tenancy. The group that I am concerned about are the accidental landlords, who just see this as another burden when they did not particularly want to be in this situation, and who may withdraw themselves from the market. I am concerned about the potential for bad landlords to fill that gap, offering substandard accommodation and not asking for the right documents, so that people could fall off the radar and people who choose to fall off the radar could go even further off.
Stephen Gabriel: Bad landlords have always been out there. Even with the introduction of this legislation, in the area that I cover in Sandwell, we are still picking up landlords who are not fulfilling their obligations. I talk about the grey economy of landlords, and I think there is still a lot of work to do to identify those landlords. In Sandwell, we have undertaken a proactive approach for one of our neighbourhoods that we know has a high turnover of newcomers. We are finding some real challenges in relation to the quality of properties that people are living in, particularly properties above shops. We have tried to go there with colleagues from environmental health and housing to take a holistic approach to those buildings, so we can get up and see what is happening above the shops. We found on one occasion two elderly people aged over 80 living in a property that I would describe as—well, not very nice.
Sarah Champion
Q 151 Unfortunately, I have areas like that with private landlords, and those properties tends to be occupied by migrant workers but also trafficked people coming over. What could be in this Bill that is not there already to target those bad landlords?
Stephen Gabriel: From my perspective, it is about what we do on the ground operationally and how we work with our enforcement colleagues. We have now opened up the channels of communication with the Home Office and the Gangmasters Licensing Authority. We have undertaken one joint enforcement activity in Sandwell, and other enforcement activities are coming through now. I am also aware that across the other authorities affected by the pilot, the increase in that relationship in sharing information, sharing data and going out on joint enforcement visits has really raised the profile of the work that we are doing among landlords.
Another thing is how we raise the profile among tenants. One of the things that we have done in the region is recently to launch a mobile app, which is called “Check Before You Rent”. One of the questions in the app is: is your landlord accredited, and have they asked you for any information about the immigration checks?
Mims Davies
Q 152 I must declare an interest in the road safety aspect, because that is an area I have worked in previously. Chief Superintendent Snelling, in terms of people killed or seriously injured, have you identified communities where there is a difference in the culture regarding drink or drug-driving? Have the police identified that as a concern?
Chief Superintendent David Snelling: In wider issues such as drink and domestic abuse and domestic violence, we have identified some communities that are more prone to that. That would be the remit of a local police chief superintendent. I am Sutton borough commander, so I have a good idea of the make-up of my communities within the area that I police. Were there to be specific community concerns or tensions, we would seek to look into it either through education or through enforcement.
On the road safety side, in Sutton we are working closely with Transport for London to raise awareness of safety among schoolchildren. For the wider population, we would hope that the provisions of the Bill would be widely publicised. As I have highlighted with the scenario for stopping, we have run certain operations nationally with the immigration service and we have worked with them to target areas of concern. They, like us, would be feeding into their community representatives to ensure that they would have an understanding of why we have exercised those powers.
Mims Davies
Q 153 Have you identified a spike in certain areas where people have been killed or seriously injured by people who do not have the right documentation or perhaps the right driving licence or insurance?
Chief Superintendent David Snelling: The short answer is no. We would tend to look locally at some of the problems. For example, in London I am aware that there has been a recent slight rise in the number of failed to stop collisions. We tend to think the reason for that is because people did not have the appropriate driving licence or insurance, which is why they would not stop. Again, some of our work would be reactive and some would be proactive.
Mims Davies
Q 154 Finally, in terms of people identified and the information that you highlight, is this a timely piece of legislation?
Chief Superintendent David Snelling: I think there is an area, yes, that we could address—some areas that would tighten up some of the current provisions. Although the police have not asked for the authority, working with the Home Office I can see where that could assist us.
The Chair
We are just over halfway through this session. A brief supplementary from Keir, and then I will come to Byron.
Keir Starmer
Q 155 Chief Superintendent Snelling, can I come back to you on a different aspect of driving? The proposed offence is driving a motor vehicle when a person is not lawfully resident in the UK. As I understand it, that means that somebody who overstays can commit the offence once they have lost their lawful right to be resident in the UK. In other words, you can have someone who is entitled to drive, has a valid driving licence, proper insurance and so on, and then on a certain day, if they overstay or go beyond their permitted residence here, they have become a criminal offender for driving a car. Do you know—if you do not, tell us—in such circumstances, is their otherwise valid insurance immediately invalid, so that they are also an uninsured driver?
Chief Superintendent David Snelling: The short answer is no. I think we would need a detailed approach to the insurance company. We often find at the roadside that some of the provisions of the legislation would still allow them to be covered as far as the legislation is concerned, although other offences may have been committed.
Keir Starmer
Q 156 Do you know what the situation is here?
Chief Superintendent David Snelling: I have not looked into it in enough technical detail.
Byron Davies
Q 157 Mr Snelling, leading on from the Minister’s questions—it is perhaps a little out of context now—on this fear about the stop and search issues, do the immigration authorities have access to the police national computer? Can they flag up on the PNC whether somebody is an illegal immigrant?
Chief Superintendent David Snelling: I am afraid I do not have that level of detail about immigration authorities’ access to the police national computer.
Rebecca Harris
Q 158 I would like to go back to the question of discrimination in housing. Mr Gabriel, you said something quite interesting, which was that you found that quite a lot of tenants quite liked the idea that they would have to be asked for documentation—they would not have that awkwardness, because it was mandated. I noted, looking at the findings of the report into the trial, the mystery shopping survey found that a higher proportion of black and minority ethnic potential tenants were asked for their documents, but in the ultimate findings a higher proportion of them were given tenancies compared with white British. Does that make any sense to you? Does that surprise you? Can you give any interpretation of that?
Stephen Gabriel: Just to clarify, my point was about how landlords felt that, with the legislation coming in and the right-to-rent pilot, they then had the ability to ask the questions, not the tenants. In relation to discrimination, I think the point that I made earlier, the issue around the indigenous population is the biggest thing. If you have got the requirement—the passport or the driving licence—you are less likely to be discriminated against than someone who has not.
Rebecca Harris
Q 159 So it could be beneficial in that regard.
Stephen Gabriel: Yes.
Craig Whittaker
Q 160 Mr Gabriel, you mentioned the grey economy of landlords and spoke about more collaborative working. I think you touched on the issuing of notices of compliance and things such as that. Do you feel that you already have sufficient powers to deal with the grey economy? Would you say that the powers in the Bill around the checks that landlords have to do will actually overall enhance your job regarding that particular economy?
Stephen Gabriel: There is more that we can do around trying to understand where the grey economy is, but I think that the Bill and the work that we have been doing go some way to beginning to address that—in particular, the collaborative working between organisations. That is the point to be made here. Previously, it was very difficult for local authority enforcement teams to work with the Home Office and the GLA, but now there is a real impetus for us to work together to deal with some of these enforcement issues, and we are seeing that on the ground.
Craig Whittaker
Q 161 So the new powers in the Bill, around the landlord checks, for example—will they enhance that role as well?
Stephen Gabriel: That is right, yes.
Gavin Newlands
Q 162 Mr Gabriel, the Bill removes support for a majority of failed asylum seekers. Do you have concerns that through this aspect of the Bill, the Government are in effect devolving to local government responsibility for the support of refused asylum-seeking families through its responsibility to accommodate children? At this time of great restraint in local government funding, do you feel that this is an area that might be looked at again?
Stephen Gabriel: It is a challenge. One of my concerns in Sandwell is that we are part of the West Midlands strategic migration partnership and there is the need for local authorities to have parity in numbers in the families whom they are supporting. Yes, in Sandwell our percentage is higher than in some of the other local authorities in the area, so if the Home Office stops supporting those families, that will potentially have a negative impact on the local authority. That could be a challenge for the local authority.
The Chair
Q 163 We have approximately seven minutes. Does anyone else want to ask a question?
Rebecca Harris
Q 164 Mr Gabriel, I often find quite a lot of anger from people who are waiting on housing lists, because they have a certain conviction in their own minds that people are getting housing ahead of them, whether private rental or whatever—that they are being squeezed out of the market because of vast numbers of illegal immigrants, whether that is true or not true. In your professional opinion, do you think that the measure will give people more reassurance that there is not that injustice, and that they will know that it is not possible?
Stephen Gabriel: The ability to carry out the checks and to be seen to be doing more to make sure that those members of the community who do have a right to stay here are being checked from a housing perspective is a tool that will allay some of those fears, I think.
The Chair
Do any other Members wish to ask questions? If there are no further questions, I thank both witnesses for their evidence, and we will move on to our final panel. Thank you very much.
Examination of Witnesses
Ilona Pinter, Kamena Dorling and Adrian Matthews gave evidence.
The Chair
Good afternoon. We will now hear oral evidence from the Children’s Society, Coram Children’s Legal Centre and the Office of the Children’s Commissioner. As I indicated, this is the final panel, and we can go up to 5 pm. May I ask the witnesses to introduce themselves for the record?
Ilona Pinter: I am Ilona Pinter. I am policy adviser at the Children’s Society and co-chair of the Refugee Children’s Consortium.
Kamena Dorling: I am Kamena Dorling. I am head of policy and programmes at Coram Children’s Legal Centre and co-chair of the Refugee Children’s Consortium.
Adrian Matthews: I am Adrian Matthews. I am the policy adviser to the Children’s Commissioner for England on immigration and asylum-related matters.
Sarah Champion
Q 165 To all of you, please—if you could answer briefly—what do you perceive to be the risks for children’s welfare of the provision to remove support from families who have been refused asylum under clause 34? May I start with Ms Pinter?
Ilona Pinter: We think the risks for children from this provision are very serious indeed. Essentially, it would see families becoming destitute—they would no longer have accommodation and financial support under asylum support. That obviously brings with it a whole range of risks, from families being street homeless to families having to move around, potentially for short periods of time, to stay in potentially unsafe accommodation. The research broadly, including the Children’s Society’s research, shows that children who are currently destitute are at a heightened risk of being exploited, as well as at risk of remaining in circumstances where they are facing domestic violence. Obviously, some of the evidence that currently exists from serious case reviews highlights the real child protection risks for children of having no support.
Adrian Matthews: Could I add that some families will no doubt go into the woodwork? That actually creates all sorts of problems, because parents will then, in order to feed their children, resort to very unsafe practices—unsafe childcare practices and unsafe working environments, and so on and so forth. The other effect is very clear: a lot of families will turn to local authorities for support, and whether they are given that support or not I think is almost immaterial in the end. The fact is that it will massively increase the burden on local authorities in terms of processing applications and claims from families who are destitute and street homeless.
Kamena Dorling: I would echo what both Ilona and Adrian have said. A key concern is, as Adrian has mentioned, this shift of the burden on to local authorities. We are already seeing local authorities struggling to support the number of families currently in the UK with no recourse to public funds. This would look to increase that pressure, and one of the results we are seeing of that pressure is very low levels of support for families that are turning to local authorities, if they are getting anything at all, but also quite high levels of gatekeeping, where often families are turned away anyway. Then we are just going to see either children visibly destitute and homeless or going missing entirely from services, and that will presumably have a knock-on effect on their access to education, access to healthcare and all the problems that we are already seeing for children in families who are undocumented at the moment.
Sarah Champion
Q 166 Looking at current practice, from your experience, how are children’s best interests currently being assessed by the Home Office? How would this play a role in a decision to deport a family under the clause?
Ilona Pinter: The first thing to say is that there is currently no mechanism by which children’s best interests are decided, considered or assessed. That has implications not only for support, but for how families’ substantive decisions within the asylum process are taken into account. The United Nations High Commissioner for Refugees did a piece of research in 2013 that highlighted a lot of failings where children’s best interests under the protection claim were not considered, which has consequences down the line. The Home Office’s own evaluation of the family returns process highlights that most families involved in the process feared returning home. Reasons include families fearing what will happen to them and their children if they are returned. We believe that the provision to end support for families to encourage them to go home will not work, because they still have those remaining fears about the consequences.
Adrian Matthews: The current practice of Home Office decision makers in taking into account the best interests of children is patchy, to say the least. We had a good example last year that we were involved in as the Children’s Commissioner, in which the Home Office had removed a mentally ill Nigerian mother with a six-year-old who had been born here. She did not survive in Nigeria. She only survived through the foster parents, who had been fostering the child for six months and supporting her while the legal process was going on in the UK. Eventually, the upper tribunal decided that the Home Office had acted unlawfully in not taking into account the child’s best interests and returned the family to the UK.
Sarah Champion
Q 167 So building on that, the potential in the Bill to deport before appeal presumably raises concerns.
Adrian Matthews: Yes, exactly.
Kamena Dorling: I was going to say that when we look at a range of provisions within the Bill, there appears to be an assumption that children’s interests will be considered as a matter of course. From our day-to-day practice and at Coram Children’s Legal Centre, where we represent children and families in such situations, at best we get lip service paid to children’s interests. Quite often, there is no detailed analysis of how any immigration decision would affect a child in a family or on their own, which is really concerning. There is a huge absence here both when we are talking about changes to support for families in the asylum system and when we are talking about the extension of the deport-first appeal. Children are absent from later provisions. There is no consideration of the impact on children.
Adrian Matthews: I would very much like to echo that. One of the most serious aspects of the appeal provisions is the test of “serious and irreversible harm” but that is applied to the person who is to be removed, excluded or refused entry, depriving the child a voice in proceedings. Under the current arrangements, in an in-country appeal under article 8 human rights grounds there is at least the potential for the child’s voice to be heard. The change specifically excludes children who are settled or who are UK citizens from having a voice in the proceedings about how they will be affected by the removal or exclusion of a parent. That is a serious concern that engages the UK’s obligations under the United Nations convention on the rights of the child, particularly article 12, which requires the state party to allow the child to have a voice in such proceedings.
Sarah Champion
Q 168 The Government believe that they are compliant with the European convention on human rights and that there is no conflict with any children’s legislation. You would disagree with that.
Adrian Matthews: I would not agree with that.
Sarah Champion
Okay. To the rest of the panel, do you think that the legislation complies?
Ilona Pinter: It is notable that on the provision to withdraw asylum support, for instance, there is no mention of the section 55 duty on the Home Secretary to safeguard and promote the welfare of children in relation to all of the functions, including asylum support. There is no mention of how many children would be affected specifically by that provision.
Kamena Dorling: If we look broadly at the UN convention on the rights of the child, as has been already mentioned, article 12, which is about the voice of the child, is key, but so is article 3, which requires us to take the best interests of the child as a primary consideration. We have had a number of cases go to the Supreme Court on that, and we have got very good guidance from the Supreme Court about how the interests of children should be examined.
One of the findings of the Supreme Court is that children should not be blamed for the actions of their parents. Again, what we seem to see in this Bill is this idea that any immigration behaviour that is deemed undesirable can result in a policy of forced destitution, for example, which seems to me a very stark means of punishing children for the action of their parents. So there are a number of concerns.
Sarah Champion
To reassure the panel, I will point out that we are blessed with a Minister who has always been a child advocate and campaigner, so I am sure he will look very closely at these matters.
Keir Starmer
Q 169 I have a question for all members of the panel, which really follows on from that point. In your experience and with your background, can you think of any circumstances in which the Home Office could argue that it was in the best interests of the child to remove support? Did the Home Office ever make a decision that it was in the best interests of a child to remove support?
Ilona Pinter: I think it is difficult to say that by specifically removing support, if there are no other mechanisms, that children would be protected. There are obviously some circumstances—a lot of the cases that we deal with are very complex—in which there are child protection issues. However, that would need to follow child protection proceedings. We do not believe that removing support from families will be an effective way of getting families to leave the country, and that has been shown through evidence time and time again, through the Home Office’s own evaluation.
Keir Starmer
Q 170 Perhaps I should just nuance the question. Are there any circumstances where support is removed in which the same support, or similar support, is not simply picked up by another agency that could ever be argued to be in the best interests of the child? Obviously, if things just swap to another agency and somebody else just picks up the bill and provides the service, it is a bit of a pointless exercise.
Adrian Matthews: Well, it either swaps to another agency or the parent puts themselves in a precarious position in order to support the child. So I think that the short answer to your question is no, there are not really any circumstances in which withdrawing support is in the best interests of the child.
Kamena Dorling: But of course what this Bill is trying to achieve, as I read it, is to increase the numbers of families returning. What we are trying to advocate is that we have a family returns process, so why not put more effort and resources into increasing the capacity of that process, through which ideally families might return? Then at that point you would be withdrawing support, because you would have already put steps in place for them to depart the UK.
Adrian Matthews: To reinforce that, if you read the reports of the independent family returns panel you see that there is quite a lot of evidence that there has been a vastly greater uptake of the voluntary return packages that are available through consistent and careful engagement by family engagement managers with those families, addressing their fears and so on and so forth. That is a much more realistic, and in the end productive, way to go, rather than simply using punitive methods of withdrawing financial support and accommodation.
Keir Starmer
Q 171 Thank you. I have a similar question in relation to the proposal on appeals, which is “remove first, appeal later”. Can you think of any examples where it is in the best interests of the child to remove first and appeal later?
Ilona Pinter: The difficulty is that, as I said before, there is not a best interests determination process, so we do not know what the best interests of the child are. However, that is not the same as saying that families or children should never be removed; that is not our position. Our position is that if you do not know what the best interests of the child are first, how can you do that balancing? There are obviously lots of circumstances in which it would be fine for families to return to their country of origin, and even children who have been born in the UK and grown up here would be able to adjust to another environment. It is not about never being returned but about how the process is best dealt with. To engage with children’s welfare there needs to be a conversation with families. As Adrian said, the returns process is working. The first report of the family returns panel showed that around 50% of returns did not need an ensured return. The next time the panel reported, 76% of returns did not need an ensured return. Families are co-operating, but there is a need to address those barriers to return, and that can be dealt with only with co-operation with the families, through working and engaging with them.
Keir Starmer
Q 172 To be clear, absent that co-operation and support, in a simple case of deport first and appeal later, is your answer as I understand it, namely, that it is simply impossible to assess whether deportation is in the best interests of the child because the exercise is never carried out?
Adrian Matthews: I would add one thing. There are enormous practical difficulties in appealing from abroad, particularly for families who have been destitute in the UK. They will be going back with virtually no resources at all; questions about how you organise an effective appeal from abroad in those circumstances need to be answered. But I do not think it will be, because once they are out of the country, they are out of sight and out of mind. Appealing from abroad is a really tricky problem.
Kamena Dorling: Presumably you can envisage a situation in which there is a mind to remove a parent or a family from the country so that they can appeal from abroad, and we would move the family unit as a whole. That might not be detrimental to the child. Families move all the time. I could remove my son from the UK with me and that would still be in his best interests. I go back to the point that we do not have an assessment of the impact on the children so we do not know.
Ilona Pinter: To put this into a little perspective, one thing that is often overlooked is that deport first, appeal later is going to affect a range of families, including those in which the children are British, those who have status, those who do not have status or those who have an irregular status. We know from the University of Oxford that 120,000 children are undocumented in this country and over half of those were born and have grown up here. Many will not have the language of the country that they are being returned to; they may have never been there, as they have grown up here. Effectively they will be going to a country to which they have never been before.
On the point about British children, which is important, we have had cases in which families have been removed where we believed that the children were British. Because there is no system for finding out the best interests of the child, or even for checking details such as whether the child is British, or whether they would be stateless if returned, there is a real risk that those families would be removed and find themselves in very difficult circumstances.
The Solicitor General
Q 173 You are making an assertion that the best interest of the child is not part of the consideration of the decision maker—for example, in this provision relating to certification of whether a deport first, appeal later procedure should be adopted—but is that actually right? Is not the evidence that, on a case-by-case basis, each individual family situation will be assessed? There may be occasions when it is in the best interests of the whole family to deport the entire family, and there may be instances when it is better for the child to remain in the UK while the subject of the application is deported. Is it not really an issue of looking at matters on a case-by-case basis, rather than the blanket suggestion that the best interests of the child simply do not come into it?
Ilona Pinter: I think we agree that it is on a case-by-case basis. We are saying that there is no assessment of children’s best interests. The UNHCR report highlights strong examples in which children’s best interests were not taken into account in the decision making.
The Solicitor General
Q 174 Forgive me, but that is different, is it not? There may be some cases in which the view of the Commission is that the child’s best interests were not put front and centre, but that is different from saying that there is a blanket approach of not taking children’s best interests into account.
Adrian Matthews: There are cases, clearly, where it may be in the child’s best interest for the parent to be removed from the country—for example, if the child is affected by domestic violence. That takes individual consideration but, excluding those cases—the UN convention covers this—it is normally the case that it is in the best interest of the child to be brought up by both parents unless it is in their interest not to be. The sorts of circumstances you are envisaging would address that. Of course, decision makers will need to look at those factors but, in general, it is in the interest of the child to be brought up by both parents. We recently did some research on the family migration rules, and I was genuinely shocked to find out that missing parents for what might be considered, from an adult point of view, a short amount of time—a matter of months, but sometimes years and sometimes longer—has a profound effect on young children at a time of their life when they are forming bonds with their parents. It is essential that the state does not interfere with those early things, because that could be what you would regard as irreversible and serious harm.
The Solicitor General
Q 175 Which means that sometimes it will be in the interest of the family for the entire family and the children to temporarily leave the country together.
Adrian Matthews: It may be, but that would be very circumstance dependent. Of course, the immigration authorities have no power to remove a British citizen from the country. That might be in the family’s control, and families do make decisions to do precisely that.
Kamena Dorling: I think it comes down to a question of the current decision making that we see. We are not saying that there is a blanket disregard. I just do not think that in a lot of decision making there is meaningful engagement with what effect a decision will have on a child. As we have seen in guidance from the Supreme Court, you are first meant to assess what is in the best interest of the child before looking at competing considerations. No other considerations, not even immigration control, automatically trump what is in the best interest of the child. We do not really see that level of engagement in decision making; we see what I would call lip service: “We have a section 55 duty. Obviously we have considered this and it is fine.” I am paraphrasing, obviously.
There needs to be more onus on proactive assessment, and we have provided a case study in which the child was actually British—we were looking at the decision to remove that child—and because the mother could not show evidence that the child was British, she was going to be removed with that child. It was only in the process of the in-country appeal that the tribunal ordered the Home Office to look into the status of the father. It was then confirmed that the child was British and should not be removed. It is about that kind of proactive engagement.
Adrian Matthews: Part of the weakness of the system—you might be right that there is some consideration of the best interest of the child subject to immigration control—is that there is no consideration of the best interest of the child who is not subject to immigration control. That could be a settled child or a British national child. The decision-making process, because it is geared towards immigration, is not set up to look at the wider effects. A clear example is that the Home Office does not know how many children are affected by the family migration rules. It does not know how many British children and settled children are affected by the exclusion of a foreign national parent. The Home Office does not count them.
The Chair
That was an interesting and important exchange. I am conscious that Simon has been waiting patiently, and then I will bring in Anne, Craig, Mims and Kelly.
Simon Hoare
Q 176 I have two questions that I hope you can deal with reasonably quickly. The first might just be a yes or no answer. Do you understand the rationale and the public demand that sit behind this Bill?
Adrian Matthews: Yes.
Kamena Dorling: If it can be yes or no, then, yes, I understand.
Ilona Pinter: indicated assent.
Simon Hoare
Q 177 We heard from Lord Green and I think one or two others that people who are seeking asylum or refuge in this country are usually pretty well linked in terms of communication and understand what is going on through the use of mobile telephones or established relationships with friends or relatives already in the country. So they know broadly what the new “regime” is going to be all about. If that is the case—I will be interested to know whether you dispute that—casting forward to the future again, someone would know that under the criteria they are bogus, for want of a better phrase, and would know that their application could not be successful, because they do not qualify under any criteria. So why would a caring or loving parent want to put their children through the mill of being destitute while they are trying to prove a point that they know is unprovable? I appreciate that it is a different kettle of fish for those who are here now, but as a signal for the future I wondered whether you think that parents, irrespective of where they come from, would be prepared to put their children at risk in order to make their point.
Adrian Matthews: It took me a number of years of studying law to understand the asylum process. I think the assumption that parents are well acquainted with the rules and regulations is very overstated. If you go to the camps in Calais at the moment there is absolutely no information about the British asylum system. Lawyers who have been there have found that people are really misguided and really do not have a sound understanding of what they are coming to when they intend to come to the UK.
Ilona Pinter: I agree. The idea that people know what they are coming to is not realistic. It is certainly not the experience that we have with the families that we work with. Actually, they are incredibly vulnerable and the fact that families would remain here destitute, rather than returning, is a sign of the difficulties that they would face being returned. Again, this is highlighted in the evaluation of the family return process—most of the families cited fear of return as one of the issues. It was shown that financial incentives and reduced re-entry bans were not helpful in persuading families to leave, because they had an overwhelming sense of what the risks would be for them and their children. While I appreciate the public rhetoric around this, the reality is very different for these families. They are willing to survive on so little because of the risks that they face if they return.
Simon Hoare
Q 178 Risks in their judgment though?
Ilona Pinter: In their judgment, of course—but in that respect they are doing what they believe is in the best interests of their children, because they believe at the end of the day that remaining in the UK will give their children the best life chances. Whether that is an accurate interpretation is debatable, but that is what they believe, and it is not about—as it is often characterised—trying to frustrate the system. What we see are very desperate families trying to do the best by their children.
Kamena Dorling: I agree entirely. It is not our experience that families and children arrive in the UK with any kind of detailed knowledge of the asylum system, nor with a detailed knowledge of the asylum support system. We certainly do not see people coming here simply for that level of support.
I wanted to add a little bit, because I think it is an important point about the rationale and the public drive behind the Bill. Presumably, in wanting to respond to that, we want changes that will bring in the change that the Bill purports to be introducing. One of the points that we have made is that taking away asylum support from families has demonstrably been shown not to incentivise them to leave the country. You make children destitute and homeless, but you do not achieve your intended aim, which is for more people to leave the UK. If we accept that—and the Home Office has conducted its own evaluations that show that—all we see, really, is punishing children for their parents feeling that it is best for them to remain in the UK. I think that that is problematic. If we have legislation, we want it ideally to achieve its purpose.
Adrian Matthews: I would echo that. I think it is an absolutely legitimate aim of the Government to remove failed asylum seekers if they have been through a fair and proper process. That is it, really; I do not have anything to add to that. It is simply about the method that you use to go about it. I sincerely believe that what is proposed in the Bill is not going to achieve the Government’s aims, and that there are better ways to do it through an established and workable family returns process that has proved that it is capable of increasing the take-up of voluntary departure, which is greatly preferable to enforced removals.
Anne McLaughlin
Q 179 I presume that you will continue to campaign and lobby against parts of the Bill. From what you are saying, one of the biggest things for all of you is the inclusion of children in the groups that will not receive support if their or their parents’ asylum claim has been refused. I do not know whether you were watching earlier, but I wanted to alert you to the fact that you have a supporter in Lord Green of Migration Watch UK. I think he is quite a valuable supporter to have, given that he did not seem overly keen on having too many asylum seekers in the country. He seemed quite surprised that children might lose support. He said we have to make a distinction between those who have children and those who do not, and that they would have to be treated differently. If I were you, I would contact him and get him to support any campaigning that you are doing.
I wanted to ask whether you agree with me that rendering families destitute will shift the financial burden not simply on to local authorities and charities, but on to the health service. I am not sure what the situation is in England these days, but I know that in Scotland, those who have had their asylum claims refused can access free healthcare. I do not know whether it is the same here, and I do not know what Wales and Northern Ireland are like. Do you agree that the health of these families will be so significantly impacted that there will be an increased cost for those services that provide healthcare?
Adrian Matthews: And not only to the families. There is a public health issue if you deprive the children of the right or the means to go to hospital or to visit their GP, or if their parents are too scared to do so. That public health issue affects all of us, not just the families.
Ilona Pinter: I agree. This was the subject of the previous Immigration Bill, where issues around health were debated at length. Like immigration control, public health is a public interest, as are child protection and international protection. There needs to be a review of those and more debate, particularly around other public interests.
Costs shift to health services. We already see in families who are awaiting their asylum decisions, particularly where parents have poor mental health because they have suffered trauma already and because of the pressures that the immigration process brings to bear on them, parents being sectioned under mental health provisions and children being taken into temporary foster placements as a result. One of the ways in which costs could shift to local authorities is through children being taken into care. If families are made destitute and parents have to rely on working without permission, provisions in the Bill will mean that the parents will be criminalised, which will again mean that children need to go into care. There are other considerations to take into account.
Adrian Matthews: I understand you are going to be hearing from local authorities and they will evidence the fact that during the section 10 pilots in 2004-05, a number of children were, in fact, taken into care as a result of what the Government were attempting then, which was to withdraw support and accommodation, so it does not work.
Craig Whittaker
Q 180 I want to come back to the Minister’s earlier point. The point about assessment is that the children’s best interests forms a part and is an integral part of that process. I think it was Kamena—I apologise if it was not—who said children should not be blamed for the actions of the parents. However, they are in this situation because of the parents. For those families who have exhausted their appeals rights, those who could and should leave the UK, how long do you feel we should give support? Do you think it should be indefinite?
Adrian Matthews: It has to be case sensitive and based on the best interests of the child. Take, for example, a child born in this country. If you are going to send them back to another country, they will need to be returned with certain things that can prove their identity—establish or re-establish their identity—so they will need an original birth certificate and their medical records; they will need documentation from the embassy to show that they have legitimately travelled from the UK to the country of return. All these things are case sensitive. A lot of different factors would need to be taken into account. So I do not think there is an answer to your question in terms of a set time or limit. It has be done on a case-by-case basis.
Craig Whittaker
Q 181 Sorry to cut you short, but the Minister has already made it clear that it will be done on a case-by-case basis. My question to you is: when families that include children get to the point where they should leave the UK, how long do we continue to support them? Indefinitely? Until they decide to go? I am a little confused by what you say.
Adrian Matthews: In the system currently in operation, families are given a lot of opportunities. They are encouraged to take up voluntary return and they go through various stages. If they do not, there is a required return stage where they are given a ticket and are expected to turn up at the airport. If they do not do that, they enter a stage of enforced return, so they will get a visit from the immigration service, who will take them from the house and to the airport, or take them to Cedars, pending their return. So the answer to your question is that we already have structures in place to ensure families get removed if they come to the end of the process.
Ilona Pinter: On the returns process, one helpful point might be that at the moment there are set time limits between family conferences, but information from Barnardo’s, for instance, highlights that for families that go through the returns process, it can take around a year for those families that go through Cedars. There are other estimates for how long it can take.
We do not advocate for families being on asylum support any longer than they need to be. Asylum support is incredibly low at £5 a day per child, and it has been reduced recently through regulations. Children are already living in very difficult circumstances. It makes it very difficult for families to afford food and clothing and be able to take care of their children. Also, parents cannot work on asylum support, so it is in the interests of children to be taken off asylum support as soon as possible either by families having their determination and being able to integrate or move into employment or other benefits, or, if they do not have a right to remain and if there are not risks for them on return, making that process as short as possible.
Craig Whittaker
Q 182 But if they are going through the returns process, one would presume that it has already been determined that they need to leave the UK.
Ilona Pinter: This is the problem that we have tried to highlight. A lot of the families come to the end of the process, but because they have not had a fair chance to have their claim considered, they have existing fears of return. That is highlighted by the fact that 40% of families that entered the family returns process are actually granted leave to remain. It means that families are not getting proper access to legal advice. They are not having a proper chance to have their claim considered, and more needs to be done on improving the decision-making process in the Home Office.
Craig Whittaker
Q 183 So it is more about the decision-making process, rather than what is in the Bill, which proposes to remove them or cut off the support once a decision has been taken. Is that correct?
Ilona Pinter: I am not sure what you are asking.
Craig Whittaker
Q 184 What you are saying to me is that it is more about the robustness of the decision-making process rather than the elements in the Bill that say that once you get to the end of that process, we pull support.
Ilona Pinter: Yes.
Craig Whittaker
Q 185 If the decision-making process was robust, you would support this process?
Ilona Pinter: We would not support making families destitute, no.
Craig Whittaker
But that is not what I am asking; I asked you a specific question.
The Chair
Craig, Ms Dorling is trying to respond.
Kamena Dorling: I think it might address the question as well—
Craig Whittaker
No, I do not want to adjust the question. I want the question answered; it was very specific.
Adrian Matthews: If we have robust decision-making—
The Chair
Order. One at a time, please. Ms Dorling is being patient.
Kamena Dorling: There are two things that need addressing. One, as Ilona has addressed, is the decision-making process at the beginning of the asylum process. The other is how families are engaged with at the end of the process. We are advocating that more energy be put into that family returns process. I appreciate that we do not want a situation whereby families are on asylum support indefinitely, but if they are part of that process and they are being worked with, either through assisted voluntary return—although funding is being cut for that—or through the family returns process, of course, they should be supported within that, and there are timescales as to how long return takes. I suspect you are talking about the families that do not engage with anything at all, which is a very tricky area, and I am not sure that we have cracked it, but given that we know that cutting off support will not encourage those families to return, it seems more practical to think how we would engage with those families.
Craig Whittaker
Q 186 What I am getting at is that a process is in place, which families will go through. I understand and accept that you are arguing that the process is not robust enough, but the great British public cannot understand, once a decision is made to deport somebody in this country, why it takes forever to do so. Let me just ask this question: what is a reasonable time that people should expect it to take for someone to be deported forcibly?
Kamena Dorling: I do not feel I can answer that, but I do feel it is a question to go back to the Home Office, because there is an enforcement question there, is there not?
Craig Whittaker
Q 187 The Home Office has come up with the Bill and that is why I am asking. You do not think the Bill is acceptable.
Kamena Dorling: But we know that the great number of people who are here in the UK, who the Home Office believes should not be here, are not being removed by the Home Office. The independent chief inspector of borders and immigration has already pointed to the fact that that enforcement process is not working well enough. I am not sitting here advocating that families are all removed immediately, but I think there is a question there. We are saying put more energy into the family returns process and assisted voluntary return, but also that there is something for the Government to think about, which is that if you think that more families need to be removed, then address enforcement. Do not just withdraw support in the hope that they will go. That does not answer your time issue, because I do not know how long that should take.
The Chair
I am sorry, but we are going to move on now. A number of people are indicating that they want to speak. I have Mims and Kelly down, but the Minister and Sarah want to make a brief intervention on this point.
The Solicitor General
Q 188 I was interested to hear the point about engagement in the process of deportation. Would you agree with me that there is an opportunity to do that, because people who are in a position of having had their leave refused and their asylum-seeking status rejected can apply for an extension of support from the Home Office, if they show that there is a genuine obstacle to their being removed; for example, ill health or a failure by the home state’s embassy or high commission to provide documentation? Do you think that mechanism is an opportunity for both sides to engage with each other, explore the obstacles and find a way forward that allows families to be deported?
Adrian Matthews: My understanding is that the precise conditions would be set by regulations. Is that correct?
The Solicitor General
Yes.
Adrian Matthews: It is very difficult to answer your question without seeing how those regulations will be set. The indication from the consultation was that they would be on fairly restricted grounds. You are correct that there was a mention of health but my experience is that—particularly where the Home Office engages with mental health issues—you are asking caseworkers to make decisions on things that they are really not competent to make decisions about such as the mental health of parents. We end up with quite a lot of distressing situations where the mental health of the parent might be a genuine obstacle but it is not recognised as such.
The Solicitor General
Yes, but my question was: is it not an opportunity for both sides to look at the evidence and come to an informed decision? I agree that people cannot make decisions on mental health unless they have evidence in front of them. If there is evidence that the applicant has a mental health problem, that should guide the decision making, should it not?
The Chair
Q 189 With a panel of three it is always difficult because each wants to give an opinion, so if we have one question to them, we will get the responses quickly. We only have four minutes. Two people want to ask questions and Sarah wants to make a brief intervention, so do not feel that you all have to respond to the questions.
Ilona Pinter: Can I make a point?
The Chair
Very briefly.
Ilona Pinter: The big problem is on decision making. The Asylum Support Appeals Project highlights that 65% of asylum appeals are successful. The section 95A provision does not have a right of appeal, so it will be very difficult for families to extend that grace period, which I think you are referring to. If the Home Office makes an incorrect decision, which happens often, families will not be able to challenge it. That is one of the big worries. Sorry, this is not short. This has not been set out yet. The Home Office proposes 28 days of a grace period. We think that is far too short. We have highlighted what we think it should be or, at least, some considerations and the evidence to take into account on what the grace period should be.
The Chair
Q 190 We have three minutes. I will take the three questions and we will see how we get on with the replies.
Mims Davies
The issue that you see is the decision-making process and resources in terms of impact on potentially destitute families. I am really keen to know what level of families we are talking about. Are they clustered in certain areas? How much will that be a resource issue on other children in communities, where people are then putting pressure on those local resources because of these impacts?
The Chair
We will just take Sarah and Kelly, and then we will try to get some responses in two minutes, I am afraid.
Sarah Champion
The panel responded to all the questions by talking about families. Does the Bill have any implications for unaccompanied children?
Kelly Tolhurst
I represent a constituency in Kent, where the issue of unaccompanied minors has caused great pressures over the past 12 months. It is already a burden on the local authorities and the local people. I wonder whether you think there are any measures that are not in the Bill that would discourage families from allowing their young people to travel here on their own?
The Chair
We are time-restrained. If you can give brief answers, I will bring all three of you in.
Ilona Pinter: Shall we answer all the questions in one go?
The Chair
Try.
Ilona Pinter: I am not sure about the question on geographical concentration but I imagine that there may be greater concentrations in the dispersal areas and urban areas, where most undocumented migrant families live and where there are more communities in which those families would get support.
The question about unaccompanied children is important. There is nothing in the Bill that says how unaccompanied children who come here, including care leavers—over 18-year-olds who would be subject to some of these provisions—will be treated. This is a really important point because, as the Bill is drafted currently, the deport first, appeal later provision could apply to care leavers who came here as unaccompanied children. These are children who have grown up here. They may be orphaned and they may be at risk—
The Chair
Okay, it does not matter. I will go on to Ms Dorling.
Kamena Dorling: I cannot answer very helpfully about certain areas, but of course you see families dispersed in the process of getting asylum support. So, with more knowledge about where those dispersal areas are, you could envisage that, when that support is cut off later down the line, those are the local authorities and regions that will be impacted more than others.
On accompanied children, as Ilona said, we are very worried that the extension of deport first, appeal later would affect those who arrived as unaccompanied children and did not get granted asylum but did get granted what was called UASC leave—temporary leave until you turn 17.5. There is huge concern there.
The other point I quickly want to make is that we have also raised concerns about changes to what is currently called temporary admission and replacing it with immigration bail. There is a suggestion that, as part of that, that could include a prohibition on studying, which for children who arrive and claim asylum and have not had their decisions dealt with, for example, would mean that they would be here and unable to go to school or college or higher education. That is in our evidence, but it is another thing to raise.
Adrian Matthews: There are probably about 15,000 individuals, split between about 5,000 who are currently on section 4 support and about 10,000 who are currently on section 95 support. The section 95 support obviously includes parents and children. There is some information in the immigration statistics. I think they will have a disproportionate impact on Wales, which is one of the dispersal areas, and also on Scotland and some of the urban areas of England. That is the answer to that.
On your question about whether you can stop parents sending their children, if you look at the profile of the countries, with one or two exceptions the majority of unaccompanied children who come to this country come from the most war-torn and dangerous areas in the world—Afghanistan, Syria, Iran, Eritrea and so on and so forth. They are the big refugee-producing countries in terms of unaccompanied children. From their point of view, those parents are making the decision and raising the money to send their children here to protect their children’s lives. Until we get changes in those countries, and they are more stable, I am afraid that those children will keep coming.
Are there provisions in the Bill that I am concerned about that have not already been mentioned? Yes. I am concerned about clause 30, on 3C leave, which is the extension you get when you are awaiting a further decision. That will have a disproportionate impact on unaccompanied children when they hit 18.
The Chair
The session started early and has finished late. I will take the rap for that. It was very interesting, and if there is anything that the panel feels they have not given us in their very technical answers, they can supply that to us in writing. I thank the witnesses for your evidence and Members for their questions.
Ordered, That further consideration be now adjourned—(Charlie Elphicke).
Trade Union Bill (Fifth sitting)
(9 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 10 / Noes: 8 - Question accordingly agreed to.
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Chair
I shall make a few introductory remarks to explain our process for those who are new to all this. We will now start the line-by-line consideration of the Bill. As a general rule, I and my fellow Chair do not intend to call starred amendments, which have not been tabled with adequate notice. The required notice period for Public Bill Committees is three working days. Therefore, amendments should be tabled by the rise of the House on a Monday for consideration on a Thursday and by the rise of the House on a Thursday for consideration on the following Tuesday.
As I said, I will explain how the process works for those who are new to Committees. The selection list for today’s sitting is available in the room. That shows how the selected amendments have been grouped for debate. Grouped amendments are generally on the same or similar issues. A Member who has put their name to the lead amendment in a group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in that group. A Member may speak more than once in a single debate. Bear it in mind that this is not like the main Chamber: it is pretty easy to be called here, so you do not have to rely on interventions, and interventions should be short.
At the end of a debate on a group of amendments, I shall call again the Member who moved the lead amendment. Before they finish speaking, they will need to say whether they wish to withdraw the amendment or to seek a decision. If a Member wishes to press any other amendment in a group to a vote, they need to let me know. I shall work on the assumption that the Minister wishes the Committee to reach a decision on all Government amendments that are tabled, although we have none today.
Please note that decisions on amendments take place not in the order in which the amendments are debated, but in the order in which they appear on the amendment paper. In other words, the debate occurs according to the selection and grouping list. Decisions are taken when we come to the clause that the amendment affects. I know that this is complicated, but we are in good hands with the Clerks. They will sort it all out; do not worry. New clauses are decided on after we have finished with the existing text—that is, after we have considered clause 22. I shall use my discretion to decide whether to allow a separate stand part debate on individual clauses and schedules, following the debates on the relevant amendments. Obviously, if a debate on amendments has been very long, a stand part debate may not be necessary.
I hope that all that is helpful to everyone. Members will recall that we agreed a programme motion on 13 October. It is reproduced at the end of the amendment paper and sets out the order in which we will consider the Bill, so we start with clause 1. There are no amendments to this clause, so we will start with the question that clause 1 stand part of the Bill.
Clause 1
Meaning of “the 1992 Act”
Question proposed, That the clause stand part of the Bill.
The Minister for Skills (Nick Boles)
It is a pleasure to open the line-by-line scrutiny of the Bill under your chairmanship, Sir Edward. This room has rather less comfortable chairs and rather more mind-blowing wallpaper but definitely better acoustics than the room that we were in for the evidence sessions. I think that we discovered through the evidence sessions that there are deep and passionate disagreements between the different parties on the measures in the Bill, but equally I hope that we discovered that both sides are prepared to argue their points courteously and respectfully, and we will all part, I hope, as friends and colleagues at the end of it.
Clause 1 sets out that references in the Bill to “the 1992 Act” are references to the Trade Union and Labour Relations (Consolidation) Act 1992. The Bill largely amends or inserts new provisions in the 1992 Act. This clause enables the shorthand form to be used throughout the Bill, and I commend it to the Committee.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
Sir Edward, it is a pleasure to serve under your chairmanship in this room with the rest of the Committee; it is a pleasure to serve opposite the Minister and alongside many hon. Friends. I agree with the Minister that we had a lively start to consideration of the Bill during the oral evidence sessions. Fundamentally, I think that Opposition Members have explored how the Bill belies its stated intent. It is partisan. It challenges long-standing civil liberties in this country. It is poorly drafted, with significant legal implications.
Given that we are discussing clause 1, which relates to the 1992 Act—previous legislation—it is important to see the Bill in context: essentially, it is a Bill without a purpose. We heard on Second Reading, most notably from my hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) that given the significant reduction in industrial action over the past 30 years, it is important to question why the Bill even exists in the first place. That reduction is borne out by the statistics; the number of days lost to industrial action each year has fallen dramatically. Since 2010, on average, 647,000 days have been lost, compared with 7,213,000 lost in the 1980s. There is no problem here and the Bill goes well beyond the realms of sense in challenging the long-standing right of workers up and down this country to stand up for their rights. We heard aptly from a number of witnesses that they see many objections to the Bill. The Government are struggling to find supporters to back it up.
I declare my interest—and I am sure that other hon. Members will do the same—as a member of the GMB union and draw attention also to my declaration in the Register of Members’ Financial Interests. Let me be clear from the outset: we intend to oppose every clause, because we consider the Bill an affront to civil liberties and the rights of workers up and down the country, and do so starting with this clause.
Question put, That the clause stand part of the Bill.
Stephen Doughty
I beg to move amendment 1, in clause 2, page 1, leave out lines 9 and 10 and insert—
“(iia) in which at least 50% of those who were sent a ballot paper in accordance with section 230(2) of the 1992 Act voted, and”.
The Chair
With this it will be convenient to discuss the following:
Amendment 2, in clause 2, page 1, leave out lines 9 and 10 and insert—
‘(iia) in which at least 50% of those who according to the trade union’s reasonable belief were employed by the employer in a trade dispute, and whom the union reasonably believed would be induced to take part in the industrial action, voted and”
Amendment 7, in clause 3, page 2, line 9, leave out
“were entitled to vote in the ballot”
and insert:
“according to the trade union’s reasonable belief were employed by the employer in a trade dispute, and whom the union reasonably believed would be induced to take part in the industrial action,”
Amendment 8, in clause 3, page 2, line 10, leave out
“entitled to vote in the ballot”
and insert
“sent a ballot paper in accordance with section 230(2) of the 1992 Act.”
Amendment 20, in clause 5, page 3, line 6, leave out from “individuals” to the end of the paragraph and insert
“who according to the trade union’s reasonable belief were employed by the employer in a trade dispute, and whom the union reasonably believed would be induced to take part in the industrial action”
The amendment would be consequential to Amendments 1 and 2.
Amendment 23, in clause 5, page 3, leave out lines 15 to 21
Amendment 21, in clause 5, page 3, line 16, leave out from “individuals” to the end of the paragraph and insert
“who according to the trade union’s reasonable belief were employed by the employer in a trade dispute, and whom the union reasonably believed would be induced to take part in the industrial action”
The amendment would be consequential to Amendments 1 and 2.
Amendment 22, in clause 5, page 3, line 20, leave out from “who” to the end of the paragraph and insert
“were sent a ballot paper in accordance with section 230(2) of the 1992 Act”.
Stephen Doughty
Amendments 1, 2, 7, 8, 20, 23, 21 and 22 stand in my name and the names of my hon. Friends the Members for Wallasey (Ms Eagle) and for Edinburgh South (Ian Murray), who are not in Committee today but are taking great interest in its proceedings.
Let me first turn to the substance of clause 2, to which our lead amendments 1 and 2 refer. The clause sets out measures by which a ballot and subsequent industrial action will only be lawful if there is a minimum 50% turnout among trade union members who are entitled to vote. Committee members will know from our evidence sessions that the overwhelming majority of trade unions and the TUC are opposed to the clause in principle and are highly concerned that it seeks to introduce excessive turnout and voting thresholds for ballots for industrial action, and that it further defines abstentions as no votes. Let me take each of these in turn.
If the clause is successful, industrial action will be lawful only if there is a minimum 50% turnout among trade union members who are entitled to vote, outside certain “important public services”—as the Government define them—as referred to in clause 3, which we will come to. A simple majority will need to vote in favour of strike action. For example, if 500 members are balloted, at least 250 must vote and at least 126 must vote yes for industrial action to go ahead.
It is important to set out at the beginning that such thresholds are rarely used anywhere else in our democracy. They were not even used in recent referendums, one of which was very significant—I am sure there will be another significant one in the next few years—and certainly not in the general election or other elections up and down the country. Much as we might wish turnout to be higher on all those occasions, I am sure that the threshold provision is relevant to the election of many members of the Committee; an extensive list has been produced by the Library.
Ministers have implied in the media and in other chat about the Bill that recent industrial action in, for example, the rail sector shows the need for the change, yet a recent ASLEF ballot for industrial action on the tube would have passed the proposed threshold, with a turnout of 81%, as would many other examples. Let us be clear: trade unions, as witnesses made repeatedly clear in their evidence, want to see high turnouts and the highest engagement when considering a matter as serious as industrial action or, indeed, a full strike. Why would they not want to? They want to see a high turnout. They want to see their members engaged. They want to be organised and to demonstrate a clear wish for action as a last resort.
Government Members have raised a number of examples of low turnouts. We could debate the merits of action in each case, but I fear—this fear is shared by many of the witnesses who gave evidence and across the trade union movement—that the Government are, in reality, simply seeking to silence unions that do not reach or narrowly miss such arbitrarily high thresholds, despite having legitimate grievances about pay, pensions or health and safety. I am thinking of one particular example: the strike referred to in evidence from the Royal College of Midwives, which was the first time in 154 years that it had taken such action. Under the Bill, that strike would have narrowly missed the threshold.
As the Minister will know, there was a lot of focus on this clause in the oral evidence sessions. While a swathe of those who gave evidence were against the introduction of thresholds, I admit that a number spoke in favour of it, although they had little evidence to back up their claims. For example, Dr Marshall of the British Chambers of Commerce spoke of how his support for thresholds was underpinned by his belief that the number of people affected by industrial action was not going down, and he emphasised extensive indirect effects. That claim was made by a number of other witnesses and by the Government. The reality is that under repeated questioning, they were unable to provide any evidence to substantiate the claim of indirect effects.
As we have made repeatedly clear, if the Government truly had altruistic intentions, they would offer clear support for our amendments in Committee. Our amendments would boost participation by expanding the use of tried and tested methods such as secure workplace balloting, which has repeatedly brought about high turnout thresholds in Central Arbitration Committee ballots and in other matters, and by bringing things into the modern age through e-balloting. We will have a lengthy discussion of these matters later, but it is crucial to underline them now. Unsurprisingly, the Government are not supporting our amendments.
John Hannett, the general secretary of the Union of Shop, Distributive and Allied Workers, hammered home the point that for thresholds to be met and for higher turnouts to be achieved, we must help as much as we can to get turnout up. That is especially the case in dispersed workforces such as those in the retail and distributive sectors, which operate 24/7. I have had extensive discussions with unions such as USDAW about the inherent difficulties and the time it takes to engage with small workforces such as those operating in small shops around the country. I know USDAW members operating, for example, in local Co-op stores in my constituency. They are dispersed and working long hours, and the efforts required to engage them in the process of balloting need to be made as straightforward and easy as possible. It is not a lack of concern about issues in their sector or any ballot proposal that prevents such workforces from engaging; often, it is the very real practicalities of their lives and professions. That situation is repeated across many other sectors.
Long gone are the days of huge unionised workforces in single locations. The reality is that workforces across the country are increasingly dispersed, with people working different hours and in many different locations. John Hannett said clearly:
“I have no problem with thresholds, but it is the facilities and…access”—
access to ballots in this case—
“that is the issue.”––[Official Report, Trade Union Public Bill Committee, 13 October 2015; c. 24, Q61.]
More fundamentally, the Opposition are concerned that the clause, and the Bill more generally, will undermine constructive employment relations. The reality is that the introduction of ballot thresholds will mean that unions need to take more time in the run-up to ballots to ensure necessary turnout exceeds by a significant margin whatever legal threshold the Government arbitrarily seek to set. That will inevitably divert time and effort away from finding an amicable settlement, which I am sure is what all members of the Committee want.
We do not want to see strikes or industrial action—we are well aware their consequences—so the Government should be doing everything in their power to facilitate negotiation and reasoned discussion about concerns. The reality is that the thresholds will remove the incentives for employers to seek an early resolution to a dispute. I believe that many of them will decide to wait and see whether a union can meet the strike thresholds before they make a revised offer. That is not a model for modern industrial relations.
It is also crucial that the Committee recognises that the Government are seeking to rush through these proposals without proper consideration or consultation. The Minister will know that the Regulatory Policy Committee roundly criticised the Government’s approach. It concluded that the Department’s impact assessment on ballot thresholds was “not fit for purpose.” Those are damning words. While the impact assessment estimated that the statutory thresholds contained in clauses 2 and 3 would reduce the number of days lost to industrial action, the RPC described as inadequate the Government’s
“assessment of the costs and disruption caused, and its impact on the economy”.
That underlines the sense that we got from many witnesses that grand claims were being made about the indirect effects of industrial action, but they were simply not substantiated by evidence.
It is worth noting that, in the previous Parliament, the RPC issued just over 2,000 opinions, but there were only 14 instances in which a Department proceeded to the next stage of the policy process on the basis of an impact assessment rated by the RPC as “not fit for purpose.” Will this be another example of flying in the face of common sense and the views of a respected independent body?
The clause defines abstentions as no votes for industrial action. We heard repeatedly from witnesses—in particular, from those with legal expertise in the field—that that is undemocratic. Others went as far as to say that that is illegal. International agencies with responsibility for supervising complaints with human rights standards have repeatedly criticised the use of strike ballot thresholds in countries across the world. The International Labour Organisation stated that, in strike ballots, only votes cast should be taken into account.
The Government’s proposals go well beyond what is endorsed by internationally recognised standards. I asked the Minister in his oral evidence session what assessment he had made of legal challenge to the Bill and he said,
“we are not anticipating legal costs to fight.”––[Official Report, Trade Union Public Bill Committee, 15 October 2015; c. 165, Q410.]
I am sure we will return to that again and again, because there is a strong weight of evidence to suggest that the Government will face significant legal costs from the Bill, and not just on this issue, but on many of the provisions on picketing and the implications for the devolution settlement, to which we will come in due course.
The Minister’s answer stood in stark contrast to the weight of legal opinion the Committee heard. I refer in particular to a comment from Stephen Cavalier of Thompsons Solicitors, who said,
“the provisions under the ILO convention specifically say that an abstention should not be treated as a no vote, and that is a clear area of potential illegality. There are not similar thresholds in any other European Union member states or Council of Europe convention states. The Bill introduces a new requirement that is likely to be found to be unlawful. In particular, the treating of an abstention as a no vote is likely to be subject to legal challenge.”––[Official Report, Trade Union Public Bill Committee, 13 October 2015; c. 33, Q79.]
We could not get a clearer opinion than that from a respected firm of solicitors who engage in trade union and employment law. That view about the inevitability of legal challenge was shared by Shane Enright of Amnesty, Sara Ogilvie of Liberty, Professor Keith Ewing and the representatives of the Welsh and the Scottish Governments in relation to a wide range of issues.
The amendments in this group attempt to address and expose other concerns we have on this clause and related clauses. We believe that, in this Bill, the Government are deliberately attempting to introduce the maximum number of obstacles and risks for trade unions as they go about exercising their democratic rights. Our amendments are designed to challenge that and to provide clarity in the regrettable circumstance that the Bill is passed in its current form.
Ian Mearns (Gateshead) (Lab)
Of course, in all of these things we want reasonable people to behave reasonably, but the new ballot thresholds may provide a perverse incentive to employers not to seek an amicable resolution to a potential strike situation because of the heightened likelihood of a no vote with, first, people who do not vote counting against and, secondly, the possibility that the threshold might not be met. An amicable settlement will become less likely, particularly if an employer—there are some employers like this—feels that it is an advantage to press it to the ultimate sanction.
Stephen Doughty
Indeed. I also suspect that that would be the case if employees suspect that an employer will use badly drafted clauses such as this to attempt to bring legal proceedings against the conduct of a ballot. This is all about ensuring the balance of power and responsibility between employers and employees in order to promote dialogue, negotiation and settlement. I agree with my hon. Friend that there are many provisions in the Bill that seek to undermine that balance and, therefore, undermine the possibility of negotiations that would ultimately prevent industrial action or strikes.
Amendment 2 seeks to protect trade unions from legal challenges in the event that they may have inadvertently sent a ballot paper to an individual who is not entitled to vote because they are not employed by the employer involved in the dispute. That is an important point in exposing some of the risks in the Bill as currently drafted. Business structures in the UK are increasingly complicated, and outsourcing is prevalent in many companies. Companies use many different structures and set-ups to conduct their operations. As a result—some members of the Committee might be surprised by this—individuals are often not aware of who is their legal employer. The amendment would mean that unions could rely on information provided by their members about who they believe their employer to be, rather than needing to make additional inquiries of the employer. The amendment also states that the 50% turnout requirement will only apply to individuals
“whom the union reasonably believed would be induced to take part in the industrial action”
when the ballot was issued. That wording would bring clause 2 in line with existing case law on industrial action ballots and would mean that unions are less vulnerable to vexatious legal challenges. Will the Minister share whether he believes that the clause, as it stands, is in line with existing case law on ballots and whether risks such as those I have exposed here exist?
Ian Mearns
Another clause will remove the check-off system for some employers. The check-off system provides, through the payroll records, a record for employers of trade union members in a particular employment situation. Removing the check-off system, tied with clause 2, removes the ability of employers to know who is eligible to vote in a strike ballot.
Stephen Doughty
That is an important point. During our considerations we will see that, rather than hanging together coherently, the Bill belies its original drafting intent and is more like a Swiss cheese full of holes. Many aspects of the Bill do not sit together well because they are being put together for a different purpose than what the Government say they are trying to achieve.
Amendments 7 and 8 would apply similar principles to those that I have just laid out, to clause 3 of the Bill which deals with the proposed 40% threshold. I know we will come to that in due course. We have a number of serious concerns about the 40% threshold that go beyond even our concerns about the 50% threshold, but the same principles exist. If we are to have thresholds, we need to ensure that unions will not be opened to all sorts of vexatious legal challenges.
Amendment 20 would apply a similar principle to the reporting requirements on ballots outlined in clause 5 of the Bill. Amendment 23 would remove the requirement on trade unions to take the responsibility of informing members and employers whether the 50% turnout threshold was met and, where relevant, whether the 40% turnout threshold was met. I do not understand why the Bill—evidenced throughout its text—seeks to bog down trade unions in extra red tape, particularly when the Government claim that it is all about reducing regulation and burdens. Surely employers would be able to easily calculate whether a trade union has met any statutory thresholds applied using the numbers provided by the trade union? I really do not see why this reporting requirement is necessary.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
Does my hon. Friend think this goes beyond the percentages required for a ballot? The fact is that companies with recognised trade unions on site have either gone through voluntary recognition or compulsory recognition, which means that the workforce have already been balloted on whether they want a trade union representative liaising on their behalf with an employer. Is this legislation not going way beyond ballots and actually trying to give employers the ability to de-recognise unions across the country in all sorts of different workplaces, public or private?
Stephen Doughty
I believe that the Bill has many sinister intents. There are many provisions that can be used to tip the balance between employers and employees well beyond what would be reasonably expected in a democratic society. We heard during the evidence sessions that the Bill and these provisions put us at the bottom of the league when it comes to international labour standards and the rights of workers and trade unions.
Amendments 21 and 22 are to clause 5 and are consequential to other amendments for consistency.
Before I conclude on this group, it is worth referring to some of the comments. Many comments were made about this set of proposals in the written and oral evidence and it is important to bring the Committee’s attention to a number of them.
The Royal College of Nursing said that:
“The changes that are proposed…will do nothing for the improvement of industrial relations. The emphasis on ‘strikes’ and seeing all industrial action through the prism of strikes is misleading. This is at a time when the number of disputes is low compared to the past. The effect of the proposals to set thresholds”—
and a whole series of other measures—
“is not a ‘neutral’ step, rather it further strengthens the power already held by employers in workplace disputes now.”
Chris Stephens (Glasgow South West) (SNP)
The hon. Gentleman has made an excellent speech. One of the other consequences of the thresholds that came out in the evidence was organisations concerned about a real impact on gender equality issues and on women workers trying to pursue industrial action. Is the hon. Gentleman concerned, as I am, that that could lead to a situation in which the gender pay gap widens as a result of this legislation?
Stephen Doughty
The hon. Gentleman makes a very important point, which was made on Second Reading and by a number of witnesses. The Bill has a disproportionate impact on women, many of whom would be standing up on issues such as disparities in equal pay. We have repeatedly heard how, despite the Equal Pay Act being so many years ago, the reality is that women earn significantly less than men for the same hour of work conducted, particularly in certain sectors. Unions play a crucial role in standing up for those women. Importantly, I mentioned the diffuse nature of the workforce in sectors such as retail, highlighted by USDAW and others. A lot of women work in those sectors, and there will be a disproportionate impact.
Turning to some of the other evidence, we heard from the GMB which underlined the point I made that thresholds will lead to unions taking more time in the run-up to ballots to ensure the necessary turnout. It stated in written evidence that
“Employers will be encouraged to sit on their hands and wait to see if the threshold can be reached rather than address the underlying issues in the dispute.”
USDAW, which I have referred to a number of times, said:
“The best method to ensure high levels of workplace democracy is to make it as easy as possible to vote and to ensure that each vote counts equally. Under the proposed system of ballot thresholds, an individual choosing not to vote is likely to have more of an impact on the outcome of the ballot than someone choosing to vote against industrial action. If an individual votes against industrial action, their vote will be added to the turnout threshold even if they are in the minority, meaning that their vote could help to ensure that the ballot threshold is met. However, if someone chooses to abstain, their vote will not be added to the turnout threshold potentially meaning that, even if the vast majority of votes cast were in favour of action, the ballot will not meet the threshold requirements. As such—”
—USDAW is categorical about this
“the proposed ballot thresholds will clearly be detrimental to workplace democracy.”
I have another piece of evidence from Unison:
“In the UK an absent vote is not regarded as a negative one. There are a range of reasons why trade union members might not vote.”
It then gives a very practical example:
“There might be a positive decision to abstain. They might be on holiday or ill. They might not have an opinion on the dispute and rely on their colleagues to make their views clear.”
Tom Blenkinsop
Does my hon. Friend agree that they can be in management and also in the trade union, and it is dependent on the employer to recognise that member of management within the business unit, although not necessarily in their branch?
Stephen Doughty
That is indeed the case. To touch on the point made by the hon. Member for Glasgow South West, low-paid workers are more likely to move and change address, and they might not regularly update the trade union on their latest details.
Unison is very clear:
“Rather than enabling such members to participate more easily in trade union ballots, the Trade Union Bill will restrict the democratic rights of working people and the ability of trade unions to represent their members in the workplace. It will ultimately lead to a diminishment of workplace democracy.”
We also had a response from UCATT, an important union representing workers in the construction sector. We did not hear from UCATT in the oral evidence sessions, which was a shame, but it has submitted written evidence, which says:
“It should be also noted that for trade unions taking strike action is always a last resort, no union asks members to lose money on a whim, it is only called for following an end to protracted negotiations that 90% of the time reach an amicable settlement.”
That point cannot be overemphasised. Unions want to find resolutions to disputes, but the Bill puts a whole series of barriers in the way of successfully resolving disputes.
Finally, it is important to look at some of the Bill’s potential legal contraventions. I mentioned the evidence given by Thompsons Solicitors. It also submitted evidence to the Government’s consultation, the conduct of which was significantly lacking, as identified by the Regulatory Policy Committee. In section 10 of the submission from Thompsons Solicitors to the Department on the consultation on ballot thresholds in important public services, it says:
“The ballot thresholds in ‘important public services’ will engage Article 11 of the European Convention on Human Rights. Any restriction on the right protected by Article 11 must be ‘prescribed by law’ and ‘necessary in a democratic society in the interests of national security or public safety, for the prevention of disorder or crime, for the protection of health or morals or for the protection of the rights and freedoms of others’. To be ‘prescribed by law’ the proposed legal framework must have sufficient clarity and precision to enable the trade union on whom the restriction is imposed to regulate its conduct accordingly (i.e. to know exactly which of its members the additional threshold applies to). There is a very real prospect, on the evidence so far, that the government’s attempts to meet this standard will fail. It is completely unacceptable to palm responsibility for identifying whether a particular member is covered by the additional threshold off on to the trade union, (paragraph 17 of the consultation). The problem will be particularly acute when considering ‘mixed’ balloting constituencies—i.e. ones including some members who are covered by the additional ballot threshold, and some who are not.”
The complexity and uncertainty created by the way the Bill is drafted provides all sorts of grounds for legal challenge and undermines the ability of unions to stand up for their workers. Industrial action must always be seen as a last resort.
Ian Mearns
My hon. Friend makes a powerful speech. We are in a period of historically low levels of industrial action, with only about 300,000 days lost to strike action in the last year or so, compared with about 130 million days lost to sickness absence. From that perspective, we are looking at such a low level of disruption from industrial action compared to sickness and industrial illness. It accounts for just 300,000 days, as compared to 130 million.
Stephen Doughty
The statistics my hon. Friend quotes are very accurate. During the oral evidence sessions, we mentioned a number of times that the impact of industrial action on actual days lost, whether to customers or parents or users of the health service, is very small compared to the number of days lost for other reasons. We only have to look at the statistics collected by Transport for London on lost customer hours. Far more customer hours are lost due to signal failures, broken-down trains, weather and so on than as a result of industrial action. In the words of the Chartered Institute of Personnel and Development, the Government’s plans to reform trade union law are an “outdated response” given the challenges that employers actually face today, many of which my hon. Friend referred to.
Ian Mearns
One passenger group working on railway delays estimated that more working hours were lost from people being delayed on their train journeys than were lost from industrial action taken by railway workers.
Stephen Doughty
That is indeed the case. It is certainly borne out by the evidence that I have seen from Transport for London. The Committee has heard from a number of train companies and representatives of passenger organisations, and indeed they also implied that this was the case. The reality is that the impacts of industrial action are very small. In conclusion, I fear that the Bill and especially clause 2 will make industrial relations worse, not better. Introducing arbitrary thresholds beyond international norms, potentially in ways that are illegal, and without any clear evidence of need underpinning that or any accompanying measures to ensure the maximum participation possible—as I said, we will return to this—suggest an ill political intent, quite frankly. That is why we will oppose clause 2 today, and we may seek to move any one of these amendments to a vote, depending on what the Minister has to say.
The Chair
We will now have a debate. Please keep in order by mentioning the word “threshold” every few minutes.
Jo Stevens (Cardiff Central) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward. I draw the Committee’s attention again to my entry in the Register of Members’ Financial Interests. I was a part-owner and director of a trade union law firm prior to election in May, and I am a member of the GMB and Unison trade unions. Unusually, I would like to start by agreeing with those in the party opposite sitting on the Front Bench. In responding to concerns about participation levels and thresholds in the election of police and crime commissioners, the Home Secretary said:
“I never set a turnout threshold for any election, and I’m not going to do it now”.
She continued:
“For the first time ever they”—
police and crime commissioners—
“will have a democratic mandate for the people for the work that they’re doing”.
That is probably just as well, because the Home Secretary’s mandate for police and crime commissioners was an average turnout of just 14.7%. While the Home Secretary would not place a threshold on the election of those who run our police forces, we are here today looking at the very same issue for trade union members deciding whether to take industrial action as a last resort. The thresholds proposed in the Bill are arbitrary, as we have heard. They are out of kilter with international standards in law, and they simply do not make sense.
Let us take the ballot held by the Royal College of Midwives last year on whether to undertake industrial action. It was the first such ballot in the college’s 134-year history, and it was won with a very clear margin: 82% of those voting were in favour of industrial action, and 8% were against. Despite that vast margin of support, because the turnout was 49% of eligible members, that proposed industrial action could not legally have taken place had the Bill received Royal Assent at the time. It could not have taken place because every vote not cast would have been counted as a vote against industrial action. Yet, had a few more thousand midwives voted against the action, it could legitimately have taken place. Abstentions here would perversely have more power to influence potential industrial action than the vote of a member who was opposed to it. That is a real, practical example of how ill thought out this legislation is, and how it will adversely impact on industrial relations.
I suggest to the Minister that not only does this clause make no sense, it also raises real legal concerns. My hon. Friend the Member for Cardiff South and Penarth referred to these in his opening address. The ILO states that only votes cast should be taken into account in a ballot. It has already indicated that it would accept a complaint in relation to dual ballot thresholds. Several of the written evidence submissions to the Committee highlight our position in respect of the ILO, but one statement from the Freedom of Association Committee stands out. It said:
“The requirement of a decision by over half of all the workers involved in order to declare a strike is excessive and could excessively hinder the possibility of carrying out a strike, particularly in large enterprises.”
There is also potential for challenge in the European Court, because under the clauses we are considering today, the minority can undermine a ballot by not voting rather than by participating. I thought this was what the Bill was all about. It gives disproportionate rights to abstentions.
The European Court of Human Rights has already ruled in the Demir case that:
“it does not follow that the government can deliberately impose a restriction on fundamental union activities and so make the position of the parties so unequal that there is no incentive to engage”.
The Bill does the exact opposite of incentivising participation, while at the same time taking no measures to remove barriers to engagement. If participation and legitimacy are the real aims of the Bill, then I urge the Minister to abandon clause 2 and accept our amendments.
Julie Elliott (Sunderland Central) (Lab)
Like my colleagues, I refer to the declarations I made at the start of proceedings last week. I want to talk in practical terms about my experience of what was referred to in some of the evidence, but I will start by saying that I totally support the comments made by my hon. Friends today. The overarching thrust of the Bill is that it will make thresholds almost impossible to meet. The premise of the Bill is based on a total lack of understanding of how the real world of industrial relations works in this country today.
In the real world, industrial action is always an absolute last resort. Last week in the evidence session, some of the leaders of the largest trade unions stated that industrial action is not what trade unions are about and not what they aim for. At the end of the day, their members lose money by taking industrial action. They often represent some of the lowest-paid people in society and that is always at the forefront for any trade union leader or official when negotiating.
No one takes industrial action lightly. Trade union officials are trained today in order to avert industrial action at all costs. However, it is a legal right and is there as a last resort. That needs to be borne in mind in everything we are discussing today. The thresholds proposed in the Bill of 50% and 40% are extreme in their nature. Modern ways of working were outlined very articulately last week by the general secretary of Unison, Mr Dave Prentis, when he talked about partnership working. The big trade unions today work very closely with the employers of their members, whether in the public or private sector. Obviously, one of the thresholds applies to all, the second applies to the public sector of a yet undefined group of people.
Partnership working is about building up relationships and getting to know people and to understand the way they work and what the real issues and nubs of the problems are. Some of the later measures in the Bill will have an impact on that working. Removing some of the facility time from people will not lead to better relationships or better partnership working. The opposite will happen and there will be a lack of trust and understanding of people and where they come from.
Some of the later proposals on check-off are probably even more significant. A ballot is the most intensive thing that any trade union and any employer prepares for, which is why the vast majority of employers in this country are not comfortable with the Bill. Drawing up the list of eligible people in the bargaining group is the most difficult thing that anyone on either side has to do. Check-off facilitates and helps with that process, because it means that the employer knows exactly where a person works within the organisation, but that is not known if someone pays by direct debit. There is also, potentially, a data protection issue, because if someone pays their trade union membership by direct debit, that information is confidential and known only by the union member and the trade union, not the employer. Therefore, in an industrial action ballot, the crucial checks and balances for getting the lists correct will not be there. Everyone wants the lists to be correct, because if they are not, the matter will end up in court.
Tom Blenkinsop
Apart from the fact that in certain sectors management would want to pay their trade union membership by direct debit, perhaps to keep it private and away from managerial colleagues, any employee with fewer than two years in post might not want to let their employer be aware of their trade union membership—depending on the relationship between the union or workforce and the employer—because of the employer’s history of behaviour towards unions. That would lead to problems for individuals seeking to exercise their right to be a union member. Furthermore, if someone had information about trade union members on direct debit, the potential for litigation in court over small anomalies being bounced back and forth between the employer and the trade union would be vast, and create even more expense for the employer and the union.
Julie Elliott
I could not agree more. None of us ever wants to reach the point where an industrial action ballot has to take place, but if we do, the time spent on the accuracy of the lists, under the new conditions, will be an enormous task. If it is a national public sector dispute, there will be at least hundreds of thousands of people to deal with. It is not just 50 or 60 people, or a handful in either direction. We are talking about huge numbers, and if it is a national dispute, they will be working all over the country and in displaced workplaces.
Chris Stephens
Does the hon. Lady believe, as I do, that part of the point of an implementing threshold is to stop national, or UK-wide, industrial action, by design, for many of the reasons she has mentioned?
Julie Elliott
That might well be the motivation behind some of it. As I said in my opening remarks, the measure makes it almost impossible for certain types of dispute to take place.
If the trade union side has to spend so much extra time not only on getting the lists correct, but on making the turnout so high, that is time the officials are not spending on talking to the employer and trying to avert strike action, which has to be the motive of everyone involved in an industrial dispute. The only way to resolve a dispute, whether an industrial dispute or any other disagreement in life, is by talking to people. If there is no time to sit down and talk constructively, the problem escalates. That is common sense.
So much time will be spent on the accuracy of the lists, with all the problems that the later clauses of the Bill throw up, and then on getting the enormous turnout. The 50% threshold is a difficult one in itself, but adding on the 40% threshold is incredible, if not completely unrealistic, except in a specific workplace with everyone working for one employer, as the rail disputes in recent history have shown. In the broader public sector there is genuine doubt as to whether the 40% threshold is achievable. The evidence from Stephen Cavalier, from Thompsons Solicitors, is that it will probably lead to more industrial action. Professor Ewing says in paragraph 10 of his written evidence:
“The ILO Committee of Experts pointed out that ‘account should only be taken of the votes cast’, while any ‘required quorum and majority should be fixed at a reasonable level’.”
I defy anybody to say that some of the measures in the Bill around thresholds are reasonable.
Where will the Bill take us if it comes into law as it is written today? My view is that it will make positive industrial relations much more difficult. Because of that, it will inevitably lead to more strikes, which I do not believe is what any Member, on either side of the House, wants. It will most likely lead to the Government ending up in court, with a massive cost to the taxpayer. Nobody wants us to end up in that situation, so I urge the Government to look again at the two thresholds.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
Does the hon. Lady agree that the Bill will not only lead, in all likelihood, to increased cost, but to increased public disruption, given that it is likely to increase disharmony within the workplace and undermine partnership working?
Julie Elliott
Absolutely, and that is a fundamental point. If the motivation behind the Bill is to try to limit industrial action, its net effect will be to make things worse.
Ian Mearns
Building on my hon. Friend’s experience, industrial action is usually taken by members of trade unions when extreme frustration at a lack of progress in negotiations is being experienced. Therefore, given the levels of frustration that exist in these situations, would the imposition of thresholds enacted by this legislation make wildcat action more likely?
Julie Elliott
That is highly possible: if people do not have an avenue to resolve their dispute with their employer—in an organised workplace with trade unions, that is usually through their trade union discussing the issue with the employer—that would be an inevitable consequence. None of us wants to see that kind of action. In the past 10 years or so, legislation in this area has led to very good industrial relations. I remember very personally and vividly, as the daughter of a miner living through the 1970s, how industrial relations used to be in this country. None of us wants to end up in that situation again. It was a dreadful time to live through. What we want is constructive, good relationships where industrial action ballots are an absolute last resort. The changes that the Bill proposes will make that impossible.
Tom Blenkinsop
There is also a potential business cost. If we do not have collective bargaining, where one individual, on behalf of the company, talks to one individual, on behalf of the workforce, that will necessitate individual consultation. Depending on the size of the workplace, that could take a very long time and cost a lot of money.
Julie Elliott
I totally agree, and these are issues we will explore later when we talk about practical implications of facility time. In conclusion, I urge the Government to look again at the thresholds and what I believe will be their impact—probably unforeseen by the Government—namely more industrial action and more disharmony in the workplace, and the potential legal consequences, with the Government having to spend a lot of taxpayers’ money defending challenges in the courts.
Chris Stephens
It is a pleasure to serve under your chairmanship, Sir Edward. I declare my membership of Glasgow City Unison and the fact that I was a Unison activist for 20 years prior to my election. Indeed, when I submitted my new application to join the branch again, it had created a House of Commons sub-branch, so that is a good tale to have.
I oppose the threshold for three main reasons. The first is the impact on equality issues, particularly gender equality. The Government have not addressed the difficulties of women workers being able to prosecute and to try to get an industrial dispute on such issues as shift changes, where they would be impacted far more than male workers. Amnesty, Liberty and other organisations made clear their concerns on those issues during the evidence sessions. The second reason is the issue of people not voting. I find it incredible that the deceased will be described as being people who are against industrial action. There are many reasons for people not voting, and that principle is wrong.
The third reason concerns the practicalities of what happens during a ballot process and afterwards leading to a dispute. The key test of whether there is a mandate for industrial action is how many trade union members participate in the industrial dispute. The trade union has arguments and has to make a calculation after a ballot result about whether that is support for industrial action. Where there has been a low turnout, some trade unions have not gone forward to industrial action because they did not believe that they had that support. That is the true test of whether there is support, and on that basis trade unions make a gamble as to whether they should go forward.
With low turnouts, the notion has been presented that trade union activists and officials, after the ballot result has been announced and they have been unable to persuade members to take industrial action, develop mystical powers to persuade trade union members to participate in industrial action. It is almost as if trade union officials adopt Jedi-like powers, where all they have to do is make one wave of a Jedi hand and say, “This is the industrial action you’re looking for.” Frankly, that is a fanciful notion, and on that basis we are opposed to the principles of thresholds.
Nick Boles
At the opening of the debate and of the evidence sessions, every Opposition Member rightly and properly declared an interest as being a member of a trade union. In many cases, they have also declared an interest as being a former official of a trade union. They are proud of that, and they are right to be proud.
I do not have that privilege, but I have another privilege, which is to be a member of the general public. As members of the public, we rely on hospitals being open, because we do not get to go to another hospital under the NHS. We have to go to the one that has offered us the appointment. As members of the public, we rely on a particular school to take our children and educate them for the day, because we do not have the option to buy our way into another school within the public services. We have to send our children to the same school every day. As members of the public, we rely on particular forms of transport that are monopolies in people’s lives. We do not have the choice to choose other forms of transport very easily when a form of transport is closed due to a strike.
I can tell the Committee that all Government Members take our responsibilities as Members and representatives of the general public seriously indeed. All we are trying to do through the Bill is to think of their interests when strike action happens and to adjust slightly the balance of power between union members and members of the general public. Opposition Members are absolutely right to represent the unions that they have all either worked for or been members of for many, many years, but we on this side of the House are absolutely right to defend the interests of the members of the public who put us here and elected us to this House.
Stephen Doughty
I have to say that it is a shame that the Minister is starting the debate by being somewhat disingenuous. Opposition Members also represent members of the public. In fact, the TUC made it clear in its evidence that it represents 6 million members of trade unions throughout this country who are also members of the general public and want their rights respected. Indeed, there are members of families who are not members of unions, but they also want their family members’ rights respected. Will the Minister not acknowledge that with one in 10 of the British population being members of trade unions, as the TUC has put it, the Bill has a significant impact on their rights and responsibilities and they are all members of the public too?
Nick Boles
I am happy to accept that the one in 10 members of the public who are also members of trade unions must be represented properly in the House, and Opposition Members are doing an admirable job of representing them. I contend that the other nine out of 10 members of the public who are not members of unions and who are affected by strikes when they shut schools and hospitals and close down transport networks also deserve representation, and that is what we are providing.
Nick Boles
I will make a little progress, if I may, and I am sure that we will have an opportunity to hear from the hon. Gentleman soon.
The shadow Minister noted that there are many other things that cause more days to be lost than strike action. He mentioned, I believe, sickness, bad weather and breakdowns in machinery. I would bring forward tomorrow Bills in this House if I could abolish sickness, bad weather and breakdowns in machinery, but unfortunately we have to deal with the real world, and we are focusing on a minor adjustment to the balance—a slight rebalancing—on something that we can affect, which is the number of services shut by strikes.
Nick Boles
I will make a little progress and then I will be happy to take an intervention. All we are saying is that we want strike action to take place on the basis of a clear democratic mandate and not just because a very small minority of union members want it. Opposition Members have made great play of how strikes are always the last resort and no one ever wants strike action based on a tiny turnout. Indeed, we heard in last week’s evidence sessions from some very distinguished and eloquent leaders of major unions who made many of the same points.
I simply draw the Committee’s attention to the fact that in 2015—in this very year—London bus drivers, in a ballot organised by Unite, whose general secretary we heard from last week and who wrote in a letter to the Prime Minister that no one wants to see strike action on the basis of a very low turnout, nevertheless called a strike on the basis of 21% of the members of the union who were eligible to vote actually casting a vote and 18% to 19%, therefore, actually supporting the strike action. We also heard from Sir Paul Kenny of the GMB. In 2014, in a case involving local government workers, 23% turned out to support strike action over pay. We heard also from the general secretary of Unison. In 2014, there was a strike over the pay of NHS workers, and 16% of the members of Unison entitled to vote in the ballot had turned out. The idea that we are somehow tackling a problem that does not exist is shown to be entirely spurious by those figures.
Chris Stephens
There are a couple of tests in terms of the Minister’s arguments. First, did any of those employers take the union to court? That is a genuine question. And surely if the trade union was not confident that its members would participate in the industrial action, it would not have called it, because trade unions cannot discipline a trade union member who does not participate in industrial action.
Nick Boles
The unions may have been confident, but their confidence was surely misplaced, given that in these cases the figures ranged from 16% to 21% for the people who actually bothered to vote, and that includes the people who voted against the proposed action. This is a problem and it affects members of the public.
Nick Boles
I will, I promise, take a whole range of interventions, but I just want a little time to make an argument in response to the eloquent arguments that we have heard from the hon. Lady and others.
There was a lot of discussion, quite rightly and properly, about the claim that we make that the indirect consequences, the indirect impact, of strikes can outweigh the direct consequences. There was some criticism—not entirely unjustified, in my view—from Opposition Members that no statistics are available to measure those indirect impacts. I hope that Opposition Members will be pleased to learn that I have therefore written to Andrew Dilnot, who runs the ONS, requesting that the ONS look into how it can capture the indirect impacts of strikes.
The shadow Minister makes great play of the fact that the number of working days lost directly due to strike action is relatively low by historical standards. Although he picks a period that particularly flatters the figures, I nevertheless accept the broad point, which is that the number of days lost directly to industrial action is relatively low, compared with some of the dark days of the past.
Nick Boles
I will not give way.
I am absolutely going to assert that millions of parents had to take a really difficult decision that had a great impact. Either one of them had to take a day off work, which they did not expect and so could not give their employer much notice, or they had to spend a great deal of money on emergency childcare, or they had to inconvenience another member of their family to provide childcare cover. So do not come to me—I know you would not, Sir Edward; I say this to the shadow Minister—bandying about your very low figures for the number of days lost directly to industrial action when 1 million parents in that strike that closed 20% of the nation’s schools had either to take a day off work or spend a great deal of money that they would rather not have spent on emergency childcare.
Stephen Doughty
I have no reason to doubt the disruption that is caused by any individual strike. We are all clear that we want to avoid that. My mother was a teacher, and I have friends with kids. It causes disruption for lots of people. My mother was a member of the NUT, in fact, and she took any suggestion of industrial action or strike action very seriously. She was hardly a militant, and she would not have wanted to do that. However, I think the Minister needs to put those statistics in context. Given that he has done that extensive analysis, perhaps he or his officials can estimate the number of days lost to a child’s education over the course of their school career—perhaps just their primary school career. It will be a very small number.
In that example—I do not know to which strike the Minister was referring—the union may have had extremely good reasons to go on strike. They do not want to, and we all recognise that it has an impact, but it must be seen in a wider context. It is not enough to justify the measures in the Bill.
Nick Boles
I want to move on to the amendments. I am sure the hon. Gentleman will remember that the strike I was talking about, which happened last year, was supported by 22% of NUT members. I am sure it was very important for those 22%, but it was not particularly important—not sufficient for them to fill out a ballot paper and put it in the post—for the other 78%, so let us get this in perspective. It was clearly of rather more importance to the millions of parents who were affected than it was to the 78% who had the right to vote but did not.
I will now turn to the amendments unless hon. Members want to intervene.
Julie Elliott
I thank the Minister for giving way. I want to ask one simple question. Does the Minister regard children going to school as childcare?
Nick Boles
I am glad to say that it is a great deal more than that, but when a school is closed because of a strike supported by 22% of union members then, unfortunately, childcare is what parents have to be able to deliver.
Jo Stevens
My point is on the earlier remark about making slight tweaks to the current law. The Minister proposes to introduce a new concept in the Bill, which is to count abstentions as no votes. How can that be described as tweaking the current law?
Nick Boles
I do not accept the caricature. All we are saying is that, when action is proposed that will have a great effect on people—citizens and equal members of the public who have no vote at all in this ballot and who are not even consulted—it is not unreasonable to require a level of participation that is more than half. That will not stop most strikes, as we have seen from the figures, but it will reassure members of the public that strikes are happening only when they have sufficient support. The British people are fair. They believe in people having the right to strike and would always want to retain that possibility for themselves, but they feel that it is unfair when it happens, as that NUT strike or those other strikes that I listed did, on a very low turnout.
John Howell (Henley) (Con)
I was looking at the evidence from John Cridland from the CBI. He sums up what the Minister is trying to say very well. He said:
“I think it is reasonable, given the level of disruption involved, that there is clear evidence of a significant mandate.”––[Official Report, Trade Union Public Bill Committee, 13 October 2015; c. 8, Q6.]
That is all we are asking for.
Nick Boles
I entirely agree with my hon. Friend. It is important to have been reminded of John Cridland’s evidence. The hon. Member for Sunderland Central made the claim that the vast majority of businesses do not support these measures. The CBI unequivocally represents more businesses than any other business organisation—that is a matter of fact—and Mr Cridland was very clear that it is not just supporting the Bill but has supported this policy for five years and has only just persuaded a Conservative Government to adopt it. So that was not an entirely accurate characterisation of the position.
Ian Mearns
I wonder whether the Minister might reflect for a moment or two on whether enacting this Bill will mean that those members—he talked about the 78% of union members in a particular ballot not voting—have an understanding that an abstention will count as a no vote. That might be the trigger that he does not want, for them to get out and vote in a ballot.
Nick Boles
One of the problems that we have in this discussion—I am sure it is a failure on my part—is that Opposition Members do not seem to understand that we are not trying to stop strikes. We are trying to stop strikes that have very low levels of support. If unions are, as a result of this legislation, enabled to ensure that every single strike ballot sails over the new thresholds, the Bill will have been successful, not least because the British public will have the confidence that the issue at stake is so important that it justifies that action.
Chris Stephens
I have a similar point to that made by the hon. Member for Gateshead. The Minister mentioned that a 22% ballot closed all those schools. If it was able to close all those schools, it would suggest that the support for the industrial action was more than 22%. Surely this is about participation and helping trade union members participate in a ballot? Will the Minister look seriously at those issues?
Nick Boles
We are looking quite seriously at those issues, which is why we have introduced the legislation. Given the hon. Gentleman’s express desire to tackle those issues, I hope I can persuade him to support at least some of our measures.
On the detail of amendments 2, 7, 20 and 21, I appreciate the desire to have clarity and certainty about who is entitled to vote, but that is already well established as a result of the operation of existing provisions of the Trade Union and Labour Relations (Consolidation) Act 1992 and of case law, which provide a balance in the system by protecting trade unions against challenge over insignificant breaches of the balloting rules. For example, many of the provisions in the legislation on balloting are already subject to a reasonableness requirement. Section 227 of the aforementioned Act confers the entitlement to vote to
“all the members of the trade union who it is reasonable at the time of the ballot for the union to believe will be induced”
to strike.
Sections 226A and 234A require that the lists and figures supplied in the ballot and strike notices
“must be as accurate as is reasonably practicable in the light of the information in the possession of the union at the time when it complies.”
In addition, section 232B provides that a union still complies with the requirements on balloting even if it has made an error in the process, so long as the failure or failures are
“accidental and on a scale which is unlikely to affect the result of the ballot”.
That was tested recently in court—the margin of error was considered in the case of RMT v. Serco Ltd. As a result, the obligations to give accurate notices and to ballot accurately are already governed by what is reasonably practicable in the light of the information in the possession of the union. The obligations are not intended to be unduly onerous for the unions to comply with. There is no obligation on the union to prepare or update records specifically for industrial action ballots. Plus, as I have explained, unions are already well used to assessing what is reasonably practicable, given that that is an established concept in the 1992 Act. Of course, we are introducing reforms to ensure that unions have up-to-date records of their membership anyway, which I will come to shortly.
Stephen Doughty
I thank the Minister for his assurances about the existing case law and previous legislation. Given that he is in the mood for tweaking, would he go back and look at those issues? We have been very clear that we oppose the legislation but, if the Minister is going to proceed, would he look at clarifying beyond doubt in the Bill that those little problems cannot be used by people who might seek to be vexatious in frustrating unions that are reasonably trying to comply with it?
Nick Boles
I am always happy to look and reassure myself, but I am pretty confident that that is the case. The amendments proposed by the Opposition go further. They would allow the union to import a reasonable belief into a trade dispute. That is in stark contrast to the current position, where there is an objective test to determine whether a matter constitutes a trade dispute or not. That is important because it is the basis from which flows the legal protections for unions and for strike action that is taking place properly. It would allow the issue to be open to a degree of uncertainty, according to what the union believed. That would be detrimental to employers and would tip the balance too far in favour of trade unions. The current wording allows clarity for both parties.
Other changes that the Government are making to the regulation of trade unions will simply make amendments 1, 8 and 22 unnecessary. The coalition Government introduced a new requirement for unions to submit membership audit certificates to show that they are complying with their duty to keep membership records accurate and up to date. The changes are designed to ensure that unions know who their members are, enabling them to be democratically accountable and to reflect the will of their members. The first membership audit certificates are due in June 2016. The fact that unions will therefore have more reliable membership records means that they will in future have more confidence that those who are entitled to vote receive the ballot paper. I am therefore not convinced that unions need leeway to allow certain members to be left out of the number of those who count towards the thresholds. Of course, that same point applies to amendments 20 and 21.
Tom Blenkinsop
Is an industrial ballot conducted among members or among employees?
Nick Boles
Obviously, the people who are eligible to vote have to be members of the union. They are also employees of the unit where the ballot is being held. Their entitlement to vote is based on being members of the union.
Tom Blenkinsop
The two are different, because the employees list could include people of other unions or none.
Nick Boles
I did not entirely catch what the hon. Gentleman just said. Perhaps he would repeat it.
Tom Blenkinsop
One list is the list of members set by the union. The other is a list of employees, which can include members of another union or of none. That is the proper list for an industrial ballot, not the members’ list by the union.
Nick Boles
I am not sure that I entirely understand the distinction that the hon. Gentleman is trying to draw. To be eligible to vote, someone obviously has to be both.
Nick Boles
To be able to call for strike action, people have to be both an employee of the unit where there is a dispute and a member of the union that is calling the ballot.
James Cartlidge (South Suffolk) (Con)
May I reassure my hon. Friend the Minister? In the light of the evidence sessions and the correspondence I have received from my constituents, although there are a huge number of technical details, the overwhelmingly important point is the one he has made: we support the thresholds in our key public services so that disruption is not brought to our constituents on such a wide scale as we have seen resulting from school closures and so on.
Nick Boles
I entirely agree with my hon. Friend. It is always good to be reminded of whom we are sent here to represent. Sometimes, I get the sense that Members think they are representing other people.
Perhaps I can help the hon. Member for Middlesbrough South and East Cleveland by describing as well as I can who is entitled to vote in a ballot:
“Entitlement to vote in the ballot must be accorded equally to all the members of the trade union who it is reasonable at the time of the ballot for the union to believe will be induced by the union to take part or, as the case may be, to continue to take part in the industrial action in question, and to no others.”
That is my understanding of the law. I have no doubt that he will want to draw my attention to where he disagrees with the law, but I believe that that is what it says in section 227(1) of the Trade Union and Labour Relations (Consolidation) Act 1992.
Tom Blenkinsop
I do not want to instruct the Minister in actual law, but as someone who has actually conducted a ballot, in terms of practice, a business unit and the employees within in it—[Hon. Members: “That is not the law.”] Well, it is the law. It is the same thing—it is a business practice that is conducted under the law and it means that employees on site are all part of the industrial ballot, whether members of the recognised union, another union or not a member of a union at all. We are talking about a business unit. That is the law.
Nick Boles
One of the beauties of British democracy is that we Members are not sent to Parliament to control the practice out there in the real world. We are sent here to pass laws and regulations. If the hon. Gentleman wants to confess that he has been party to practice that was not in accordance with the law, I am certainly not going to report him for it, but it seems to me that he is suggesting that there is a difference between workplace practice and the current law.
Tom Blenkinsop
On a point of order, Sir Edward. I do not know where the Minister is going with this, trying to infer things or besmirch my reputation when I was simply pointing out what the law and business practice is. We are only two hours into line-by-line consideration of the Bill. I do not think this is a very good start, Sir Edward.
The Chair
I am not sure that that was a point of order, but the hon. Gentleman made his point.
Nick Boles
I am sorry, Sir Edward. I did mean that as a light jest. From the look in the hon. Gentleman’s eyes, I think he knows that. I should probably plough on.
The Chair
Order. The Minister is not supposed to talk about Members’ eyes; it is what they say that is important.
Nick Boles
Fair enough, Sir Edward.
The fact that the unions will have more reliable membership records means that, in future, they will have more confidence that those who are entitled to vote do indeed receive a postal ballot paper. That is why I am not convinced that unions need leeway to allow certain members to be left out of the number who count towards the thresholds. As I have said, that point applies to amendments 20 and 21 as well.
Finally, on amendment 23, it is not enough simply to have the 50% and 40% thresholds in place. We must also ensure that union members and the employer have information about whether all the conditions that relate to the ballot mandate have been met, because it is not just the union leaders who need to know whether the ballot has secured a valid mandate. Members and employers ought to know whether any subsequent industrial action is valid and legally secure. Information about whether the threshold or, if appropriate, thresholds are met is a crucial part of that. It adds transparency and clarity to the process.
Of course, we could leave unions, members and employers to work it out for themselves from information that they are already entitled to receive—under section 231 of the 1992 Act—about the number of votes cast and the number of individuals answering either yes or no, but that would not be fair. The union will have calculated the result in order to know itself whether it has secured a mandate, so why not simply pass on that information to those who are directly affected by the mandate? On that basis, I urge the hon. Member for Cardiff South and Penarth to withdraw amendment 1.
Stephen Doughty
I do not wish to withdraw the amendment. I will briefly comment on a few of the points that the Committee has made on this group. First, my hon. Friend the Member for Cardiff Central raised some important points about the turnout thresholds for police and crime commissioners, which gave us a very strong context for the absurdity of the Government proposals and their position. The Government have been involved in plenty of other ballots, not least the election of many Conservative Members—I accept that this is also true of Opposition Members—where those thresholds would not have been met.
I also refer to the point made on the impact of abstentions, which we will emphasise at numerous points in the Bill. The Government are supposedly serious about increasing turnout, but there is nothing in the Bill to increase participation. My hon. Friend the Member for Sunderland Central made some important points about the potential to undermine partnership working in seeking a resolution to disputes, and spoke of the practical experience that she and others have had. She described a ballot as the most intensive thing that unions and employers go through and spoke of the challenge of getting lists right.
The hon. Member for Glasgow South West aptly pointed out the equality impacts and trade union self-regulation on whether to take action.
James Cartlidge
The point of equality impacts has been raised many times. Obviously, the threshold makes no specific statement in any sense on that, but does the hon. Gentleman accept that, going back to the Minister’s point about school closures and the impact of major strikes, women are among the most disproportionately affected, particularly mothers with children at school?
Stephen Doughty
I have no doubt that women are affected by strike action. Nobody on the Opposition side of the Committee is attempting to deny that. We are making a point about the impact of the Bill as a whole and its disproportionate impact in every strike ballot that is going to be undertaken under the new rules.
Stephen Doughty
Yes, fathers do take children to school, but we are concerned particularly about the impact of the Bill on women trade unionists, which many witnesses have made clear. As I have said, trade union members represent one tenth of the UK population. I will come back to the Minister’s comment on that in a moment.
The hon. Member for Glasgow South West made the point that trade unions will only in very rare circumstances proceed with industrial action if they are not going to be able to get their members to take part. That should be the real test of whether or not there is consent in the broader sense. I liked the hon. Member’s reference to apparently Jedi-like powers to induce members into industrial action. All I can say is that this is not the Bill Ministers are looking for.
The Minister made some very false divisions. I intervened when he made the point that Opposition Members are somehow standing up for militant trade unionists and Government Members are standing up for ordinary members of the public. What absolute nonsense! The idea that there is such a division is simply not the case. Every one of those 6 million trade union members is a member of a family who care about their conditions—whether health and safety, pay, pensions, or working arrangements. I believe they have deep concern about many of the actions that the Government are taking to undermine workers, particularly in the public sector.
Jo Stevens
Would it not be right to say that many public sector unions have taken industrial action in order to protect the very public services that Conservative Members say are affected by the disruption?
Stephen Doughty
My hon. Friend makes an excellent point. I am sure that, without the Bill, we would get into a wider debate about the Government’s attitude towards public services and their funding. The Minister talks about the Bill being a minor adjustment. That is simply not the case. It is the most dramatic change to trade union legislation in a generation. That is the considered view of many of the legal experts and others who have examined it. It is not “tweaking” to change the rules on abstention, potentially in breach of international conventions. It is very significant. The way that the Government and the Minister have been dressing this up as a tiny movement here and there to bring things in line is disingenuous.
Ian Mearns
We are getting to the nub of the problem the Bill is trying to sort out. Government Members have repeatedly talked about the disruption caused by industrial action in schools, but thankfully in this country industrial actions in schools are few and far between. To put it in context, according to the ONS, the problem the Bill is trying to sort out—industrial action in this country—added up to just 0.00005% of all days worked. We are sitting in this room trying to sort out that problem.
Stephen Doughty
My hon. Friend makes a very clear point about the problem the Bill seeks to solve. We have heard that again and again. I am pleased that the Minister said he will ask the ONS to look at the issue of indirect impact. It will be helpful for the House to have that information. I suspect it will confirm many of the views that have been expressed by Opposition Members and many of the witnesses. It is disappointing that some witnesses, including the CBI and others, made grand statements about the need for the Bill without being able to justify it. Even without ONS statistics, there are other ways of making the case clearer, but they have been unable to do it.
Julie Elliott
On whether bits of the Bill are legal and whether they will end up in the courts, the evidence presented last week by legal experts Stephen Cavalier and Professor Keith Ewing confirmed that the measure would end up in the courts. Does my hon. Friend agree?
Stephen Doughty
I certainly do. I am not a lawyer and I do not have experience of testing such things in the courts, but a significant amount of legal opinion suggests that the Bill is potentially in breach of a series of international conventions, let alone the devolution settlement and existing domestic legislation, and it questions whether many aspects of the Bill are enforceable in the courts.
Going back to the necessity of the measures in the Bill, the Minister has said that he accepts that there are historically low levels of industrial action in this country, and yet the Government have repeatedly extrapolated a sledgehammer from a limited number of examples. We can debate at length the rights or wrongs of any individual strike or industrial action, but we are making legislation for the whole country, all forms of industrial action and all trade union members. The legislation will affect every single trade union member in this country and every single dispute. It simply cannot be right to extrapolate and make general points on the basis of a few examples that the Government have used to back up their case.
Dr Cameron
Does the hon. Gentleman agree that the public are unlikely to look on the Bill favourably, given the potential legal challenges and the impact on the public purse?
Stephen Doughty
One interesting aspect is that the public are not aware of the likely impact on the public purse of legal challenges arising from the Bill. We can look at a number of examples. For example, the Government tried to take the Welsh Government to court over changes to the Agricultural Wages Board, which has a lot of similarities to aspects of the Bill. It resulted in an extremely expensive legal case, which went all the way to the Supreme Court. If the public were aware of the likely challenges and costs arising from the Bill, they would take a very dim view.
Let me turn briefly to what the Minister said about Opposition amendments. I appreciate his clarifying that unions are protected under section 227 of the 1992 Act. He said that they are protected under reasonableness measures in existing case law. If the Government intend to proceed with this legislation, I urge him to look carefully to ensure that those protections actually exist. I will describe more such protections when we discuss the next amendment.
I have less confidence in what the Minister said in opposing amendments 1 and 7, so I will press them to Divisions and test the will of the Committee at the appropriate point. It would be helpful, given the nature of the debate between the Minister and my hon. Friend the Member for Middlesbrough South and East Cleveland, if the Minister could clarify his position on my hon. Friend’s point in writing to the Committee. It is important that the Committee is in possession of the full facts on the nature of how disputes are played out and how balloting takes place in the workplace. I re-emphasise the concerns that we and the vast majority of people who gave evidence have about clause 2 and its many implications.
Stephen Doughty
I beg to move amendment 3, in clause 2, page 1, line 14, at end insert—
‘(3) Small or accidental failures in the arrangements for carrying out the ballot which do not affect the result of the ballot are disregarded for the purposes of compliance with section 226.’
The amendment would ensure that small or accidental mistakes in the carrying out of a ballot which are immaterial to the outcome of the ballot are disregarded and are not grounds for complaint to the Certification Officer or recourse to the courts.
The Chair
With this it will be convenient to discuss amendment 13, in clause 3, page 2, line 24, and insert?
‘(3ZA) Small or accidental failures in the arrangements for carrying out the ballot which do not affect the result of the ballot are disregarded for the purposes of compliance this section.’
The amendment would ensure that small or accidental mistakes in the carrying out of a ballot which are immaterial to the outcome of the ballot are disregarded and not grounds for complaint to the Certification Officer or recourse to the courts.
Stephen Doughty
I do not intend to detain the Committee for long on these two amendments, which are designed to be probing and to highlight the difficulties that unions may face when seeking to comply with the proposed threshold rules. The amendments relate to some of the points we have been discussing about the potential for vexatious legal challenges on the conduct of ballots that I believe, given the history of industrial relations in this country, some employers may choose to make.
I have already outlined why we have serious concerns that the Bill is attempting to put as many barriers as possible in the way of people exercising their democratic rights. It is worth looking at what Sara Ogilvie of Liberty said in the evidence sessions. She summarised her concerns by saying that:
“My concern is that the proposals in the Bill would absolutely render the right”—
of industrial action—
“illusory, largely by creating a system of bureaucracy and hurdles that people have to overcome.”––[Official Report, Trade Union Public Bill Committee, 13 October 2015; c. 60, Q158.]
That concern clearly applies to the matters we have just discussed, but I want to flag up a further, related concern.
The Bill does not provide trade unions with any defence if they make a minor technical mistake when sending out ballot papers, even when they have made genuine efforts to comply with any new requirements. Trade unions are currently protected from small accidental failures when identifying who should be balloted and when sending out ballot papers. Mistakes that would not affect the outcome of the ballot should be disregarded.
The amendments would extend the small accidental failures defence to the new 50% and 40% turnout requirements. If the Minister believes that trade unions are already protected in that regard, as he has said, will he explain why? Will he reassure those who are deeply worried that the proposal will be yet another tool in the hands of those who would attempt, in a vexatious manner, to frustrate the legitimate expression of trade unions’ rights, such as by complaint to the certification officer through the proposed new powers or by recourse to the courts? What are his views on that?
Nick Boles
I thank the hon. Gentleman for his comments on the amendment. In matters as serious as workplace disputes and industrial action, it is of course right that trade unions must undertake a number of procedures when running a strike ballot. The rules are there to ensure consistency and fairness in how the ballot is organised. They are not in place to trip up unions, but are there to protect the interests of workers, employers and the unions themselves.
Inconsequential errors of process that have no material impact are not what the balloting rules are designed to address. That is reflected in the Trade Union and Labour Relations (Consolidation) Act 1992 and in case law, which together already protect trade unions against challenge over insignificant breaches of the balloting rules. For example, section 232B of the 1992 Act provides that a union still complies with the requirements on balloting even if it has made some error in the process, so long as the failure or failures are accidental and on a scale that is unlikely to affect the result of the ballot. As I mentioned previously, in the case of RMT v. Serco the Court of Appeal held that although the exception in 232B does not apply to all parts of the 1992 Act, that does not prevent a union from claiming immunity when there is an insignificant breach or a trifling error in relation to the rules, even when there is no explicit statutory defence. That case also made clear how far unions must go to ensure the accuracy of the figures given in ballot and strike notifications, and the explanation they must give as to how the figures have been reached. Specifically, it established that there is no obligation for a union to obtain further information or to set up systems to improve its record keeping.
The law, therefore, already delivers the assurance that the hon. Gentleman seeks, and I ask him to withdraw the amendment.
Stephen Doughty
I thank the Minister for his comments. The points that have been made are important, because with any legislation it is not beyond the ken of those who would wish to frustrate the exercise of democratic rights to attempt to use the law in a way that would at least bog down disputes in lengthy litigation. I appreciate the Minister’s reading his comments into the record, and I certainly hope that they will be considered if the Bill proceeds in its current form. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Chris Stephens
I beg to move amendment 90, in clause 2, page 1, line 14, at end insert—
‘(3) This section shall not apply to trade disputes in Scotland.’
The Chair
With this it will be convenient to discuss the following:
Amendment 11, in clause 3, page 2, line 24, at end insert—
‘(2G) None of the provisions of this section shall apply to services the provision of which is devolved wholly or partially to the Scottish Government, Welsh Government or Northern Ireland Executive.’
The amendment would ensure that the provisions of the Bill requiring 40% support for industrial action in certain public services would not apply to services devolved to the Scottish Government, the Welsh Government and the Northern Ireland Executive.
Amendment 12, in clause 3, page 2, line 24, at end insert—
‘(2H) None of the provisions of this section shall apply to services provided by the Mayor of London or local authorities in England.’
The amendment would ensure that the provisions of the Bill requiring 40% support for industrial action in certain public services would not apply to services devolved to the Mayor of London or local authorities in England.
Amendment 77, in clause 3, page 2, line 28, at end insert—
‘(4) This section shall not apply to trade disputes in Scotland.’
Amendment 78, in clause 4, page 3, line 2, at end insert—
‘(3) This section shall not apply to trade disputes in Scotland.’
Amendment 79, in clause 5, page 3, line 25, at end insert—
‘(3) This section shall not apply to trade disputes in Scotland.’
Amendment 80, in clause 6, page 3, line 44, at end insert—
‘(3) This section does not apply in relation to industrial action in Scotland.’
Amendment 81, in clause 7, page 4, line 9, at end insert—
‘(3) This section shall not apply to trade disputes in Scotland.’
Amendment 82, in clause 8, page 4, line 24, at end insert—
‘(3) This section shall not apply to disputes in Scotland.’
Amendment 42, in clause 10, page 7, line 10, at end insert—
‘(5) None of the provisions of sections 84 and 85 shall apply to public sector employees in sectors or providing services which are wholly or partially devolved to the Scottish Government, Welsh Government or Northern Ireland Executive.’
The amendment would ensure that the provisions on contributions to political funds would not apply to employees in public services providing services which are devolved to the Scottish Government, the Welsh Government, the Northern Ireland Executive.
Amendment 72, in clause 10, page 7, line 10, at end insert—
‘(6) None of the provisions of this section shall apply to employees of the Mayor of London or local authorities in England.’
The amendment would ensure that the provisions on contributions to political funds would not apply to employees in public services providing services which are devolved to the Mayor of London or local authorities in England.
Amendment 51, in clause 12, page 9, line 20, at end insert—
‘(13) None of the provisions of this section shall apply to facility time of the employees of the Scottish Government, the Welsh Government or the Northern Ireland Executive, or to public sector employers working for or providing services that are wholly or partially devolved to the Scottish Government, Welsh Government or Northern Ireland Executive.’
The amendment would ensure that the provisions on facility time would not apply to employees working for or providing public services which are devolved to the Scottish Government, the Welsh Government or the Northern Ireland Executive.
Amendment 73, in clause 12, page 9, line 20, at end insert—
‘(14) None of the provisions of this section shall apply to facility time of the employees of the Mayor of London or local authorities in England.’
The amendment would ensure that the provisions on facility time would not apply to employees working for or providing public services which are devolved to employees of the Mayor of London or local authorities in England.
Amendment 84, in clause 12, page 9, line 20, at end insert—
‘(13) The provisions in this section shall only apply with the consent of the Scottish Government, Welsh Government, Northern Ireland Executive, the Mayor of London and Local Authorities in England in their areas of responsibility.’
Amendment 85, in clause 13, page 10, line 44, at end insert—
‘(14) For the avoidance of doubt, the powers in this section shall only apply with the consent of the Scottish Government, Welsh Government, Northern Ireland Executive, the Mayor of London and Local Authorities in England in their areas of responsibility.’
Amendment 86, in clause 14, page 11, line 11, at end insert—
‘(4) This section and the Schedules it inserts shall not apply in Scotland.’
Amendment 87, in clause 15, page 12, line 23, at end insert—
‘(4) This section shall not apply in Scotland.’
Amendment 88, in clause 16, page 13, line 26, at end insert—
‘(5) This section and the Schedule it inserts shall not apply in Scotland.’
Amendment 89, in clause 17, page 14, line 43, at end insert—
‘(11) Trade union members resident in Scotland shall not be required through their union to contribute to a levy imposed by this section.’
Chris Stephens
This group of amendments could be called the devolved group. It goes to the heart of principles regarding mandates—not just the mandates that trade unions derive with regard to taking industrial action, but whether there is a mandate across the nations of the UK for the Bill and for specific clauses within it. That is natural, when we have four nations in the UK with a different leading party in each.
The amendments also raise issues of consent. The devolved Administrations and local authorities are being dictated to by the Bill regarding how they conduct their industrial relations. There are issues regarding the effect on the spirit of friendship and solidarity across the UK, and regarding our mandate, which is to seek the devolution of employment law in the Scotland Bill. It is important to point out that Parliament has yet to put to the test whether employment law should be devolved to Scotland.
The constitutional issues that arise from the Bill could have serious consequences. We were told by Ministers in the evidence sessions that industrial relations are reserved, but in reality they are not. The reality is that devolved Administrations in the past have kept the two-tier workforce agreements, which the coalition Government removed for workers in the public sector in England.
Edward Argar (Charnwood) (Con)
Does the hon. Gentleman not accept, though, as the Scottish Cabinet Secretary Ms Cunningham did, that industrial relations are currently reserved?
Chris Stephens
Ms Cunningham then went on to make the position clear about the impact that would have. The hon. Gentleman is correct that industrial relations are reserved at this point, but an electoral mandate was given to 56 MPs who were elected in May—I could argue that there are 58 MPs in Scotland who are opposed to the Bill. The Bill is a real concern, because it ignores, for example, the work of the Scottish Government in setting up the Scottish fair work convention. They are working in partnership with trade unions rather than seeing them as the enemy of the public and using the kind of rhetoric we have heard while discussing the Bill.
The Bill brings into question the impact of the industrial relations capacity. We have heard from the local authorities in Scotland. Conservative councillor Billy Hendry said in a Convention of Scottish Local Authorities statement that COSLA is opposed to the Bill. The Bill seeks to dictate to the devolved Administrations on issues of facility time and check-off. There seems little support in Scotland and Wales or in aspects of the public sector in England for the removal of check-off. Check-off is a voluntary arrangement, and for the UK Government to dictate to parts of the public sector who have an electoral mandate to conduct industrial relations is wrong. It will be interesting to hear from the Minister whether he has responded to the Scottish or Welsh Governments on the principles of consent.
More importantly, the deputy General Secretary of the Scottish Trades Union Congress at our political conference in Aberdeen at the weekend, at a fringe meeting, described the principles around facility time and check-off to be the most pernicious parts of the Bill, simply because it strikes at the heart of trade union organisation. Employers benefit from employees having good facility time. They know who they are; they are people who can deal with people and sort issues out; it leads to fewer tribunal claims, less litigation, better health and safety and, indeed it can lead to lifelong learning for employees as well. Those are the very real benefits of facility time.
There was no consultation with the public sector, this provision interferes with electoral and political mandates, and I believe that there is a lack of consent for the Bill across many parts of the UK.
Dr Cameron
Does my hon. Friend agree that Scotland and the Scottish Government have had harmonious working relationships with management and unions, in terms of partnership, and that there is great concern, from constituents and from the Scottish Government, the councils and the Scottish Trades Union Congress, about the Bill’s potential to undermine this?
Chris Stephens
Absolutely. The current figures show that there is less industrial action in Scotland than in the rest of the UK. That suggests that partnership working is successful and leads to less industrial action and better working relationships across the board. We know that many public bodies oppose the Bill. Some public bodies have gone even further and said that they will defy the Bill. This can only lead to conflict with other public bodies, conflict across the public sector, and it could lead, as Professor Keith Ewing suggested, to a constitutional crisis across the UK. It is rather ironic that this is coming from the UK Government, when they usually point the finger at other people for causing constitutional crises across the UK.
The trade union movement is the largest group in civil society and we should be working in partnership. I look forward to the debate and will indicate in my summing-up whether we wish to push any amendments to a vote.
Stephen Doughty
It is a pleasure to move on to one of the most significant parts of the Bill in relation to its potential legality, let alone its potential for implementation.
I wish to speak to our amendments 11, 12, 42, 72, 51 and 73, but I shall respond first to the speech by the hon. the Member for Glasgow South West, many aspects of which I have a great degree of sympathy with. I entirely understand his concerns about the impact of the Bill on Scotland, particularly in areas that are clearly devolved. Let me be clear at the outset that, in line with the principles of togetherness and solidarity that underpin the trade union movement, we intend to oppose and to attempt to defeat every substantive clause of the Bill in order to stand up for workers in every part of the United Kingdom, including Scotland. Our amendments also highlight specific areas that we believe most clearly breach the existing devolution settlement, in line with the evidence provided to us by the Welsh and Scottish Governments and other concerned stakeholders.
Ian Mearns
Hon. Members will be aware that in the north of England the Government are seeking to establish elected mayors covering regions or sub-regions, and great cities and local enterprise partnership areas in places such as the north-east of England. Does my hon. Friend see the capacity for additional conflict if elected mayors are established and then instructed by Her Majesty’s Government about how they should conduct industrial relations affairs within their own elected area?
Stephen Doughty
I agree with my hon. Friend. Not only does that apply to such relationships going forward, but we need to look at the impact of the Bill retrospectively. I would appreciate clarification from the Minister on that. Obviously, local and devolved government across the UK already has extensive contractual arrangements on matters such as check-off, facility time and so on. That is particularly true in the public sector, but also in relation to bodies that receive public funding. Those things are woven into the fabric of employment contracts up and down the land. The Bill simply drives a coach and horses through that and could result in a serious number of legal challenges.
Chris Stephens
On the point raised by the hon. Member for Gateshead, if an elected mayor, a local authority political party, or even a devolved Administration political party puts in its manifesto that it wants to deal with workers by having good facility time and check-off, surely that mandate should stand and should not be interfered with.
Stephen Doughty
The hon. Gentleman makes an important point. Who should have the power in that situation to determine the type of partnerships and arrangements that exist? Should it be for the UK Government, who claim they are pro-devolution, to interfere in those relationships and negotiations?
The implications are clear. I refer to the position that many Scottish local authorities and Scottish Labour party have taken regarding the Bill, which is essentially a position of non-compliance, particularly with the measures abolishing check-off and curbing facility time. To date, every single Labour-led administration in Scotland has passed motions to that effect. They are giving a clear signal of intent regarding the potential constitutional clash we are heading towards.
James Cartlidge
I am very interested in amendment 12, which states:
“None of the provisions of this section shall apply to services provided by the Mayor of London”.
In other words, thresholds would not apply in London. In the city where we have had the greatest problems with tube and bus strikes with low turnouts, on which we have had a huge amount of evidence, is the hon. Gentleman seriously suggesting that we should leave London out of the thresholds?
Stephen Doughty
The point we are making with the amendments is that it should be for devolved Governments, and the Mayor of London, to determine the type of relationships they want to have. If the hon. Gentleman wants to get into a debate about the Mayor of London’s relationship with the trade unions, I think he is heading on to a sticky wicket. We heard nonsense from the Mayor of London on Second Reading. That goes back to a fundamental point: we are constantly looking at the impact of strikes rather than the reason for them. It is as though they were all dreamed up by a bunch of militants without cause. That is simply not the case. I suggest we do not go down the line of debating the Mayor of London’s industrial relations.
Going back to Scotland, Scottish local government is making it clear that it will not implement the Bill. If that is the case, as also appears to be the suggestion of the Welsh Government and other public bodies across the UK, we are heading into difficult territory.
The Labour party believes that a collective response and approach to this divisive legislation is both the most ethical and efficacious way to proceed, in the best traditions of trade unionism. Although I understand the principles underpinning many of the SNP amendments in this group that are intended to exempt to Scotland alone from particular clauses, our position is clear. We want to exempt all of the United Kingdom, including Scotland, from all the clauses of the Bill. We intend to do so by voting against each clause of the Bill, and I hope the SNP will continue in the vein already established in Committee and join us in doing so in the principle of solidarity.
There is much that the hon. Member for Glasgow South West and I agree on. However, although I understand the intent behind the SNP amendments, there is a risk that amendments that seek to defend the rights of workers in only part of the UK will play into the Government’s hands and encourage a race to the bottom. I hope the SNP will continue its support in defeating each clause of the Bill and join us in voting against the Bill, should it proceed, on Third Reading.
The SNP has tabled amendments 84 and 85, which relate to consent to legislate on a range of issues across the UK. We believe that devolved nations should be exempted, as per our amendments. Nevertheless, there is no inconsistency in supporting those SNP amendments. We would also look favourably on a number of other amendments the SNP has tabled to later parts of the Bill.
I turn to amendment 11 to clause 3. Setting balloting thresholds for the range of important services outlined in the Bill will clearly have a direct impact on public policy areas that are wholly devolved. As a Welsh Member of Parliament, I am very concerned that the Bill could breach the devolution settlement, whether in Wales, Scotland, local authorities in England or London. In clause 3, it could particularly affect health services and the education of those aged 17.
The Chair
Order. As we have had a debate about Jedi knights, may the force be with you all.
Trade Union Bill (Sixth sitting)
(9 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 8 - Question accordingly agreed to.
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 8 - Question accordingly agreed to.
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 8 - Question accordingly agreed to.
The Committee divided: - Ayes: 10 / Noes: 8 - Question accordingly agreed to.
The Committee divided: - Ayes: 10 / Noes: 8 - Question accordingly agreed to.
The Committee divided: - Ayes: 10 / Noes: 8 - Question accordingly agreed to.
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 11, in clause 3, page 2, line 24, at end insert—
‘(2G) None of the provisions of this section shall apply to services the provision of which is devolved wholly or partially to the Scottish Government, Welsh Government or Northern Ireland Executive.’
The amendment would ensure that the provisions of the Bill requiring 40% support for industrial action in certain public services would not apply to services devolved to the Scottish Government, the Welsh Government and the Northern Ireland Executive.
Amendment 12, in clause 3, page 2, line 24, at end insert—
‘(2H) None of the provisions of this section shall apply to services provided by the Mayor of London or local authorities in England.’
The amendment would ensure that the provisions of the Bill requiring 40% support for industrial action in certain public services would not apply to services devolved to the Mayor of London or local authorities in England.
Amendment 77, in clause 3, page 2, line 28, at end insert—
‘(4) This section shall not apply to trade disputes in Scotland.’
Amendment 78, in clause 4, page 3, line 2, at end insert—
‘(3) This section shall not apply to trade disputes in Scotland.’
Amendment 79, in clause 5, page 3, line 25, at end insert—
‘(3) This section shall not apply to trade disputes in Scotland.’
Amendment 80, in clause 6, page 3, line 44, at end insert—
‘(3) This section does not apply in relation to industrial action in Scotland.’
Amendment 81, in clause 7, page 4, line 9, at end insert—
‘(3) This section shall not apply to trade disputes in Scotland.’
Amendment 82, in clause 8, page 4, line 24, at end insert—
‘(3) This section shall not apply to disputes in Scotland.’
Amendment 42, in clause 10, page 7, line 10, at end insert—
‘(5) None of the provisions of sections 84 and 85 shall apply to public sector employees in sectors or providing services which are wholly or partially devolved to the Scottish Government, Welsh Government or Northern Ireland Executive.’
The amendment would ensure that the provisions on contributions to political funds would not apply to employees in public services providing services which are devolved to the Scottish Government, the Welsh Government, the Northern Ireland Executive.
Amendment 72, in clause 10, page 7, line 10, at end insert—
‘(6) None of the provisions of this section shall apply to employees of the Mayor of London or local authorities in England.’
The amendment would ensure that the provisions on contributions to political funds would not apply to employees in public services providing services which are devolved to the Mayor of London or local authorities in England.
Amendment 51, in clause 12, page 9, line 20, at end insert?
‘(13) None of the provisions of this section shall apply to facility time of the employees of the Scottish Government, the Welsh Government or the Northern Ireland Executive, or to public sector employers working for or providing services that are wholly or partially devolved to the Scottish Government, Welsh Government or Northern Ireland Executive.’
The amendment would ensure that the provisions on facility time would not apply to employees working for or providing public services which are devolved to the Scottish Government, the Welsh Government or the Northern Ireland Executive.
Amendment 73, in clause 12, page 9, line 20, at end insert?
‘(14) None of the provisions of this section shall apply to facility time of the employees of the Mayor of London or local authorities in England.’
The amendment would ensure that the provisions on facility time would not apply to employees working for or providing public services which are devolved to employees of the Mayor of London or local authorities in England.
Amendment 84, in clause 12, page 9, line 20, at end insert—
‘(13) The provisions in this section shall only apply with the consent of the Scottish Government, Welsh Government, Northern Ireland Executive, the Mayor of London and Local Authorities in England in their areas of responsibility.’
Amendment 85, in clause 13, page 10, line 44, at end insert—
‘(14) For the avoidance of doubt, the powers in this section shall only apply with the consent of the Scottish Government, Welsh Government, Northern Ireland Executive, the Mayor of London and Local Authorities in England in their areas of responsibility.’
Amendment 86, in clause 14, page 11, line 11, at end insert—
‘(4) This section and the Schedules it inserts shall not apply in Scotland.’
Amendment 87, in clause 15, page 12, line 23, at end insert—
‘(4) This section shall not apply in Scotland.’
Amendment 88, in clause 16, page 13, line 26, at end insert—
‘(5) This section and the Schedule it inserts shall not apply in Scotland.’
Amendment 89, in clause 17, page 14, line 43, at end insert—
‘(11) Trade union members resident in Scotland shall not be required through their union to contribute to a levy imposed by this section.’
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Sir Alan, as we return to line-by-line scrutiny of the Bill. When we left, we were discussing the group of amendments about devolution and I was about to set out my case on amendment 11.
By setting balloting thresholds for the range of important services defined by the Bill, we need to be clear that this will impact on public policy areas that are wholly devolved. As a Welsh Member of Parliament, I am concerned that the Bill could breach the devolution settlement in Wales and in Scotland, as well as with regard to the increasing powers of local authorities in England, Mayors and the Mayor of London.
Health services, education of those aged under 17 and fire services are already clearly devolved to Wales, and the Welsh First Minister stated in a recent letter to the Prime Minister:
“It is clear…that significant elements of the Bill relate specifically to public services which in Wales are unambiguously devolved responsibilities. I therefore do not accept the suggestion that the Bill must be regarded as concerned exclusively with non-devolved issues…Policy on how to support, or ‘protect’, the delivery of devolved public services such as health, education and fire is…for the Welsh Government and the National Assembly for Wales. This includes the way the public sector bodies in such devolved services work with trade unions to ensure effective delivery of services to the public.”
That is very important because we regularly hear examples from the Government about services. Most of them seem to relate to London—though, as I have said, we should give the Mayor of London the choice of how to handle these relationships. These examples do not relate to services in Wales, Scotland or elsewhere. I wonder why that is. Given that the devolved Governments have raised a series of concerns in their oral and written evidence, in letters and so on, will the Minister inform the Committee what discussions he and other Ministers in the Department and the Minister for the Cabinet Office have had with Ministers and officials in the devolved Administrations before the Bill was published and subsequent to their concerns being raised?
This is particularly important because the First Minister of Wales specifically pointed out the positive social partnerships that exist in Wales—we have heard similar evidence from Scotland—and the impact that that can have on the positive delivery of public services. The Minister need not accept just the word of the Welsh Government for this, welcome though that would be, as we also have research published by the Royal College of Nursing, which witnesses touched on in oral evidence. The research highlights the benefits of high-trust working relationships between managers and unions in the public sector. In that case, it was related to health in particular. I believe that the Bill and this clause seek to drive a false wedge between them.
We have already heard how Scottish Labour and local authorities run by Scottish Labour have made it very clear that they do not intend to implement the Bill. I have been made aware during the lunch break of a statement released by one of the Welsh councils, and I know that many share this position. I have a statement from Torfaen, a Labour-run authority. Councillor Anthony Hunt has tabled a resolution there, endorsed by the council, which says that the council
“resolves to oppose the introduction of the Trade Union Bill 2015, urges the Government to abandon the Bill and instead make a commitment to work in partnership with the trade union movement”.
There is dissension at many levels.
Jessica Morden (Newport East) (Lab)
I refer the Committee to my declaration in the Register of Members’ Financial Interests. We also heard evidence from the Welsh Minister for Public Services about the firefighters’ dispute over pensions, in which a solution was reached and the Fire Brigades Union put off strike action in Wales. Is that not a good example of where Wales is doing things differently?
Stephen Doughty
That is a perfect example, which exposes the different industrial relations policies that different Governments across these islands are pursuing and the benefits to the public of avoiding strike action, which is what the Government say that they want to do with the Bill. The example that my hon. Friend just gave stands in stark contrast to the testy relationship that appears to exist, as we heard in oral evidence, between the London fire brigade and the Fire Brigades Union, and the wider context of industrial relations in that city. Surely if the Government’s aim, as they keep repeating, is to reduce industrial action and disruption, particularly in crucial services such as fire, we want to do everything we can to build positive partnerships and come to resolutions, as was the case in Wales.
Amendment 12, in a similar vein to amendment 11, seeks to ensure that the Bill does not interfere with the ability of directly elected Mayors and local authorities in England to manage such services and decide how to manage their relationships with trade unions. It is consistent with the Government’s localism agenda. Amendments 42 and 72 relate to clause 10, on political party fund opt-ins, which we will discuss in due course. Briefly, amendment 42 would ensure that the opt-in requirements for trade union political funds would not apply to public sector employees working in sectors or providing services that are devolved to the Scottish and Welsh Governments. Amendment 72 would ensure that the proposed new opt-in requirements for union political funds did not apply to employees of the Mayor of London or local authorities in England. Again, as a point of principle, we believe that those bodies should be able to make their own decisions about how to manage their relationships with trade unions in those sectors and how those trade unions use their money.
On amendment 51 and 73, I draw the Committee’s attention to a letter dated 10 September 2015 from Carwyn Jones, the Welsh First Minister, to the Prime Minister, expressing his concerns about the Trade Union Bill. In the letter, the First Minister says:
“Similarly, it cannot be right for the UK Government—blind to policy priorities and devolved service delivery reforms in Wales—to specify how much union ‘facility time’ devolved public sector employers should allow. Nor am I convinced that the intention to end ‘check off’ arrangements for trade union subscriptions in the public sector is necessary or appropriate. The Welsh Government operates these arrangements as part of its approach to effective social partnership and is not seeking to change this.”
I know that the Scottish Government are similarly concerned about this matter, and I am sure that my colleagues from the Scottish National party would agree.
These are important policy decisions about relationships and the balance of responsibilities and rights. They are part of the crucial relationship between the Government and public bodies, and those who work in them. Frankly, the Welsh and Scottish Governments have a different approach, and they want to ensure that it is positive.
Ian Mearns (Gateshead) (Lab)
My hon. Friend outlines a coherent case. Although the Government maintain that they have the power to enact the Bill across the United Kingdom, it could in practice be enacted in very different ways in different parts of the United Kingdom. English citizens could end up with many fewer rights than their counterparts in Scotland, Wales and Northern Ireland. Do we want English men and women to have fewer rights than their Scottish, Welsh and Northern Irish counterparts?
Stephen Doughty
That is a very important point. As I made clear when introducing our amendments, the Labour party believes in exempting all parts of the United Kingdom from the Bill and its provisions. It would be hugely problematic for there to be areas of complete disagreement and an imbalance among the different parts of the UK. That prompts a series of questions, and I hope the Minister can explain how the measure will work in practice, given that the devolved Governments and local authorities are already indicating that they do not wish to implement it.
Amendment 51 would ensure that the new requirements to report on facility time would not apply to employees of the Scottish Government, the Welsh Government, the Northern Ireland Executive or public sector employers working for or providing services that are partially or wholly devolved to those bodies. It would ensure that the Bill does not interfere with the ability of those Governments to manage those services and decide how they engage with their staff and determine their relationships with trade unions.
In the same vein, amendment 73 would ensure that the new reporting requirements did not apply to the facility time of employees of the Mayor of London or local authorities in England. Again, that is consistent with the Government’s localism agenda.
Chris Stephens (Glasgow South West) (SNP)
May I remind the shadow Minister of Dave Prentis’s evidence last week? I thought it was peculiar—perhaps the shadow Minister can enlighten us—that he said that, when it comes to check-off, it is not just about the devolved nations, but the new combined authorities. They will be allowed to do everything, but not talk to staff and trade unions about having check-off or not.
Stephen Doughty
That is a very important point. I thank the hon. Gentleman for drawing our attention to what the general secretary of Unison had to say on that matter. Unison represents a significant number of employees in local government across the UK and has exposed a very serious problem.
I want to ask the Minister some specific questions that I hope he will answer in his response to this part of the debate. I pressed him in the oral evidence session about the legal assessments that had been made in developing the Bill. Clearly, I do not expect him to share the detail of Government legal advice, but I would like to know, given the apparent paucity of consultation with devolved Governments across the UK and, it appears, with local government, what conversations took place. I am not asking the Minister to share the contents of the conversations, but can he tell us what conversations took place, given the huge implications of the Bill and the legal precedent for cases such as this ending up in the Supreme Court? What conversations took place? Did any take place? I sincerely hope that they did. Anything the Minister can share with the Committee would be very helpful.
I pushed the Minister on my second point in the oral evidence session. As we have heard from a vast number of legal experts, there is a serious risk of legal challenge to the Bill. One legal opinion can be challenged by another, but the reality is that that might be exactly where the Bill ends up: in the courts. Have the Government set aside funds to deal with legal proceedings that might result—it is inevitable, I believe—from the Bill’s proceeding in its present form?
Thirdly, I would like to know the Minister’s response to the apparent concerns of the Welsh and Scottish Governments, local government across England and local government in Wales and Scotland, and his response should they choose not to implement the Bill, because they believe that it breaches their settlement. Will he take legal proceedings against them to enforce the Bill? How much does he think that that will cost the taxpayer? Or will he just let them carry on? I am sure that he wants to enforce his Bill, but there will be a cost if there is resistance to it from the public bodies to which he is trying to apply it. Keith Ewing said very clearly that he thought that we were walking blindfold into a major constitutional crisis. I have great sympathy with that position.
Fourthly, given the nature of existing contractual arrangements in a whole series of public bodies that receive public funding, which refer to check-off, facility time, and to many other matters that are pertinent to the Bill, does the Minister propose that the measure will apply retrospectively, and that we would therefore have to unwind hundreds of thousands of contractual arrangements, particularly in the public sector across the UK? Will the Bill apply retrospectively? How does the Minister think that will impact? What estimate has he made of the cost, should any individual challenge that through the courts? I imagine that quite a significant number of individuals would want to challenge that if they believed that they had signed a contract in good faith with a public body that gave them certain rights. What estimate have the Minister and the Department made of the cost of that? How does he see the Bill being implemented?
Will he have a hit squad, which the Minister for the Cabinet Office talked about, going round local authorities and devolved Governments to check the texts of the contractual arrangements that they enter into? Will he go through every piece of paper signed by every public sector employee or by anyone who could vaguely be determined to have enjoyed some sort of public sector funding in their role? Will he interfere with every single one of those contracts? This is an extraordinarily heavy-handed approach from a Government who claim that they want to avoid regulation and interference—and that they are the Government of devolution and localism.
I have a final question for the Minister. We heard from the Scottish and Welsh Governments that they are reserving their position on whether a legislative consent motion is required for the Bill. Perhaps not all members of the Committee are familiar with legislative consent motions—LCMs—but they can be seen regularly on the Table in the House when the UK Government seek to legislate for matters that are partially or fully devolved for some practical reason. If the legislation makes sense, the Scottish and Welsh Governments and the Northern Ireland Executive can give permission to the UK Government to do that. There are many circumstances in which that is appropriate. However, on this occasion they clearly do not believe there is a clear case for that. I would like to know what the Minister would do, should the Welsh and Scottish Governments withhold legislative consent. What discussion has the Minister had with UK Government Law Officers about the Government’s approach and, again, what would be the costs to the public purse? I suggest that the Minister makes ready a tidy little pot of money to deal with all the legal proceedings that will emanate from the Bill if it goes ahead in its current form. That will really put paid to the suggestion that the Bill will benefit the taxpayer. It will cost the taxpayer a lot of money.
The Minister for Skills (Nick Boles)
It is a pleasure to serve under your chairmanship again, Sir Alan. As we have heard in eloquent speeches from the shadow Minister, the hon. Member for Cardiff South and Penarth, and the hon. Member for Glasgow South West, amendment 90 and the rest of the amendments in this group aim to limit the geographical extent of the Bill. In the oral evidence sessions last week, we heard evidence from Roseanna Cunningham, the Cabinet Secretary for Fair Work, Skills and Training in the Scottish Government, and Leighton Andrews, the Minister for Public Services in the Welsh Government, about the collaborative relationship that these Administrations have with trade unions. That is, of course, laudable. There is absolutely nothing in the Bill that need cut across the positive relationships—the partnerships, as they describe them—between unions and Government in Scotland and Wales, any more than it will cut across the partnership and the positive relationship that we have with unions in relation to English matters.
The Bill is about ensuring that industrial action can go ahead only with a strong, democratic and recent mandate. It is about increasing transparency and accountability, both in strike ballots and in political funds. It is about protecting non-striking workers from intimidation and ensuring that unions take proper responsibility for picket lines. It is about securing transparency and value for money for the taxpayer. It is about creating an appropriate regulatory environment for unions. To me, these all seem to be reasonable objectives. How can we not want to apply these benefits uniformly across Great Britain?
Mike Emmott, senior policy adviser at the CIPD, who in general does not support the measures in the Bill, nevertheless put it eloquently when he told this Committee last week that it was appropriate for the Bill measures to be dealt with on a Great Britain-wide basis. He said:
“It is going to be quite odd for employers dealing with different rules applying in different jurisdictions, where there may be issues that go across the whole of the UK.”––[Official Report, Trade Union Public Bill Committee, 13 October 2015; c. 36, Q90.]
The Bill seeks to ensure that when the lives of commuters or patients or parents of school-age children are disrupted by strike action, that action is supported by a significant proportion of union members. In particular, we are seeking to protect the users of important public services from highly disruptive strike action that is driven by a small minority on the basis of an outdated ballot. The provisions of the Bill apply to the whole of Great Britain: to England, Scotland and Wales, to London, and to English local authorities. This is because all the provisions in the Bill relate to employment and industrial relations law, all of which are clearly reserved matters under the devolution settlements with Scotland and Wales. In Northern Ireland, on the other hand, employment and industrial relations are transferred matters; therefore, respecting the agreement that was properly reached with Northern Ireland, the Bill’s provisions do not apply there.
On that basis—that this is indeed a reserved matter—it is entirely in order for the Government to propose that the Bill applies to the whole of Great Britain. There are strong, practical reasons why employment law should apply across the whole of Great Britain. Under the devolution settlements with Scotland and Wales, Parliament devolved some responsibilities, while some remain reserved. Again, certain responsibilities are being devolved to local authorities in England and to the Mayor of London. None of the responsibilities that are devolved include employment law or industrial relations, so devolved matters are simply not at play.
The shadow Minister asked a number of detailed questions, which I will try to answer as best I can. Obviously contacts take place between officials in every Department here in London and officials in the devolved Administrations. I am not going to provide a running commentary or a list of them, but I can tell the hon. Gentleman that, in response to letters that the First Minister of Wales wrote to the Prime Minister on 9 September, the Prime Minister replied on 2 October. In response to letters from Roseanna Cunningham on 7 August and 9 September, she and I had a reasonably lengthy phone conversation on 8 October. I am always happy to speak to them and to discuss any concerns they may have.
The hon. Member for Cardiff South and Penarth said that there had been suggestions by members of the Welsh Government, the Scottish Government and other local authorities that they might refuse to comply with the provisions in the Bill should it become law. I say gently to the hon. Gentleman that it is quite remarkable to compare the number of times you hear people threatening not to obey a law in prospect—when it is being considered by Parliament and when there is some chance of affecting the outcome of Parliament’s deliberations—and the number of times when those duly constituted public authorities actually refuse to obey the law of the land and put themselves in breach. Let us cross that bridge when we come to it. I do not anticipate those rather wild and lurid threats being carried out—they are, after all, being made by institutions and individuals who oppose the Government politically and oppose the measures. They are, of course, entitled to use, in rhetoric, whatever arguments they like, but ultimately what they do is what will count.
Similarly, the number of times when it might be claimed that a legislative consent motion is required is very different from the number of times when it is actually required. When it is required is determined by the devolution settlement and by whether a matter is reserved or not. As Ms Cunningham herself has admitted, it is absolutely clear that, currently, employment law and industrial relations a reserved matters. There is absolutely no question about the full right of the UK Parliament to make laws that affect the whole of Great Britain on those matters.
Stephen Doughty
I appreciate that the Minister would not do anything other than defend the Bill as an entirely reserved matter, but does he accept that its provisions will have significant consequences for matters that are wholly or partially devolved to a series of Administrations around the UK? Yes or no?
Nick Boles
No, I do not accept that. The hon. Gentleman seems to suggest that minor changes in how individual employees pay a subscription to a particular membership organisation is a challenge to the ability of the devolved Administrations—the Scottish or Welsh Governments—to run their national health service or their schools. That seems ludicrous to me. It is, of course, a matter of employment law and it will, therefore, apply to people who work in public services that are, themselves, devolved, but the idea that it will prevent or interrupt the policies of those Governments towards their public services is to overstate the case.
Nick Boles
I am happy to give way to the hon. Lady, but I do not want to have an endless ping-pong session with the hon. Gentleman at this point.
Jo Stevens
I refer the Minister to the letter of 14 October from the Welsh NHS Confederation to his colleague, the Minister for the Cabinet Office, which states:
“We feel that some of the proposals outlined in the Trade Union Bill could have a detrimental effect on this relationship”—
with trade unions—
“and potentially lead to unnecessarily challenging industrial relations in future…strike action in the NHS in Wales over the last decade has been minimal, despite significant organisational change and the introduction of significant changes to terms and conditions, so we do not believe that any additional measures to protect the public from strikes are necessarily required.”
Will the Minister comment on that?
Nick Boles
Yes. In a sense, the answer is the same. Everybody is entitled to say exactly what they think. I encourage it, I welcome it and we will always listen to any representations. We disagree. We believe that those people are overstating the case and that, when the Bill becomes law and the provisions are implemented—in Scotland and Wales as well as in England—it will not interrupt those very positive industrial relations, it will not interrupt those partnerships, and it certainly will not interrupt their ability to run their public services as they see fit.
Chris Stephens
There is a difference between employment law and industrial relations and how they impact on public services. I am curious about the Minister’s comment about the provision of public services, because political parties say how they will deal with industrial relations in public services as part of their manifesto commitments, whether for Scottish, Welsh or any other elections. Surely, those mandates have to be respected.
Nick Boles
We respect mandates, as I hope the hon. Gentleman will respect ours. I draw his attention to another example. The national minimum wage affects every single person who works anywhere in the United Kingdom. It is a reserved matter. It is something that this Parliament sets. I have not heard objections from the Scottish Minister—the very same Scottish Minister—saying that this is an egregious intrusion into Scottish matters and that somehow it is appalling that there is a national minimum wage. It is simply the case that we live in a system where some matters are reserved to the national—the United Kingdom—Parliament and other matters are devolved. The content of employment law and industrial relations is a reserved matter.
Nick Boles
I think we have had enough, Sir Alan. I will give way one last time, because we are making incredibly slow process.
Stephen Doughty
To be fair, Sir Alan, I asked the Minister a number of questions. He has not answered the major question about whether the legislation applies retrospectively to contractual arrangements in the public sector in the devolved Administrations and across local government in England and elsewhere, and about what he believes the consequences will be. He makes out that this is all some slightly trifling matter that is not going to cause problems. Often, facility time, check-off and whatever else are written into contractual provisions and exist in arrangements that are made by devolved Administrations with their employees about their contracts. Will the legislation apply retrospectively, and what does the Minister believe will be the impact on the ability of Administrations to make contractual arrangements, as they have done before? Or is he admitting that the Bill interferes with their ability to do that?
Nick Boles
On the effect of the provisions on existing contracts, we have asked whether they are acceptable by international obligations and we are absolutely assured that they are. Again, I refer the hon. Gentleman to the national minimum wage. Its introduction had an impact on existing contracts, some of which therefore had to be revised to reflect it. This legislation will have no greater impact—in fact, rather less so—on existing contracts. We are confident that any effect it will have is entirely consistent with all the relevant legal framework.
Nick Boles
This is seriously the last time, because the hon. Gentleman has many that new clauses he wants to get to and I am just trying to help.
Chris Stephens
The Minister has been most kind, so I will ask just this question. The cost to public bodies of reissuing new statements of particulars and contracts could be considerable. Will the Government provide finances to the public bodies in that position?
Nick Boles
Sir Alan, you know as well as I do that if I were even to dare tiptoe on to the question of the financial settlement with devolved Administrations, there is literally a device implanted in my brain that would explode and decapitate me. I am not going to go there, however much pleasure it might give Opposition Members. [Interruption.] However, if the hon. Gentleman wants to write to the Chancellor—or to me and I can pass on the request—I will, of course, reply to his question.
If there are no further requests for interventions, I will conclude. The amendments in this group seek to use the Bill as a mechanism to carve out different arrangements in employment law and industrial relations for Scotland, Wales, London and English local authorities. Parliament has already determined that these matters are reserved. The amendments are an attempt to extend devolution by the back door and that is why we cannot accept them. I ask hon. Members not to press the amendments.
Jo Stevens
In opposing clause 3 and speaking in support of our amendments, I wish I had the faith in the legal advice that the Minister seems to have in his lawyers. I remind the Government of the evidence that we heard last week from Professor Keith Ewing, professor of public law at King’s College, London, about the Bill being incompatible with settlements in Wales and Scotland, which is entirely contrary to the position that the Minister has just asserted. The Committee will recall that Professor Ewing said:
“The Government are walking, almost blindfolded, into a major constitutional crisis around the Bill. That constitutional crisis could be as explosive for this Government as the poll tax was for the Thatcher Government in the late 1980s and early 1990s. This is a big, big problem, and I am not sure that people have really thought through the consequences.”––[Official Report, Trade Union Public Bill Committee, 15 October 2015; c. 129, Q346.]
Not having thought through the consequences is a recurrent theme in the Bill. I appreciate that the Government seem to have struggled to give examples of good industrial relations in England. Almost every example of industrial action and dispute that they have referred to has involved employees in London, which I would suggest is a reflection on the Mayor of London rather than on current industrial law.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
Is the hon. Lady as surprised as I am that the Minister’s response appears somewhat flippant, as though he wishes to call the bluff of the devolved Governments and the councils? There is little recognition of possible legal repercussions, costs and contingencies for the public.
Jo Stevens
I absolutely agree, and that is a risk that the Government are taking. The Bill has significant equality implications, despite the suggestion otherwise in the equality impact assessment—which reads, frankly, as though it was written on the back of a fag packet. The Bill presents a real danger that decades of progress on equality in the workplace will be undermined through the erosion of trade union rights. We know that trade unions are one of the best protections from discriminatory treatment in the workplace, with trained officers and representatives who deal with a range of workplace issues, protecting equality of treatment and, in the process, saving employers from reputational damage and litigation. It is simply not acceptable or legitimate for the UK Government to impose the Bill on Wales.
We have heard that the First Minister wrote to the Prime Minister to set out his position and his concerns clearly and constructively. The Prime Minister’s response has been described by the Minister for Public Services as disappointing. I think he was being too polite. I would go further and describe it as inadequate. It failed to acknowledge any devolved interest whatever. We have heard from the Minister for Public Services that the Welsh Government are considering how they would seek to protect legitimate, devolved interests, including devolved public services, from the Bill, including tabling a legislative consent motion.
I go back to the comments of Professor Ewing from the beginning of my contribution. Do the Government really want to mire themselves in expensive, lengthy litigation with the Welsh Government over the Bill, played out in Supreme Court? Do the Government really want to suffer another embarrassing defeat as they did over the Agricultural Wages Board litigation with the Welsh Government?
The Bill was the subject of a debate in the Welsh Assembly last week. The Assembly Member for Pontypridd summed up the view of the Welsh Government by saying:
“We do not need this law in Wales and we do not want this law in Wales”—
it sounds a bit like Dr Seuss, this—
“And I know that we will do all that we can to support all those who oppose this Bill and, if necessary, to challenge its legitimacy in the Supreme Court.”
The Government have been given a clear warning. By accepting our amendments to clause 3, the Government have the opportunity to save time, save face and save taxpayers’ money. Will they take it?
Stephen Doughty
I want to respond briefly to a number of comments made by the Minister. Obviously, he maintained his position that this is a wholly reserved matter and claimed—shamefully—that this was about extending devolution by the back door. We on this side would contend that this is attempting to extinguish part of devolution by the back door. The Government have made that very clear.
The Minister is essentially saying to the Committee and to the public, “Trust me, it’s not devolved in any way: it’s all fine,” but we have heard from my hon. Friend the Member for Cardiff Central that the Government’s record on this is wobbly at best. They have already suffered serious defeats in the Supreme Court at great cost to the taxpayer. I would expect, at the very least, the Government to have taken the most precautionary and consultative approach before proceeding with matters of this seriousness. The Minister did not want to detail all the different meetings or give a running commentary. I gently suggest to the Committee that that was because not many meetings, if any, took place before the Bill was published. That is certainly the impression we have been left with by the Scottish and Welsh Governments, let alone local government in England.
The Minister was very hazy on his expectations of the impact of the Bill on existing contractual arrangements, either retrospectively or going forward. I hope that he and the Government have very deep pockets, because I sense that this is not an idle threat; there are real, serious legal objections to the Bill and its implications and I imagine that a number of the bodies that are raising these concerns will take action over this. It is for that reason that I give the Minister a chance to exempt himself from that cost and trouble to the taxpayer, by pressing amendments 11 and 12 to a vote.
The Chair
Order. Before the hon. Gentleman does that, I remind Members, in dealing with such amendments, that the mover wants to respond too, and that they will have the opportunity to have a more wide-ranging debate on matters that have been raised in the stand-part section of this consideration. I ask them to keep succinctly to the topic in hand, or we will not have time to deal with all the measures that concern us.
Victoria Prentis (Banbury) (Con)
I am sorry to reduce the agricultural wages case to the level of Dr Seuss, but do you agree, Sir Alan, that within the agricultural wages case it was found, in principle, that although agriculture is a devolved matter—that matter was won by the Government—the wages aspect is not? It was because it was a mixed Bill that there was the result that there was. This is quite different. This is a Bill about industrial relations and trade unions. It is quite simple and obvious that this a reserved matter.
Chris Stephens
This has been an interesting debate about the group of amendments on the impacts on the devolved Administrations and other public bodies. It is interesting that some know better than others the effects that this will have on those bodies. I shall respond first to the shadow Minister’s gentle rebuke on the SNP’s amendments only applying to Scotland. He indicated that he respects our mandate on that and I agree with his point that the group of amendments seeks to enforce what has been referred to as the respect agenda. We hear from the UK Government that they respect the devolved Administrations and other public bodies, but with these amendments we want to ensure that that takes place.
Like the shadow Minister, the SNP opposes all of the Bill and will be voting for many of the amendments and against the clauses. We agree on his point about solidarity; we may have different approaches, but I assure him that we are in solidarity with all workers in the UK regarding the Bill, although there may be some differences in how we want to achieve that. I would go as far as to say that if the Bill were introduced in another nation state, we would oppose it and would be raising it in this Parliament, as we do with any abuses of workers’ rights across the world. There is no contradiction in supporting the consent amendments in this group and those that want to take workers out of it.
I turn to the hon. Member for Gateshead’s contribution about English workers having fewer rights. The general secretary of Unite, Len McCluskey, commented about that in his evidence, saying that that was one of the dangers that the Bill would introduce. The Minister seems to indicate that it is settled that employment law is reserved, but that is not the case. A new clause is being introduced to the Scotland Bill. I do not want to touch on the Scotland Bill too much, but a new clause is being inserted for debate, it will be put to the parliamentary test and the parliamentary verdict on that is yet to be given.
Nor have the Government taken into account the fact that Scotland has a different civil and criminal law and a different legal jurisdiction. That was also mentioned in the evidence from Thompsons Solicitors. Given that the Bill touches on criminalising certain behaviour, more consultation with the devolved Administrations is required. I certainly take the view that a legislative consent motion is needed, as is consent across the board in the public services.
The Minister asked me to write to him in relation to the costs to the public sector in terms of individual contracts. I wrote to his colleague in the Cabinet Office on this, and I am still waiting for a response. My concern is that some of the Bill relates to the agenda of the TaxPayers Alliance, which I believe is based on ignorance of the issues. It does not even take into consideration the fact that public services actually gain income from facility time and, indeed, from check-off. That is being ignored. It is very dangerous indeed to interfere with the collective bargaining units that exist across the UK, which is what the Bill seems to do.
Our view of the Bill is that it is ideologically driven. The Government seem to want to implement their ideology in all parts of the UK, even those where they have no mandate, and on that basis we intend to press amendment 90 to a Division. We will also want to press amendments 84 and 85 when we reach the relevant clauses.
Question put, That the amendment be made.
Stephen Doughty
I beg to move amendment 4, in clause 3, page 2, line 5, after “engaged” insert “solely”.
The Chair
With this it will be convenient to discuss the following:
Amendment 5, in clause 3, page 2, leave out lines 6 to 8 insert—
“the provision of essential public services.”
Amendment 6, in clause 3, page 2, leave out lines 7 and 8.
Amendment 9, in clause 3, page 2, leave out lines 11 and 12 and insert—
‘(2D) In subsection (2B) “essential public services” means those services the interruption of which would endanger the life, personal safety or health of the whole or part of the population.”
The amendment would define “essential public services” in accordance with the International Labour Organisation’s definition.
Amendment 10, in clause 3, page 2, leave out lines 13 to 21.
Stephen Doughty
We have already touched on aspects of clause 3, but there is a more substantive debate to be had on it. As Committee members will know, the clause seeks to introduce a requirement that in “important public services”, 40% of those entitled to vote must vote in favour of industrial action, and that there must be a 50% turnout. In certain important public services, that will mean that if 50% of members participate in the ballot, 80% of those voting must vote in favour in order for a strike to take place. For example, if 500 members are balloted, at least 250 members must vote in the ballot and 200 must vote yes for industrial action to go ahead.
As I have said, if the Government were serious about increasing participation, whether in important public services or anywhere else, they would be taking the measures that we are proposing. I certainly believe, and I am sure my fellow Opposition Members would agree, that the Government’s real agenda is to prevent public sector workers in particular, on whom the legislation will have a significantly greater impact, from raising legitimate grievances and opposing changes to their pay, pensions and rights at work planned in this Parliament. One might even suspect that the Government had such plans in their agenda for the months ahead.
While politics are clearly at the heart of the Bill and this clause in particular, the Government have other legal obstacles to manoeuvre. As I outlined in the debate on the last clause, many legal experts believe that treating abstentions as “no” votes for industrial action is undemocratic and potentially illegal, and conflicts with international standards. International supervisory bodies such as the International Labour Organisation state that only votes cast should be taken into account.
The next hurdle for the Government will be of particular interest to noble Friends and Members in the other place when they read the debates we have had on the Floor of the House and in Committee. The Conservative manifesto in the 2015 general election referred to making provisions regarding only “essential public services”. That was also the specific term used in Her Majesty’s most Gracious Speech, delivered on 27 May 2015:
“My Government will bring forward legislation to reform trade unions and to protect essential public services against strikes.”
In a previous life, I was involved in drafting a line in Her Majesty’s speech. Obviously, it was subject to Her Majesty’s approval, and I am glad she delivered it. A great degree of rigour and attention is paid to the specific wording, so that Her Majesty feels confident with it and it reflects the Government’s intent very clearly. That is an important point.
“Essential” is the word used in International Labour Organisation conventions, and it has a very narrow legal definition. To quote an ILO general survey, the definition is restricted to services
“the interruption of which would endanger the life, personal safety or health of the whole or part of the population”.
Transport services, public transport, public education, port authorities, postal services and others all fall outside that category. Given that, I very much suspect—perhaps the Minister can enlighten us when he gets to his feet—that the Government realised that the legislation was poorly drafted and that using those words would leave it vulnerable to serious legal challenge, so they sought to row back, instead changing the wording to “important” public services, as we now see in the Bill. Disturbingly, those public services are to be defined by the Secretary of State in as yet unseen secondary legislation.
A number of categories of services are referred to in the clause using very broad terms, such as “health services”. There is
“education of those aged 17 and under”,
which we discussed in the devolution debate; I do not want to go over old ground, but that causes particular issues for differing education systems across the UK. “Fire services” are referred to, as are “transport services”—in a very general sense, and we have already heard how those are excluded from the ILO definition. There is
“the decommissioning of nuclear installations and management of radioactive waste and spent fuel”,
and “border security”.
Those provisions, alongside the consultation document, are so wide that they could apply to nearly every area of publicly funded activity. One might think that the Government have taken their chance not only to ensure that they can potentially avoid legal challenges—although I think this could still be subject to one—but to draw the definition as wide as possible so that everybody would be forced into the 40% threshold. What assessment has the Minister made of whether it is predicted that the other place will still feel bound by the Salisbury convention, given that the clause clearly breaches a Conservative manifesto commitment, let alone the specific text that was in the Gracious Speech?
What assessment has the Minister made of the effect that the proposals will have on women? We have discussed that at length already, but TUC research suggests that nearly three quarters—73%—of trade union members working in important public services, as defined by the Government, are women. I imagine that Committee members will vote on the proposals shortly; does the Minister think it is appropriate that they do not yet know for certain to whom they will apply? We have to take our responsibilities as legislators in this place very seriously. We do not know what this secondary legislation is, but the Government are again saying, “Trust us, trust us. We’ll be all right. We’re going to put this stuff down and you’ll be fine with it.” That is not acceptable. The Bill has been scheduled for some time; the Government have had plenty of time to introduce the regulations and they have not. What we know for certain, as I said, is that the proposals will impact on public policy areas that are wholly devolved, and that will have the implications we have discussed.
At this stage, it is also important to challenge one particular myth that is being peddled by those in favour of the Bill. It is a particular favourite of the hon. Member for Uxbridge and South Ruislip (Boris Johnson) who, on Second Reading, suggested that unions are required to meet a 75% threshold in Germany. For the record, that is not accurate. Some German trade unions have adopted rules requiring 75% support for industrial action among members, but those are decisions taken by the union within its own democratic structures, not imposed by the state.
Julie Elliott (Sunderland Central) (Lab)
Does my hon. Friend agree that many trade unions in this country also have internal procedures whereby they will ask for a higher threshold on certain ballots for strike action in order to make sure that the result is overwhelming, and well beyond what is legally required?
Stephen Doughty
I agree absolutely. I think that sits alongside the comments made by the hon. Member for Glasgow South West that the unions want to have a high turnout and that they want to be able to have as much confidence as possible among their members, because of the fact they cannot sanction members for not taking part in the industrial action as agreed. It is important to look at the German example, because statutory thresholds, as proposed by the UK Government, would actually be unconstitutional in Germany. We heard about international comparisons in the oral evidence, and the Bill, in so many respects—this is yet another one—puts us in a very serious place in terms of the international league of whether these measures restrict or infringe on long-established rights. Therefore, we will oppose the clause, because we think it is ill thought out, partisan, open to serious legal challenge, breaches the devolution settlement and will not do anything to better industrial relations.
Amendment 4 is a probing amendment that provides that the 40% threshold should only apply to those who are normally engaged “solely” in the provision of important public services or ancillary activities. We need to discuss this very important issue, and I hope that the Minister can enlighten us on it. The amendment is designed to highlight the problems that unions will face when trying to determine whether the 40% threshold applies. It is not clear whether individuals who spend only part of their time providing important public services will be covered by the 40% yes vote requirement.
Let us take, for example, education unions planning to ballot staff in a school with a sixth form, where they might be involved in the provision of education to young people of different ages. Trade union officials will find it very difficult to assess whether staff who teach both pupils aged under 17 and those in years 12 and 13 are “normally engaged” in providing “important public services”. That will be particularly problematic where teachers’ work schedules vary during the academic year. It is just one of the many implementation problems that I do not think the Government can have seriously thought through if they intend to proceed with the Bill as drafted.
Amendment 5 is also designed to encourage debate. It provides that the 40% yes vote requirement should apply to those employed in the provision of “essential public services” rather than “important public services”. As I have said, the Government’s proposed restrictions extend well beyond the definition of “essential services” recognised by the ILO. The Government claim that the proposed thresholds are justifiable because they do not introduce a complete ban—some would beg to differ—on the right to strike in “important public services”. They therefore argue that the ILO standards do not apply.
However, the Employment Lawyers Association warned the Government against introducing thresholds to services not covered by the ILO definition of “essential services” in its response to the BIS consultation on balloting thresholds. The response continued:
“ELA cautions that if the provisions”—
in the Bill and any accompanying regulations—
“are not drawn as narrowly as possible then the Government runs the risk of a challenge on the basis that the imposition of the raised thresholds infringes Article 11 of the European Convention on Human Rights. Any restrictions on the right to strike must not be greater than necessary to pursue a legitimate aim and…necessary in a democratic society.”
That is why it is important that we look at the ILO definition. It is very tightly defined, referring to public safety and so on. It is very clearly defined in terms of where things would be problematic. The Government are going well beyond that boundary. The ILO has criticised Governments who have introduced thresholds for industrial action ballots. The ILO committee on freedom of association has concluded:
“The requirement of a decision by over half of all the workers involved in order to declare a strike is excessive and could excessively hinder the possibility of carrying out a strike, particularly in large enterprises.”
The ILO has called on Governments who have imposed statutory thresholds to amend their national laws to bring them into closer conformity with the principles of freedom of association. Dare I make some international comparisons? The countries that it has gone after include Bulgaria, Honduras and Nigeria. Does this country really want to be in that territory? Not only are we going well beyond what a near neighbour in the EU—Germany—believes would be unconstitutional, but we will be putting ourselves in the league of countries that are being criticised by the ILO, such as Bulgaria, Honduras and Nigeria. That simply is not good enough.
I come now to amendment 6. The 40% yes vote requirement will apply not only to individuals directly involved in the delivery of important public services, but to individuals normally engaged in
“activities that are ancillary to the provision of important public services.”
As a result, hundreds of thousands of union members working in large parts of the private services sector are likely to be caught by the 40% threshold. The amendment would therefore delete the reference to ancillary activities. Again, it will be very hard to define and identify who is involved in such activities. The Government are clearly trying to apply the provision as widely as possible and certainly well beyond what the ILO would expect.
Further to amendment 5, amendment 9 would define essential public services in line with the ILO definition. We want the wording to mean
“services the interruption of which would endanger the life, personal safety or health of the whole or part of the population”.
We have some very serious issues for the Minister to explain. He needs to explain how these passages will be implemented. When we look at international legal comparisons, the potential impact of the measure, the breach that I referred to and the risk of legal challenge, we are experiencing many of the same challenges as we discussed under the last clause, and I hope that the Minister can explain his position.
Jo Stevens
We have heard numerous submissions in evidence to the Committee, both oral and in writing, that the Government’s definition of “important public services” is at odds with the definition of essential services used in international law, but if we go outside the legal technicality of this broad definition, there are many practical considerations to assess when it comes to important public services and I do not see that the Government have put any thought into those practicalities on the basis of the Bill as drafted.
Julie Elliott
It is a pleasure to serve under your chairmanship once again, Sir Alan. I want to speak in support of the amendments in the names of my right hon. and hon. Friends concerning the differences between “essential” and “important” public services. I totally agree with the comments from my hon. Friend, who has outlined the problems very clearly.
As written, these clauses unworkable in practice. Everything I have said so far in this Committee has been about the practicalities of the Bill and that is really where I want to start today, but before doing that, I want to talk about the definition of essential public services. It is a well established, well trodden path: everybody understands what it is. The Conservative manifesto and Her Majesty’s Gracious Speech both talked about essential public services. During our consideration of the previous group of amendments, the Minister said, “Of course, we respect the mandate of the commitments made in manifestos.” If that is what he believes, this flies in the face of it and is an absolute contradiction, so I would like to hear his comments on that matter.
The TUC is a representative body of 52 trade unions, most of which are not affiliated to a political party, representing almost 6 million people—the TUC expresses the views of a substantial body of people. On pages 2 and 3 of its written evidence, the TUC mentions that the Employment Lawyers Association
“has warned the government against introducing thresholds to services not covered by the ILO definition of ‘essential services’.”
The ELA clearly recognises that there will be problems with the definition. Page 3 of the evidence states:
“The TUC is concerned that the Bill does not define ‘important public services’. Instead the government plans to specify which workers will be covered by 40 per cent threshold in regulations. MPs will therefore have limited opportunity to scrutinise and amend new legislation which restricts the democratic rights of millions of UK workers.”
In oral evidence, Dave Prentis, the general secretary of the largest public sector union, Unison, talked about life and limb cover; but in their oral evidence some of the people who support the Bill did not seem to understand either what life and limb cover is or that it even exists. Dave Prentis’s evidence is highly pertinent. Once again, I feel that the Government are heading blindly into legal action. Recklessly changing the definition will cause major problems and ultimately could restrict, by the back door, the right of workers in the private sector to take what I regard as legitimate strike or industrial action.
The public sector has changed out of all recognition over the past 20 years. It now has substantial organisations, whether in local government, the national health service or other areas. There is a melange of different constructs, whether they are outsourced by contracts, let by bidding, that contain clauses with which some of this legislation might clash, or whether they are in arm’s length management organisations. Will people in cleaning services, for example, be deemed as essential or important, or will they be deemed as not important? Different cleaning services in a hospital might be treated differently. Someone who cleans a reception area might be treated differently from someone who cleans operating theatres. All of those things will come into the mix at every stage of every different industrial dispute. The cost implications have not been thought through.
It would be much safer, and would practically avoid the risk of litigation, if we stuck to the term “essential public services.” The Conservative Government have a mandate for that from their manifesto commitment and from Her Majesty’s Gracious Speech. The term is well defined, unlike the alternative in the Bill, which will be incredibly difficult for MPs to scrutinise and will restrict the right of many people to take industrial action. Almost inevitably, the result will be litigation, which will cost taxpayers money. Every time the Government go to court when they have not thought proposals through—we saw many instances in the previous Parliament, particularly in the energy sector, where the Government lost cases—the cost of that litigation returns to the taxpayers, who fund Government court cases. I urge the Government to consider these proposals carefully. Although we disagree with the Bill’s substance, these amendments would at least make the clause workable. Also, I look forward to hearing the Minister’s comments on his party’s manifesto.
Nick Boles
I thank hon. Members for their contributions. The amendments strike at the very heart of the Government’s objective in introducing a 40% threshold for strikes in important public services. I remind the Committee why we are introducing this measure. Nowhere is the impact of strike action more severe than when it takes place in important public services. The reason for that, and it is a thread that runs through all of the sectors listed as important public services, is that broadly—I accept it is not the case in every single detail—each of those services, as public services, operates as a monopoly in the lives of those who rely on it as users. That is not to say that, in time, people cannot put their children into a different school, secure an appointment with a consultant in a hospital trust outside the area in which they live, or find other ways to make the journey that they do every single morning and evening to and from work. It does mean, however, that when strikes happen, it is impossible for the vast majority of the British public who rely on those services to secure that alternative provision within public services. It goes without saying that the Border Force is itself a public monopoly—quite rightly so—and although nuclear decommissioning may involve contractors, thankfully we do not have competing nuclear commissioning regimes.
Where people and businesses rely on the services every day and where they have no choice of an alternative service provider, we believe that those services represent the important service sectors where the additional requirement of the 40% threshold is justified. That threshold ensures that strikes affecting services in those sectors can go ahead only when a reasonable level of support has been secured by the trade union. We are not banning strikes; the legislation is about making sure that enough members support the proposed action before it can go ahead.
The six sectors set out in the Bill as being subject to the 40% threshold have been chosen precisely because they are those where strike action has the potential to have the most far-reaching consequences for a significant number of people. Opposition Members discussed the difference between important services versus essential services. They are right that the ILO defines “essential services” and that that is an accepted definition, but it does so for the purposes of making it clear that it is therefore allowable to prohibit the right to strike in those services. The right to strike can be entirely prohibited in the sectors that the ILO has deemed to be essential, which include some but not all of the same sectors that we have listed—for example, firefighting services, the hospital sector, air traffic control, public or private prison services, electricity services, water supply services and telephone services.
Nick Boles
No, not at the moment. I will make my argument, and then I will be happy to take as many interventions as hon. Members wish to make.
Because of the ILO’s definition of essential public services as those where it is permissible to prohibit the right to strike we decided to clarify that clause 3 proposes not a prohibition or a strike ban but simply a threshold of support for a strike. That was intended to clarify that the services listed are not the same as those covered in ILO definition, but are important public services. To be clear, our manifesto named the four most important of those services to which clause 3 applies. We have an absolute manifesto mandate for the inclusion of fire, health, education and transport services. Since then, based on cross-government consultation, we have added border security and nuclear decommissioning. If Opposition Members want to argue that those two sectors are not important public services on which the public have good reason to rely, they are welcome to have a go. I accept that the sectors were not listed in our manifesto, but I feel pretty sure of what the public’s view will be of whether they should be included in the definition of “important public services”.
Jo Stevens
Can the Minister tell us when those regulations will be published?
Nick Boles
I have consistently made it clear that it will be before the Bill receives Royal Assent. I cannot give the hon. Lady the precise timing. We do not know the precise timing of the Bill’s further parliamentary stages, because that is not entirely within our gift, but the regulations will come forward before the Bill receives Royal Assent.
Stephen Doughty
The Minister has given a very convoluted explanation of why the wording was changed from “essential” to “important” public services, which does not bear scrutiny. Was it because he was worried that if he used the phrase “essential services”, it would be subject to legal challenge? On the point that my hon. Friend the Member for Cardiff Central has just made, will the Minister commit to publishing the regulations before the Bill leaves the Commons and goes to the other place? It is important that the public see them.
Nick Boles
It is always interesting to describe an argument one disagrees with as “convoluted”. My argument was not convoluted; the hon. Gentleman just disagrees with it. His argument was not convoluted either; I just disagree with him. I have made clear when the regulations will be brought forward—before Royal Assent—and I do not think I need to say any more than that.
I turn to amendment 4. In the modern economy, many people work in roles that encompass several different tasks and responsibilities, so it is likely that some workers who contribute to the delivery of important public services do not do so for 100% of their time. None the less, if such workers were absent during strike action, their absence would undermine the service. For example, a deputy headteacher might teach for only part of their time, spending the rest of the time on planning and management. That is why the Government propose to include all those “normally engaged” in important public services within the scope of the 40% threshold. We believe that that phrase is easy to understand and correctly encompasses those whose absence would adversely impact the public service.
On amendment 6, we have included so-called ancillary workers in the scope of the 40% threshold because they are often central to the operation of the important public services cited. For example, while hospital cleaners and rescue centre call staff are not front-line surgeons or firefighters, their work is critical to ensuring that front-line staff can deliver the service. Their absence can make the difference between the ability to run a service and it shutting down during the period of strike.
As I said, the Government consulted on these issues over the summer, and we are currently analysing the responses. That will help us in preparing the regulations, and I will take all views into account as we develop the secondary legislation to implement the detail of the threshold. For those reasons, I ask the hon. Gentleman to withdraw amendment 4.
Stephen Doughty
Although the Minister gave his explanation in funny terms, I find it unbelievable, quite frankly. It is a very convoluted reasoning. The reality is that the ILO defines essential services in a very restrictive way because the international legal consensus, and indeed the international human rights consensus, is that the right to strike and to freedom of association should be restricted only in very narrow cases. That is why it is a tight definition. It is intriguing that the Government have chosen to move away from that. They clearly want to expand the restrictions much more widely. I have already given the example of Germany, where such provisions would be unconstitutional.
I must take issue with the Minister’s unwillingness to give us a commitment on the publication of the regulations. He said that there was a consultation. Like all consultations on the Bill, it took only eight weeks rather than the usual 12. All the consultations were done over the summer to frustrate the input from sectors such as teaching, as many of the profession’s union members are away from school at that time. It is an odd situation, and a serious one for Parliament, that we are discussing severe restrictions on the exercise of people’s democratic rights, yet the Minister is saying, “Trust me. We’ll publish them. They’ll be all right. It’ll be fine.” The regulations should have been published alongside the Bill so that we could see what the Government intend. Is the Minister going to publish them 20 minutes before the Bill gets Royal Assent, if we ever get that far? That is simply not good enough, and I would like the Minister to consider publishing the draft regulations. We need to get some clearer intent before the Bill leaves the Commons, and certainly before it gets into the other place. For that reason I am keen to test the will of the Committee on amendment 5.
Chris Stephens
Is the hon. Gentleman as confused as I am? The hon. Member for Cardiff Central made a similar point about some of the services being covered under existing legislation, such as life and limb cover. I am beginning to wonder whether it is not just the Government witnesses who do not know about life and limb cover but the Government too.
In addition, does the hon. Gentleman not think that the 40% threshold is dangerous? The last time a Government introduced such a threshold they had a small majority and ended up out of power for 18 years. That might happen again.
Stephen Doughty
That is an intriguing historical example. The hon. Gentleman’s point is a good one. Large parts of the legislation have not been thought through and appear to have been drafted by people who simply do not understand how trade unions operate in the modern workforce. The witnesses the Government called forward certainly did not know that. As my hon. Friends the Members for Cardiff Central and for Sunderland Central have made clear, there are serious practical implications. I would therefore like to press amendment 5 to a vote, with the clear message that we believe the Government should stick to their manifesto and to their own Queen’s Speech, and stick to the definition of essential services laid out by the ILO.
In the case of amendment 4, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 5, in clause 3, page 2, leave out lines 6 to 8 and insert—
“the provision of essential public services.”—(Stephen Doughty.)
Question put, That the amendment be made.
Stephen Doughty
I beg to move amendment 14, in clause 4, page 2, leave out lines 32 to 34 and insert—
“(2B) The voting paper must state the trade dispute to which the proposed industrial action relates.”
The Chair
With this it will be convenient to discuss the following:
Amendment 15, in clause 4, page 2, line 32, leave out
“reasonably detailed indication of the matter or matters in issue in the”
and insert “description of the”.
Amendment 16, in clause 4, page 2, leave out lines to 38.
Amendment 17, in clause 4, page 2, leave out lines 39 to 41 and insert?
“(2D) The voting paper must state whether the industrial action is intended to be continuous or discontinuous.”.
Amendment 18, in clause 4, page 2, leave out lines 39 to 41 and insert?
“(2D) The voting paper must state whether the industrial action is intended to be continuous, and if so the intended date for any of the affected employees to begin to take part in the action or, if discontinuous, the intended dates during which any of the affected employees are to take part in the action.”.
Amendment 19, in clause 4, page 2, leave out lines 39 to 41.
Stephen Doughty
We now come to another area of the Bill where I believe that the Government’s true intent is to frustrate the rights of trade unions to take action, to provide grounds for vexatious legal challenges and essentially, in the words of Sara Ogilvie from Liberty, to make their rights “illusory in practice”. While some aspects of the Bill are designed to stop industrial action going ahead in the first instance, others are there to frustrate the industrial action that does go ahead. This clause is very much in the latter vein.
The hon. Member for Glasgow South West, who has briefly left the room, spoke powerfully in opposition to the Bill on Second Reading. He said that the Government were trying to tie up trade unions in blue tape, and I think he is right. Clause 4 will require trade unions to provide more information on the ballot paper, but unions are already required to ask members on the ballot about the type of industrial action they are willing to take—for example, strike action, action short of a strike, a work to rule and so on. Failure to comply with the clause would enable employers to apply for an injunction to stop the strike going ahead or for damages after industrial action has started. I am keen to see the burden and cost of Government regulation fall wherever possible, and the Government’s one-in, two-out rule is a good starting place. The Government’s own words in their statement online are:
“To reduce the number of new regulations for businesses, the government operates a ‘one-in, two-out’ rule. This helps prevent government policymakers from creating new regulations that increase costs for business and voluntary organisations.
Where policymakers do need to introduce a new regulation, and where there is a cost to business when complying with that regulation, departments have to remove or modify existing regulation(s) to the value of £2 of savings for every pound of cost imposed.”
As this is an example of a significant level of new regulation, I hope the Minister will rise to his feet and inform the Committee which two regulations applying to trade unions will now be removed. He does not want to do so at the moment; I hope he will come to that in his speech.
This additional blue tape and regulation risks making industrial relations in the UK worse, not better. With new regulation come additional risks of litigation, and to reduce that risk many unions are likely to include lengthy descriptions of the dispute on the ballot paper that go well beyond those defined in the clause. That will risk confusing members and confusing the issue when we should be having things as simple and straightforward as possible. It will also mean, in a similar vein to other parts of the Bill, that it is more difficult for unions and employers to resolve disputes and avoid the very strikes and industrial action that the Government say they want to avoid. Many unions may find it difficult to convince members that they should accept a settlement that does not deal with all the issues listed on the ballot paper. Unions may also be reluctant to reach an agreement on part of the dispute for fear that it will prevent future industrial action on other aspects of the dispute. Alongside the Government’s wider proposed changes—lifting the ban on the use of agency workers, for example—that will unbalance workplace relations, assisting employers to plan for future strike action by lining up agency staff.
I ask the Minister to explain why, if the Government’s stated intent to reduce regulation and avoid costs is as defined on their website, it is one rule for the business and voluntary sector and another for the trade unions. The effect of the clause will be to introduce a level of regulation that ties unions up in blue tape and causes a whole series of effects for them.
Ian Mearns
The principle that my hon. Friend is outlining is solid. The Government have a hard and fast “one in, two out” rule for business regulation. When organisations such as the Federation of Small Businesses do consultations, their members say they would like less regulation but the organisations cannot put their finger on what they would like to get rid of. Things that would be difficult to get rid of normally come top of the list—VAT returns and health and safety regulations, which protect the employers as well as the employees in many respects. I am wondering whether my hon. Friend can tease out from the Minister what regulations on trade unions he would get rid of in order to impose this set of rules on them.
Stephen Doughty
I would be very interested to hear what the Minister has to say. The whole Bill seems to be about creating additional burdens, which will, quite frankly, make illusory a lot of the rights that trade unions and their members—ordinary workers up and down the country—enjoy at the moment and put those people at serious risk of not being able to execute those rights.
Let me turn to the amendments, which have been tabled to encourage debate. We will decide whether to press any to a Division when we have heard what the Minister says. Amendment 14 would require unions to state on the ballot paper
“the trade dispute to which the proposed industrial action relates”,
but they would no longer be required to provide a detailed description of “every aspect of the dispute”—that very amorphous term that the Government are using.
Amendment 15 would require unions to provide a description of the trade dispute, rather than a
“reasonably detailed indication of the matter or matters in issue”.
In general, reducing and simplifying the information about the dispute that unions are required to provide on the voting paper would assist in the earlier settlement of disputes. As a result, workers would return to work faster. Disputes would be less likely to escalate, and there would be fewer legal challenges, reducing costs for employers and unions. That is an important point.
The Bill is muddying the waters around straightforward and transparent processes that already exist. Essentially, we are providing a very big space for the lawyers’ hands to come in and for a lot of cost to be expended on behalf of business, the public sector and trade union members. We should avoid legal proceedings wherever we can and encourage arbitration, negotiation and the reasonable settlement of disputes without recourse to the courts. All the proposals in the Bill will increase costs for all the parties involved.
Amendment 16, approaching things in a different way, would remove the requirement to describe the types of action short of a strike on the ballot paper. Amendment 17 would remove the requirement on trade unions to specify the timetable for different forms of action. Instead, trade unions would be required simply to state whether the proposed action is continuous or intermittent, which is perfectly reasonable. That would clearly set out whether it would be one long piece of industrial action or one with numerous parts to it.
Amendment 18 would remove the requirement on trade unions to specify the timetable for different forms of action. Instead, trade unions would be required to state when the industrial action was scheduled to start—in principle, that is reasonable—and when any discontinuous industrial action would come to an end. If we are going to start requiring unions to set out detailed explanations and timetables on how they will conduct the action and so on, action may be stirred up at earlier stages in disputes and people will be encouraged not to seek arbitration and reconciliation. Instead, conflict will be encouraged. Amendment 19, taking a slightly different approach, would completely remove the requirement on unions to specify the timetable for different forms of action.
The amendments are intended to tease out of the Minister how he sees this part of the legislation operating in practice and make him justify why it is necessary. Balloting is already a straightforward process. It is already clear what people are voting on and what types of action are being proposed. This part of the Bill simply seeks to muddy the waters and may result in a lot of expensive litigation.
Jo Stevens
I rise to speak in opposition to clause 4 and in support of amendments 14 to 19. From reading the clause, the Government appear to think that trade union members are not capable of understanding what they are voting on in a ballot on industrial action. That is a patronising attitude to working people, who do not lightly take industrial action; they consider carefully what they are voting for. They understand the issues. There is not one single shred of evidence of union members saying that they did not understand what they were voting on or why.
The Government propose changes to the law that will turn an industrial ballot paper from a succinct statement with a yes or no question to something resembling a legal disclaimer. The Chartered Institute of Personnel and Development has said that the proposals are “counterproductive”. Employers’ lawyers have said that the proposals are vague and unworkable and that they will lead to legal challenges and expensive litigation. No one wants that—apart from the Government, it would appear.
As my hon. Friend the Member for Cardiff South and Penarth said, the purpose of the proposals appears to be to encourage court cases by employers. Witnesses to the Committee have said that they are not about information for union members, but ammunition for employers. Looking at the detail, the ballot paper must include
“a reasonably detailed indication of the matter or matters in issue in the trade dispute”.
What does that mean? It has been criticised by lawyers across the spectrum for being so uncertain as to be meaningless. What is “reasonably detailed”? It is an oxymoron and it is contradictory. How will both sides of industry know whether something is detailed enough to be “reasonably” detailed or regarded as too detailed? Unions and employers will be in court every single time. What is “an indication”—a nod or a wink? This is not the language of statute, and I wonder whether it might come from the Prime Minister’s nudge unit. Anyone with any experience of industrial relations will know that the question of what is in issue in a dispute is often a matter of disagreement. This wording will further add to legal challenges.
The next requirement imposed by the Bill is to state
“the type or types of industrial action”.
What does that mean? We heard in evidence to the Committee that even Government lawyers themselves cannot explain it. The current definitions of “strike” and “action short of a strike” have been clarified by case law and amendments to statute over the years. They are now clear and well understood, so what are the “types” of action the Bill refers to? We are told that they include an overtime ban, for example, and work to rule, but those are not legal terms of art. Again, this will lead to expensive litigation and legal wrangling in the courts.
Finally, the union must state on the ballot paper
“the period or periods within which the industrial action or…each type of industrial action is expected to take place.”
Why should a union be required to state that information at the stage of the ballot, weeks before any action could lawfully take place, when they must in any event give notice of dates of action after the ballot is completed and before action takes place? The intention behind every single one of these provisions is to set legal traps for unions so that employers can run off to court and get injunctions to stop legitimate action.
Employers, however, do not want the provisions either. They fear the consequences. Employers’ lawyers have said they are concerned that unions will have to draw the descriptions on the ballot paper as widely as possible to give themselves legal protection. Unions will have to include every possible type of action they might take and set out every day on which they might take each type of action.
What is more, employers’ lawyers fear that to avoid legal challenges, unions will have to stick to every single detail spelled out in the ballot paper. They will not be able to resolve any issues in the dispute unless all issues are resolved, otherwise they will face legal challenge. They will have to take every type of action specified and on every single day specified, otherwise they will face legal challenge. How on earth is that supposed to reduce the number of disputes that take place? It will simply increase them.
Disputes will escalate. They will become more entrenched and more difficult to resolve, all because of these changes. That is why the CIPD says that the proposals are a “significant step back” that will “harden attitudes”. I invite the Minister to withdraw them, but if the Government persist with these counterproductive proposals that no one wants, they should be amended as we propose.
Nick Boles
I am pleased that the hon. Lady gives me the opportunity to set out in more detail what sort of information we expect unions to include on the voting paper. I fear this may take a little time, but I want to address all the amendments tabled and why we will resist them.
I will start with first principles. We want unions to be absolutely clear with their members about what they are being asked to vote for, in order to ensure full transparency in any industrial action ballot. It is clearly in the interests of union members, as well as employers and the wider public who are affected by strike action, that those being asked to vote for such action can make a fully informed decision about whether to back it.
I remain concerned that merely requiring a trade union to state the trade dispute without requiring any further detail, as suggested in amendment 14, would not meet the objective of enabling members to make a fully informed decision. It would only require a very broad statement. In reality, it will in most cases mean that members have no more information about the dispute than they have from wider communications. It does not provide enough clarity for union members to determine whether they choose to support industrial action. That cannot be right or democratic.
Nick Boles
I will continue for a second and then give way to the hon. Gentleman; I owe him one, because I did not see him trying to intervene earlier.
I have a couple of actual strike ballot papers in front of me. They are quite hard to get hold of, so I have not got a huge number. On one, the only statement on the paper was “impact of redundancies”, which did not clarify in which workplace, which group of employees was affected or when the strike was proposed. That ballot paper provided a very vague, short description. Another ballot paper provided a vague but incredibly broad statement about
“adverse changes to pensions, workload, conditions of service, including pay and pay progression, and job loss.”
Neither statement is particularly helpful to those voting on the ballot because not enough information is given about when that dispute would be resolved, so that is not obvious to the person voting. Being told the location of the site of the affected workers would not necessarily help members to know what matters are at issue, and neither would knowing that the dispute is about pay, for instance.
Let us not lose sight of the potential wider benefits of the proposed change. As now, the employer will receive a copy of the voting paper, so including better information about why the industrial action is proposed should have the added effect of helping to eliminate any misunderstanding, which can creep in in such circumstances, between unions and employers about exactly what issues remain in dispute. In turn, that should facilitate employer discussions with the trade union about how the dispute might be resolved, where possible without recourse to industrial action.
Turning to amendment 15—
Nick Boles
Of course. I was ploughing on and I did not mean to forget the hon. Gentleman. It is only because he is outside my peripheral vision—
Chris Stephens
If the Minister wants to access other ballot papers, he should join a trade union. In my experience, when a ballot paper is issued, the trade unions are allowed to insert a sheet of paper that sets out fully the issues in the trade dispute, so why is the clause necessary?
Nick Boles
I would simply say that if they all do that, and I agree that that practice is welcome, it should hardly be difficult just to provide a few more details on the ballot paper so that when somebody’s vote is decided, it is clear what they have voted for or against. I promise Opposition Members that from now on there are no blinkers on this Minister, as I am sure that they will be happy to admit.
Let me explain why we have used the words “reasonably detailed”, because the hon. Member for Sunderland Central in particular thought that was a mistake. That specific form of words is used in clause 4 to take into account the particular circumstances of each trade dispute. If there is any more detail that a union could reasonably give on the ballot paper, the requirement is not satisfied. For example, if the issue is identified simply as “pay”, it may well be right to say that there are further details that the union could have included. Those details might include which year’s pay offer is in dispute, and which employees are covered by the offer. Again, that links back to our overall objective to ensure that unions provide clarity to their members about what they are being asked to vote for so that there is full transparency in any industrial action ballot.
We think it is much more helpful to union members if a trade dispute that affects them in different ways is articulated in sufficient detail so that everyone knows the point on which they are being asked to make a decision on industrial action and how each individual is affected by the trade dispute. However, we do not want to put unnecessary burdens on unions by asking them to include a long and detailed account of the trade dispute. That would be onerous and would dilute the very clarity that we are seeking to provide. That is why the clause does not require a “reasonably detailed” description of the trade dispute. It is about balance, and the Bill as currently drafted best achieves that.
Amendment 16 would not assist members to understand what type of action they are voting for. That is particularly important because there is no definition of action short of a strike. If we do not require a trade union to state on the voting paper what specific type or types of action it is proposing, a member will not know what action he or she is being asked to back. Even stating that the proposed action is action short of a strike does not help members to make a sufficiently informed decision, because there are various types of action that amount to action short of strike. Just using that phrase will not help members to understand what they are voting for. For example, a member may support industrial action that amounts to an overtime ban, but not a period of work to rule. If the voting paper does not specifically state which of these actions the union proposes its members take, how will they know how to vote?
Having said that, I appreciate the point the hon. Gentleman made about there being a degree of uncertainty at the stage when the union is drawing up the voting paper about how the negotiations will continue to play out and therefore what action the union might subsequently take. Nevertheless, if the union has reached the stage at which it is asking its members to support a ballot for industrial action, it must surely have in mind a plan for such action. All we are asking in new section 229(2C) is that the plan should be disclosed to the union members. I do not believe that is unreasonable.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
The Minister gave work to rule as one example of action short of striking. Can he define what work to rule is?
Nick Boles
My understanding is that it is working to the contractually committed hours and not being willing to work beyond those or in a different place, perhaps, than contractually committed. I am sure I can provide the hon. Gentleman with the legal or commonly accepted definition, but that is my understanding.
Nick Boles
I do not think it is my job to apply it to any particular workplace.
Seema Kennedy (South Ribble) (Con)
Does my hon. Friend agree that the clause is about giving certainty to all involved in business: the employers and the union members, the people who are voting? I draw the Committee’s attention to the submissions of Dr Marshall and, in particular, David Martin, who said:
“Communication with the workforce is fundamental”.––[Official Report, Trade Union Public Bill Committee, 13 October 2015; c. 16, Q42.]
The clause is a sensible evolution in the legislation and is just about ensuring clarity for all involved.
Nick Boles
I thank my hon. Friend for her intervention; she is absolutely right. In a sense, the hon. Member for Middlesbrough South and East Cleveland has, perhaps unintentionally, made my argument for me—I do not have to understand what is proposed on every single ballot paper; I am the mere Minister in this. The people who have to understand it are those being asked to vote on whether to strike—which, if they choose to, will have huge direct personal effects on those being asked to strike, as hon. Members have pointed out—or being asked to co-operate with an overtime ban or anything else. It is they who need clarity about what is being proposed, and that is all we seeking to ensure.
Nick Boles
I am not giving way again; I need to make some progress.
On the period for proposed industrial action, a union member may be fully supportive if he or she knows that it would take place in late November or early December, but not if it was to take place, say, over the Christmas period. Trade union members may want to consider the proposal in relation to their personal circumstances, as well as their work. Amendment 19 would simply not meet that objective, because it would preserve the current situation, in which there is no requirement whatever to provide any information in the voting paper to union members about the timing of industrial action.
I have similar concerns about amendment 17. Simply knowing whether industrial action is to be continuous or discontinuous, without any further information about timing, does not help a member to understand when such action might take place. Indeed, I doubt whether the words “continuous” and “discontinuous” in the context of industrial action mean very much to a lay person. Surely it is the time period that is the key to ensuring that members have clarity about when action is due to take place. Of course, it is also important that employers know whether the proposed action will be continuous or discontinuous. That is why the notice of industrial action, which a union must provide to an employer under section 234A(3)(b) of the 1992 Act before taking such action, must include a statement to that effect. Crucially, however, that notice must also contain details about the intended dates for such action. Indeed, that is its purpose: to tell the employer exactly when the action will happen. That is in contrast with proposed new section 229(2D), which requires a union only to provide an indication of when the expected industrial action would take place, not a specific date or set of dates.
That brings me to amendment 18. To require a union to state whether the industrial action is intended to be continuous and to state the intended dates would be to require it to specify a particular date on which the action is to start—for example, from 15 October. That would be very restrictive; indeed, it is much more prescriptive than the requirement under clause 4, which, in this example, would just be to indicate the period of industrial action as being in, say, October. That would give a union the flexibility to start such an action on, for example, 1 October, 15 October or 25 October, and for it to last for, say, one day, one week or longer—subject, of course, to the union providing 14 days’ notice to the employer and the action taking place within the four-month time limit of the mandate.
I have even more concern about a union’s ability to meet the proposed requirement to specify that the action is discontinuous, together with the intended date for such action. That combination of words would effectively require a union to state up front and before it has even secured a mandate for action the precise dates on which such action is planned or intended. It would be much more difficult for a union to predict such dates so far in advance, and they may well turn out to be unreliable. For example, if the union finds that it does not want to take action starting on or specifically on those precise dates because negotiations are ongoing, it would no longer have a ballot mandate. The dates would need to be reliable or the union would risk misinforming members. Making a union set out its plan in such detail, so early, means that the dates would be very likely to change.
Having said that, let me be clear: it is entirely reasonable to require a trade union to specify that the action is discontinuous, together with the intended date for such action, at the point when it is serving notice of intended action to the employer under section 234A(3)(b) of the 1992 Act, as is the current position. However, to suggest that a union should articulate the precise dates on which it will take particular action so much earlier in the process is an entirely different proposition, and one I cannot support for the reasons I have outlined. I therefore urge the hon. Gentleman to withdraw the amendment.
Stephen Doughty
The debate has been interesting. As the Minister will appreciate, the role of the Opposition is to table amendments to expand on a series of issues, not necessarily to push them all to a vote. The debate has been helpful in eliciting from the Minister various responses about the intent behind clause 3.
I listened carefully to what my hon. Friend the Member for Cardiff Central said about the concerns of the Chartered Institute of Personnel and Development and employers’ lawyers relating to the clause. I agree with her that, in many respects, the clause, the Government’s intent and, I would gently say, some of the Minister’s comments can be seen as patronising to trade union members. The suggestion that there is widespread ignorance about the disputes on which members are balloted and that they are somehow under the Jedi powers of their union steward masters is a fantasy. If Members speak to any ordinary trade union member or person affected, they will find that people are very clear: they know what issues are affecting their pay and pensions.
Tom Blenkinsop
In most unions, by the time strike action is taken, a local dispute will usually have been taken to a regional level, and if the matter was not resolved at a regional level, it will have been taken to a national level. That is certainly what happens in large private industry, particularly the steel industry. I imagine that there are such cultural norms in most trade unions.
Stephen Doughty
I completely agree. It is important to recognise something that Government Members seem to have lost in this debate: the vast majority of trade union members and workers, whether in public services or the private sector, will seek to resolve disputes through very reasonable mechanisms, such as talking to line managers, colleagues and others in the management of a firm or public service, before they reach the stage of even contemplating industrial action or disputes. Most people act in a human way and want to resolve things as easily as they can. It is only when frustrations build up and concerns are not listened to—for example, on health and safety or fundamental disputes with the Government about restrictions on pay or pensions—that things reach the point where industrial action is considered. I say gently that the Government do not appear to understand how things operate in practice.
Chris Stephens
The hon. Gentleman will have heard me ask the Minister about an insertion that goes out with the ballot paper. Can he think of an example of any trade union that would not include with the ballot paper an insertion fully stating the trade dispute?
Stephen Doughty
Indeed, I can barely think of any possible examples in which a trade union would not explain the progress of negotiations and what might be going on and feed back to its members what is happening in a workplace.
Tom Blenkinsop
As a former trade union officer with the Community trade union, I was part of the National League of the Blind and the Disabled section, which deals with blind and disabled workers who work in Remploy factories—
Tom Blenkinsop
Sadly, that is right. My section also dealt with blind and disabled people working in sheltered workplaces, including at Ayresome Industries in Middlesbrough. As well as union officers, the unions brought in, over a prolonged period, signers and Braille writers to ensure that those employees were informed of the situation and the exact nature of any dispute.
Stephen Doughty
That is a very important example. The Minister selectively looking at a couple of ballot papers proffered to him by his officials is simply not reflective of the wide degree of communications and engagement that will go on when trade union members—workers in a firm or a public service—are considering industrial action. It goes back, again, to the point made by the hon. Member for Glasgow South West: why would trade unions want to be hoodwinking people into action? How would they then convince them to take part in it? It is just nonsense.
Ian Mearns
This is a very important point. Surely, in an industrial dispute there are people who will agree down the line with the union stance, others who are more ambivalent and some members who are against. When a union informs its members and updates them about what has been transpiring in the course of a dispute, members who are against taking industrial action will pass on any misinformation from their union to an employer and the employer will undoubtedly take legal action against the trade union for misinforming the workforce. Therefore, we are clearly seeing a measure here which is not necessary.
Stephen Doughty
My hon. Friend the Member for Gateshead makes a very good point. Also, as I said, the amendments encourage some clarity from the Government on the issue of timetables. I think the Minister said that—surely, they have in mind a plan. Actually, most trade unions operating in a dispute are trying to find a resolution from the start: industrial action is a last resort. We have to say that again and again. I imagine that in many circumstances there is no plan—they are hoping that management or Government, whoever it might be, will come forward with a reasonable solution through means other than industrial action to solve a dispute.
Julie Elliott (Sunderland Central) (Lab)
Does my hon. Friend agree that the whole premise of the Government’s argument about this part of the Bill comes from a belief that the unions are very top-down, imposing what is going wrong in the workplace, or what workers have a problem with? Whereas actually, the reality of industrial disputes is that problems arise from the bottom, from something that union members are not happy with, which the union officials are trying to sort out and resolve. If that fails, it is the union members that pressure for industrial action, often as a result of consultative balloting in the first place.
Stephen Doughty
That is exactly the point. Indeed, as with many other parts of the Bill, it looks like it has been drafted by people who simply do not understand how trade unions operate in a modern industrial setting. It is based on assertions, ideas and myths that have been created, often by the Minister’s colleagues. I remember the Minister for the Cabinet Office using some very colourful language in this area. It does not reflect actual practice and I hope, given that the Minister is trying to set out the case for this, that he will explain whether the Department has received widespread, conclusive evidence of ignorance, with people writing in saying, “We don’t understand what’s going on, the Government must legislate”. Where is the demand for this legislation, other than in the theoretical towers of Victoria Street?
With that, I seek the Committee’s view on amendment 14 and the wording of disputes on a ballot paper. Also, in the spirit of wanting to encourage the Government to foster negotiation and allow the maximum time to achieve resolution of disputes, I wish to press amendment 19, which would remove the requirement for timetables altogether, to a vote.
Question put, That the amendment be made.
Stephen Doughty
I do not intend to detain the Committee long on the clause because we have discussed part of it, but I do want to raise a couple of points. Under section 231 of the 1992 Act, trade unions are already required to inform members and relevant employers about the results of ballots—how many votes were cast, how many members voted yes and no, and the number of spoilt votes. Clause 5, as we have said, would add to the information that trade unions are required to include. They would be required to inform members and employers of the number who were entitled to vote in the ballot, whether the number of votes cast reached the 50% turnout requirement, and, if the 40% threshold applies—although, of course, we have no idea where that will apply at the moment—whether that was met.
As with many measures in the Bill, and as I outlined in the debates on previous clauses, the Government are simply seeking to introduce additional administrative requirements, which are unnecessary and designed to disrupt and deter trade unions from effectively representing their members. We will oppose this clause, for it is another example of that blue tape which, if it were proposed for any other organisation, would rightly be regarded as needless bureaucracy, and I am sure the Government would be wanting to call it out as such.
Question put, That the clause stand part of the Bill.
Stephen Doughty
I am getting more and more tied up in the Government’s blue tape. Much like clauses 4 and 5, this clause is designed to deter and disrupt trade unions by burdening them with additional requirements.
I am sure that we will have at a later stage an extensive discussion of the role of the certification officer, given the clauses and provisions through which the Government are attempting to expand it. This clause also touches on that issue because it will require trade unions to report to the certification officer on whether industrial action has taken place in the last 12 months, the nature of the disputes, what action was taken and the turnout and ballot results. If trade unions fail to comply, they may face severe financial penalties. Not only does this measure create significant new administrative burdens for trade unions, which do not necessarily gather those data centrally, but many are rightly asking why this new duty is necessary and what purpose it will serve.
As I hope members of the Committee know, though I am sure they will be enlightened at later stages, the certification officer is an independent agency with responsibility for regulating trade unions and employers’ associations. I am concerned, as are others, including some who spoke to the Committee during the oral evidence stage, that the role of the independent certification officer risks being politicised in a wide range of ways through the Bill. This is just one of them. I would like some assurances from the Minister, even at this stage, that the Government are aware of those concerns. Will the Government seek to ensure the integrity and separation of the certification officer? We have already heard how the role will be blurred between investigator, manager of data, executioner of orders and many other things, blurring all the principles of natural justice. It would be good to hear some assurances from the Minister.
This comes down to whether the Government think it is appropriate that an agency of the state, albeit a currently independent one, should gather detailed information about private disputes between employers and unions. Although trade unions have been vocal in their opposition thus far, I believe that many businesses and employers, if they were aware of the full implications of this clause, would object to detailed information about their workplace operations being published online and a permanent record of disputes being retained. We all know about the media organisations that harvest as much information as they can from centrally published databases and so on. I suspect that quite a lot of mischief could be caused by attempting to portray certain employers in ways that I think they would feel uncomfortable with.
Ian Mearns
That is an important point. Many employers will reflect that this would not do them a great deal of good in the public gaze. Strikes are often—almost without exception—symptoms of poor industrial relations within the workplace. Many employers, where those industrial relations have broken down to such an extent, may be rather concerned to find that the Government are proposing that detailed information about their workplace operations will be open to public scrutiny. That may well not be good for the very people that the Government are trying to protect here: businesses.
Stephen Doughty
I thank my hon. Friend for that very important point. While we heard oral evidence from the CBI and the BCC on a range of issues, they did not seem to be as strident and as certain in their views as on other aspects of the Bill, despite this potentially having a significant impact on businesses and employers. It would appear, I have to say, that their formal consultation with their members was perhaps more limited than one would expect for organisations that seek to represent industry and businesses up and down the country. I find that quite surprising, given the impact that this could have on disclosing information.
Jo Stevens
Perhaps I can help the Committee because, before I came to this House, I conducted industrial relations on behalf of the business of which I was an owner with a recognised trade union. I would certainly not have wanted detailed information about the disputes, very few of which took place over a 26-year period, to be publicly available online for anyone else to see. This raises not only issues of reputation and industrial relations between businesses but also issues of commercial sensitivity that would adversely affect businesses. I am sure that is not what the Government want.
Stephen Doughty
I completely agree. Many businesses and employers would have concerns if that were a consequence, unintended as it may be, of the legislation. There are some fundamental issues at stake in terms of the confidentiality of these types of dispute and the potential that this will prevent negotiations and concerns being dealt with in the most sensible, consensual and private way to come to a resolution.
Ian Mearns
We can imagine a situation where industrial relations have broken down to such an extent that, in order to embarrass an employer, the wording on the ballot paper and the information alongside it, given the detailed nature of many industrial disputes, could be written in such a way as to create commercial problems for a company. Would my hon. Friend agree? The role of the certification officer in publishing this information could also have a detrimental impact if confidential commercial information were directly related to an industrial dispute.
Stephen Doughty
Indeed, and it would be a strange situation were we to find a Minister in a future Committee sitting able to find many examples of ballot papers to read from, casting all sorts of aspersion on the conduct of businesses in industry and the public sector up and down the country.
Tom Blenkinsop
A potential example that we would certainly not want documented or in the public view is a trade union dispute between GCHQ and its employees. Would the Government really want that information published?
Stephen Doughty
I can think of all sorts of other examples. Again, the implications of this do not seem to have been properly thought through. Will the Minister briefly comment on who has requested this? Who has said they want this? Have employers, businesses and public servants up and down the country been banging on the Minister’s door saying, “We want this information out there in the public domain,” as the Bill would require?
This would not only add to the regulation of trade unions and the implications for employers; new powers for the certification officer would inevitably be followed by additional costs. The wide extension of the certification officer’s power will have significant fiscal implications. What assessment has the Minister made of the likely cost implications of the certification officer having to gather this additional information? Will it come from existing budgets, will new moneys be provided or will it be cost-neutral?
In any other sector, I am sure the Government would attack such burdensome regulations as needless officialdom that should be done away with in a bonfire of bureaucracy. Does the Minister agree that legislation affecting trade unions should be held to the same standards?
Nick Boles
There the hon. Gentleman goes again with his blood-curdling language. I have been described as introducing “an executioner” of trade unions. The simple truth, as ever, is a lot duller: we are just trying to beef up the certification officer’s role so that it can be a modern regulator of trade unions.
The certification officer will have no greater and no more expansive powers than other regulators—indeed, rather less in some examples. We also want more transparency for everyone about industrial action undertaken by unions. Effective regulation and transparency help to improve confidence in how institutions are run, which can only be a good thing. It is slightly surprising to hear the hon. Gentleman and his colleagues argue against transparency, as if somehow the public interest is better protected by keeping things secret. That is a surprising position for the Opposition to take.
We will discuss the detail of the certification officer’s role later, and I do not want to anticipate that. This debate is about the information that trade unions are required to provide to the certification officer about industrial action. That is an important requirement, because the timely provision of good quality information is a key component of ensuring effective regulation. It gives more confidence to those affected by industrial disputes, which is of course why trade unions are already required to provide certain information every year to the certification officer. That is set out in section 32 of the Trade Union and Labour Relations (Consolidation) Act 1992 and annual returns submitted to the certification officer are already available for public inspection. I do not remember any proposal coming forward from the previous Labour Government to alter the fact of those annual returns or of that availability. If industrial action is taken during the period of the return as a result of a successful ballot called by a union, the clause requires that union to include certain information about the action in its annual return to the certification officer.
Jo Stevens
Can the Minister tell the Committee who exactly has asked for the provision? We are not aware of anyone, neither employer nor union, who has asked for it.
Nick Boles
I have news for the hon. Lady: the Government sometimes act because they have received a mandate—and a majority—at a general election on a clear proposal in their manifesto. That clear proposal was to reform the role of the certification officer. The Government have also, during the term of the coalition Government, had a longstanding commitment to transparency in the public interest and we are not ashamed to continue that in the clause.
The union will need to provide details about the nature of the dispute, the nature of the industrial action and when the action was taken, as specified by clause 4. One of the ways in which we seek to achieve a more effective role for the certification officer is by ensuring that he has full information about any industrial action proposed and taken by a union. We want to achieve that through increased transparency in the annual return to the officer. The clause also requires a union to provide the certification officer with details of the outcome of any ballot for industrial action, if the union has called a ballot during the period of the annual return. That requirement applies whether the ballot was successful or not.
Accurate information presented in a transparent manner about industrial action proposed and taken by a union helps to demonstrate to union members, and to the wider public, that unions are properly regulated and fully accountable for their actions. I commend the clause to the Committee.
Question put, That the clause stand part of the Bill.
Stephen Doughty
If the administrative burdens—all the blue tape—were not already sufficient to halt industrial action, make the rights of trade unions illusory and disrupt the activities of their members, and even though the ballot thresholds are rarely used elsewhere in our democracy, the Minister has yet another legislative weapon in his armoury to render the campaigns in the run-up to industrial action, which are often used to seek agreed settlement and avert strike action, impotent. Clause 7 seeks to extend the notice period that unions must provide to employers before industrial action can take place from seven days to two weeks. That is excessive and unnecessary, because trade unions are already required to provide at least one week’s notice of a ballot, allow at least two weeks for the ballot and then announce the result before giving two weeks’ notice of action. In practice, at least five weeks will pass between the start of a balloting process and any industrial action.
It is important to understand that, because the actual practice, rather than the academic approach that the Department appears to be taking to trade union activities, is what matters. Members of the Government gave all these examples in their oral evidence of people being able to prepare for disruption and everything else. Obviously those of us on this side of the Committee would want people to have the maximum amount of information and awareness with which to do that, but five weeks is a long time. Of course, in most industrial disputes such things would have been under discussion for some time. There would be an awareness of tensions and potential problems. There may have been consultative ballots in the past and evidence that there may be disruption. Industrial action is always a last resort.
Ian Mearns
My hon. Friend is making a powerful point. Clause 4 has been agreed by this Committee, and is therefore likely to go forward to Report. The important point is that, because of clause 4, employers will be informed of the proposed start date of the industrial action when the people involved in the ballot receive a copy of the voting paper. The notice is already in the Bill, so this is yet another unnecessary measure.
Stephen Doughty
I absolutely agree. In fact, I was just about to make that very point. Because of clause 4, employers will know when industrial action, if it is agreed upon, would start before the ballot is run. The information is there. There is already the five-week period, which is lengthy, and most people would consider it reasonable. Again, I believe that this measure belies the Government’s real intent. In my view and the view of the Opposition, the extended notice period will serve no legitimate purpose other than giving the employer additional time to organise the agency workers that the Government want to allow them to undermine the strike or industrial action, and to prepare for the legal challenges and the lawyers’ charter that the Bill provides.
Seema Kennedy
The hon. Gentleman and his colleagues have made great play of the fact that Government Members have very little experience of trade union activity. Personally, I accept that; I do have not very much. But I do have experience—as does my hon. Friend the Member for South Suffolk—of running a small business. There is cost, inconvenience and, most importantly, damage to the employee’s goodwill when they go to law. The idea that we are all rushing off to lawyers is a misunderstanding, certainly of what I would have done as an employee and of what the majority of British businesses do.
Stephen Doughty
I regularly speak to many small businesses up and down my constituency. I have a very positive relationship with them, and I have a good degree of understanding of the challenges they face. As I have repeatedly said in this Committee, we want to avoid situations in which industrial action takes place. That is not under dispute in this debate or in our discussion about the whole Bill, but we believe the Government are going too far on the restrictions on reasonable rights.
Jo Stevens
Is it not the case that the litigation to which the hon. Member for South Ribble referred is actually brought by employers, not by employees or trade unions? It is employers who bring injunctions against industrial action.
Stephen Doughty
My hon. Friend speaks with a great degree of legal experience and expertise from her previous career. That is indeed the case, and it is a very important point to make. I believe this is just a case of providing opportunities to undermine, rather than seeking resolution and negotiation in a consensual manner. It again provides the potential for protracted disputes, which means that amicable settlements will be more difficult to achieve. If the Government were serious about promoting positive industrial relations, dialogue, agreement, conciliation and arbitration, they would not simply be extending time, which is already extensive, on the basis that people will be shocked if there were a tube strike tomorrow. People know well in advance if such things are happening, and it is deeply patronising to suggest otherwise.
Nick Boles
We recognise the important part that negotiations play in reaching resolution of disputes between unions and employers. Even where such negotiations have been ongoing for some time, reaching the point at which a union serves notice of an intention to take industrial action signals to an employer that the matter has now escalated to a critical level. With a valid ballot mandate having been secured—which in itself is a prior signal that the matter is escalating—serving notice is the last stage in the process before a union can take industrial action. It is therefore also the employer’s last opportunity before the industrial action takes place to reach a negotiated solution. This is when continuing dialogue between the parties becomes even more important.
We recognise that, which is why the clause allows a longer period of time during which the trade union and the employer can discuss and strive to reach an agreement on how best to resolve the dispute without recourse to industrial action. That is why in clause 8 we are also removing the need to take some industrial action within four weeks of a ballot. A negotiated settlement is best for the employer, the public, the union and its members, and we are keen to promote every opportunity for such discussion to take place.
Ian Mearns
Does the Minister accept that intransigence and the refusal to negotiate in a proper manner by employers is also a form of industrial action?
Nick Boles
I am realistic; I understand that there are times when unions feel they have no option but to take industrial action. As I have said, nothing we are doing is stopping that, but let us not lose sight of the scale of disruption that strikes can cause, not only for employers, but for members of the public. It is only right that those whose lives are affected are confident that the legislation provides every opportunity to avoid such disruption, if at all possible. Providing a longer period of time for the notice of the intention to take action is an important part of that process.
Some unions must agree with that, because there are instances where they have chosen to give two weeks’ notice voluntarily, such as in October 2014, when nursing staff provided more than three weeks’ notice of a half-day strike. It is only fair that employers and members of the public who rely on services have the certainty of having a decent amount of time to make contingency arrangements and that both parties to a dispute have more time to continue negotiations. I therefore commend the clause to the Committee.
Chris Stephens
I am still debating in my head whether the clause is insidious or whether, again, it relates to the Government’s view on Jedi-like powers. This morning we discussed trade union officials having Jedi powers to convince trade union members who did not participate in the ballot to participate in the action. Does it take 14 days for those Jedi-like powers to dissipate? I do not know, but I have concerns about the clause that relate to the ever-increasing number of statutory redundancy notices being issued. The limit has been changed to 45 days, which makes it difficult for the trade union to organise and complete its ballot process within the timeframe that the Government are setting out, and that will lead to more balloting. When a trade union gets notices from an employer that there is to be redundancy, the first thing the union will have to do is trigger the mechanisms for balloting before it has even had a discussion with the employer.
The proposal also treats the public with contempt. There seems to be a suggestion that the public are somehow not aware that a trade union has served notice of industrial action to an employer, but the trade union will notify the media of that to get the discussion going with its members. Indeed, some parts of the media that are not friendly towards trade unions and are perhaps more friendly towards the Government will use that publicity too.
The population out there is not made up of hermits. I think the real purpose of changing the notice period from seven days to 14 days is to ensure that momentum is lost in support of an industrial action. In reality, the notice period starts when the employer is notified that the trade union intends to ballot for industrial action. Under existing law, employers are more than adequately able to prepare with the seven-day notices, so I am opposed to the clause.
Question put, That the clause stand part of the Bill.
Stephen Doughty
I beg to move amendment 24, in clause 8, page 4, line 14, leave out “four months” and insert “twelve months”
The amendment would extend the period before any new ballot would be required, and reduce the risk of incompatibility of the provisions with Article 11 of the European Convention on Human Rights – an issue addressed by the Government in its memorandum on the Bill.
As we have discussed, Opposition Members believe that many of the measures we have scrutinised risk making industrial relations worse, not better. Clause 8 is no exception to that rule. Existing legislation provides that so long as industrial action starts within four weeks of a successful ballot, the mandate for it remains intact for as long as the dispute with the employer exists. The changes brought about by clause 8, however, will mean that trade unions are no longer required to start industrial action within four weeks. Where industrial action, whether continuous or discontinuous, lasts for more than four months, the union will be required to reballot.
The clause will have two effects. First, it will create substantial legal and administrative costs for trade unions, which spend significant sums of money on ballots to ensure the very participation that the Government say they want to encourage. I do not see that the Government appreciate the impact this will have—perhaps I am suspicious that they do—on unions in terms of costings.
Secondly, where ballots meet the Government’s thresholds, the measures will actually intensify disputes, leading to more sustained industrial action at the outset as unions try to settle disputes without the need to reballot, given the financial implications. That is a real threat, and one that I do not believe the Government have given consideration to. Again, if their intent is to prevent industrial action and strikes, why are they introducing this sort of measure? This inevitably risks worsening employment relations and creating more disruption for the wider public, which none of us wants.
The additional risks posed by the clause to industrial relations, coupled with the fact that the number of days lost to industrial action are at a historic low—my hon. Friend the Member for Gateshead pointed out that the days lost to industrial action today are barely one hundredth of those lost in the 1970s, with nearly two thirds of actions lasting only one day—mean that many are rightly wondering what the purpose of the clause is.
I gently suggest to the Committee that the Government’s focus for the proposals is some particular public sector disputes relating to the Government’s proposals on pay and pension changes. In those disputes, trade unions have often relied on one ballot mandate to organise a succession of strike days over 12 months or so, to limit the immediate impact in the short term but make clear their concerns over a period and encourage the Government to negotiate on the matter. However, under the Government’s proposals, after four months, unions will be required to reballot, even if employers refuse to engage in genuine negotiations and the dispute remains unresolved. I believe this has more to do with silencing the critics of Government who want to raise legitimate grievances about pay, pensions and conditions at work.
Jo Stevens
Does my hon. Friend agree that the clause is designed to allow employers to effectively sit out a dispute and refuse to negotiate in order to force a union to reballot, at considerable cost? For big public sector unions with hundreds of thousands of members, the costs are significant. In contrast, unions will feel forced to bring forward any planned strike days in an attempt to secure an earlier settlement.
Stephen Doughty
Indeed; that is a likely intent of this. When coupled with the measures on check-off and political funds, the Government are essentially chopping off funding for trade unions and then massively increasing their costs by this measure and the other regulatory burdens imposed by the Bill. Rather than imposing additional restrictions on workers’ ability to strike, the Government should engage in genuine negotiations with trade unions.
Ian Mearns
My hon. Friend makes an important set of points. I have a real concern: the Government have stated time and again that the whole thrust behind the Bill is to avoid disruptive industrial action, but it seems to me, particularly where complicated industrial disputes cover many different workplaces, that the proposals in the clause could significantly increase the potential for unwelcome wildcat action, where members’ frustrations boil over and they just walk off the job.
Stephen Doughty
That is a risk. Undoubtedly, when the Minister gets to his feet he will talk about ballot mandates from a long time ago legitimatising action years down the line. There is a genuine sympathy with that concern, which is why I tabled amendment 24, which would extend the period before a union would be required to reballot its members from four months to 12 months. The amendment would be likely to assist the resolution of disputes and significantly reduce the administrative cost burden for trade unions involved in protracted disputes, while avoiding the problem that the Minister will undoubtedly refer to as motivation for the clause.
It is a question of reasonableness in all these matters. Most unions want to ensure that there is a strong mandate for action if it is required, which is fair, but four months is such a short period. Given the costs involved, it reveals a different intent behind the Bill and will discourage good industrial relations.
Chris Stephens
Does the hon. Gentleman share my concern that the Bill is potentially a rogue employers’ charter? Such employers will use tactics to continue to delay the negotiations. On that basis, if the four-month limit is coming up, they will not deal with the trade unions.
Stephen Doughty
Absolutely, and, combined with the other measures by which a vexatious employer might wish to frustrate the balloting, the wording and everything else that we have already discussed, that creates a very difficult set of circumstances that will fundamentally render illusory the right to strike, to freedom of association and to withdraw labour in furtherance of a dispute. I hope that the Minister will comment on that.
Nick Boles
As we draw towards the end of the first day of line-by-line consideration of the Bill, we are reaching a point where the shadow Minister could do my bit as well. He could make my arguments: he anticipates them and knows exactly what I am going to say before I say it. It would be vastly to the entertainment of the Committee were we to allow him to do so, but I might be fired.
We simply want to ensure that industrial action is based on a current mandate on which union members have recently voted, and that those members are still working for the employer where the industrial action is proposed. It should not be a legacy mandate based on a vote undertaken many months or years previously.
I would not want to disappoint the shadow Minister by not doing as he anticipated and reminding the Committee of certain recent strikes that caused great disruption to members of the public but were based on very old mandates. There were strikes by the National Union of Teachers in July and March 2014 that were based on mandates from June 2011 and September 2012. In October 2013, there were strikes based on a mandate from November 2011. It just is the case that there is current practice of holding strikes based on very old mandates. That is what we are seeking to address with clause 8.
We specify that a ballot mandate has to have an expiry date, which both frees employers from the current situation where strike threats are made for which the original balloting took place some years earlier and removes the resultant long periods of uncertainty, not only for employers but for union members and members of the public.
Stephen Doughty
For the benefit of the Committee, will the Minister clarify where the four months come from? Why four months?
Nick Boles
In deciding how long the mandate should last, it is important that we strike a balance. As I have said, we must remove the uncertainty, which can currently last years. That must be balanced with the need to provide a reasonable amount of time for constructive negotiations to take place. Of course, I am delighted to see that, through the amendment, the Opposition are open to the idea of testing the concept of a time limit to the mandate. The question, as the hon. Gentleman has just asked, is why we have decided on four months, rather than the 12 months that he proposes.
We consider that a four-month period balances the objective of, on the one hand, ensuring that strikes cannot be called on the basis of old ballots and, on the other, allowing sufficient time for constructive dialogue to take place. A period of 12 months would tip the balance too far in favour of the unions to the detriment of everyone else—not just employers, although employers would still have the threat of strike hanging over them for a considerable length of time. Union members should have certainty on the period during which they might be asked to take industrial action. That is particularly important given the consequential effect on their pay. Twelve months is simply too long to expect people to live with such uncertainty. If members have moved jobs, it might not even be the same group of people affected.
According to the Chartered Institute of Personnel and Development, annual staff turnover in 2014 was 13.6%, which means that after 12 months, on average, nearly 14% of the workers who voted for a strike might no longer be in the same job. That must call into question whether the union has a truly valid mandate.
Ian Mearns
The Minister is quoting statistics that cover industry and employment in the UK, which includes people who are, by design, on short-term contracts where turnover is built into the system. By the nature of their employment rights, not having two years to protect their employment, such people will probably not go on strike in the first instance. The statistic is being skewed by a group of workers who will have no effect on the likelihood of a strike in another instance.
Nick Boles
Let us not forget that people’s perceptions of a dispute can change over time. It is only right that unions check whether industrial action still has the support of their members. Leaving it for a year before a union checks that it still has a mandate is simply too long. In fact, any of the circumstances about strike action are likely to have moved on after four months.
I think we are all agreed that constructive dialogue is important. Negotiation is key to resolving disputes satisfactorily. A four-month time limit on the ballot mandate should not impact on the parties’ ability to negotiate a settlement. Indeed, negotiations may well be more focused when an employer has greater clarity about the trade issues in dispute and where a union has a strong and recent mandate for industrial action.
Chris Stephens
During the course of a dispute, trade unions will be contacting their members and having workplace meetings on every part of the process. I do not get why four months is necessary. The Minister seems to suggest that trade unions do not contact their members during that four-month period.
Nick Boles
Obviously we disagree on this, but the fact is that this is not only about union members—some of whom may have moved on or changed their mind—although they are incredibly important to the process. It is not only about employers, although they are also incredibly important to the process because they can lose a great deal of money and perhaps even customers as a result of strike action. This is also about members of the public who rely on services and need to know that there might be a bus strike if a ballot in support of strike action took place three months ago. No one will remember the strike ballot and its result if the period was 12 months.
Let us not forget that, crucially, the period of four months is not the only period during which negotiations will take place. Indeed, such negotiations should have started long before a union seeks a ballot mandate. Let me also be clear about what the clause does not do. It does not prevent strikes. If a union has legitimately secured a clear, decisive, democratic ballot mandate for industrial action from its members, and the dispute cannot be resolved by negotiation, that union’s members can strike. It also does not prevent unions from seeking a further ballot mandate if the dispute is ongoing when the ballot mandate expires. New subsection (1A)(a) specifically provides for that. I therefore ask the hon. Member for Cardiff South and Penarth to withdraw the amendment.
Stephen Doughty
While I sympathise with some of what the Minister said, I fundamentally do not see the argument for a four-month period. This is a matter of interpretation. Twelve months provides a much better period; four months is far too short and will encourage disputes. Indeed, as many Members have said, it could encourage wildcat action, which we certainly would not condone and I am sure the Government would not want. With that in mind, I seek to press the amendment to a vote.
Question put, That the amendment be made.
Welfare Reform and Work Bill (Eleventh sitting)
(9 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
Emily Thornberry (Islington South and Finsbury) (Lab)
I beg to move, That the clause be read a Second time.
Like housing, the cost of childcare has weaved its way through these debates, as we have considered a Bill that places significant new burdens on working families with children. The rising cost of childcare is not a new phenomenon, but it has certainly made life more difficult in recent years for working parents, who have seen their incomes largely flatline, whereas the cost of childcare has been going up.
According to figures compiled by the Family and Childcare Trust, the costs for preschool children have increased by 20% in real terms over the past decade. Between 2007 and 2013, the proportion of families who said that they found it either difficult or very difficult to pay for childcare increased from 18% to 26%. In the past five years, as prices have continued to outstrip wages, the trend has worsened to the point where the average family will pay an additional £1,500 a year in nursery fees compared with what they paid in 2010.
The impact on families with the lowest incomes, regardless of whether they work, has been particularly alarming. Children living with parents who have to pay for childcare are now a third more likely to live in poverty once those costs have been taken into account. The Bill, which attempts to redefine poverty by focusing on whether anyone in a household works, instead of on how much working households can earn, will effectively ignore the problem. That does not make it any less real, however, for real families in the real world, and it should not blind the Committee to the fact that there is a lack of consistency in the Government’s approach, which seeks to impose strict requirements on parents to support themselves solely through work while providing less and less support to cover the costs of the childcare that would make work an option.
It is significant in that context that 41% of parents who responded to a survey carried out by Citizens Advice last year said that the cost of childcare either prevented them from working at all, or, if they already worked, prevented them from increasing their hours. That will not be helped by a promise to increase the number of hours of childcare available, as long as the promise simply remains a promise and is, frankly, no more than an unfunded commitment. We have discussed that commitment at length during previous debates in this Committee and the fact that the Childcare Bill, which is currently making its way through the other place, is a four-page Bill, which does not increase the confidence of Opposition Members that this pledge is realistic.
The most obvious concerns—I will not rehearse them all this morning—are that the extension is inadequately funded; that the Government have yet to outline their plans for increasing the number of childcare places to meet any increase in demand; and that we have had no indication that any additional support will be made available for single parents who will be expected to be available for work as a result of measures in this Bill. It seems telling to us that when we put forward an amendment saying effectively that no parent should be forced to work unless adequate childcare is in place, Government Members felt it necessary to vote against such a reasonable amendment. That group of people will be hit particularly hard by the regressive four-year freeze on working-age benefits and tax credit, which clauses 9 and 10 provide for. I remind the Committee that single parents make up 56% of families receiving both working tax credit and child tax credit. If the extension of free hours is inadequately funded—I would welcome any evidence to the contrary—it is inevitable that the out-of-pocket costs parents are forced to pay will increase as sharply in the next five years as they have in the past five years.
Freezing the level of working tax credit, under which working parents can claim reimbursement for up to 70% of their childcare costs, is particularly counterintuitive if the aim is to make work pay, as the Government continue to insist it is. If we assume that childcare costs will rise at the usual pace over the four years during which the payments are frozen, the amount that working parents will be able to claim for support with childcare costs will fund fewer and fewer hours each year. In those circumstances, the only option for many parents will be to cut back on the hours they work, which would seem to be at odds with the underlying principle of the so-called Welfare Reform and Work Bill. Parents who take such a step, which the Bill as it stands would make an entirely logical choice, will leave themselves open to harsh penalties under the sanctions regime if they find themselves unable to work altogether.
New clause 8, which would require the Secretary of State to undertake an annual review of the childcare element of working tax credit, would not require that the sums involved necessarily be increased, but would simply acknowledge that a four-year freeze in all benefits and tax credits is an extreme measure that will tie the Government’s hands in all circumstances. Economic growth may, for example, significantly exceed expectations over the next four years—that seems unlikely, but it is possible. Were that to happen, the freeze might prove unnecessary and more extreme in its effects, widening the gulf between the incomes of low-income families and the costs they are expected to cover.
It might also be the case—this seems somewhat more likely—that the promised extension of free childcare will not materialise according to the Government’s plans. In that scenario, significant costs will continue to fall to parents, whether they are working or looking for work. I would like to think that, in such circumstances, the Secretary of State would be open-minded enough to admit that tax credit payments specifically earmarked to cover working parents’ childcare costs might need to increase at a level that was adequate to ensure that those costs remained affordable. If the intention behind the Bill is, as the Government say, to give people an incentive to work and to ensure that work always pays, more flexibility is surely called for.
The Minister for Employment (Priti Patel)
A very good morning to the Committee.
The new clause seeks to ensure that the Secretary of State would have to review the level of the childcare element of working tax credit annually, and that that review would be used to determine the maximum rate at which that element was set.
By way of background, I should say that the childcare element, like a number of other elements of tax credits, has never been automatically increased as part of an annual review, but we do keep it under review. Indeed, since its inception in 1994 as part of family credit and disability working allowance, it has increased from a starting rate of £40 per family towards the costs of childcare to its present-day level, where the Government contribute 70% of childcare costs up to £175 a week for one child or £300 a week for two or more children. Under universal credit, as the Committee has discussed, that will increase to 85% of childcare costs.
In addition, the Government have taken significant steps to increase support for childcare for working families, including by extending free entitlement to childcare for working parents of three and four-year-olds to 30 hours—an increase on the 15 hours allowed for in the last Parliament—and by providing for 15 hours of free childcare a week for two-year-olds from disadvantaged backgrounds. We also have the forthcoming introduction of tax-free childcare, which will benefit up to 1.8 million working families by up to £2,000 per year per child, or by up to £4,000 per year for disabled children.
Emily Thornberry
I have been sitting here processing what the Minister has said, and I believe that she told the Committee at the outset of her speech that the Government have kept the cost of childcare continually under review. If that is right, there is not a huge gap between us. Given the alarm that is spreading across the country over cuts in benefits and whether working families will be able to make ends meet, would it be a good idea to give a commitment today that the review will happen annually? We would not need to discuss the matter any further.
Priti Patel
We take the view that the new clause is not needed. The childcare element has never been included in formal annual uprating reviews, and the Bill does nothing to change that. The Government already keep the level of the childcare element under review, as we have said. We are committed to helping families with childcare through some of the areas to which I have already alluded. On that basis, the new clause is not needed and I urge the hon. Lady to withdraw it.
Emily Thornberry
This was largely a probing new clause, and I am grateful to the Minister for her response. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 10
Changes to age of eligible claimants of housing benefit
‘(1) The Social Security Contributions and Benefits Act 1992 is amended as follows.
(2) After section 130(1) insert—
“(1A) The Secretary of State shall not make provision about eligibility for housing benefit in respect of the age of a claimant except by primary legislation.”.’—(Hannah Bardell.)
This New Clause aims to ensure that any changes to the age of eligible claimants for housing benefit must be made by primary legislation rather than regulation. The Government intends to withdraw entitlement to housing benefit from 18-21 year olds and it is understood this change would be enacted by regulation.
Brought up, and read the First time.
Hannah Bardell (Livingston) (SNP)
I beg to move, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss new clause 12—Entitlement to housing costs element of universal credit for 18-21 year olds—
‘(1) Entitlement to the housing cost element of Universal Credit shall not be restricted for those 18 to 21 year olds who fall into the following categories—
(a) those who have previously been in work;
(b) a person who lives independently;
(c) those with a disability or mental health problem receiving Employment Support Allowance or Income Support;
(d) those with dependent children;
(e) pregnant women;
(f) those who are owed a rehousing duty under—
(i) section 193 of the Housing Act 1996;
(ii) section 9 of the Homelessness etc. (Scotland) Act 2003;
(iii) section 73 of the Housing (Wales) Act 2014;
(g) those who are homeless or at risk of homelessness who are being assisted by local authority housing teams;
(h) those who are living in statutory or voluntary sector homelessness accommodation;
(i) those who have formerly been homeless and have been supported by voluntary or statutory agencies into accommodation;
(j) those who have formerly been homeless between the ages of 16 and 21;
(k) a person without family or whom social services have found that a home environment is not suitable for them to live in;
(l) care leavers; and
(m) those leaving custody.
(2) Within three months of section [Entitlement to housing costs element of universal credit for 18-21 year olds] of this Act coming into force, the Secretary of State must, by regulation, provide definitions of—
(a) “a person who lives independently”;
(b) “risk of homelessness”; and
(c) “a person without family”.’
To ensure that 18-21 year olds who meet one of the listed conditions are entitled to receive the housing cost elements of universal credit.
Hannah Bardell
It is pleasure to serve under your chairmanship again, Mr Streeter. As I will be changing brief for the Scottish National party, this will be the last opportunity I have to speak on this subject. I will be moving to Business, Innovation and Skills, where I hope to continue the work that I have done.
Hannah Bardell
Indeed; what can I say?
The SNP fully supports the intention behind Labour’s new clause, and we seek to prevent any young person from being locked out of the housing system due to age. We heard our youngest Member of Parliament, my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black), speak passionately in her maiden speech about the fact that she would be the only 18 to 21-year-old in the UK who would be supported in housing under the Conservative Government’s proposals. We have already said that we will support Labour’s new clause 10, because we share the concerns of the hon. Member for Islington South and Finsbury.
The SNP is concerned that the Government’s intention to remove young people’s access to support with their housing costs could lead to an increase in youth homelessness. According to Crisis, youth homelessness is already on the rise, with 8% of 16 to 24-year-olds recently reported as homeless. In four years, the number of young people sleeping rough in London has more than doubled. In a written answer on 14 September the Government confirmed they would restrict 18 to 21-year-olds from access to housing benefit. Their rationale, which we believe is deeply flawed, was cited as a wish not to allow young people to slip into a lifetime of benefits. The Government may not realise that it is not simply a matter of people deciding to have to rely on housing benefit to keep a roof over their head; many young people are not able to live at home with their parents for a variety of reasons. The fact that the Government are already squeezing the pockets of working families and families with more children will make it even harder for parents to afford to keep their children at home for longer.
Of the 19,000 18 to 21-year-olds who will be affected by the change, 60% are in social housing, all of whom will have been subjected to the stringent eligibility test and only deemed a priority by the local authority because they are in need. The remainder of those eligible for help live in the private rented sector and receive the shared accommodation rate—the lowest rung of housing benefit, according to Shelter, barely enough to cover a room at the bottom end of the market.
We have seen the increase in housing costs across the UK, which has locked out this sector of society. That is frankly wrong. The Government have failed young people by failing to provide economic opportunities and stability in the workforce. Growing numbers of talented young people are left unemployed. The Minister cannot simply say, “Stay at home, and your parents will look after you”, because that is regressive and smacks of a lack of vision. Many young people cannot live at home and housing benefit is the only thing that stands between them and homelessness. Between 2010 and 2014 Crisis helped to create 8,120 tenancies in the private rented sector for people who are homeless or at risk of homelessness, with support from the Department for Communities and Local Government.
The SNP believes it is unfair to restrict entitlement to a benefit based solely on age rather than on evidential grounds. We support Labour’s wish for a blanket ban on the Government restricting entitlement based on age, but as the answer to a written question on 14 September confirmed, it looks likely that the Tories are intent on locking young people out of this lifeline. That is why we have tabled new clause 12, which would provide restrictions related to vulnerable people who may be impacted. I recognise that the Government have said that they will bring forward exemptions for particularly vulnerable young people, but the full details of that proposal are not in the Bill. We tabled the new clause to ensure that young people in the circumstances that I have described are protected.
Emily Thornberry
Does the hon. Lady agree with me that it is very important to look closely at what the Government say counts as vulnerable? One can imagine them saying that they are going to look after vulnerable youngsters, but their definition will be restricted. For example, they may include young people leaving care but not anyone else. We need to be careful, because Opposition Members’ definition of vulnerability may be different from what Ministers are trying to get away with.
Hannah Bardell
The hon. Lady must have read my mind. I was just coming on to the point about care leavers and those who have experienced violence or abuse. As the hon. Lady says, the categorisation of those who are vulnerable must be a unified approach. We must be in agreement on that throughout the House. Some young people may be unable to live with their parents because of relationship breakdown—for example, if they have been thrown out because of family circumstances such as a parent remarrying—or because of their own lifestyle choices or sexuality, but they might find that difficult to prove. Many young people who have found themselves homeless are currently supported into accommodation funded by housing benefit, either by a local authority or by a homelessness organisation. Without that support, those vulnerable groups will be homeless and unable to meet housing costs. Housing benefit helps those people live independently when living at home is no longer an option, and removing it could leave people choosing between returning to a destructive family home or the street.
Accepting the new clause would at least show that the Government were serious about their commitment to protect the most vulnerable, which we must have within the law. I look forward to hearing from the Minister, and I urge hon. Members to support our new clause 12 as well as Labour’s new clause 10, to ensure that vulnerable young people can access housing support to keep them off the streets.
Jess Phillips (Birmingham, Yardley) (Lab)
As everyone always says, it is an honour to serve under your chairmanship, Mr Streeter.
Jess Phillips
I really mean it. It is an honour.
As soon as I heard of the plans for the removal of housing benefit from those aged 18 to 21, I was understandably alarmed. There are many reasons why, and I have discussed with colleagues on the Government Benches. I took to my feet in Prime Minister’s questions and asked the stand-in Prime Minister, the Chancellor, to guarantee that certain vulnerable groups would be exempt from the changes. I highlighted to him then, as I do to the Committee now, that every year, Women’s Aid conducts a survey of residents to provide socio-demographic information about a sample of women residents living in refuge services in one day. Last year, on that one single day, 132 women living in refuges were aged 18 to 20. In Birmingham, women aged 18 to 21, who had been beaten and tortured, raped and belittled, made up 25% of all residents living in Birmingham and Solihull Women’s Aid refuges. Almost all will have received housing benefit to live in the refuge and stay safe. That gives an idea of the number of women in that group.
Anyone who has ever worked in supported accommodation with victims of domestic violence will know that that group—those living in refuge—represent the tip of the iceberg of those living within the community and suffering the same thing. As an example, in the last year that I worked in refuge, 800 people came through our refuge services, and 8,000 were rehoused in the community. That means that around 10% were in refuge. From those figures, we can see how many people within the community are fleeing violence. If we take the idea that 25% of those people are aged 18 to 21, the Committee will see my concern.
Up and down the country there are young people who simply cannot live with their parents, such as abuse victims, care leavers and kids whose parents have died, moved away or simply do not want them to live with them. Those are people with little or no earning power, no networks and no safety net. I want the Government to answer this simple question: where will those people live?
Priti Patel
May I begin my remarks by thanking the hon. Members for Livingston and for Birmingham, Yardley for their thoughtful contributions? This is an important area, to which the Government naturally want to develop the right approach.
I should like to make two points. The change in housing support debated thus far refers specifically to the new youth obligation that will be introduced from April 2017, the purpose of which is to help young people to develop the skills and experience they need to get into work. Specifically, from day one of their claim, young people will benefit from an intensive period of work-related support, which will include job search support, interview techniques and structured work preparation. After six months, having built up their work preparation and received support to help them to get into employment, they will have the choice of applying for an apprenticeship or traineeship, of gaining the work-based skills that employers value, or of taking up a work placement. The youth obligation will be integrated with universal credit, ensuring that those moving into work will be better off and supported.
With regards to the housing changes, the hon. Member for Birmingham, Yardley was right in her comments and in the representations she has made to the Government. She has heard that the Government are focused on protecting vulnerable people.
The hon. Member for Islington South and Finsbury made a relevant point about the definition of vulnerability. We want to ensure that we get that right, so we are currently working with a wide range of stakeholders to understand those vulnerable groups. That work needs to be completed for robust policy and, importantly, for support, measures and exemptions to be put in place to help those groups. That work is still under way.
The hon. Member for Birmingham, Yardley touched on a number of stakeholders, some of whom we are working and engaging with. Should she like to present others to the Government, we would be very happy for her to do so.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Will those consultations be completed before Report and Third Reading?
Priti Patel
I will be honest: I simply do not know, so I will find out and come back to the hon. Lady on that.
The hon. Members for Birmingham, Yardley and for Livingston touched on the various groups that cannot rely on the stability of a family home. We are focused on that and want to do everything we can to help those young people. That is the reason for the exemptions to protect the vulnerable. We are discussing the policy with landlords, housing associations and charities, who provide a unique perspective on the groups discussed.
I hope we can work together on stakeholder engagement. As I have said, that work is under way and the policy will not be introduced until next year, which gives us time for the detailed approach we absolutely need. I therefore urge the hon. Member for Livingston to withdraw her new clause.
Hannah Bardell
We will not withdraw the new clause.
Question put, That the clause be read a Second time.
Emily Thornberry
I beg to move, That the clause be read a Second time.
The new clause gives hon. Members the opportunity to put the Government out of their misery and abolish the changes they believe they wish to make on tax credits. The Government claim that they have a mandate to impose massive cuts to tax credits, which will blow a hole in working families’ budgets in a few months’ time, but they have no such mandate. The Conservative party went into an election this year with a vague aspiration to reduce welfare spending by an abstract figure of £12 billion which, because of an almost complete lack of specifics, almost no one took seriously. Of course, the Prime Minister made clear that he was not going to touch tax credits, so he has broken his promise to the people. Those people will not forget.
The cuts to tax credits that the Government recently introduced undermine one of the bedrock principles of welfare reform, which we thought was shared by all the parties, which is that hard work should be rewarded. Indeed, when Gordon Brown introduced the new rules and payments, he did it so discreetly that many people probably did not even know that it was a politician that had made the decision. He discreetly redistributed income, he discreetly made it right that work should pay and that, instead of the taxman taking taxes away, the taxman would give people money in their pay packet in order to make sure that they could work, hold their heads up high and support their families. I remember speaking on the doorsteps about tax credits to many people who asked the classic question, “What did Labour ever do for me?” I would explain about tax credits and they simply thought that it was something to which they were entitled. Now they will realise that it was a political decision. When they get their letter at Christmas from the Chancellor telling them that they will be losing £1,000 or £2,000, what a happy Christmas it will be for these poor families. The letter will be care of this Government, who were not elected with a mandate to do that.
The view that hard work should be rewarded was shared by all parties. Between them, the 11 Conservative members of the Committee represent 40,000 working families with children who will be hit by the cuts. Some 4,000 working families with children will be affected in Louth and Horncastle; 3,900 working families with children will be affected in Bury St Edmunds; 4,300 working families with children will be affected in North Devon; 2,500 working families with children will be affected in East Hampshire; 4,700 working families with children will be affected in Cannock Chase; 2,600 working families with children will be affected in Hexham; 2,700 working families with children will be affected in Witham; 3,500 working families with children will be affected in Sutton and Cheam; 3,100 working families with children will be affected in Elmet and Rothwell; 5,700 working families with children will be affected in North West Cambridgeshire; and 3,000 working families with children will be affected in Faversham and Mid Kent. That is a large number of families and a large number of constituents. I ask those Members to consider that very seriously when deciding what to do this morning.
The impact will be immediate. There will be no transitional measures—the funding simply stops. As I said, families will find out over Christmas that they will suddenly lose more than £2,000 a year. We are talking about families for whom that amount of money can make the difference between keeping their head above water and not. Conservative as well as Opposition members of the Committee will find desperate families coming to see them, probably not even appreciating that they have been on what the Tories call “welfare”. They have been dependent on the state in order to ensure that their work pays. Indeed, some may even have been tempted to vote Conservative on the basis that it was a good idea for the welfare bill to be cut, not realising that they would be affected, and thinking that it would affect some other family that they know nothing about, a long way away or down at the bottom of a council estate, that they would never come across. They believe they are doing the right thing, doing what the Government expect, what their morality expects them to do and yet, nevertheless, they will be penalised. It will be down to them to help pay off the deficit and the debt caused by bankers and the international financial crisis at a time when the Government believe that their priority ought to be cutting taxes paid by the richest in order to allow them to pass on their riches to the next generation. The Government have changed the tax rates in order to give tax breaks to the richest, and they have decided that the people who should be penalised are those who can hardly fight for themselves, and who are doing their best for themselves and their families.
Debbie Abrahams
My hon. Friend is making a very powerful speech. Has she read the article in the British Medical Journal last week, which looked at the impact on child poverty? It stated that an extra 200,000 children will be plunged into poverty, but it also looked at the effect on child health. The UK already has the highest rate of child mortality for under-fives, which can be directly attributed to the additional child poverty that is faced in this country. The implications of this are really significant.
Emily Thornberry
My hon. Friend makes a powerful point. There are many arguments against the tax credit cuts, and although it is tempting to rehearse all of them this morning, another debate is going on elsewhere. Essentially, I cut down a long speech to a short one to make the main points.
I was talking about the policy being a failure in moral terms, as my hon. Friend illustrates well. The focus today might be down in the Chamber, but members of this Committee have the real power. They have in our hands the power to do the right thing and to put the interests of working families in their constituencies ahead of the interests of their party. They have in their hands the power to put the interests of children in some of the poorest working families first, remembering that, even as things stand, two thirds of children in poverty have a parent in work. How much worse will it be after they have suffered the cuts to tax credits?
I am sure that Conservative Members who have an interest in this field are, deep down, genuinely and gravely concerned. When we put the new clause to the vote and when their Whip holds up the piece of paper saying no, will they look aside, think about the thousands of their constituents who will be so greatly affected by the Bill and vote with their conscience, vote the right way, and stop this now?
Hannah Bardell
The hon. Lady has made a powerful speech. I will not drag out my comments on a painful and frankly despicable assault on our society. Much has been said about tax credits and I would like to give a bit of a Scottish flavour to the debate.
Since the election campaign and throughout this Parliament, the SNP has opposed the Bill in its entirety and the cuts to child tax credits in particular. It is important to highlight the findings of the IFS, that it was “arithmetically impossible” for families to do better with the limited increase in the living wage. We are talking about an attack on low-income families and vulnerable working families. In Scotland more than 500,000 children live in families that rely on tax credits to make ends meet; 350,000 of those children will feel the impact of the cuts as much needed tax credits are stripped away from more than 200,000 low-income families.
The austerity measures proposed by the Conservative Government are disproportionately harming the poorest and most vulnerable households while giving tax breaks to the better-off, thus increasing inequality, not closing the gap. Much has been said about families claiming benefits and families in work as if they were different people, different sections of society, but the reality is that the majority of people who will be affected by the provisions of the Bill are families in work.
The changes are regressive; they take proportionately more from low-income households and give to the richer ones. Planned cuts to tax credits increase the burden on the working poor and the children living in such households. The IFS has found that 63% of children living in poverty are in working households—I repeat: 63% of children living in poverty are in working households. The increase in the minimum wage for people aged 25 and over, which has been wrongly branded a living wage, is nowhere near enough to offset the cuts. The changes run contrary to the Government’s own policy of making work pay and they weaken the incentives to work, because the impact of cuts will fall disproportionately on low-income working families. This is not war on poverty; this is war on the poor.
Priti Patel
I am speaking on behalf of my hon. Friend the Exchequer Secretary, who has been paired for the clause.
It is clear that we are going to disagree on this clause. I will speak about the tax credits changes in the context of the new deal presented by the Government in the summer Budget. As my right hon. Friend the Chancellor stated at the time, the deal was to move Britain from a high welfare, high tax, low wage economy to a low welfare, low tax, higher wage economy. I know that I am rehearsing arguments that hon. Members have heard previously, but spending on tax credits more than trebled in real terms between 1999 and 2010; at the same time that increase in spending did not address issues of poverty. There was a 20% rise in poverty at that time.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Will the Minister give way?
Debbie Abrahams
On a point of order, Mr Streeter. The fact is that child poverty was reduced during the period the right hon. Lady is referring to, and so was pensioner poverty. Not to have the opportunity to challenge those points is a question for the Chair, I believe.
The Chair
I am afraid that is not a point of order, but the right hon. Lady has skilfully made her point, and there is of course an opportunity for others to speak after the Minister, should they wish.
Priti Patel
I will restate my point. Nine in 10 families with children were eligible for tax credits. That was reduced to six in 10 in 2010 following the coalition’s reform in the last Parliament. The present reforms will reduce that and take tax credit spending back to where it was in 2008 and not, as Opposition Members suggest, to a world without tax credits. Alongside the tax credits changes, we are introducing the national living wage, which, we have clearly heard, Opposition parties do not support. That will be worth more than £9 an hour by 2020.
Emily Thornberry
With great respect, the right hon. Lady is talking nonsense. Of course we support wages going up by whatever means that can be done. What we do not support is the ridiculous associated rhetoric suggesting that the proposals are somehow taking over or working on the national living wage campaign, which is based on a completely different set of statistics. It is typical of the Conservative party to try to confuse people and confabulate as it is doing. Of course we support increases in wages.
Priti Patel
It is typical of the Labour party to scaremonger and distort some of the facts that we have heard, as well.
The national living wage will be worth more than £9 an hour by 2020. The increase in the personal allowance is part of a single thought-out and coherent plan to ensure that people keep more of their money, rather than having more of their income taxed. The new national living wage means that someone working full time on the current national minimum wage will have a pay rise of nearly £1,000 gross next year, and about £5,000 by 2020. Of course, the personal allowance will go up from £11,000 to £12,500, which means a typical taxpayer will pay more than £1,000 less income tax by 2020.
The Opposition have given illustrations of their view, and I want to give illustrative examples of how families will benefit over the course of the Parliament when the welfare and tax changes announced in the Budget are taken fully into consideration. The income of a couple with two children where only one parent is in work on the current national minimum wage will increase by £2,480. The income of a lone parent with one child working 35 hours at the current national minimum wage will rise by £1,500. A family with two children where the parents are working 35 hours a week on the national minimum wage will see their income increase by £5,500. And a single person with no children working 35 hours on the current national minimum wage will see their income rise by more than £2,000.
There will also be a wider ripple effect in the economy, which is growing, through the national living wage pushing up wages above the current national minimum wage. As we have discussed, not just in this clause but in previous ones, we are committed to doubling free childcare for three to four-year-olds and providing £5,000 of support in childcare for working parents.
No analysis has taken into account those factors from 2016, with the wider ripple effects, which are set to benefit more than 3 million working people. On top of the uplift in the free childcare, there is the £2,000 per child that working families and parents will be entitled to through tax-free childcare.
Neil Coyle
On childcare, will the Minister explain how families with children older than the qualifying age will benefit from that policy?
Priti Patel
They will benefit from tax-free childcare. That will be available for families whose children are at school—basically, those who are still school age. That is a Treasury policy.
Priti Patel
My understanding is that tax-free childcare will cover after-school clubs and school holidays, but I will get clarification—[Interruption.] Well, I will give the hon. Lady clarification.
The point I would like to make is that, as we discussed in the previous sitting, the Government have a very strong record on childcare provision, tax-free childcare and support for disadvantaged two-year-olds. The fact that we have been spending in excess of £5 billion on supporting childcare provision for working families should be welcomed by all parties. It is sad that political parties choose to point-score about childcare provision.
We are clearly going to disagree on the content of the new clause. I have highlighted how the increased personal allowance, the national living wage and the welfare changes announced in the summer Budget will provide support for working families. For the reasons I have set out, the new clause is not appropriate for inclusion in the Bill, and I urge the hon. Member for Islington South and Finsbury to withdraw it.
Emily Thornberry
We will not withdraw the new clause, Mr Streeter.
Question put, That the clause be read a Second time.
Emily Thornberry
I beg to move, That the clause be read a Second time.
The new clause is about having a review of the application of sanctions. Many shadows have fallen upon our discussions over the past few weeks. This particular shadow is whether there is a link between welfare reform and work. What happens to people who do not live up to the requirements imposed on them?
Too often in recent years the Government’s focus has been on a target-driven approach that has assumed that anyone out of work simply lacks willpower. The cornerstone of that approach has been the sanctions regime. The Committee might remember that the previous Minister for Employment, who lost her seat at the last election, took the view that
“people who get sanctions are wilfully rejecting support for no good reason”.
The evidence, however, had she or any of her colleagues cared to look, suggests otherwise.
As the Minister frequently reminds us, and as I am sure she will remind us again today, it is true that conditions have always been attached to the social safety net since unemployment benefit was first introduced in 1911. Nevertheless, the Government mislead the public when they fail to acknowledge that the sanctions regime introduced as part of the Welfare Reform Act 2012 marked a radical departure from the history of the welfare state and from the entire principle of evidence-based policy making.
The official justification of the Department for Work and Pensions for sanctions remains that
“they are there to encourage claimants to take reasonable steps to find employment or move closer to the labour market”,
but its own impact assessment for the 2012 changes acknowledged that there was insufficient evidence for the proposed approach achieving that. Since then, of course, extensive evidence has emerged that demonstrates that sanctions are deeply counterproductive if helping people into work is really the intention.
The number of people claiming jobseeker’s allowance has fallen since 2012, but that has coincided with a significant rise in the number of people whom the Office for National Statistics classes as economically inactive—not unemployed or claiming jobseeker’s allowance, but statistically almost non-people. Interestingly, many of those economically inactive people, if asked why they have become economically inactive, give their reason as being discouraged. So that is their reason—they have been discouraged and so dropped out of the labour market altogether. I would have thought it was important to do some work on what “discouraged” means and on the experiences of those discouraged people, because there might well be a clear link between cause and effect.
Research published in January by Oxford’s Professor David Stuckler found that, of those sanctioned between 2011 and 2014 who subsequently stopped claiming benefits altogether, only 20% said that it was because they had found work. According to the professor, all those people were sanctioned and 80% of them then stopped claiming benefits, but not because they had found work. So they are all off the jobseeker’s allowance statistics and are no longer unemployed. In some ways, therefore, perhaps there has been some success.
To the extent that increased sanctions have had an identifiable impact at all, it has been to increase dramatically the levels of hardship and poverty in recent years, as illustrated most starkly in the extraordinary rise in food bank use. I do not know how many Members were at the Trussell Trust breakfast this morning, but one of the stories I heard arose because the trust has started to give medical advice at some of its food banks. It was giving medical advice to a nurse who had a condition that meant she needed to take various pills. The nurse in her knew that she had to take the pills regularly, but the mother in her knew that, because their tax credits had been wrongly taken away and they were in great need, she had to give the food in the cupboard to her children. So she was taking the pills without having eaten anything and was causing herself more harm. There are hundreds of thousands of these stories and unfortunately things seem to be getting worse, not better. We understand that last year, a million people took advantage of food banks. One has to wonder what would happen if they were not available. According to the 2014 survey by the Trussell Trust, 83% of food banks said that the new sanctions regime had caused an increase in the number of people needing their help.
Another very odd thing about the sanctions regime, which would be addressed if the new clause were accepted, is that different towns and villages have different numbers of people going to food banks and different levels of sanctions. There is one jobcentre where in one month, 40% of people were on sanctions. If there are such extraordinary variations happening within the system, there is clearly unfairness. If individuals within jobcentres are given powers and exercise them with a wide element of discretion, that discretion will clearly be exercised differently in different jobcentres. In some areas there will be more strain on food banks, let alone on the poorest and most vulnerable who continue to be sanctioned.
Neil Coyle
It might surprise my hon. Friend to learn that part of the strain on the resources of the food bank in Southwark, which is provided by Pecan as part of the Trussell Trust’s network, comes from people in work. Some 10% of that food bank’s users are working, and the Government have just made that a whole lot worse with their tax credit changes.
Emily Thornberry
My hon. Friend is right. The range of people going to food banks is very alarming. It is not enough to say, “Oh well, it’s because people know that there are food banks now. They didn’t know about them in the past, but now they do, and they are going in because it’s free and taking a can of beans, but they don’t really need it.” That may be how some Government Members feel that people behave. There is another point of view, which is that to go to a food bank is completely humiliating. It is the worst.
I raise my own personal experience again. After my family got thrown out by the men with the bowler hats and went into social housing, I remember my mother used to get boxes of food from friends. It was embarrassing, but it was the way we kept things together; there were no food banks at that point. I remember that one of the food boxes always used to include Campbell’s meatballs. My mother kept them under the stairs and threatened us that if we did not eat what was on our plates, we were going to have to eat the meatballs instead. They may still be under the stairs for all I know. But at least those boxes of food were delivered to our door, instead of my mother having to go out to ask for food. That is humiliating for anybody, for heaven’s sake.
What the Government’s sanctions regime has brought us is increased hardship and suffering, with no tangible gains in the likelihood that those affected will move into work as a result. If we could be confident that all this suffering was resulting in something good, that there was meaning and that people were moving into work who would not have moved into work otherwise—can the Conservative party show us some real evidence of that?—that would take some of the edge off the terrible stories that we hear, which show that the sanctions regime is simply unfair. How on earth do people manage if they are living from hand to mouth, have no savings and have exhausted the support they can ask for from their families and friends, but then are sanctioned a third time and given nothing for three months?
Debbie Abrahams
I am very pleased to support the new clause, and I congratulate my hon. Friend on her excellent speech.
I have been campaigning on this issue for more than two years. I started when a constituent came to me and told me that he had been going through the work capability assessment process when the nurse conducting it said, “I think you’re having a heart attack. You need to go to hospital.” Off he trotted, and he was okay, but, two weeks later, he got a letter through the post saying that he had not completed the assessment so he was going to be sanctioned. That was how this all started for me. I thought, “Possibly this is just a one-off,” but then I heard more and more cases not only from constituents but from people right across the country. That corresponded with the introduction of the new sanctions regime at the end of 2012 as part of the Welfare Reform Act 2012.
People on not only employment and support allowance but JSA were being sanctioned. Sometimes that was for being a few minutes late. I have heard other examples of increasingly unreasonable reasons, such as people being sanctioned for attending their mother’s funeral or, absurdly, for going to a job interview. That is the ridiculous state the sanctions policy is in.
I have also heard of another worrying category of reasons, which can only be described as fabricated. I still have an email from a constituent saying that he had been sanctioned because he had not attended an interview with his adviser. He came to my office and showed me the evidence that he had not seen that specific adviser but he had seen another. He asked how he could possibly be sanctioned.
I wondered what on earth was going on, but it all fell into place when another constituent came to see me. He had been an adviser in various Greater Manchester jobcentres for more than 20 years. He was so appalled with what was going on that he had to tell me. He said that there were targets for sanctions that are part of the performance monitoring for jobcentres. The aim is to get people off flow, and sanctions were the way to achieve that.
My hon. Friend mentioned the recent inquiry, but before that the Work and Pensions Committee undertook an inquiry into the role of Jobcentre Plus in the reformed welfare system. When the then Minister came to the Committee I asked whether she would undertake a more detailed, independent inquiry. The Select Committee thought that she had agreed to that. Paragraph 100 of its report states:
“We strongly believe that a further review is necessary and welcome the Minister’s commitment to launch a second and separate review into the broader operation of the sanctioning process.”
As we know, there has been a bit of backtracking on that. The report concluded:
“Our evidence suggests that many claimants have been referred for a sanction inappropriately or in circumstances in which common sense would suggest that discretion should have been applied by JCP staff. DWP should launch a second, broader, independent review of conditionality and sanctions, to include investigation of whether the process is being applied appropriately, fairly, proportionately and in accordance with the rules, across the Jobcentre network.”
That was an all-party report indicating that the situation was very worrying.
In addition to those very serious ethical issues, there were and still are concerns about the numbers of people affected, and in particular the meteoric rise in the use of sanctions for employment and support allowance claimants. Between December 2012 and 2015 jobseeker’s allowance sanctions were 3.6 million, including 1.7 million adverse decisions. In the case of ESA sanctions—remember, those affect people who have been found not fit for work—from November 2012 to March 2015 there were 245,679 sanctions, including 68,400 adverse. That compares with the June 2010 to October 2012 period, when there were 60,363, including only 27,919 adverse. That is more than a doubling in ESA sanctions.
As my hon. Friend said, the regime is particularly punitive. A sanction is for a minimum of four weeks and can be for up to three years. The Government have said that it is very unlikely that people will be sanctioned for three years, but I am afraid it has happened. It particularly affects young and disabled people and lone parents.
During 2013-14 it became clear that although no other benefits, for example housing benefit, were meant to be affected, they were. As soon as someone was sanctioned, they were automatically having housing benefit and other benefits stopped. That exacerbates the position of people already on incredibly low incomes.
Emily Thornberry
Might I take advantage of this moment to point out that, when my local law centre takes up appeals on sanctions, it has a 100% success rate?
Debbie Abrahams
My hon. Friend is absolutely right. Cases are often overturned on appeal, but for someone on ESA—that means they are not well—going through that process is traumatic and can exacerbate the condition. I will come to that in a moment.
My hon. Friend mentioned the Oakley review, which reported in July 2014. It looked specifically at the JSA sanctioning. It was an important step, but there were still many unanswered questions, which is why the Select Committee wanted to look at it in more detail.
I am aware of the dreadful circumstances of food bank use to which my hon. Friend has alluded—in my area, 60% of food bank use is attributed to sanctions. More shockingly, I am aware of the reports of accidental deaths following sanctions. Those have been included in coroners’ reports, so I do not mention them lightly. David Clapson was one particular case. He was a former soldier who gave up his job with BT to care for his mum, who had dementia. When she died, he wanted to get back to work and signed on at the jobcentre. He missed an appointment with his job adviser and was sanctioned. He was diabetic. Without the £71.70 a week from his jobseeker’s allowance, he could not afford to eat or put credit on his electricity card to keep the fridge where he kept his insulin working. Three weeks later, David died from diabetic ketoacidosis caused by a severe lack of insulin. He was 59. A pile of CVs was found next to his body. The coroner said that, when he died, he had no food in his stomach. His sister, Gill Thompson, has campaigned tirelessly to get an independent review into sanctions. The petition she started has more than 211,000 signatures to date.
David is not the only person to have died following sanctions. There have been 49 peer reviews following the death of a claimant, but the DWP is still not prepared to release the details of whether sanctioning was involved. I hope Ministers reconsider that.
The Work and Pensions Select Committee inquiry reported in March. If anything, the Opposition’s concerns from the previous inquiry worsened. The negative impacts on poverty, including child poverty, debt, physical and mental health, were reported. The Committee was given the example of a woman who had discharged herself when she was in hospital because she was frightened of being sanctioned.
There is evidence that the sanctions targets were driven by targets to get claimants off-flow, distorting the JSA figures. As my hon. Friend the Member for Islington South and Finsbury has mentioned, the team from Oxford analysed data from 376 local authority areas and found that 43% of JSA claimants who were sanctioned left JSA. As my hon. Friend said, 80% did so without having a job.
The main recommendation from the Select Committee was for a more detailed independent inquiry. Matthew Oakley said that he expected that to happen. I am at a loss as to why the Government are dragging their feet. Surely that is the very least we should do for the people who have lost their lives following sanctions and for their relatives. I hope the Committee will do the right thing and support the new clause.
Hannah Bardell
My colleagues have spoken very passionately on the new clause and the Scottish National party absolutely supports it. It might be interesting for the Committee if I shared some of Michael Adler’s report on benefit sanctions and the rule of law. In his concluding remarks, he says:
“We now come to the question of whether benefit sanctions are compatible with the rule of law. My conclusions, and I must stress that these are my personal conclusions and that other people may wish to take issue with them, is that they are not.”
The SNP has, for a very long time, in Committee, on the Floor of the House and publicly, opposed the sanctions regime and called for a root-and-branch review. Much of that is highlighted in Mr Adler’s report. He notes how
“the House of Commons Work and Pensions Committee (2015) reiterated its previous call for a comprehensive, independent review of sanctions and for a serious attempt to resolve the conflicting demands on claimants made by DWP staff to enable them to take a common-sense view on good reasons for non-compliance. The Committee concluded that there was no evidence to support the longer sanction periods introduced in October 2012 and recommended the piloting of pre-sanction written warnings and non-financial sanctions. Sadly, these recommendations seem to have fallen on deaf ears and to date there has been no response from the DWP to the Report.”
I encourage DWP to give us its thoughts on that and why it cannot take that on board.
Mr Adler also says in his report:
“Vulnerable claimants are most likely to be sanctioned and, despite the availability of hardship payments, many of those who are sanctioned experience enormous hardship. Anecdotal evidence suggests that many of them end up becoming homeless, using food banks and resorting to crime.”
As DWP has said, sanctions are supposed to be part of a benefits system that gets people back into work and helps people. How can that be the case when someone of that credibility suggests that they are damaging society so badly?
I have not yet been in office for six months, but at least 25% of the workload coming through my constituency surgery and office is down to people who have been sanctioned. One of those is someone who suffers from Parkinson’s and who was treated appallingly by a representative of DWP. I am fighting that case and I have taken it up on the Floor of the House. I urge DWP and Ministers to look again at the sanctions regime and how it is treating vulnerable people in our society. It is not encouraging them back into work and it is not helping their families. We must have a root-and-branch review and listen to the Committees of the House on which Members across the political divide sit so that we can have a sensible approach to treating the most vulnerable.
Priti Patel
Let me start by saying that the Government keep the operation of the sanctions system under constant review to ensure that it continues to function effectively and fairly. Where we identify an issue, we will act to put it right. It is therefore unnecessary to embed the implementation of a review in the Bill. The Government have made a number of improvements to the JSA and ESA sanction systems following recommendations made by the independent review led by Matthew Oakley only last year. That improvement work is continuing to ensure that the Oakley recommendations are acted on in the right way where possible. In addition, we are taking the opportunity to ensure that the ongoing improvements in the review are built into the design and delivery of universal credit.
We have not only responded promptly and positively to the recommendations, but have gone further. We have improved the clarity of the JSA and ESA hardship application process, and made improvements to the payment process to ensure that payments are made within three days. We have carried out a review to check that our systems are operating effectively in respect of housing benefit, and that housing benefit is not impacted when a sanction is applied. We have introduced an improved claimant commitment for JSA jobseekers on the Work programme. We have also revised guidance to encourage jobseekers to share that claimant commitment with their provider. That will ensure that jobseekers understand what is required of them—their responsibilities both to Jobcentre Plus work coaches and Work programme providers—and that providers are clear on any previously agreed restrictions for the jobseeker, helping them to design tailored support.
We have made significant improvements to the decision-making process to ensure that doubts about actively seeking work are resolved quickly. The vast majority of decisions are now made within 48 hours, including consideration of good reasons. Our systems are ensuring that, when decisions are made in the jobseeker’s favour, their benefit payments are transferred to them using faster electronic payment systems to ensure that payment reaches their account on the same day.
I would like to touch on a couple of the points hon. Members have made. Sanctions were discussed in Committees in the previous Parliament, and there have been many debates about sanctions in the Commons Chamber and in Committees. Each month, more than 99% of ESA claimants comply with the requirements that are asked of them with regard to sanctions, and the individuals are asked only to meet the requirements that they agree with their advisers. That includes consideration of any health conditions, disabilities or health impairments.
Neil Coyle
There are individual examples. A man with a visual impairment and who has a guide dog was sanctioned for non-compliance. He did not know what the agreement said, because he was never sent it in an accessible format—he never had a Braille copy of the agreement. That was raised with the Royal National Institute of Blind People. A case was raised with Mencap of someone with a significant learning disability who never understood what the agreement meant, could not comply with the proposals that he had supposedly agreed to, and ended up being sanctioned. Does the Minister agree that those examples do not reflect a system that she has described as effective and fair? Where is the Department’s review of accessible formats provision?
Priti Patel
The hon. Gentleman is right to give those examples. What happened is not right. He mentions accessible formats. I will go away and report back to him on that, but what happened in that case is simply not right—that should not have happened to someone with a visual impairment.
The Department is considering the contents of the Work and Pensions Committee report and looks forward to working with it not just on that, but on future reports.
I come back to my point that, with all our policies, we will keep the operation of the sanctions system under review. We are focusing our efforts on continuing to improve the process on JSA and ESA to ensure that the agreed recommendations can continue to be delivered in the existing universal credit live service and embedded into the design and build of the emerging universal credit digital service. On the basis that we have a system of continually reviewing the sanctions system and are looking at it with regard to the universal credit live and digital services, I urge the hon. Member for Islington South and Finsbury to withdraw the new clause.
Emily Thornberry
We will press the new clause to a vote.
Question put, That the clause be read a Second time.
Westminster Hall
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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Cancer Drugs
(9 years ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Jim Shannon (Strangford) (DUP)
I beg to move,
That this House has considered the availability of cancer drugs.
As the turnout this morning indicates, the subject of the debate is of concern to us all. There are more Members from Northern Ireland present than usual, but that may be an illustration of the concerns of our constituents across Northern Ireland on this matter.
I did some background research before I came down to the Chamber, and I discovered that in September 2013, the British Medical Journal asked:
“Which way now for the Cancer Drugs Fund?”
In July 2015, the Health Service Journal said:
“Cancer commissioning overhaul could save 30,000 lives”
and The Daily Telegraph on 4 September led with the headline:
“Thousands of cancer patients to be denied treatment”.
On 5 September, The Independent reported:
“NHS cuts to drugs fund mean thousands of cancer patients in England will be denied life-extending treatments”.
Finally, The Guardian stated on 23 September:
“UK NHS cancer patients denied drugs due to inflated prices”.
All those headlines highlight a clear problem when it comes to cancer drugs, which is of the utmost importance and which is, unfortunately, too close to home for many of us. There are many organisations that help those affected, but I would like to mention Macmillan Cancer Support, which is very much in my mind. The charity stated that 2.5 million people in the UK are living with cancer in 2015. The fact that that is slightly less than 5% of our total adult population indicates that this problem is enormous. It is hard to find anyone whose life has not been touched by this horrendous disease in some way.
My father, who passed away this year, had cancer on three occasions. He survived all three of them and lived to the ripe old age of 85, having first been diagnosed some 36 years ago. I have always said that the skill of the surgeons, the care of the nurses and the prayer of God’s people saved him on those three occasions. For many of us, cancer is not simply something that others talk about; it is something that affects each and every one of us.
My father is only one example. In my office every week, people come to me who are suffering from cancer. Some are also in the throes of benefits problems; very often, in addition to the trauma of health issues caused by their cancer, people have to deal with benefits difficulties. We have to work out how to get them into the benefits process and take the financial pressure off them at such a crucial time.
Lady Hermon (North Down) (Ind)
I congratulate the hon. Gentleman on securing the debate, which concerns the availability of cancer drugs throughout the UK, not simply in Northern Ireland; I am surprised that more Members are not present. Greater availability of off-patent drugs would help in the fight against cancer and reduce cost to the NHS. Will the hon. Gentleman support that call and the private Member’s Bill on the topic?
Jim Shannon
I thank the hon. Lady—my hon. Friend—for her contribution, and I am happy to add my support. Indeed, I attended a meeting of the all-party group on off-patent drugs last Thursday, and it is important that we support its campaign.
Nick Thomas-Symonds (Torfaen) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Strangford (Jim Shannon) on securing a debate on an important issue that affects many families—perhaps all families—across the UK. I intervene at this point because the hon. Member for North Down (Lady Hermon) has mentioned the private Member’s Bill that I am sponsoring—the Off-patent Drugs Bill. Would the hon. Gentleman agree that there are problems affecting the prescription of off-label drugs? It happens inconsistently across the country, and there are problems of information and a conservatism about prescribing off-label. Does he agree that those problems are best dealt with by legislation?
Jim Shannon
We have hit on an issue that resonates across the whole House. Let us put on the record the fact that there is a goodly representation of other parties today, and those hon. Members are here because they have an interest in the matter. I am pleased to see the Minister in his place. He tells me that I never miss one of his debates, and I do not know whether this is his debate or mine, but we are both here for the same purpose. I am pleased to see the shadow Minister, the hon. Member for Denton and Reddish (Andrew Gwynne), in his place as well.
Survival rates are improving, and that development is great for everyone.
Ms Margaret Ritchie (South Down) (SDLP)
I congratulate the hon. Gentleman on securing this debate about cancer, which impacts on almost every family throughout Northern Ireland and Britain. Before we proceed to talk about cancer drugs, does he agree that it is most important that we have proper diagnosis and proper testing? As well as widening access to cancer drugs, does he agree that access to testing such as Oncotype testing for breast cancer, and BRCA1 and BRCA2 testing for ovarian cancer, is important, because they will suggest the right type of cancer drugs to prescribe—and, indeed, indicate whether cancer drugs are required at all? We need the diagnosis and testing, and then we need the right type of drugs.
Jim Shannon
I absolutely agree. The hon. Lady mentioned ovarian cancer. Most of us from Northern Ireland will know of Una McCrudden, who passed away earlier this year. She was an energetic person who spoke out on behalf of those with ovarian cancer. She survived six years after she was first diagnosed, and all her latter years were put into that campaign. I know that the hon. Lady knew her as well as the rest of us did.
Great work has been done on ovarian cancer. Only last week, I heard of one of my constituents who had been diagnosed with ovarian cancer and undergone surgery. The operation was successful, and we thank God for that, but many others do not survive. Survival rates are improving, and given that one in two people diagnosed with cancer in the UK survives, we are on the right track. The fact remains, however, that we could and must do so much better.
With innovation in cancer treatments making great strides, it is imperative that we, as representatives of the people the length and breadth of this nation of the United Kingdom of Great Britain and Northern Ireland, campaign to increase the availability of cancer drugs to our constituents. The Minister and I have discussed this many times. Queen’s University in Belfast is one of the leading advocates for innovation in the search for new cancer drugs, and it leads the way in cancer treatment, as it does in many other spheres of life. Today the Chinese President is visiting Parliament, and we have all sorts of other contacts with China, so it is particularly appropriate to highlight the fact that Queen’s University works in partnership with organisations and universities in China to move that work forward.
Cancer knows no creed, colour, race, religion or class. It is an enemy that we have all come together to fight. With that in mind, I hope that we can all come together to give our constituents up and down this nation access to the very best treatment for that common enemy. We are united in our desire to see greater availability of cancer drugs in every postcode area across the United Kingdom.
Mr Andrew Smith (Oxford East) (Lab)
I join other hon. Members in congratulating the hon. Gentleman on securing the debate, and I support what he is saying about access to cancer drugs. Is it not also important to underline the fact that the overwhelming majority of successful treatment of cancer is by surgery or radiotherapy, often supported by drugs?
Jim Shannon
Absolutely. My father survived cancer three times because of the surgeon, the chemotherapy, the radiotherapy and all the other treatment that he received, and the drugs helped. So, by the way, does a good diet; there are lots of things that we need to do to tackle the disease. I draw the House’s attention to the recent developments in Northern Ireland. Hon. Members will know that health is a devolved matter. My party colleague, Simon Hamilton MLA, the Minister for Health, Social Service and Public Safety, has taken the initiative to release £1.5 million to fund specialist cancer drugs. That will allow for NICE-approved cancer drugs and treatment to go ahead this year.
Gavin Robinson (Belfast East) (DUP)
I congratulate my hon. Friend on securing this debate. He mentions the figure that has been secured by our Health Minister in Northern Ireland. Has any thought been given to the amount of money or resources made available to reduce the time individual patients will have to wait before securing the drugs they need?
Jim Shannon
I am unable to answer that question effectively and honestly. I know that question will be brought to the attention of the Minister back home and the Minister here will have a response to it. Today’s debate highlights the issue and raises awareness. We have concerns about the long waiting list. As the hon. Member for South Down (Ms Ritchie) said, we need diagnoses early—the earlier the better. I find it frustrating when I hear from some of my constituents who might wait 12 weeks for a diagnosis and perhaps longer for treatment. We need to address that.
Andrew Stephenson (Pendle) (Con)
I join other hon. Members in congratulating the hon. Gentleman on securing the debate. I agree with the point that he is making about the availability of cancer drugs across the United Kingdom. Does he agree with me that the environment in which patients are treated is also important? Will he join me in congratulating my local hospital trust, East Lancashire Hospitals, on its commitment to build a new cancer unit at Burnley general hospital with the support of the Rosemere Cancer Foundation?
Jim Shannon
As the hon. Gentleman says, there are many good examples across the whole United Kingdom of Great Britain and Northern Ireland, where things are done well. We thank the doctors and nurses, who work energetically, and the many charities.
The national target for accessing these life-changing drugs is 19 weeks. The move in Northern Ireland will go a long way towards enabling the health service there to reach that target. My hon. Friend the Member for Belfast East (Gavin Robinson) was correct that we need to focus on that target. Each day in Northern Ireland, 23 people are diagnosed with cancer and 11 people die of it. According to Cancer Research UK, there were 331,487 new cases of cancer in 2011 and 161,823 deaths from cancer in 2012. That tells us a wee bit about the magnitude of cancer and its importance to every person in the whole United Kingdom. More should be done but I can only welcome the recent developments in the Province. I hope that other areas of the country can follow suit by freeing up the funds necessary and introducing legislation to prioritise fighting this awful disease to the best of our ability.
In England and Wales, cancer remains one of the biggest killers, causing 29% of all deaths. Progress has been made and all progress is welcome, but it is opportunities like today when we can really make a difference to the lives of individuals and families from all walks of life. Recent developments across the water—here—are deeply concerning. In September, 16 drugs were removed from the Cancer Drugs Fund list in addition to another 16 drugs that were removed from the list in January.
Nick Thomas-Symonds
I congratulate the hon. Gentleman on making that point. Does he agree with me that the removal of Abraxane from the national Cancer Drugs Fund list is particularly concerning given that pancreatic cancer patients, 80% of whom are diagnosed when the cancer has already spread, are often left with a finite and small amount of life? A drug such as Abraxane can make a significant difference to those people and that decision should—I hope it will—be reversed in future.
Jim Shannon
The hon. Gentleman must have helped me put my notes together because I have written that one down. It was one of my next points. Yes, we are concerned about that. I look forward to the Minister’s response on that point because, quite clearly, it is hard to understand why Abraxane should be removed given that it at least extends the life of many people.
Sir Oliver Heald (North East Hertfordshire) (Con)
On that point, a very small number of conditions are very fast-acting. Pancreatic cancer is one of them—six months, on average, between diagnosis and passing away. Does he agree with me that NICE needs to find some way to capture the importance of an extra two months? An extra two months to somebody who only has six is time to settle their circumstances and come to terms with the situation. It is a very important two months and somehow that needs to be captured.
Jim Shannon
I could not have said it better. That is exactly the issue for many in the House and for those outside who have to deal directly with these issues.
Moves such as the removal of the drugs prevent thousands of cancer sufferers across England and Wales from being able to access the quality treatment they deserve. Thousands of people are disadvantaged, thousands of families are losing out and thousands of normal people are in despair. Today, we need to give them hope, an advantage and life itself.
The Government have said that the manufacturers of drugs recommended for removal from the Cancer Drugs Fund will have an opportunity to reduce their costs. Negotiations are under way. I am keen to hear the Minister’s response on that. I would like confirmation that patients already receiving a drug that will be removed from the Cancer Drugs Fund will continue to be treated with that drug. Clinicians certainly indicate that they consider it appropriate to continue treatment. The patient needs to be assured that the system is such that those who are on the drugs will continue to be. I had written down the point about pancreatic cancer. The hon. and learned Member for North East Hertfordshire (Sir Oliver Heald) is absolutely right. I thank him for his intervention.
We are living in times when we are all being asked to tighten our belts but when it comes to issues like this, we simply cannot put a price on doing what is right. Given the consequences for patients, it is imperative that we act sooner rather than later. A long-term and sustainable system for cancer drugs is essential and, while we build that, we have to keep doing what we can to improve the lives of those suffering right now. That starts today with this debate. The debate has been happening outside the Chamber and today is an opportunity to highlight to issue in the Chamber.
I am particularly looking forward to hearing the Scottish National party spokesperson today because I was talking to the hon. Member for Central Ayrshire (Dr Whitford) last night at a different debate. She was unable to attend today. The Scottish National party, Scotland and its Parliament have led the way in how cancer drugs can be allocated. There are lessons to be learned from Scotland so the SNP’s comments will be particularly pertinent.
We have an opportunity to do what is right. Today we have an opportunity to make a difference and to affect normal, everyday people’s lives in a positive way. We need to seize that opportunity. Let us use this House for what it was designed for—to help the people we represent. Cancer can strike anyone. It is indiscriminate and that is why we should be doing our best to get what is best for our constituents.
With the working group on the Cancer Drugs Fund currently suspended, it is important to remember that each minute we fail to make progress on the issue we are failing a British citizen suffering from cancer. I need not remind the Chamber of the ultimate consequences of patients being denied access to life-extending treatments. The longer we delay consultation on the new system, the more lives we are failing. Having said that, it is important that we consider the outcome and results rather than just the intention of the actions we take. The Cancer Drugs Fund did great work when it started and the intention of the fund was most honourable. However, we all know of the budgetary constraints that made the Cancer Drugs Fund sustainable, which is why we need to have an open and rational discussion about how to progress.
I should have said this at the beginning, but I will do so now: I thank the hon. Member for Scunthorpe (Nic Dakin), who attended the Backbench Business Committee on my behalf on a Monday about two months ago. I was unable to be over here on that Monday but he did it for me so I thank him publicly for that opportunity.
I welcome the fact that the Cancer Drugs Fund will become operational once again from April 2016, as I welcome any provision of care for cancer sufferers, but it is imperative that we develop a long-term solution that commits us to those who depend on cancer drugs for the extension of their life and for their families. Very often—I see this in my constituency office and I know that other Members do—we see the impact on the families. There are enormous financial, emotional and physical pressures.
Ms Ritchie
Is the hon. Gentleman aware that the UK National Screening Committee, which advises the devolved Administrations and the NHS in England on clinical trials, started a process of clinical trials last year? At the debate that I had in this Chamber on 4 November last year, I was told by another Minister in the Department of Health that that evidence base would be assessed for future treatment and diagnostic purposes. Does the hon. Gentleman agree that it would be useful if the Minister, in summing up, advised us of the results of those trials, which could then lead to better treatment and decisions on possible cancer drugs?
Jim Shannon
The Minister’s staff are taking notes, and hopefully he will be able to respond positively.
During the transition to the new system, cancer sufferers who were not registered with the Cancer Drugs Fund prior to suspension are not able to access the benefits of the CDF, which is deeply concerning. The second round of delisting will see a further 16 drugs delisted. As the CDF is suspended, patients who did manage to get registered are losing out on drugs that could potentially have been listed and may have been vital to their treatment, which is of concern to everyone in this House.
This is clearly an emotive issue that goes to the heart of everyone here and our constituents across the United Kingdom of Great Britain and Northern Ireland, which is why so many people are in this Chamber today. I thank each and every Member for their interventions and contributions. I look forward to the contributions to come.
Action is urgently needed, but we also need a sensible, rational and robust exchange on how to deliver this positive initiative in a sustainable manner that allows us to have a positive, long-term impact on those who are suffering. I look forward to the contributions of the shadow Minister, the hon. Member for Denton and Reddish, and particularly the Minister, for whom I have the greatest respect. I look forward to his reply with all the positive answers that we want so much.
Several hon. Members rose—
Mr Philip Hollobone (in the Chair)
Order. The debate is due to last until 11 o’clock. I want to call the three Front Benchers no later than just before 10.30 am—they will have about 10 minutes each. We will hear from Mr Shannon again for two or three minutes at the end as he sums up the debate. I will then put the motion to the Chamber. Now, the moment we have all been waiting for: I call Nic Dakin.
Nic Dakin (Scunthorpe) (Lab)
As ever, it is a real pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Strangford (Jim Shannon), who is an assiduous campaigner on this and many other issues, on setting out the case very clearly in his opening speech.
I will focus on pancreatic cancer, which, as everyone knows, is an extremely aggressive form of cancer with the worst survival rates of any of the most common cancers. The way in which Abraxane has been dealt with by the cancer drugs fund and the National Institute for Health and Care Excellence is illustrative of the challenges in access to other cancer drugs.
When used in combination with standard chemotherapy, Abraxane can extend the life of eligible patients on average by just over two months compared with using gemcitabine alone. However, it is important to note that, in some cases, patients live for significantly longer than two extra months, with some patients on the trial living for more than two years. The hon. and learned Member for North East Hertfordshire (Sir Oliver Heald) captured very clearly how two months can be significant in allowing patients with such an aggressive disease to settle their affairs and manage their situation as best as they can. There has also been a significant increase in the number of patients surviving for more than one year. For a disease in which there have been no drug improvements for more than 40 years, Abraxane is significant in finding a better answer.
Abraxane represents a middle road for pancreatic cancer patients. It is more effective than gemcitabine alone and, although it has considerable side effects, it is less toxic than FOLFIRINOX, which has been shown to extend life for longer but can only be used for the very fittest of patients. Although not all patients will be fit enough to use Abraxane, more patients will ultimately have access to life-extending treatment.
Abraxane was added to the cancer drugs fund in March 2014. That was a moment of great hope and expectation for the pancreatic cancer community, which for so long has had little about which to be positive. However, as new drugs were added to the cancer drugs fund and costs started to rise, a process began of removing drugs from the CDF’s list of approved drugs so that the fund could keep within budget, as the hon. Member for Strangford has outlined. A further review began in July 2015, and a decision was announced in September that Abraxane, along with several other drugs for other conditions, would be removed as of 4 November. That is happening across cancer treatment. For example, lenalidomide, which is currently being trialled on multiple myeloma patients with positive results, is also being removed from 4 November. This is a big problem out there in the real world.
It seems bizarre that a drug can be added to the cancer drugs fund in March 2014, then be removed just 18 months later. It seems wrong that a drug for which there was such strong demand—more than 550 patients accessed Abraxane via the cancer drugs fund in its first year, and the numbers were rising towards the end of the year—should be removed when few other treatments exist. It seems inequitable that the scoring system used by the CDF does not take into account the extremely poor survival rates for pancreatic cancer. We simply cannot have a one-size-fits-all system in which a drug giving substantial relative gain for a disease that has seen hardly any new treatments or improvements in survival for decades is judged by the same standards as drugs for other cancer types that have much better survival rates and many more treatment options.
Abraxane is not one of the most expensive drugs on the CDF. It costs some £8,000 per patient, not the £90,000 for some other treatments. There is considerable public outcry against the decision. One petition on Change.org created by my constituent, Maggie Watts, who lost her husband to pancreatic cancer 40 years after he lost his mother to pancreatic cancer— there has been no change in survival prospects over those 40 years—has exceeded 88,000 names already. Another petition started by the charity Pancreatic Cancer Action on the parliamentary e-petition site has passed 20,000 signatures.
There is a real problem, and a postcode lottery is emerging across the United Kingdom, with Scotland having approved Abraxane for routine use on the NHS back in January 2015 after the drug was assessed using Scotland’s new patient and clinician engagement system. Perhaps, as the hon. Member for Strangford said, we in England can learn from that. Wales used its own assessment to approve the drug for use back in September 2014. However, because NICE has said no to Abraxane in England, the drug will be reappraised in Wales, which might lead to access being removed. Northern Ireland has never had access to the drug because it generally follows NICE decisions and, as things lie, it does not look as if Northern Ireland will have access to the drug in future.
Mark Tami (Alyn and Deeside) (Lab)
My hon. Friend has outlined all the hoops that people have to leap through. If their timing is wrong, they may or more likely may not qualify for the drug. That is happening when patients are at their weakest. They are not experts, and they find themselves victims of what can appear to be a very cruel and harsh system.
Nic Dakin
My hon. Friend is right that patients and their families are at a critical point, which is why it is important that, on this difficult issue, we try our best to find a way forward that is sensitive to the need for such exceptional drugs in exceptional circumstances. In many ways, the Government should be praised for introducing the cancer drugs fund, but the CDF is clearly not fit for purpose when dealing with such exceptional situations, which is what is needed.
Other countries across the world are taking a leap forward in approving Abraxane for their health systems. Abraxane has been approved on price grounds for reimbursement in Austria, Denmark, Germany and Greece, and it has been given the go-ahead in the USA, Canada and Australia. There is a real danger that patients in the UK will be left behind unless they happen to be in Scotland. Removing access to Abraxane could mean that fewer patients can access trials. Moreover, we could be setting back research into a disease that for many years has had the worst survival rates of the most common cancers. This is an opportunity for a breakthrough in medical research that needs to be taken
I ask two things of the Minister, who goes about his work in an assiduous and effective way. First, can he take steps to examine the processes that NICE and the CDF use to consider drugs so that they take into account the exceptional circumstances surrounding drugs of this nature in areas where there has been no medical process or medical hope for many years? Secondly, will he meet me and the other officers of the all-party group on pancreatic cancer to explore the specific issues around Abraxane?
David Simpson (Upper Bann) (DUP)
I congratulate my hon. Friend the Member for Strangford (Jim Shannon) on securing this debate. On a more humorous note, I heard him mention that he has never missed a debate that the Minister has participated in; I think we could safely say that he has not missed any debates in the past five or 10 years. He is a champion in his own constituency when it comes to cancer research and pushing for cancer drugs, and I congratulate him publicly today on his work and his effort.
I welcome the opportunity to participate in this debate. In recent days, our newspapers, TV screens and social media have been flooded with reports about cuts to cancer treatments. One of the latest reports I read indicated that 5,500 patients could miss out under the Government’s plan to reduce the availability of cancer drugs.
Today, cancer is a word that has become all too familiar in our households. As we come together to debate the availability of drugs, some 2 million people are battling cancer. They are husbands, wives, mothers, fathers, sons or daughters. The impact of cancer is much greater and much more widespread than it might appear if we consider only those who are statistically labelled.
Recently I had the opportunity to visit the state-of-the-art facilities at the Queen’s University Centre for Cancer Research and Cell Biology in Belfast. It is making fantastic headway in understanding cancer: how it is formed; how it develops; and ultimately how we can slow down its growth, and eradicate faulty genes and molecules in tumours. The centre was recently awarded almost £4 million to continue its work in research and in developing cancer treatments.
I am proud that Almac, a pharmaceutical company that is a world leader in cancer drug discovery, has its headquarters in my constituency of Upper Bann. Its founder, the late Sir Allen McClay, was so dedicated to improving patient care that he donated much of his wealth to the Centre for Cancer Research and Cell Biology. However, while all this work is going on and new drugs and treatments are being identified, we consistently hear reports that there are plans to remove life-prolonging drugs for various cancers, including breast cancer, prostate cancer and bowel cancer, to name just a few.
Lady Hermon
One of the greatest concerns is about the cost of these drugs. The hon. Gentleman said that one of the famous manufacturers of cancer drugs is based in his constituency. How often does he have the opportunity to meet people from that company? Would it be helpful for a cross-party delegation to meet the senior management of that company, to persuade them to reduce the cost of their drugs? I am sure that they could; where there is a will, a way will be found.
David Simpson
I welcome that intervention—the hon. Lady makes a very good point. If Sir Allen were alive today and witnessing the cuts in the availability of these life-prolonging drugs, which were once in the headlines as good news stories, he would come out with his old statement: “Bang your heads together and get a resolution to this.” It is a good idea to have such a delegation. I meet Almac staff on a regular basis. Almac is a pioneer in this sector; it is working with Government very closely; and I understand that the pricing of its drugs is not ridiculous.
However, I will make a parallel point. Well over a year and two months ago—perhaps more—it was announced at the Budget that the Health Minister would introduce funding so that a vaccine for meningitis B could be given to children. It took a year and two months—perhaps even more time—for that policy to be implemented, because the pharmaceutical companies were holding out for more money than the Government could afford to pay. They were asking ridiculous prices, because they had the sole remedy for a complaint, so could exploit that situation.
The message needs to go out to some of the pharmaceutical companies that we are dealing with life here. And as one hon. Member said earlier, even if there are only two or three months of life left, people want to hold on to that life as long as they possibly can, because where there is life there is hope, and hope is what people want to hold on to.
A number of weeks ago in this House, I attended an awareness day for secondary breast cancer, and I was shocked to learn that the Government do not keep data on people who are living with this incurable disease, which is remarkable. In the other House, Baroness Morgan of Drefelin has highlighted the issue: because the Government, the NHS and the pharmaceutical industry have again failed to agree realistic prices for new drugs, some women will die sooner than they should.
Bowel cancer is the fourth most common cancer in the United Kingdom. Experts say that around two thirds of those who seek NHS treatment for advanced bowel cancer treatment are likely to face an earlier death under the plans to scale back spending. That is wrong. Like many Members, I regularly meet—possibly on a weekly basis—constituents who are battling cancer or who have just been diagnosed with cancer. I recently met a family who told me of their agonising fate as their father had been diagnosed with lung cancer. Like many families, they have carried out their own extensive research and confirmed with their oncologist that there are drugs out there that could prolong his life. Millions of pounds have been spent on developing these drugs, which could perhaps either save people’s lives or prolong them. However, that family were told, “Sorry, but we can’t give it to him, because it’s just too expensive.”
Where do we draw the line when it comes to someone’s life and life expectancy, and the family who are left behind? I realise that the Government have very hard decisions to make. I appreciate that, but anyone in Westminster Hall today who has either suffered from cancer or known a family member or a loved one suffer from cancer would go to the ends of the earth to try to help them and to resolve this issue, because life is precious. As I say, the Government have hard decisions to make, but I do not think that anyone here today would or should put a price tag on a loved one’s life.
More needs to be done. Families living with cancer need all the help they can get, through the Government, through counselling, through drugs or through whatever help they can find. I trust that the Government will consider that when it comes to the funding of these drugs.
Mark Durkan (Foyle) (SDLP)
As other hon. Members have said, it is truly a pleasure to serve under your chairmanship, Mr Hollobone. I want to begin by commending the hon. Member for Strangford (Jim Shannon) on securing this debate and giving us an opportunity to discuss an issue that is important to many people and families in every constituency that is represented in this House. The issue is important not just because of the scale of cancer’s impact, but because people are confused about some of the policies: the policy language and all the different funding mechanisms that seem to afflict delivery of treatments and options for new drugs.
I endorse much of what the hon. Member for Scunthorpe (Nic Dakin), who chairs the all-party group on pancreatic cancer, said about Abraxane. I, too, am an officer of that group. Abraxane is a perfect but terrible example of exactly the confusion and concern that people feel. Here is a drug that was supported by NHS England, but will be withdrawn on 4 November. People do not understand why, in this day and age, with evidence-based policy and all the intelligence that we are supposed to have at the disposal of the public policy system, we have a snakes-and-ladders system that means that drugs are available in some places but not others, or are available for certain periods but then are not.
As the Minister will probably tell us, part of the problem goes back to pressure on the Cancer Drugs Fund. The fund was a positive innovation, but it was meant to be a transitional step—something to make good the problems with the National Institute for Health and Care Excellence and its approval system, which was leading to poor rates of approval for many cancer drugs. Most of us, across all political parties, thought that there was a problem with drugs breaking through the NICE approval thresholds. The Cancer Drugs Fund was a deliberate innovation aimed at ensuring that in the short term more drugs would be available and used under that specialist mechanism, with the intention that underlying problems and issues with the NICE regime would be resolved.
Now, the Cancer Drugs Fund has ended up with its own budget pressures. Thankfully, the Government have topped up the fund over various periods, but that applies to NHS England. In Northern Ireland, where my constituency is, we did not have a bespoke cancer drugs fund and we were caught in the twilight zone of drugs seeming to be available and being discussed in debates such as this as though they were available when they were not available in Northern Ireland. The terrible irony is that some of the drugs that were available under the Cancer Drugs Fund were the subject of clinical trials.
The hon. Members for Strangford and for the hon. Member for Upper Bann (David Simpson) referred to the centre at Queen’s. What I am probably most proud of in my political contribution is that as Deputy First Minister I insisted on securing funding for the regional cancer centre in Belfast. We designed it as part of the reinvestment and reform initiative. When we negotiated with Tony Blair and Gordon Brown, I made it clear that we wanted a down-payment for the new borrowing power. The first thing we wanted to do was invest in the cancer centre at Queen’s, without messing around with public- private partnerships or anything else. We wanted a straight-up investment.
That cancer centre, like so many others, is working miracles every day, but alongside the miracles performed by those who carry out surgery or lead the radiotherapy units that the right hon. Member for Oxford East (Mr Smith) discussed, there seem to be debacles with funding policy and schemes.
There is a question about what will happen. We are supposed to be looking at a merger of NICE and the Cancer Drugs Fund. The fund is meant to move on from next year, but people who are directly involved and who deliver cancer services and campaign on cancer policy have no clear feeling about what is happening. People’s hopes are at stake, and they are confounded by what has happened with Abraxane and many other drugs that will no longer be available from 4 November.
We are blessed in this debate because the Minister not only speaks a lot about innovation, but in many ways has become a bit of a byword for innovation—and not just in life sciences. I hope that he and his colleagues can be truly innovative in the policy instruments and funding mechanisms that they hope to introduce. A key issue, which other Members have touched on, concerns not just provision of funding but control of prices and their negotiation. We must make sure not only that we have funding mechanisms that we understand, but that there is real leverage in price negotiation if we are to make those drugs truly available.
In these islands, we have a number of different Administrations and perhaps we need to do more to achieve combined purchasing power strength. One of the most neglected and underused creations of the Good Friday agreement is the British-Irish Council, which brings together all eight Administrations across these islands. That is a very good example of where those eight Administrations need to collaborate much more effectively, combining their leverage to make sure that there is a more consistent and compatible policy on available drugs, services and treatments, and to provide strength in combined purchasing when negotiating.
Devolution gives us the benefit of being able to innovate and take things forward in slightly different ways. I look forward to hearing the word from Scotland—from the hon. Member for Motherwell and Wishaw (Marion Fellows)—because, as we have heard in previous debates, Scotland moved to a new drugs fund that combined elements of the Cancer Drugs Fund with responses dealing with rare diseases. That, too, is subject to its own pressures and there are difficulties about what gets through and what passes the requirements test for funding and availability.
Obviously we do not have clinical expertise or a full understanding, but we are meant to be able to assist with policy constructs and governance, and we can do more. We should encourage the Minister to work with colleagues, not just in the devolved Administrations, but also with the Irish Government—all eight Administrations across these islands—to do more with the drugs companies and to achieve better understanding.
That would be a great help to the many people who provide key services, innovating, researching, and conducting clinical trials, not just in the cancer centre at Queen’s, but in other locations throughout these islands. It makes it much easier for them if they know that they are working against a better policy-meshed backdrop at the level of government; that the challenge funds are there for their research work; and that the collaboration that they are trying to achieve with commercial companies is matched by real price leverage and positive price control effort, as well as conscious usage planning on the part of Governments.
As the right hon. Member for Oxford East said, the issue is not just cancer drugs. Surgery is a key issue and none of us wants to understate its importance, nor that of radiotherapy. In my constituency, thankfully, a radiotherapy unit will open in 50 weeks’ time. It will be a cross-border unit, again using some of the models and ideas in the Good Friday agreement. The new radiotherapy unit, which will be part of the new cancer centre at Altnagelvin hospital, is funded by the Irish Government as well as the Northern Ireland Administration. It will make a huge difference to many people, assisting them on their cancer journey and making sure that they have less arduous physical journeys.
I look forward to the Minister’s response and the ongoing work that I know he wants to do. I hope that he takes that work forward with colleagues throughout all the Administrations in these islands and not just with his Whitehall colleagues.
Mr Philip Hollobone (in the Chair)
We now come to the first of the speeches by the Front-Bench Members. They have about 10 minutes each.
Marion Fellows (Motherwell and Wishaw) (SNP)
Thank you, Mr Hollobone; after the build-up I have had, I hope not to disappoint. However, my hon. Friend the Member for Central Ayrshire (Dr Whitford) I am not, so you will forgive me if I disappoint somewhat. I apologise in advance that I will not be able to stay for the summing-up, as I have urgent constituency business connected to Tata Steel.
Cancer is an enemy we all have to fight. The hon. Member for Strangford (Jim Shannon) said that earlier. He is absolutely right, and I thank him for securing the debate. Many right hon. and hon. Members have already mentioned that cost is often a factor in decisions regarding specialist cancer drugs, and it is a factor that cannot be overlooked.
Scotland does things slightly differently. Its £80 million new medicines fund is proportionately much larger than the UK’s cancer drugs fund of £340 million. The Scottish Medicines Consortium—the SMC—which was reformed last year, gives advice to NHS boards in Scotland and is in charge of the fund. The SMC takes patient and clinician evidence as part of its assessment for drugs, which has led to many more of them being passed for use. The SMC also covers orphan drugs, for one-off conditions. In January of this year, the first case of Translarna for use in muscular dystrophy was agreed in Scotland, because of the SMC’s work.
Returning to cost, the UK’s pharmaceutical price regulation scheme limits the amount of money paid by the NHS to pharmaceutical companies and thereafter a rebate comes back to the service. In Scotland, the rebates are put back into the fund, but I understand that in the rest of the UK the money goes to the Treasury. In that way, Scotland sometimes gets the fund to grow even more. The cancer drugs fund can lead to health inequality, simply because better educated, middle-class patients and their families are better able to argue their case. That is not right, and something should be done on it.
A number of right hon. and hon. Members, including the hon. Member for Foyle (Mark Durkan)—I apologise in advance for not referring to all Members by their constituency—have said that funding is important. The price challenge from cancer drugs is acute, and we all need to find a better way of funding drugs, to help everyone. For example, Herceptin took 20 years to get to patients, and a lot of drugs frequently do not make it through. It is understandable that the cost of drugs reflects that of research and development, which can take a long time and cost large sums, but surely it cannot be impossible to bring about a costing system that benefits everyone. A combined purchasing council, as mentioned by the hon. Member for Foyle, is something that the Government should look into.
I am extremely sorry that I cannot bring any more new information to the debate, but the fact that the Scottish Government place so much emphasis on the matter, and spend such a large proportion of their health budget on it, is indicative of how much we need and want to help cancer sufferers and those with unusual conditions. I hope that my small input has helped to stimulate the debate. Mr Hollobone, I am afraid that I now have to leave the Chamber because I have had an urgent call to go elsewhere. I apologise.
Andrew Gwynne (Denton and Reddish) (Lab)
It is a pleasure to see you in the Chair, Mr Hollobone, and to follow the hon. Member for Motherwell and Wishaw (Marion Fellows).
I commend the hon. Member for Strangford (Jim Shannon) on securing the debate through the Backbench Business Committee and on the way in which he opened it. He has set the correct tone for how we seek the improvements we would like to see in access to cancer drugs for all our constituents. He was absolutely right to say that cancer touches every family. I lost my mother to ovarian cancer 21 years ago, and it is as painful to talk about today as it was then, when I was teenager. Only last week, my aunty passed away from cancer. It was a quick movement from the diagnosis to her passing, and I would like to place on the official record my thanks and tribute to all the staff at Willow Wood hospice in Ashton-under-Lyne, who looked after her so beautifully in her last days and hours. I also express my condolences to Evan, Shana, Sonya, Lal and Connor, who she has left behind.
The hon. Member for Strangford was absolutely right to say that we have made advances, but we still lag behind many comparable countries in cancer treatment. Access really does matter. I represent a cross-borough constituency, so I have to deal with two of everything, from police divisions right through to NHS trusts. Early on in my time as the Member of Parliament for Denton and Reddish, a constituent who had been diagnosed with breast cancer came to my advice surgery. She explained that her specialist had recommended Herceptin for its treatment, but that it was not available in her primary care trust area. If she had lived across the road, across the invisible administrative line—but still in the same constituency, with the same Member of Parliament—she would have had access to the drug. That was one of those moments when it was perfectly acceptable for the Member of Parliament to throw all the toys out of the pram. I did so, and thankfully I managed to get the primary care trust to change its mind.
Several years later the lady came to my surgery again, about something completely different, and it was one of those proud moments when one realises one has made a difference. She said, “Mr Gwynne, you don’t recognise me, do you?” and I replied, “I’m sorry, I don’t. I have met lots of people in my time as an MP. Should I recognise you?” She said, “I’m that lady you got Herceptin for, and I’m still here.” I do not know whether the Herceptin made a difference, but she believed that it did, and she would not have had access to it if I had not thrown all the toys out of the pram. That is why I start by commending the Government on the introduction of the Cancer Drugs Fund. The fund has been of significant benefit to patients, and that is to be welcomed—it would be churlish not to recognise the difference it has made. I am a little concerned, however, that the Government—as we have already heard—are now presiding over a series of reductions, which threaten the progress made.
We have already seen 18 treatments cut, and now NHS England has announced that a further 25 are due to be removed from next month. The Rarer Cancers Foundation has estimated that if all the cuts go ahead, more than 5,500 patients a year could be denied access in the future. My hon. Friend the Member for Scunthorpe (Nic Dakin) and others during the course of the debate have made that point powerfully.
Is the Minister content to stand by as the cuts are made? What will he do to help the patients who will miss out on these treatments if they are removed? At Prime Minister’s Question Time last week, the Prime Minister lauded NHS England’s negotiation process as a means of securing better value for the taxpayer, yet I fear the truth is rather different. I hear reports from charities and drug companies that suggest that NHS England has refused even to discuss discounts on some of the treatments threatened with cuts. Far from wanting to strike a deal that works for the taxpayer and helps patients, NHS England seems intent on leaving deals on the table. It is sad that efforts to save money on a range of drugs have been spurned. The chief executive of NHS England once said that he wanted his organisation to:
“Think like a patient, act like a taxpayer.”
The current position, however, seems to be against the interests of taxpayers and patients. Will the Minister intervene in NHS England to ensure that it considers every single offer that is put to it and that it redoubles efforts to maintain access to these drugs while securing the savings we all want to see?
The Minister cannot wash his hands of the issue when the process is evidently failing patients and delivering poor value for public money. Other countries seem to be able to make the drugs available without spending more money on their health services, which implies that they are better at striking deals, or at least are more flexible in doing so. Why are we not following the same process? Why should our constituents be denied these drugs when patients in other countries have access to them?
In brief response to my hon. Friend the Member for Torfaen (Nick Thomas-Symonds), I place on record that we on the Labour Front Bench support his private Member’s Bill on off-patent drugs, which has the support of the Association of Medical Research Charities and will help to improve access to off-patent drugs. We also need to look at ways of encouraging clinicians to use off-patent drugs.
I will touch briefly on points that my right hon. Friend the Member for Oxford East (Mr Smith) and the hon. Member for Foyle (Mark Durkan) made on radiotherapy and surgery and the benefits that extending access to those treatments can provide. Going into the general election, the Labour party’s position was that we would extend the Cancer Drugs Fund to become a cancer treatment fund that would include radiotherapy and surgery. What consideration have the Government given to ensuring that all the innovations will be available as part of the fund?
On the pharmaceutical price regulation scheme, I fear that there is more bad news to come for cancer patients. In August, the Department of Health snuck out some changes to the PPRS on a Friday afternoon, and I fear that the implications of that news could be bad indeed. The change agreed with the Association of the British Pharmaceutical Industry effectively limits the level of PPRS rebates that drug companies have to make on expenditure through the Cancer Drugs Fund. That creates a financial black hole over the lifetime of the PPRS that the Rarer Cancers Foundation tells me could amount to £567 million. The Government need to find more than half a billion pounds to cover the gap between projected Cancer Drugs Fund spend and PPRS rebates. Will the Minister tell the House how this gap will be filled? Can he reassure patients that the budget for the CDF will not be cut and that patients will not miss out as a result of that secret deal between the Government and the drugs companies?
Finally, I want to cover the consultation on the future. The cuts announced to the Cancer Drugs Fund in September were an inevitable consequence of an abject failure to fix the system. The Government’s record on the reform of drugs pricing and assessment is a sorry tale of promises not kept. First we had value-based pricing, which was meant to be the solution, but went nowhere. Then we had value-based assessment, which was derided by all sides and shelved by NICE, the very organisation that proposed it. The hon. Member for Foyle made some powerful points and interesting suggestions not just on the combined purchasing power of the various NHS systems across the devolved Administrations, but on the wider purchasing power of all the Administrations of the islands on which we reside. I would like the Minister to consider that.
We have the promise of Cancer Drugs Fund reform, but the process is already riddled with confusion and delay. The NHS England working group on reform was shut down as quickly as it was set up. A consultation was promised for July and then September—now it is October and we still have no consultation. In drawing the debate to a conclusion, will the Minister provide an update on when the consultation will finally be published? If he cannot do so, will he intervene with NHS England to ensure that Members are updated so that they can reassure the many of thousands of cancer patients whose treatment depends on satisfactory reform?
The Parliamentary Under-Secretary of State for Life Sciences (George Freeman)
It is a pleasure to serve under your chairmanship, Mr Hollobone, at this early hour of the morning. I know that many Members would have liked to have been here for this debate. I suspect that if the debate had been scheduled for the main Chamber, we would probably have half-filled it, given the level of interest. I am delighted to have the chance to respond.
First, I congratulate and pay tribute to my friend, the hon. Member for Strangford (Jim Shannon). He is, as a number of colleagues have observed, a tenacious campaigner on this subject, and I am glad that we have kept up our record of 100% support for each other. He is a parliamentary champion of this cause, and it is a pleasure to work with him on it. He spoke powerfully about his own family’s experience of cancer, as did the hon. Member for Denton and Reddish (Andrew Gwynne). I am sure many Members from all parts of the House have experience of cancer. My father died of throat cancer when I was 19. It is a disease that still, despite all the progress, robs families and stalks the land. I will say something in a minute about the progress that has been made, because it is stunning.
I suspect when many of us were children, that word—cancer—normally spelled a quick and tragic death. Now, more than 2 million people living in Britain have had a cancer diagnosis. Cancer Research UK and all those involved in cancer research have achieved extraordinary things, but it is still a diagnosis and treatment that people dread. Cancer is a serious cause of early death, and it was powerful to have heard such cross-party support for cancer research.
As the hon. Member for Strangford and others observed, cancer does not respect any boundaries, whether they are of geography, income or party politics, although I make the point that it heavily correlates with health inequalities. Many colleagues in the House with constituencies with particularly high incidences of cancers also have constituencies with particularly a high incidence of poverty generally. There is a strong link between life chances and poverty and health and health inequalities. I observe that the Petitions Committee has received a petition on Abraxane, which is a symptom of how widely the concern on this issue goes across the House.
I will try to deal with some of the issues that have been raised. The truth is that the field of cancer research has pioneered the model of 21st-century drug discovery and life science research that is transforming how the sector works. That is driven principally by breakthroughs in genomics, genetic science and informatics—the ability to develop treatments and diagnostics based on being able to predict which patients will respond to which drugs and which patients are likely to be predisposed to a particular disease. Such breakthroughs and the use of big data, big informatics and genomic insights into the use of genomic biomarkers are allowing us to redesign the way in which drugs are discovered and developed. Cancer has led in that field partly because cancer is itself a genetic disease and because of the extraordinary work of Cancer Research UK and various other charities. I pay tribute to their work and leadership not only in deep science, but in the policy-making framework on treatment, diagnosis and care. I will talk about the cancer strategy that CRUK has helped us to put together in a moment.
The role of charities is growing in this space. I recently opened a combined laboratory in Cambridge shared by Cancer Research UK and MedImmune, a subsidiary of AstraZeneca. We have seen partnerships and collaborations between charities and companies before, but this was a joint laboratory, jointly funded with a joint research committee. It is a sign of where this landscape is going. We will see charities become the gatekeepers of patient power, patient tissues and patient genomic information, and gatekeepers of the patient asset in this new landscape of patient-centred research. It is a very exciting time for medical research charities.
Pioneering cancer research has made many cancers diagnosable and treatable diseases. As I have said, more than 2 million people now live with cancer. Diagnosis is still poor in pancreatic and colon cancer, and in many cases there is no proper cure, but about 98% of breast cancers are treatable and curable. That is a stunning breakthrough and I am sure that over the next 20 or 30 years we will see all cancers quickly reach that point. We need to recognise the extraordinary improvements in this field. The role of genetics and informatics is welcomed by the Government. We are doing everything we can through our life sciences strategy, set out by the Prime Minister in 2011, to drive this new landscape.
We have made groundbreaking commitments with the Genomics England programme. We are the first nation to commit to sequence the genomes from 100,000 NHS patients and combine that with clinical data. We have made groundbreaking commitments to open up our data sets to drive this model of 21st-century research. It is important that all of us who understand the power of that work also support it, because our constituents worry about the use of data. We need to make sure we safeguard individual patient data, and we need to make sure we unlock the assets of the NHS throughout the United Kingdom so that we are a genuine powerhouse in the 21st-century model of patient-centred research.
I want to pay tribute to the work of Northern Ireland scientists, academics and companies. The hon. Member for Strangford mentioned the Experimental Cancer Medicine Centre at Queen’s University. He is absolutely right that it is a world-class centre. I visited earlier in the year to commend, congratulate and support the team there. Sometimes the sector appears to be more interested in Oxford, Cambridge and London than in the extraordinary world-class centres out on the corners of the United Kingdom. I went specifically for that reason. The work there is not only world class in terms of the deep science on the cell mechanisms of cancer, but, in embracing the unified life sciences strategy research and treatment, the centre has helped to pioneer leadership in stratified medicine, pulling in inward investment and, interestingly, taking the patient catchment for the lower quartile of cancer outcomes to the upper quartile. That is a sign of how research medicine drives up clinical standards.
Jim Shannon
I visited Queen’s University in Belfast in the summer. They told me that they wished to see more partnerships and relationships with other universities, including on the mainland. The funding strand needs to be encouraged and we need to be a part of that. Will the Minister take that on board? I am sure he knows all about it, but I simply remind him.
George Freeman
The hon. Gentleman makes an important point. I will be discussing the matter with the Minister for Universities and Science and the Medical Research Council. We need to make sure that we move to a more networked and collaborative model of science funding. Traditionally, we have tended to fund established centres of excellence, which is important, but we also need to make sure we build networks. Cancer networks in research and treatment have been incredibly powerful in driving the advances that we have discussed. He makes a very good point. I was delighted to see the leadership of the Queen’s centre recently recognised by Cancer Research UK with a £3.6 million grant.
I want to talk about the wider landscape of cancer treatment and then turn to the drugs question.
Lady Hermon
I am grateful to the Minister for allowing me to intervene on him before he moves on to a different point. I am pleased that Her Majesty’s Opposition have made it clear in the debate this morning that they are going to support the Off-patent Drugs Bill, a private Member’s Bill. It would be helpful to many MPs who have had emails from constituents, as I certainly have, to find out what the Government’s attitude is to the Off-patent Drugs Bill. I encourage the Minister to say, “Yes, the Government will support it,” although I do not want to put the exact words into his mouth.
George Freeman
I will come to that important point as I deal with some of the questions that have been raised.
On the wider issue of cancer treatment, I want to highlight the announcement that the Secretary of State recently made on setting out our cancer strategy and the work of the cancer taskforce. We have set out important measures on a wider treatment regime for cancer. By 2020, NHS patients will be given a definitive cancer diagnosis or the all-clear within 28 days of being referred by a GP. This will be underpinned by an extra £300 million a year by 2020. We are launching a new national training programme that will equip another 200 staff to develop the skills and expertise to carry out endoscopies by 2018. We have a commitment from NHS England to implement the independent cancer taskforce’s recommendations on molecular diagnostics. This will mean that around 25,000 additional people a year will have their cancers genetically tested to identify the most effective treatments.
I have been absolutely insistent since day one when we launched the genomics programme that this deep science project should be embedded in NHS England. Patient recruitment for the project comes through the 11 genomic medicine centres in NHS England, and NHS England is now developing an infrastructure for doing genomic and molecular diagnostics in the mainstream NHS. We want the NHS to be the first health service in the world to launch genomic medicine for all as part of our universal 21st-century offering. A lot of work is going on at the moment on how we build the infrastructure for molecular diagnostics.
Our aim is that, by 2020, everyone diagnosed with cancer will benefit from a tailored recovery package, individually designed to help each patient. We are also committed to empowering patients and giving them much more information, so that those who choose to do so will be able to access personal health information, such as their test results, diagnosis, treatment history and their cancer recovery package, online. By 2017, there will be a new national quality of life measure to help to monitor how well people live after their treatment has ended, enabling priorities for improvements to be identified. We will continue to work with NHS England, charities and patient groups to deliver those commitments. It is important to remember that as people live with cancer—hopefully, more people will live with it—we will need to invest in the support network for how they live with it, and how we continue to monitor and support them and deliver post-treatment care.
I want to emphasise the importance of the role of NICE. Nothing I am about to say in any way undermines our commitment to its independent role and expertise in guiding and supporting decision making on drug access with the latest evidence and health economic leadership. In no way do we want to undermine its position. NICE has led the world. That is a great tribute to it and to the UK’s system. We are clear that if a drug is recommended by NICE, the NHS is legally required to fund it. Over the years, many thousands of people in England have benefited from the cancer drugs that NICE has recommended. These include Herceptin, Yervoy, and Zytiga for prostate cancer.
Most recently, hon. Members will have seen that NICE published final guidance on 7 October that recommends Keytruda, or pembrolizumab, for the treatment of advanced melanoma, after disease progression with Yervoy. I urge NICE to embrace the new technologies. I will talk about that in a moment. I am particularly pleased to be able to announce that in the early access to medicine scheme, which we launched last year as the beginning of the new landscape and which I have asked my accelerated access review to look at beefing up and developing, the first drugs have come through. They have been fast-tracked.
I am delighted to confirm to the House that NHS England has now undertaken routinely to fund the use of NICE-recommended early-access-to-medicine products within 30 days of NICE guidance being published. Colleagues will know that the scheme was established so that an innovative drug may be designated a promising, innovative medicine, and if there is no alternative mainstream therapy, the treatment can be fast-tracked into patients, with their consent, and rapid assessment carried out. The link to NHS England commissioning had not been established, but it is now in place. I am delighted that the first drug has gone through that system, and we hope that more will follow.
Mark Durkan
I welcome the Minister’s words on the progress of early access, but does he recognise that since 2011 NICE has turned down every new breast cancer medicine, while the cancer drugs fund has approved six new breast cancer treatments in NHS England? Between April 2013 and March 2015, that represented more than 2,000 extra life-years for patients coming from the CDF—life-years that NICE did not deliver.
George Freeman
The hon. Gentleman tees me up perfectly for the next section of my speech, because I want to deal with access to drugs and the Cancer Drugs Fund. We all recognise, not least the Prime Minister, that access to drugs is essential in this landscape, which is why he personally led the launch of the Cancer Drugs Fund—I thank the shadow Minister for paying tribute to that leadership. We have now committed just over £1 billion to the Cancer Drugs Fund—a substantial investment—and just under 80,000 patients have benefited from treatments that otherwise would not have been approved. They are largely treatments that NICE has turned down and the Cancer Drugs Fund has then stepped in to fund.
Because of the cancer field’s leadership in this new model of drug discovery, the rate of new drugs coming through is increasing and going to a targeted patient base. The smaller patient catchment for which industry must recover costs has driven it to raise prices and costs. In many ways, it has challenged NICE’s traditional £30,000 per quality-adjusted life-year model. It is driving huge pressure on our traditional model of health-economic reimbursement.
As Members have said, and as the National Audit Office report recently highlighted, the CDF was originally established as an interim measure to ensure that cancer patients were not denied drugs while we fixed the landscape. Although I have been in post only 15 months, I hope colleagues can see that the reviews of accelerated access and the CDF are not accidentally aligned. We are currently looking at how we make sure we support access to innovative medicines. Where cancer has led, other therapeutic areas will follow.
The genomic and informatics revolution will require NICE to change how it works. The explosion of progress in this field is what has put so much pressure on the CDF. Ever more treatments are coming online, but NICE is turning down ever more treatments on very well respected health-economic grounds. Those are difficult judgments about what represents health-economic value for the system and for patients. The CDF does not have a built-in discounting mechanism: it effectively takes the price on the basis of which NICE has rejected the drug and agrees to pay it. We want to look at whether we might use our extraordinary purchasing power to use the fund in a more productive way to get earlier access and, in return, discounts. That is what the accelerated access review is all about.
It is important to confirm that if NHS England decides to de-list a drug, any patients who have received a drug through the cancer drugs fund will continue to receive it. Where patients, particularly those with rarer cancers, are unhappy with a recommendation to de-list and their clinicians advise it, they can initiate individual cancer funding requests, an important avenue that many patients are successfully using.
I want to discuss the accelerated access review and respond to some of the questions that have been asked. I launched the review this time last year, asking and challenging the system to answer three big questions. Given the NHS’s extraordinary position as a universal, single-payer health system with leadership in genomics and informatics, the review is about asking what we can do to accelerate how we get innovation to patients. I have asked three specific questions. First, what can we do to shorten the time, cost and risk of getting innovation to that all-important moment of first use in patients? How can we make things quicker both for the patients who need it and for researchers, so that they can get those all-important human clinical data?
Secondly, what can we do to help NICE to embrace new flexibilities and pathways and to use genomics and informatics to update its systems, in order to deal with the issues raised by a number of colleagues relating to the end of the one-size-fits-all blockbuster model so that, in the 21st century, NICE has more tools at its disposal and more adaptive pathways—to use the jargon—to open up those flexibilities?
Thirdly, I have asked the accelerated access review to look at what barriers we can knock over and what incentives we can put in place to speed up the roll-out of innovative drugs and device diagnostics across the system. Unfortunately, there is great variation in the pace at which innovation is rolled out. In many ways, the CDF has pioneered on the very problems with which the system is now confronted. I am convinced that the CDF will be part of the solution. I cannot prejudice NHS England’s consultation, but I can reassure Members that, through the accelerated access review and the comprehensive spending review, we are looking at what we might be able to do to ensure that our commitment to funding innovative cancer medicines through the CDF also supports the broader landscape for innovative medicines. We will have to wait to hear the detail in the comprehensive spending review and subsequent announcements at the end of the consultation.
I want to deal quickly with one or two of the points made in the debate. The hon. Member for Upper Bann (David Simpson) made an important point about the different parts of the United Kingdom co-operating. As the UK Minister for Life Sciences, I am very conscious of leadership in Scotland, Wales and Northern Ireland, and would be interested to follow up on his point about using the broader network.
The hon. Member for Scunthorpe (Nic Dakin) asked me about NICE looking at exceptional circumstances. The accelerated access review is looking at whether we can give NICE more freedoms and flexibilities. The hon. Member for Motherwell and Wishaw (Marion Fellows) made an important point about the Scottish model—the innovative medicines fund there, the Scottish Medicines Consortium and the importance of patient voice, of which I am very conscious. She also discussed health inequalities, which are important.
Various colleagues asked about Abraxane. NICE is in the process of developing guidance on Abraxane for pancreatic cancer, which it expects to publish very shortly. The hon. Member for Strangford made an important point about data. We recognise that we need to be much better at gathering and using the data from the CDF. A data-sharing agreement between NHS England and Public Health England was signed in July.
In closing, I thank the shadow Minister for his support for the cancer drugs fund. We are intent on it remaining focused on access to drugs; we are tackling the wider treatment regime through the cancer strategy I have set out.
Mr Philip Hollobone (in the Chair)
Order. I am sorry, but we are running out of time so I am going to call Jim Shannon to wind up.
Jim Shannon
Thank you for chairing the debate, Mr Hollobone. I thank all right hon. and hon. Members who participated. A vast array of excellent knowledge was on display today from those who gave speeches and made interventions. Some great ideas were put forward, particularly that of the hon. Member for Foyle (Mark Durkan) about combined purchasing power. The Minister and shadow Minister were both on to that; it is something we can use better to develop the existing innovative drugs policies across the whole United Kingdom. I draw particular attention to the advances being made at Queen’s University Belfast, which we should combine with progress in the rest of the United Kingdom.
The contributions from each and every Member were valuable, detailed, informative and compassionate. It is important that we put on the record our thanks to the charities and other contributors. We are all moved by the e-petitions, which show that there is clearly a deep interest in the best way to fund cancer drugs. We have tried to ensure that patients at their weakest are the focus of the debate. I thank the Minister for his comprehensive reply. We look forward to helping our constituents across the whole United Kingdom of Great Britain and Northern Ireland.
Mr Philip Hollobone (in the Chair)
Order. I encourage Lady Hermon to grab the Minister and the hon. Member for Strangford (Jim Shannon) on the way out.
Question put and agreed to.
Resolved,
That this House has considered the availability of cancer drugs.
Post-Study Work Visa (Scotland)
(9 years ago)
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Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I beg to move,
That this House has considered the operation of the post-study work visa in Scotland.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I hope the House will note the views of students, graduates, academics, Universities Scotland, the National Union of Students Scotland, colleges, the Scottish Parliament and the business community, which are all calling for the UK Government’s decision to revoke the post-study work visa to be reversed. That broad coalition claims that the Government’s reckless decision hinders the student experience, is devastating for Scotland’s universities and colleges, and damages businesses’ ability to grow their operations.
The post-study work visa is an almost unique area of policy, in that it unites all Scotland’s political parties, including the Scottish Conservatives. In Scotland, we would call it a no-brainer. The post-study work visa, introduced in 2004, was one of new Labour’s few genuinely effective policies. It made a positive contribution to Scotland politically, economically and socially—an exception to prove the rule, some might say.
As the humanitarian crisis affecting refugees from Syria illustrates, Scotland has a proud record of welcoming people from all over the world. We value the contribution that our international students make to and in our communities, towns, workplaces, classes and lecture theatres. They internationalise our experiences and make us more informed and culturally aware.
One of the best things about Paisley is that the University of the West of Scotland’s main campus is located at the top of our high street. UWS is a fantastic university. It opens its doors to students who would normally not get the chance to access higher education, and it provides an excellent student experience. Although I was not a student at UWS, I have strong connections with it: my wife just enrolled there, and my dad will graduate from it in a few weeks’ time. Additionally, three of my staff graduated from UWS, two of whom served as student presidents of the university. Although they graduated at different times and with different degrees, they all agree that studying and working alongside and socialising with the international cohort was the best thing about their time at university. It opened their eyes to different cultures and a different way of working, and they became better students as a result.
Learning from others at university can be just as important as the academic education a person receives. That is the crux of the issue. The UK Government fail to understand the positive and real impact that the PSW visa has on Scotland. Although the Home Secretary believes that the PSW visa benefits only those from outside the European Union, the truth is that we all benefit from having international students studying and living in our communities. That is why the broad coalition I spoke of is united in its desire to see the post-study work visa reintroduced. We believe there is a clear, demonstrable demographic and skills need, along with wider and immeasurable social and economic benefits to restoring that route into work.
Carol Monaghan (Glasgow North West) (SNP)
Does my hon. Friend agree that one of the real benefits of a post-study work visa is that the experience, qualifications and expertise that those students have gained in our universities can be used in our communities to grow our economy? Otherwise, that expertise would return to their countries and be taken away from our communities.
Gavin Newlands
My hon. Friend makes a very good point. When the Minister sums up, can she explain why everyone else is wrong and her Government are right in believing that the post-study work visa is bad for universities, colleges and businesses?
Student leaders, such as the National Union of Students Scotland, have long supported the post-study work visa, as they have first-hand experience of the benefits that international students bring to our campuses. NUS Scotland states that international students enrich the curriculum, diversify the university experience and help improve the skill sets of our home students. I have received such feedback not only from NUS Scotland but from students who live in my constituency. Regardless of which university they study at or which course or subject they study, our home-based students all speak positively about the impact that their international colleagues have on their time at university. Although Members here probably graduated a good few moons ago, I am sure they would all say that their university experience was richer for studying alongside students with backgrounds different from their own.
Kirsten Oswald (East Renfrewshire) (SNP)
I echo my hon. Friend’s words. I have worked in the Scottish further education sector for the past 12 years, and there are absolutely real cultural, social and economic benefits to having a diverse student populations in our colleges and universities. Our global competitors are very happy to welcome those valuable international students and everything they have with open arms—other places will benefit from things our communities should be benefiting from.
Gavin Newlands
That was a very strong point from my hon. Friend.
NUS Scotland rightly points out that Scotland’s equivalent of the post-study work visa, the fresh talent initiative, attracted prospective international students to consider Scotland as a place to study. The Higher Education Statistics Agency suggests that the number of students from overseas markets enrolling in Scotland’s universities has declined substantially since the Home Secretary closed the post-study work opportunity. For example, recent research undertaken by the Scottish Government’s Post Study Work working group suggests that the number of new entrants to Scottish universities from India fell by 63% between 2010-11 and 2013-14.
The ending of the visa sends a clear message to that important international market that Britain is closed for business. How does the Minister respond to such damning statistics? Does she think that the fall in the number of students coming from India and other key international markets is good for universities?
During my research into the impact caused by the removal of the visa, I spoke to a number of graduates who stated that their teamworking and language skills increased as a result of working in diverse groups that contained members who came from another part of the world. They said that it created obvious challenges, although mostly for the international students who struggled to comprehend a strong west of Scotland dialect—something that Members here can appreciate. The experience of working alongside international students helped those graduates to prepare for the world of work. We need to ensure that our graduates are able to work with different cultures, and university is key in preparing them for an increasingly globalised workplace.
It is clear that students, student leaders and graduates appreciate the opportunities that the visa provided. It made Scottish universities a more attractive destination, diversified the curriculum, improved our university experience and helped to improve the skill sets of our home students. However, not only students support it. Academics have also played an important part in calling for the restoration of the visa. As well as acknowledging the benefits that international students bring to their campuses, academic leaders cannot stress enough the importance of the economic benefits that international students bring to Scotland’s higher education system.
Most non-EU students make a significant and vital contribution to Scotland’s education sector and national economy; they do not come here, receive a free education and go back to their own country as soon as they have graduated. They pay fees—in some cases, up to £24,000 a year to study at one of our top universities—and spend money while living here on accommodation, living costs and the occasional drink. According to the Department for Business, Innovation and Skills, Scottish universities received £374 million from non-EU student course fees in 2012-13. While studying in Scotland, international students also contributed to the Scottish economy through off-campus expenditure, estimated at £441 million a year. In times of austerity, we surely cannot refuse to accept that income.
Hon. Members will be aware of Scotland’s fantastic reputation for higher education. Scotland now has five universities in the most recent Times Higher Education world ranking’s top 200, and three in the top 100. Those rankings assess performance in a number of areas, including employee reputation, staff-student ratios, research citations and academic reputation. Scotland well and truly punches above its weight in providing an excellent university education, and I pay tribute to the work of the Scottish Government, university staff and students in achieving that success. We should build on the reputation that Scotland’s higher education system has worked so hard to cultivate—not denigrate it, as ending the PSW visa programme is doing. We can improve our reputation and sustain our excellent academic record by restoring the visa. A failure to do so will cause us to fall behind our international competitors.
Universities are measured on their academic record and attractiveness. Can the UK Government say with any authority that the UK is an attractive place to study since the ability to live in, work in and contribute to Scotland has been removed? The decline in the number of international students choosing to study in the UK clearly shows that the UK is falling behind in international competitiveness and attractiveness. Don’t just take our word for it: the all-party parliamentary group on migration produced a report in February. Its Tory vice-chairman noted:
“Higher education is one of our country’s leading export success stories…But the government’s current approach to post-study work and student migration policy is jeopardising Britain’s position in the global race for talent.”
Higher education is not the only sector feeling the impact of the removal of the visa. Further education colleges are also calling for this important route into work to be reinstated. I am fortunate to have the Paisley campus of West College Scotland in my constituency. During my first recess as MP for Paisley and Renfrewshire North, I made it a priority to meet the college’s principal, Audrey Cumberford. During my meeting with Audrey, we spoke about several important issues affecting the college, including its success following a recent merger. However, we also spoke about the challenges that the college is facing and the major test confronting the college sector as a result of the Home Secretary’s decision to revoke the visa.
Like others in the FE sector, Audrey Cumberford claims that the post-study work visa was an important factor in attracting the best international student talent to Scotland. It secured essential income for colleges and allowed college and university graduates to continue to contribute to Scotland at the end of their studies. It could be argued that colleges have actually been hit harder following the demise of the visa as the number of international students studying in Scotland’s colleges fell from 2,039 in 2010-11 to 561 in 2013-14—a shocking and inexcusable fall of 72%. What is the Minister’s response to that shocking decline? What support can the Government provide to current students who are losing out from not being able to study alongside students from other countries?
Audrey Cumberford serves not only as the principal of West College Scotland, but as the chairwoman of the Renfrewshire chamber of commerce, playing an important role in supporting local businesses. She speaks to businesses from around the world on a regular basis, hearing about the opportunities and challenges that exist when setting up and operating a business in the UK. Again, business leaders are uniting with students, universities, academics, the NUS and colleges in calling for the reintroduction of the post-study work visa. The Post Study Work working group is quite damning in its claim that the UK Government’s decision to revoke international students’ ability to work after graduating from university is acting as a barrier to economic growth in Scotland. In fact, the results of a consultative survey found that 90% of businesses in Scotland were in favour of the reintroduction of the post-study work visa. Is there another policy programme that nine out of 10 businesses oppose and that businesses claim is having a detrimental impact on their operations? Surely the Conservatives, the self-proclaimed party of business, would want to do something to help them.
Businesses in Scotland claim that they are losing out on recruiting highly skilled workers now that the option of employing a highly skilled and qualified overseas graduate is no longer available. From a job market point of view, there is no reason whatever not to allow such students to take up the job opportunities waiting for them. They would pay tax and contribute to our communities and we should allow them to pay the country back for the education that they have received. The Government talk about reducing wasteful spend, but training these students, pouring thousands of pounds into educating them and then allowing another country to reap the benefits is surely the ultimate waste of money.
Businesses are also refuting the UK Government’s claim that international students will take jobs away from UK-based students. The fact of the matter is that a skill shortage exists in Scotland and the Post Study Work working group acknowledged the role that international student recruitment could have on filling that gap. Significant skill gaps exist in areas such as financial services, food technology, engineering and IT, and we should reduce the constraints on such businesses to allow them to recruit skilled international workers and make use of them to train up domestic workers. Would one approach to help meet the skills gap not be the restoration of the post-study work visa?
In conclusion, I hope that in my first Westminster Hall debate I have been able to articulate the views of the broad coalition that wants the post-study work visa to be reintroduced. The matter has been brought to the attention of the Scottish Affairs Committee time and again as it consults with Scots from a variety of sectors. It bears repeating that it is rare to find a policy area that unites all major Scottish political parties in addition to business, civic Scotland and the higher and further education sectors. The UK Government are finding themselves increasingly isolated on the matter and the decision consistently to reject calls for the PSW visa to be reintroduced does nothing for their reputation as being deaf to and out of touch with the Scottish public when it comes to immigration matters. We are in a post-referendum period and the ball is well and truly in the UK Government’s court. There is civic consensus and unanimity across all political parties in Scotland that post-study work visas should be reintroduced.
Scotland’s immigration needs are different from those in the rest of the UK, and we welcome the contribution that new Scots make to our economy and society. A post-study work visa is an important lever for attracting the best international student talent. The Smith Commission recommendations clearly outlined that Scotland should have more flexibility within the current UK-wide framework for immigration. The Government have consistently indicated a willingness to listen to the arguments and make amendments to the Scotland Bill, but they have consistently failed to follow their words with action. I offer the Government yet another opportunity to show that they can listen. There is room in the Smith agreement to devolve the administration of student visas, so I ask the minister to give that serious consideration.
The Parliamentary Under-Secretary of State for the Home Department (Karen Bradley)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I apologise for my slightly late arrival. Something is going on outside, and it seems that the roads are a bit busy for some visitor or other. Anyway, I got here and I was delighted to hear the vast majority of the speech made by the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), whom I congratulate on securing a debate on the operation of post-study work visas in Scotland.
The Government recognise that there should be opportunities for the brightest and best graduates from UK universities to remain in the UK to work, and we have an excellent post-study work offer for graduates seeking to undertake skilled work in Scotland after their studies. The hon. Gentleman and his hon. Friends the Members for East Renfrewshire (Kirsten Oswald) and for Glasgow North West (Carol Monaghan) are right to say that overseas students enrich the universities at which they study. I am lucky enough to be a graduate of Imperial College London. When I studied there, over 20 years ago, more than a third of students were from overseas, and I know that my university experience was enriched as a result. I will therefore set out the opportunities available to overseas students who graduate from UK universities and make it clear that the UK is not closed for business.
The number of students who can stay in the UK after completing their studies is not limited, but they need to meet certain conditions. Those with an offer of a graduate-level job, paying an appropriate salary, may take up sponsored employment through tier 2, the skilled worker route, which is one of the ways that they can apply to stay. Over 25,000 UK employers are licensed by the Home Office to sponsor non-EEA nationals to work in the UK under tier 2. If graduates apply from within the UK, the resident labour market test is waived and they are not subject to the annual limit on tier 2 numbers. In 2013, more than 4,000 visas were issued to tier 4 students to switch into tier 2 in the UK; last year, that number increased to more than 5,500.
We have introduced a visa category for graduate entrepreneurs, the first of its kind in the world. Those who have been identified by a higher education institution or UK Trade & Investment can stay on for up to two years to develop their business in the UK before switching into tier 2 or the main tier 1 entrepreneur route. Just over 560 graduate entrepreneur visas were granted in 2014, up from 206 the year before.
We have also made provisions to switch into tier 5 those graduates wishing to undertake a period of professional training or a corporate internship related to their qualifications before pursuing a career overseas. In addition, PhD students can stay in the UK for an extra year under the tier 4 doctorate extension scheme to look for work or start their own business. All those post-study work provisions are available to non-EEA graduates of UK universities, including those in Scotland.
It is worth putting the statistics on the record. In the year ending March 2015, 137,000 non-EU students entered the UK and only 41,000 left. That shows that many people are taking advantage of the opportunities to stay in the UK and work that the legal migration route offers, but it also indicates that there are many overstayers—people who are here beyond their visa. It is therefore important that the Government, who are listening to people’s migration concerns, do not allow or accept abuses.
I also want to address the question of whether Scottish universities are at a competitive disadvantage. Let me be clear: I would never talk down Scottish higher education establishments. Scottish universities are absolutely fantastic. I have relatives who have studied at Glasgow and other institutions and I know about the fantastic qualifications, training and learning that they received. Since 2010, university-sponsored applications have increased by 7%, with a 4% increase to 14,627 last year. The figures indicate that Scotland is not closed for business and that overseas students do want to study in Scotland.
The hon. Member for Paisley and Renfrewshire North mentioned a decline in further education college numbers. We are reforming the student visa system to tackle abuse. There has been a fall in the number of international students applying to study in further education, the area where immigration abuse had been most prevalent. However, I repeat: university-sponsored applications to Scottish universities are increasing—up 7% since 2010 and up 4% last year alone.
The current set of provisions replaced the tier 1 post-study work category, which was closed in April 2012. The previous category permitted students graduating from a UK university to stay in the UK for up to two years after they finished their course, with unrestricted access to the labour market. The number of applications was significant, climbing from 20,015 grants of extension of stay in 2008 to 43,719 in 2011, when the route accounted for 45% of all grants of extension of stay for the purpose of work. Analysis of the route shows that the availability of the post-study work category gave rise to a cohort of migrants with a significant possibility of engagement on unskilled work. An operational assessment of the employment status of tier 1 migrants undertaken in October 2010 found that three in five users of the tier 1 post-study work category were in unskilled work, not graduate-level work. That does not suggest that the UK is not open for business. Our great university education should mean that we encourage people who want to stay to do graduate work, not to carry out unskilled labour.
In addition, UK Visas and Immigration intelligence assessments made in 2009 found that applications to switch into the tier 1 post-study work category were associated with high levels of abuse, including the submission of suspected bogus educational qualifications. A 2014 analysis of the tax status of migrants who had switched from the tier 1 post-study work category to the tier 1 entrepreneur category found that the majority had no declared economic activity or were working in breach of their conditions of stay. At the same time, we transformed the immigration routes for migrant workers and introduced a cap of 20,700 for non-EEA migrant workers, and there has been an increase in sponsored visa applications for highly skilled workers.
We have also tackled abuse of the student route. We have struck off nearly 900 bogus colleges since 2010. At the same time there has been a 17% rise in the number of sponsored student visa applications for universities, and a 33% rise for Russell Group universities.
Kirsten Oswald
It is a great shame that the Government have not found a way to deal with bogus colleges without the great disadvantage that is being inflicted on colleges and universities. I urge the Minister to be cognisant of the differences between universities and colleges when she gives her explanations. That would be very welcome.
Karen Bradley
I do understand the point that the hon. Lady makes about the difference between FE and higher education colleges. I am privileged to have a higher education college in my constituency now, as the FE college has become part of the University of Derby and is therefore now a higher education establishment. I am aware of different types of students and courses.
I want to touch on the matter of devolution. The Smith commission commits the Scottish and UK Governments to working together to explore the possibility of introducing formal schemes to allow international higher education students to remain in Scotland and contribute to economic activity for a defined period of time. The current provisions available to graduates of Scottish universities are precisely the type referred to in the report of the Smith commission.
On the question of net migration overall, as the Home Secretary has set out, high levels of immigration can put pressure on schools, hospitals, accommodation, transport and social services and drive down wages for people on low incomes. We now have a more selective approach to immigration, which is designed to operate in a fair and practical way, giving students, graduates, workers and employers the confidence they need in our system.
I recognise that the hon. Member for Paisley and Renfrewshire North and his hon. Friends value the post-study work provisions in Scotland and across the UK. I confirm my commitment to our continuing to provide an excellent offer to people who graduate from UK universities.
Question put and agreed to.
Air Passenger Duty: Regional Airports
(9 years ago)
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Julian Knight (Solihull) (Con)
I beg to move,
That this House has considered air passenger duty and regional airports.
It is always a pleasure to serve under your chairmanship, Sir David. I am delighted to have secured this important debate, and I put on record my thanks to my hon. Friend the Member for North West Leicestershire (Andrew Bridgen), who has been a champion of regional aviation and has campaigned on many of the issues that I hope to touch on in the debate.
Along with many hon. Members present, I have a regional airport on the edge of my constituency—in my case, Birmingham airport. I will set out the importance of my regional airport to the west midlands and to the wider UK economy, before moving on to the specifics of air passenger duty.
Birmingham airport is the second largest regional airport in England and the third largest regional airport in the UK. York Aviation has calculated that in 2014 the airport’s total economic impact in the west midlands was worth about £1.1 billion. The airport supports about 25,000 jobs.
Karen Lumley (Redditch) (Con)
I congratulate my hon. Friend on securing the debate. Does he agree with me that Birmingham international airport is a fantastic airport and, when High Speed 2 is built, some people in London will be able to get to Birmingham quicker than they would be able to get to Gatwick or Heathrow?
Julian Knight
My hon. Friend is a strong champion of regional aviation, and many of her constituents in Redditch not only use Birmingham airport and enjoy its facilities but work there.
As I was saying, York Aviation calculated that some 25,000 jobs rely on the airport, which puts it in a similar bracket to developments such as HS2 in driving the regional economy. Passenger numbers at Birmingham airport have grown by 13% over the past five years and in 2014 alone it handled more than 9.7 million passengers, including a 7.2% growth in long haul. Nevertheless, the airport is running well below capacity. It could conceivably accommodate up to 36 million passengers, rather than just under 10 million.
The potential for Birmingham airport, and I am sure for many other hon. Members’ airports, to impact positively on the UK economy is considerable. Genuinely, we have only scratched the surface of what we can achieve. While we take seemingly forever to debate a new runway at Heathrow, jobs and direct investment in the regions are going begging.
The west midlands is in receipt of over a quarter of all foreign direct investment entering the UK and leads the UK in terms of export growth. It is the only part of our country with a positive visible trade balance with the European Union, seeing overall growth of 100% between 2009 and 2014. Birmingham airport is central to that—but more growth and jobs could be had. A major stumbling block is the air passenger duty regime.
Regional airports are at a disadvantage, as rates of APD are calculated on the destination of the flight and the class of travel that a passenger is in. This fee is the same whether someone flies from Heathrow, Birmingham or any other English or Welsh airport: for flights within the European open skies area, the fee is £13 in standard or £26 in a higher class, but jumps dramatically for flights outside that area, to £71 in standard class or £142 in a higher class. APD in the UK is considerably higher than in our neighbouring competitor economies: in Germany, it is £5.70 in the European open skies area and £32 for the rest of the world in standard class; and in France it is cheaper still, at £3.90 in the European open skies area and £8.90 for the rest of the world in standard.
An Airport Operators Association survey found that the APD has had a direct effect on passenger numbers and routes. Bristol airport reportedly said that several domestic services were scrapped as a result. Routes between Southampton, Leeds-Bradford, Glasgow, Edinburgh and Brussels airports had been “adversely affected” by the tax.
Mr Nigel Dodds (Belfast North) (DUP)
I congratulate the hon. Gentleman on securing this important debate. What he is alluding to is all the more pertinent in relation to Belfast City airport and the international airport in Northern Ireland because we share a land border with the Irish Republic, so a few miles down the road Dublin airport does not apply such taxes. We have severe taxes—air passenger duty—in Northern Ireland, so there is a double whammy for us. I support what he is saying and I urge the Government to take seriously the impact of this iniquitous tax on small, regional airports and peripheral areas of the United Kingdom.
Julian Knight
The right hon. Gentleman highlights an issue to do not only with his own airport but the wider UK aviation industry. Both Derry airport—also in Northern Ireland—and Cambridge airport in England claim that they are being prevented from expanding their services by APD. My argument is that the hub status of the major London airports, in particular Heathrow, allows them more easily to absorb the shock of air passenger duty, but that is not the case for some of the regional airports.
There have of course been successes in attracting new long-haul routes to Birmingham, for example. We have Air India now flying its routes to Delhi and Amritsar daily; American Airlines has begun daily flights to JFK, alongside the daily flight to Newark—that is not Nottinghamshire; Emirates has launched a third daily flight to Dubai; and this summer Hainan Airlines operated 34 twice-weekly flights between Birmingham and Beijing.
As was made clear to me in my recent meetings with the Ontario Teachers Pension Plan, which owns Birmingham airport and is a responsible trustee, my local airport would love to have a regular direct flight between the UK and China week in, week out, rather than only for the summer, and it is a real failing that in the week in which the Chinese President is visiting we do not have a regular scheduled flight between the UK’s second city and Beijing. We cannot separate the issue of APD and devolution, which is a central plank of the Government’s approach to reforming and reinvigorating the UK economy.
It is hugely important that the fruits of growth that come from devolution extend to our connectivity as well. That must include greater use of our regional airports for short and long-haul flights.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I, too, congratulate the hon. Gentleman on securing this important debate. We have a strange situation in Wales. The Welsh Government own our own national airport, but the UK Government will not devolve APD to them so that they may utilise their asset. Does he agree that that is a slightly strange situation?
Julian Knight
I thank the hon. Gentleman for his contribution. I am about to turn to those particular points.
Mrs Caroline Spelman (Meriden) (Con)
Before my hon. Friend continues, and on the very day that the Chinese President visits our Parliament, may I follow his train of thought about the importance of connectivity with China? My hon. Friend might recall that the President’s predecessor stopped first at Stratford-upon-Avon before coming to London, so the appetite for tourism to the west midlands is real and strong, and greater connectivity through Birmingham would enhance it.
Julian Knight
Greater connectivity throughout the United Kingdom—in all the regions and devolved Administrations—would enhance not only tourism, but business and trade. I will come on to those points shortly.
Powers over APD are being considered for Wales, and that might have a knock-on effect for English airports such as Bristol and Liverpool. More seriously for my local airport, Birmingham, the new Manchester devolution deal might see that city gain the power to cut APD for its own airport, which could lure scheduled and package-holiday flights away from Birmingham. Clearly, if we are not to be placed at a disadvantage by rival areas, we need Birmingham airport to be able to compete fairly. However, I do not want my speech or this debate to be exercises in grievances or fiscal wishful thinking.
Despite the best efforts of this Government, we face a difficult fiscal environment. While we are still trying to clamber back from the recession and endemic overspending by Labour, any suggestions should at least be revenue neutral for the medium term.
Henry Smith (Crawley) (Con)
I congratulate my hon. Friend on securing the debate. In his few months in Parliament he has become a worthy campaigner on behalf of Solihull and the west midlands. Might the answer to the question of APD be a UK-wide reduction or abolition of the tax, the highest such charged in the world, apart from in Chad? A recent PricewaterhouseCoopers report suggested that the amount of economic growth that Birmingham and other places, such as London and the south-east, would generate from the abolition of the tax is greater than the amount brought into the Exchequer.
Julian Knight
My hon. Friend makes some valid points. I had no idea that we were second only to Chad when it came to air passenger duty; that is certainly new to me. I hope to address some of the issues he raised.
At a time when we are trying to clamber back from financial difficulty, revenue neutrality is something that we need to put, as much as we can, in our proposals. There is justifiable concern in the west midlands and other regions about their airports’ ability to compete with devolved areas. While devolution is a bottom-up process, the Treasury could heavily encourage the devolution of APD to combined authorities or devolved areas as soon as practicable.
What practical things can be done by the Government right now? I would suggest an APD holiday on new routes. Birmingham airport is in discussions with Hainan Airlines for a regular, scheduled service, following two summers of charter services. An APD holiday could aid that. That would provide a direct link for the UK’s second city to the powerhouse of China and further assist the west midlands’ current trade surplus with China. It would also help foreign direct investment just as with the new Gentling resort close to Birmingham airport.
Regional airports, the wider economy and future tax take would benefit from an APD holiday. While Birmingham airport and others want a general cut in APD, which is unlikely in the short term given the financial circumstances, it would accept any measures to reduce that tax. It estimates that a cut in APD on non-congested airports would boost passenger numbers by about 2.9 million in just a decade. All increases in passengers will bring goods, services and jobs.
David Simpson (Upper Bann) (DUP)
I congratulate the hon. Gentleman on obtaining the debate. I am sure he agrees with the findings of the Select Committee on Transport, which said earlier this year that small, regional airports had been held back because of air passenger duty, which was affecting jobs and the skills base coming in. As the likes of Belfast City airport and the international airport in Northern Ireland are confident that passenger numbers would grow substantially if APD were removed, that should be an incentive to bring more people in.
Julian Knight
I thank the hon. Gentleman for that contribution. I note that the Transport Committee wanted to attach a report to the debate, which I was happy to agree to.
The hon. Gentleman made it clear that all increases in passengers will bring goods, services and jobs to an area, all of which will return money to the Exchequer through other taxes. These measures will go some way towards reversing the scandal under Labour that the UK did more trade with Ireland than with Brazil, Russia, India and China combined. The Prime Minister, through trade missions, and the Government, more generally assisting in trade with the emerging and fast-growing markets, are tackling that problem. However, there is still the issue of connecting our regions, and the country more generally, with the large and frankly now emerged, rather than emerging, economies of the world.
Dr Philippa Whitford (Central Ayrshire) (SNP)
I am grateful to the hon. Member for Solihull (Julian Knight) for securing the debate. My constituency contains Prestwick airport, and when I moved there in the mid-’90s we were connected to almost every decent city in Europe. My husband is German, so we batted backwards and forwards from there quite regularly. We still had flights to Canada and a thriving tourist industry. In particular, we had central Europeans and Scandinavians coming to play golf—Ayrshire is a golf centre. We have a beautiful coastline and it is the country of Robert Burns.
After APD came in, we started to get fewer and fewer flights. When I visited the airport after being elected, it was like the Mary Celeste; there are about six flights a day that basically go only to Spain and Italy, purely for tourism, and there are no business flights. We are not even connected to London—I have to spend an hour on the road to get to Glasgow to fly down. That is absolutely killing our tourism industry.
Hotel and guest house owners were learning Swedish because we had so much golf traffic coming in, but we have become expensive in comparison with other places. We have heard about the decision to give Heathrow a third runway because it is overcrowded, but an awful lot of us have to go through Heathrow when we do not really want to be there; we are trying to go somewhere else.
There could be a differential. Air passenger duty might be used to try to control the pressure in London, but it is killing regional airports. All we have are a few flights out of Prestwick, with people going to Spain or Italy for a couple of weeks. What is important to my constituency is flights in. We need to make it an attractive place for people to come on holiday, spend a few weeks playing golf, sailing and whatever else, and leave their money in our economy.
Edinburgh airport produced a report on what the impact on Scotland would be if APD were reduced. We hope that it will be devolved, but that will take time; in the meantime, Prestwick airport gets more and more vulnerable. The report showed that although Glasgow and Edinburgh airports would get an initial boost, from 2017 onwards one of the biggest gainers would be Prestwick.
We have a fantastic airport, which is usually weather-clear because of its situation. It has a huge runway. We used to have people—including Elvis—flying in from America and Canada, but now the airport sits there one step up from being mothballed. We are not even in the position that the hon. Member for Solihull described. The airport was going to be shut down two years ago by its owners, Infratil from New Zealand, so the Scottish Government bought it to protect it.
We need to get the airport growing. It will not sit there forever unless we can get trade going. An airport gains from trade regardless of the direction, but the area it sits in benefits in particular when the traffic is coming in.
Mark Menzies (Fylde) (Con)
It is a privilege to serve under your chairmanship, Sir David. I will keep my remarks short because I know that many right hon. and hon. Members wish to contribute. Blackpool airport is in my constituency. Sadly, it is one of the airports, along with Plymouth and Manston, that has closed in recent years.
At its peak several years ago, Blackpool enjoyed more than 600,000 passengers per annum. It had Ryanair and Jet2 flights to Northern Ireland, the Republic of Ireland and the Isle of Man. The decision to close the airport last year was a devastating blow to the local economy. Not only was there an impact on people’s ability to fly out of Blackpool to holiday resorts; it also sent out a message that the wider tourist economy was not fully open for business. With Blackpool and the Fylde coast, we, too, have world-class golf courses such as Royal Lytham and St Annes, so the facility of an airport is important. When the Open was on, for example, a large number of private and corporate jets used that facility, which brought in high spenders to access our golf courses.
We have talked about many things that could be done to help the small, regional airports. One that seems glaringly obvious is some flexibility on air passenger duty. I am aware that the Government have looked at that in relation to Northern Ireland, to introduce some fairness on long-haul flights, and that powers are to be devolved to the Scottish Parliament. That is quite right, because it is an important economic tool—[Interruption.] I could not hear what my friends from the Scottish National party were saying, but it is important that that power is used to try to generate and stimulate flights.
Graham Stringer (Blackley and Broughton) (Lab)
The hon. Gentleman is making a good case for Blackpool airport, which I have flown out of. We have heard cases for Birmingham, Prestwick and Belfast, and I could make a very similar one for Manchester; a case could be made for Bristol and Newcastle and for the large London airports. Is this not simply a bad tax? Every regional economy, along with the Exchequer, would benefit if it was abolished.
Mark Menzies
It is certainly a very unpopular tax, as we would discover if we asked any of our constituents when they booked flights and saw what they were paying in air passenger transport duty or if we spoke to any business person who had to take regular long-haul flights; the tax would be a huge cost to their business.
When we move to a situation where Scotland has power over its air passenger transport duty and may decide to abolish it altogether, there will be a market distortion, particularly in the north of England. Although that is welcome for Scotland, those of us with regional airports in our constituencies are deeply concerned that it could see the migration of the few flights left from some small airports, with the necessary knock-on loss of those regional airports to our economies. I urge the Treasury to put a plan in place so that airports—those in the north of England in particular—are not disadvantaged when Scotland is able to exercise those tax-varying powers.
It also seems odd, when we are trying to shift traffic away from the over-congested runways of the south-east, that we are not using every tool in our box to try to get some of those flights into the midlands, the south-west, Scotland and the north of England. There are so many people whose journeys do not originate in the south-east but who migrate their journeys because that is where the flight connectivity is. Again, I ask the Treasury to work with the Department for Transport to see whether we could implement some mechanisms to vary air passenger transport duty to try to stimulate alternatives outside the over-congested runways of the south-east.
I conclude with a plea for Blackpool and the small regional airports that are hanging by a thread. Blackpool reopened several months ago, but there are flights only to Northern Ireland and the Isle of Man. Small regional airports such as Blackpool need all the help they can get. At a time when aviation is booming, it would be a real travesty if they were to lose their place as part of our national transport infrastructure.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak on this matter, and I thank the hon. Member for Solihull (Julian Knight) for securing the debate. As the hon. Gentleman and others, including my right hon. Friend the Member for Belfast North (Mr Dodds), have said, air passenger duty is a very important issue for us in Northern Ireland. Air passenger duty can be a positive means of raising revenue but can also be an obstacle to growth. If changes are not brought in it will be a problem for us in Northern Ireland.
Members are no doubt aware that our airports are in direct competition with those in the Republic of Ireland, so I am pleased to speak on this issue and to make a plea for Belfast City airport, for Belfast Aldergrove airport and for Londonderry airport. With air passenger duty set to be halved in Scotland, this debate is timely and will, I hope, ignite a national conversation on the issue, regardless of which side of the debate people are on. Given the potential for Scotland to reduce APD—and perhaps Wales as well—we have to look at the issue across the whole of the United Kingdom.
As I have said, it is now certain that the duty will be at least halved in Scotland, and the Scottish First Minister has indicated her preference for its eventual abolition. As that is the intention, we must be ready and able to respond. With signs that Wales could soon follow suit, the disparity in APD across the UK is likely to push regional airports in England and Northern Ireland further towards supporting the abolition of the duty.
Data from the Civil Aviation Authority show that the numbers of terminal passengers—that is, passengers joining or leaving aircraft at the reporting airport—were the equal highest ever, at around 240 million a year; again, those figures indicate how important this issue is. It is clear that despite air passenger duty, demand has not decreased but in fact increased, suggesting that people will want to fly regardless of APD. However, the increase in traffic has not been evenly spread, and as the hon. Gentleman and others have said, regional airports are losing out—airports outside London, in Wales, in Scotland and, in particular, in Northern Ireland. That is why those airports are making a case for at least some reduction in air passenger duty, with Wales and Scotland already on course to deliver, and why this debate is important to me: as MP for Strangford, as I see Belfast City airport as the airport for the people of my constituency.
As well as regional disadvantages, APD is at risk of creating a socioeconomic divide, where those with the ability to pay can enjoy the benefits of air travel when and where they want, while those without it are left using other, less appropriate means of transport. Air passenger duty raises approximately £3 billion a year in tax revenue, year on year, for the United Kingdom but, as I said, despite its introduction, demand has risen rather than fallen. Although APD is a form of revenue raising it has failed in its aim of reducing demand and carbon demand. If something is broken—and in this case, it is—let us fix it. It is clear that APD does not work for regional airports across the whole of the United Kingdom.
We could point to the revenue the duty raises as a justification for continuing with it, but there is evidence that we would be better off without it, not just with regard to regional airports or people from lower socioeconomic groups, but with regard to the economy as a whole. The figures have already been mentioned by my hon. Friend the Member for Upper Bann (David Simpson), and point to the benefits of the abolition of air passenger duty to regional airports, not least those across the water in Northern Ireland. That is a keen concern for me and my party colleagues.
The benefits of abolishing air passenger duty would be seen across the entire United Kingdom. According to PricewaterhouseCoopers, abolishing the duty would see the UK economy grow by a staggering 0.5% in the first fiscal year alone. Crucially, the UK Treasury would see an extra £570 million in tax receipts in the first year after abolition resulting from increased demand for air travel, as well as any additional tax receipts from trade linked to air travel.
The figures are clear and cannot be argued with. They indicate the need for a change. That change would benefit the Treasury and everyone across the United Kingdom, so it seems very much to be a win-win situation. Increased activity in the sector would mean an increase in jobs and economic success and security for our constituents. Our party is on the record as supporting the third runway at Heathrow—we said that in the Chamber last night—and are keen to see it go forward, as we see connectivity with the rest of the United Kingdom of Great Britain and Northern Ireland as a plus. That is the good news. We also need a reduction in air passenger duty, because if action is taken it is clear that we will all benefit.
In Northern Ireland we know all too well how much air passenger duty influences airlines’ decisions about doing business. We compete directly with the Republic of Ireland in this sector and need only to look at what happened when air passenger duty was abolished in the Irish Republic. The figures are interesting: Dublin airport increased its number of passengers from the north of the border—my constituents, those of the hon. Member for South Antrim (Danny Kinahan) and of other Northern Ireland MPs. That is proof, if ever proof were needed, that APD is an obstacle to business, growth and prosperity and security for our people.
It is time we took heed of the facts—the revenue that could be generated by abolishing APD, as well as what abolition has done for the Republic of Ireland and how that has hurt us in Northern Ireland, in particular. Let us set the potential of the air travel industry free, and we can spread the prosperity from that industry fairly across the United Kingdom so that we all gain.
Mrs Caroline Spelman (Meriden) (Con)
I wish to make a short contribution to this debate, as Birmingham airport is in my constituency and is a very significant employer. It is an intriguing example, as it is an airport that has extended its runway without major public opposition, to the great surprise of the Prime Minister, who asked on a visit, “How did you achieve that?” The straight answer is that for a long time the airport has had a good working relationship with the surrounding community. The surrounding community therefore have quite strong views about air passenger duty, like many hon. Members present, and I share their concern.
A tax should be there to nudge behaviour. The question is, does air passenger duty really do the job it originally set out to do? From hon. Members’ contributions, it is clear that one impact of air passenger duty is the reduction of services and even the closure of some regional airports, with devastating consequences for the regional economic activity that previously focused around them. We are right to encourage the Chancellor to deliver on his pledge in February this year to review the potential options to support regional airports, which I imagine include reducing the impact of air passenger duty. I would like to underline how important that is for Birmingham airport.
I am grateful to my hon. Friend the Member for Solihull (Julian Knight) for securing the debate. As he explained, Birmingham is a significantly underutilised airport. The runway is now the same length as Gatwick’s, yet it takes a third of the passengers that Gatwick takes. I am sure my constituents will be a little alarmed by my hon. Friend’s referring to the 36 million passengers who could theoretically flow through Birmingham airport. That will cause a little consternation at both ends of the flightpath in my constituency. A bit more realistically, with more competitive pricing of this tax or, indeed, its abolition, passenger throughput would increase. The range of airlines locating themselves in Birmingham would increase, which would create jobs.
The significance of this in Birmingham is, as has been touched on, the linking up of transport policy. Mainstream parties of all persuasions have agreed that we should construct a high-speed line from London through Birmingham to Manchester that stops at Birmingham airport. Not many of our country’s airports are located on a main line: Heathrow is not; Gatwick is not on a main north-south line; and Stansted is not. One of Birmingham airport’s unique selling points is its centrality and the fact that people can step off the aircraft on to a mainline railway route at present. Once HS2 is built, the journey from Birmingham international airport to Euston will take 31 minutes. Having taken nearly one hour and 40 minutes to get in from Luton just the other day, I would welcome a 31-minute transfer time from an international airport to London.
Air passenger duty has had unintended consequences, with closures of and reductions in services, but taxes are designed to drive our transport choices. As far as the west midlands is concerned, if one objective is to turn people away from aviation towards alternative forms of transport, the problem is that there is no spare capacity on the railway line, which is why a high-speed line is being constructed. If hon. Members have had the pleasure of driving up and down the M42 recently, they may have noticed the roads are pretty congested.
Indeed, because there is no spare capacity on the railway network, at a time when the west midlands’ manufacturing industries are undergoing a renaissance, their goods are all having to go by road. Our economic recovery can regularly be seen going up and down the M40, as 17 transporter loads of Jaguar Land Rover cars leave the factory and make their way to Southampton. This tax needs to be examined from the viewpoint of whether it is nudging behaviour as it was intended to. If not, and if it is having unintended consequences, there is a strong case for the review to be completed as soon as possible.
This comes at a time when the Government are seriously committed to devolving power. Hon. Members from Scotland have already benefited from significant devolution, and there is more of that to come, but this is a comparatively new development for the regions of England. Variation in air passenger duty would be entirely in step with the logic of returning powers to the regions, so that they can then seriously examine whether such a tax is desirable, whether it would achieve the region’s aims and whether the region still wishes to collect it at the original rate.
Now is absolutely the right time to have this debate. This is significant for our nation’s future transport choices, wherever airports are located. There is a significant underutilisation of some transport assets, as well as a significant overutilisation of others, and air passenger duty does not seem to be doing much to address that problem.
Danny Kinahan (South Antrim) (UUP)
I thank the hon. Member for Solihull (Julian Knight) for securing the debate. Belfast international airport is in my constituency. It employs some 4,000 people—a huge number, given the Northern Irish economy—and helps some 200 businesses nearby. It is phenomenally important, just as Belfast city airport is, which is only 20 minutes away, and Londonderry, an hour away. As we have heard, Northern Ireland needs its connections, especially by air, because everything else is slow. While other hon. Members have the benefit of rail and roads in their constituencies, if we take them it is either through Scotland and down, or through Dublin and across. It is long-distance, so the only way to do things economically and quickly is to fly. Air travel is therefore vital to us.
Figures that I was given a year ago show that 47% of passengers going to Dublin airport are from Northern Ireland. I was recently told that the figure is now 52%, so we are draining our population, who are disappearing to travel because of three things: air passenger duty, good roads in Ireland that mean people can get to the airport quickly, and the fact that they are going to a hub that takes them to the rest of the world. The other alternatives include Manchester and Birmingham. Air passenger duty, therefore, is one of the three things that we are really asking the Government to tackle and remove. The point was well made by others about the impact on the less well-off who want to travel. We are adding more than £100 to the travel costs of a family of four. That is sometimes more than the ticket itself, if they have booked early enough. We need to review this.
I am nervous hearing hon. Members talk about different levels of air passenger duty in different parts of the United Kingdom, just as I am nervous about all the matters that break up the Union. Although we want the freedom to travel, we have to be very careful, or all we will end up doing is stealing our own labour forces from one another.
Jonathan Edwards
On that point, does the hon. Gentleman therefore oppose the move to devolve corporation tax to Northern Ireland?
Danny Kinahan
No. I like the fact of corporation tax. I have just said that we have to be careful, so I am being careful on that matter. We need to find the right balances that work between us. That is why I want to see an all-party group on the Union, so that we can talk through these ideas.
Tourism in Northern Ireland is run by Tourism Ireland, which runs it all from an all-Ireland basis, focusing only on tourism in Northern Ireland. So if Ireland decides as part of its rail policy to put in a direct line from Dublin to its airport, making it easier to get there, that is not part of the tourism policy that we have a say in, and it further damages our economic chances. I am told that, as a result of the block grant in Northern Ireland, if we lost air passenger duty and had to pay for it there would be a staggering cost of £55 million. I would love to know the details behind that. Yet I am also told that Belfast international airport thinks that if we got rid of air passenger duty, it could bring in 5,000 jobs and some £5 million. That should open up the whole economy to working better, which is what we want to see.
I want to mention one rather dour side of this: our way out of the troubles in Northern Ireland in the past was a thriving economy, with people travelling the world and seeing how other things work. We want everyone to travel. We want them to come home and to bring back ideas. Air passenger duty is severely damaging us, and we therefore want to see it removed. Even if it is removed in stages, can we at least start to look at that? We want to see Northern Ireland open for business, just as we want to see the United Kingdom open for business.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Thank you, Sir David, for letting me speak even though I had not put in a submission to do so. I thank the hon. Member for Solihull (Julian Knight) for bringing this issue forward for debate.
We have had some excellent contributions. I will be relatively brief. First, I want to pick up on the contribution by the right hon. Member for Meriden (Mrs Spelman), who made some excellent points, particularly about APD’s original purpose of changing behaviour and, arguably, getting people to use other forms of transport. Under all Governments of all hues, when a tax is applied, it becomes a revenue stream. It then goes into the big, black hole of revenue and is not used for the purpose it was intended for. There has not therefore been the intended investment in other forms of transport, which would allow greater connectivity.
As we know, APD has had unintended consequences. We have heard from hon. Members about different regional airports that have suffered badly because of APD—none more so than my regional airport, Prestwick, which my hon. Friend the Member for Central Ayrshire (Dr Whitford) discussed. We have heard it argued that taking away APD can create jobs and additional revenue. At Prestwick, APD has cost jobs and cut tourism, so it has clearly cost the Government money. It stands to reason that taking away APD can reverse that harsh reality.
Another issue, which has not been touched on quite as much, is that passengers using regional airports often have to go via the main London airports. They then suffer a double whammy in terms of APD. A family of four from the States—they could be tourists or expats who want to visit family—would have to pay four times £71 in APD for each flight, or about £560 for the round trip. If they took a further flight to a regional airport, they would then have to pay four times £13 each way, so the APD would be more than £600. It is no surprise that that is off-putting and has caused a decline in passenger numbers.
That is why there should be a reduction in APD. I welcome the fact that responsibility for the issue will be devolved to Scotland, and I welcome the Scottish Government’s plans to reduce the duty. If it is reduced, it will give our regional airports a chance to create their own routes, which will then generate competition with, say, the London airports. If we can get away from having to do the double hat on APD—with people flying from one airport to another and then onwards, as I have just outlined—that would give us a better chance of opening up new routes and new connectivity.
For me, that is the nub of the issue on APD: it is off-putting in the first place, and it is doubly off-putting if people have to make another flight from a regional airport. I therefore welcome the Scottish Government’s plans. We have had excellent contributions today, and I hope the Government will take note of them.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
It is a pleasure to serve under your chairmanship, Sir David. I congratulate the hon. Member for Solihull (Julian Knight) on securing this important debate. As the SNP spokesperson on transport, I obviously take a keen interest in this issue.
The hon. Gentleman described the positive impact regional airports can have on the economy—jobs, direct investment and the growth that stimulates further jobs down the line. Members around the Chamber have talked with common purpose about supporting regional airports and those who have to travel from the periphery.
The right hon. Member for Belfast North (Mr Dodds) said that regional airports are being held back by APD, but I would suggest that this goes even further: they are also being held back by a lack of flexibility in policy on route development and route protection. The right hon. Member for Meriden (Mrs Spelman) said that devolving the relevant powers would make a difference, and I think they will when they come on stream for Scotland. That is mainly because Scotland’s regional airports will not get the benefit of High Speed 2. Even if HS2 does come to Scotland, they will not see a difference.
Mrs Spelman
For the record, it is right to say that the Scottish Government do want HS2 to reach Scotland. They have given clear evidence to that end.
Drew Hendry
Absolutely. We would be delighted to see HS2 reach Scotland; indeed, we have always said it should start in Scotland and be developed southwards.
My hon. Friend the Member for Central Ayrshire (Dr Whitford) mentioned the impact that the development of regional airports has on tourism. Nowhere is that more true than in her constituency, but it is now an expensive destination because of the policy we have had. As we heard, Elvis left the building, and he was not encouraged to come back subsequently—regrettably, he cannot do so now.
The hon. Member for Fylde (Mark Menzies) talked about APD’s effect on Blackpool airport. He said that the airport needs support, but that it has been left in a precarious position over the years. That is very similar to the position in Inverness and Dundee, so I have a great feeling of common purpose with him. We must make sure that routes are not dropped just because there is a more profitable option elsewhere. These routes are important lifelines for the communities they serve.
We have heard about the proposals for the reduction and abolition of APD in Scotland. I am pleased to say that those are yet another good idea from the SNP Government, and they seem to have gained quite a lot of support around the room. They make sense, and it is important that we go ahead with them.
As the MP for Inverness, Nairn, Badenoch and Strathspey, I understand the impact of APD. Regional airports such as Inverness and Dundee have long suffered the inequity of APD, but they are not alone, because other airports suffer too, and Edinburgh, Glasgow and Aberdeen are not well served by APD either. As we have heard, Prestwick could very much benefit from the proposed change. Air connectivity is vital to the local economy, and I am pleased that it will be—in fact, I am impatient for it to be—in the Scottish Government’s hands.
The UK introduced APD in 1994 to raise revenue from the aviation industry, anticipating that it would have environmental benefits through its effect on air traffic volumes. When it was introduced, it took the form of a flat £5 charge on flights in the UK and a £10 charge on other flights. It has been changed many times over the years. It was doubled in 1996, lowered in 2000, frozen between 2001 and 2007 and doubled from February 2007. It was then changed under the Labour Government in 2008 and the coalition Government in 2010. In 2013, it was increased, and the Chancellor made further changes in 2014 and 2015. This APD hokey cokey, married with the here today, gone tomorrow effect on routes and regional airports, has done nothing to help regional economies in places such as Inverness and Dundee or in the other constituencies represented by Members around the Chamber.
I point to those changes because, throughout all these years, successive Governments have failed to support regional airports. My constituents have suffered under the current approach. In addition to devolving APD powers as quickly as possible, we need public service obligations on routes to regional airports, as well as guarantees on those routes. We also need more flexibility on route development.
By 2016, £210 million less per annum will be spent in Scotland by inbound visitors than would have been the case if APD had not risen since 2007. That is a staggering figure. When power is transferred, the Scottish Government are committed to reducing APD by 50% by the end of the next Parliament, with a view to eventually abolishing the tax when public finances allow. Their plans to abolish APD have been welcomed by the British Air Transport Association, Aberdeen and Glasgow airports, VisitScotland and the Scottish Chambers of Commerce.
Sophie Dekkers, the UK director for easyJet—Scotland’s largest airline—has said:
“When APD is halved passengers in Scotland will quickly feel the benefit, with easyJet and other airlines adding more services to existing destinations and launching flights to new destinations from Scotland.”
Again, that would be welcome news for my constituents, who have long suffered the effect of here today, gone tomorrow flights.
Jim Shannon
In the scenario that the hon. Gentleman has outlined, if Scotland were to abolish APD, and given that the Republic has already done it, Northern Ireland would be the meat in the sandwich. It is important that Northern Ireland as well as Scotland gets to do it. Does he agree?
Drew Hendry
I absolutely agree, and support the devolution of powers to the nations of the UK in that way.
A consultation on a Scottish replacement to APD has been launched by the Scottish Government. It will give the people of Scotland and other interested parties the opportunity to provide their views—public views—on the design and structure of a Scottish APD. A Scottish APD stakeholder forum has also been established to help provide expert policy input in the preparation of policy proposals for Scottish APD, involving the air transport industry, environmental groups and tax practitioners and advisers. Devolution of APD to the Scottish Parliament will provide an opportunity to design a replacement tax that better supports our objective to improve connectivity to Scottish airports, generating new direct routes and increasing inbound tourism.
Reducing APD will have a positive impact on passengers, business costs and connectivity. However, as I have said, our support for regional airports should not end there. We need to make sure that the UK Government will do more to support regional airports, with a review of the current public service obligation regimes. The current criterion is too narrow and limits opportunities for regional airports.
Rebecca Long Bailey (Salford and Eccles) (Lab)
It is a pleasure to serve under your chairmanship, Sir David, especially since this is my first speech as shadow Exchequer Secretary to the Treasury. I am pleased to be working with the Financial Secretary to the Treasury today; no doubt we will spar together on other occasions. I offer my thanks and congratulations to the hon. Member for Solihull (Julian Knight) on securing an important debate on a topic that is of concern to me not only in my capacity as shadow Exchequer Secretary, but because my constituency will be affected.
I thank the hon. Members who spoke in the debate. The hon. Member for Central Ayrshire (Dr Whitford) gave a passionate account of the impact that air passenger duty has on her local airport, Prestwick. The hon. Member for Fylde (Mark Menzies) spoke about the plight of Blackpool airport, especially in the light of its closure not so long ago and its struggle to get back on its feet. My hon. Friend the Member for Blackley and Broughton (Graham Stringer) rightly questioned the future viability of APD generally. The hon. Member for Strangford (Jim Shannon) made some important points about how Belfast has suffered in its competition with Dublin airport. The right hon. Member for Meriden (Mrs Spelman) highlighted the fact that the time for debate is now: it is an important issue and we need to get a grip on it quickly. The hon. Member for South Antrim (Danny Kinahan) made some fantastic points relating to Northern Ireland, and there were also fantastic contributions from the hon. Members for Kilmarnock and Loudoun (Alan Brown) and for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry).
Air passenger duty was highlighted in recommendations by the Smith commission. I reiterate my party’s support for the implementation of the commission’s recommendations as set out in the Scotland Bill. Inevitably, that will have consequences, but that should not undermine the principle of devolution for Scotland, and indeed Wales and Northern Ireland. That said, we cannot escape the fact that the Scottish Government’s anticipated reduction of air passenger duty by 50% in the next five years and their intention to abolish it altogether when finances allow are predicted to have a significant effect on regional airports in England, especially those close to the border. HMRC research conducted in 2012 suggested that the number of passengers using Newcastle airport would decline by 10% the short term, and that Manchester, the closest airport to my constituency, would lose almost 5%.
My hon. Friend the Member for Blackley and Broughton, whose constituency neighbours mine, cited evidence in a previous debate on this issue that if one easyJet and one Ryanair flight were moved from Manchester to Glasgow, the Treasury would lose £2.9 million and 450 jobs would be lost in Manchester. That is of course a forecast, but we can already see the effects of variable rates of air passenger duty by examining the situation in Northern Ireland. Belfast International has suggested that it loses between 570,000 and 1.5 million passengers a year to Dublin airport, where no APD is levied. Dublin airport has run a marketing campaign specifically targeted at attracting Northern Ireland passengers, and in 2013 the number of passengers from Northern Ireland using Dublin airport increased by 12%. With the possibility of powers to determine APD rates being devolved to Wales in due course, the issue is set to have an impact not only on airports in the north of England, but on those in the south-west.
Jonathan Edwards
As the hon. Lady has mentioned my beloved homeland, will she confirm that it is now the policy of the Labour party to support the devolution of APD to Wales? Previously—I appreciate that it was before the hon. Lady was elected to the House—the Labour party abstained on such votes on Finance Bills. I should be grateful for clarification, because that would be quite a shift in her party’s policy.
Rebecca Long Bailey
I shall come on to my party’s position in due course.
I was saying that the possibility of powers to determine APD being devolved to Wales could lead to an impact on airports in the north of England and the south-west. York Aviation has predicted that, with Cardiff airport no longer subject to air passenger duty, Bristol airport would lose 440,000 passengers, up to 33 routes, 1,500 jobs and more than £800 million from local GDP. That concern has been cemented by a warning from Ryanair’s commercial chief that the company could double its profits per passenger by flying from Cardiff instead, should APD rates be set to zero there. It is therefore clear that the devolution of powers to set air passenger duty will have a profound effect on England’s regional airports, so I am glad that the Conservatives heeded the advice of my colleagues the then shadow Chancellor Ed Balls and my hon. Friends the Members for Streatham (Mr Umunna) and for Barnsley East (Michael Dugher) when they wrote to the Government in September last year, calling on the Treasury to start work on a mechanism to prevent English regional airports from being disadvantaged by devolution to Scotland or anywhere else.
I welcome the Government’s publication of a discussion paper outlining three possible options for tackling the issues affecting our regional airports. I have a few specific concerns about the consultation, on which I am sure the Minister will be able to put me at ease, but first I ask the Minister for an update on the progress of the consultation as a whole. It is my understanding that the closing date for submissions was 8 September, but as yet there has been no published evidence and no conclusions from the Government. Will the Minister say when the Government’s response will be published? More specifically, one solution discussed in the paper is to devolve the power to set rates of air passenger duty to local or combined authorities, either partially or fully. That seems to have implications for our compliance with EU state aid rules. The Labour party supports reform of the EU state aid rules, which would be a much better subject for renegotiation that those chosen by the Prime Minister. None the less, the current rules will apply.
One problem is that the Government cannot vary national tax rates in a way that is more favourable to specific regions. For that reason funding for the relevant local authority would be reduced by the full value of air passenger duty receipts in that area. HMRC research indicates that full devolution to a local authority containing one medium-sized airport would require a staggering reduction in funding of £45 million a year. The point of devolving the powers is to allow regional airports to avoid undercutting by rivals. Can the Minister confirm that under that option a local authority that took that course would receive no extra funding from central Government and would have to deal with a cut of £45 million? He will understand our concern that even the devolution package the Chancellor proposes will not contain much in the way of revenue-raising powers, nor anything like the scope that the devolved Administrations have to make savings elsewhere. Also, does he share my concern that if local authorities are able to set their own levels of APD, it will start a race to the bottom, which, taken to its logical conclusion, would result in an overall loss to the Treasury of £3.2 billion?
Alan Brown
The hon. Lady talks about a race to the bottom and says that different regional airports cutting APD could result in a net decrease overall. Does that not run contrary to the argument I have just been making, which is that cutting APD increases passenger numbers, jobs and revenue? Does she therefore agree that her argument could be flawed?
Rebecca Long Bailey
I thank the hon. Gentleman for making that important point. Hopefully, when the Minister responds about the progress of the report, he will be able to shed some light on those issues specifically.
The third option outlined in the discussion paper is to provide aid to regional airports that will be particularly affected by the devolution of APD, but I am particularly concerned that that would do little to neutralise the effects at the airports that will feel the greatest impact. Airports such as Manchester and Newcastle would be too large to be eligible for such aid under the proposal, so the measure would be ineffective in tackling the problem where doing so will have the biggest impact. Furthermore, providing direct aid has an obvious fiscal implication for the Exchequer, so it would be helpful to clarify whether that would be provided by the Treasury or would again involve corresponding cuts to other local authority funding.
Finally, it would be helpful if the Minister touched on the environmental implications of air passenger duty generally. I have had a number of queries regarding that, particularly from my own constituents. Aviation is, of course, covered by the EU emissions trading scheme, and we anticipate that the fifth carbon budget will address the sector later this year, but it would be helpful if he were to outline how the proposals under consideration will interact with our obligation to decarbonise, especially if we are moving towards little or no APD, and how a devolved settlement will work alongside nationally set targets.
In conclusion, there is a degree of consensus that this matter must be addressed urgently, and we welcome both the Government’s consultation and today’s debate. There are a number of points on which we would welcome further clarification, and I look forward to hearing the Minister’s response.
The Financial Secretary to the Treasury (Mr David Gauke)
Sir David, it is a very great pleasure to serve under your chairmanship this afternoon. I congratulate my hon. Friend the Member for Solihull (Julian Knight) on securing the debate and setting out his case so well. Indeed, I thank all right hon. and hon. Members for their contributions, including my right hon. Friend the Member for Meriden (Mrs Spelman), my hon. Friend the Member for Fylde (Mark Menzies) and the hon. Members for Central Ayrshire (Dr Whitford), for Strangford (Jim Shannon), for South Antrim (Danny Kinahan), for Kilmarnock and Loudoun (Alan Brown), for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) and for Salford and Eccles (Rebecca Long Bailey). I congratulate the hon. Member for Salford and Eccles on her appointment as shadow Exchequer Secretary—I speak as a former shadow Exchequer Secretary—and am delighted to welcome her to the Front Bench.
The Government have a long-term economic plan to rebalance growth across the regions and nations of the United Kingdom, strengthening our economy as a whole. That includes the commitment to a major transfer of power to our great cities, counties and nations so that local people can take more control of the decisions that affect them.
As part of that plan, the Government are delivering the Smith agreement for Scotland and will devolve air passenger duty to the Scottish Parliament. In accordance with the St David’s day package, the Government are also considering the case and options for devolving air passenger duty to Wales. In England, the Government are creating a northern powerhouse by pushing ahead to deliver a package of devolved powers to major northern cities and investing in transport and infrastructure. In the north-east, for example, the Government are in good discussions about the potential to devolve further powers and responsibilities to the regions.
Mrs Spelman
I am sure that the Minister would appreciate the sensitivity of this issue for west midlands MPs. If he is not going to mention the fact that the Government are in negotiation with the west midlands local authorities about the creation of a midlands powerhouse, we will be a bit disappointed.
Mr Gauke
My right hon. Friend is absolutely right, particularly in the context of a debate secured by my hon. Friend the Member for Solihull, to refer to the progress that we want to make in the west midlands, which is very much a priority area as well. I was going to touch on that. The case for the midlands engine set out today by my hon. Friend and my right hon. Friend the Member for Meriden is important.
I turn to English regional airports; I know they have expressed concerns that air passenger duty devolution will impact negatively on their business. The Government appreciate those concerns. Regional airports play an important role as local employers and enable the transport of people and products nationally and internationally. That improves connectivity, increases trade and helps to create new jobs. Consequently, the Government are undertaking a review of how to support regional airports in respect of such impacts. That is why the Prime Minister stated earlier this year:
“We are not going to accept a situation where there’s unfair tax competition…We will do what’s necessary to make sure that England’s regional airports can succeed.”
Drew Hendry
Does the Minister agree with the points made around the Chamber earlier about the fact that, whether someone is in a regional airport in Scotland or England, the economic growth that can be generated by changing the tax regime to encourage trade will enable all the regions to become more successful? They are not necessarily a threat to each other.
Mr Gauke
The Government have made significant progress on the devolution of taxes generally. The hon. Gentleman will be aware of the announcement made by the Chancellor of the Exchequer on the retention of business rates, for example. I know that business rates are already devolved in Scotland, but allowing English local authorities to retain business rates is an example whereby through aligning incentives, as it were, we can create the conditions for economic growth in every part of the United Kingdom.
I will deal with the specific points on APD in a moment, but first let me address the issue of the regional airports review, because, as part of that review, the Government published a discussion paper at the summer Budget this year. The paper explored three potential options for supporting regional airports affected by devolution: the first was devolving APD to regions within England; the second was varying APD rates within England; and the third was providing aid to regional airports.
The paper explored how the options could work and highlighted key points for consideration. The period for feedback on the options is now closed. We received a large number of responses and would like to thank all interested parties for their valuable responses to that consultation. We are carefully considering the views and evidence that we have received. We appreciate that the aviation industry values stability and certainty in the UK tax system and we will respond to the views expressed on the options in the discussion paper in due course. The response will set out how the Government wish to take the matter forward.
Jonathan Edwards
The Government have devolved APD to Northern Ireland and Scotland. The draft Wales Bill, published today, is glaring in its omission of any mention of APD being devolved to Wales. Is there a reason why the Government are rolling back on devolving APD to Wales?
Mr Gauke
I refer the hon. Gentleman to the remarks that I made a few moments ago. In accordance with the St David’s day package, we are considering the case and options for devolving air passenger duty to Wales. That consideration is ongoing. Once a conclusion has been reached, I am sure that he will be looking very closely at our response.
If I may, I will respond to some points that have been made in this afternoon’s debate. The hon. Member for Blackley and Broughton (Graham Stringer) raised the issue of whether APD is a good tax or whether we should just scrap it. It is worth bearing in mind that it raises £3.2 billion each year, which is an important part of the Government’s overall revenues. We consider that APD is a fair and efficient tax that ensures that the aviation sector contributes to the public finances. The amount of tax paid by people who can afford business class travel or luxury jets is much more than that paid by a passenger going to the same destination in economy class.
In recent years, we have reduced long-haul rates of APD and frozen short-haul rates for five years, and we are exempting children. APD is the main way in which the aviation sector is taxed. International treaty agreement means that there is no tax on international aviation fuel and no VAT on international flights. Unlike many countries, the UK does not charge VAT on domestic flights. It is also worth pointing out that the aviation sector is performing strongly. Passenger numbers grew by 4% in 2014 compared with 2013.
My hon. Friend the Member for Crawley (Henry Smith) referred in an intervention to a PwC report arguing that abolishing APD would boost GDP, create jobs and pay for itself. We do not agree with the assumptions behind the 2013 and 2015 PwC reports on APD. Our view remains that abolition would have a limited effect on GDP and cause a net loss of tax receipts. As I said, APD makes a contribution towards the public finances. Abolishing it would put pressure on the Government to increase less efficient and more regressive taxes.
Alan Brown
The Minister makes the point that APD is one way of taxing the aviation industry and he thinks that it is a fair tax, but will he acknowledge that the UK charges a much higher rate? The UK’s short-haul rate in economy is more than double the EU average; in terms of the medium-haul rate, the UK charges €90, whereas the EU average is €24. The UK is aggressively taxing the aviation industry, and that is what the whole thrust of the debate is about. The Government may want to tax the aviation industry, but we are arguing that our industry is heavily over-taxed compared with those in other countries.
Mr Gauke
Our rates are higher than those in many other countries; I am not disputing that. I am arguing that we are not convinced that abolition of APD would pay for itself. Presumably the Scottish Government are also not convinced, because they have not brought forward proposals to abolish APD. It may be an aspiration for the long term—when finances allow—but that does suggest that there would be a loss of revenue.
The hon. Member for Central Ayrshire referred to the experience of Prestwick airport and the effect on tourism—a perfectly legitimate point to raise. As I said, we accept that APD rates are high on an international comparison. However, we think that APD is a very small component of a tourist’s overall spending on a trip to the UK. Some analysis done by Treasury officials over the summer suggests that depending on how long a long-haul passenger stays in the UK, APD probably makes up less than 2% of total spending on travel, hotels and subsistence, so although I accept the point, we have to put it into the context of the wider costs that may apply.
Drew Hendry
I am listening to the Minister’s comments about the effect on Prestwick airport. Does he accept that Prestwick, along with other regional airports whose local economies rely heavily on tourism, would be affected exponentially by additional costs for passengers? The Scottish Government’s approach—to reduce immediately and then remove APD—is likely to serve those economies better than taking no approach at all.
Mr Gauke
What I will say—this is the case for devolution; I suspect that the hon. Gentleman and I might agree on this—is that we shall see. We have the chance to see whether that approach has an impact on tourism levels in that area. We will be able to see that from the evidence that emerges, and that could help to inform future decisions. We have that flexibility, and the Scottish Government are able to exercise the policy that they think fit for Scotland.
Dr Whitford
Do we not have an example available to us in the Republic of Ireland? It got rid of its tax and certainly has reported a massive upsurge in tourism. The point is that when someone is looking at choices of where to go, they do not think about the money that they will spend having a meal out; they are looking at how much it costs to get there and how much the hotels are. The issue is what they see on the internet up front. We are a tourist area, as the Republic of Ireland is, so we would get a similar benefit.
Mr Gauke
The hon. Lady refers to the increase in tourism in the Republic of Ireland, but according to the last numbers that I saw, the percentage increase was not very different from that for tourism in Northern Ireland. That suggests that APD perhaps is not that significant a factor in bringing tourists to a particular area. In the context of Scotland, however, no doubt the hon. Lady will be keeping a close eye on the impact of the APD changes on the tourism industry in her area, as indeed will the UK Government.
While I am on the subject of Northern Ireland, I shall pick up the points raised by the hon. Member for South Antrim and the right hon. Member for Belfast North (Mr Dodds). We do recognise that Northern Ireland is the only part of the country with a land border with another country that has a lower rate or no rate of APD. Many Northern Ireland passengers drive to Dublin to catch flights; I acknowledge that. APD is not the only reason why Northern Ireland passengers travel to Dublin for flights, but I accept that it could well be an important factor.
We have already devolved direct long-haul APD to the Northern Ireland Assembly. It has now set long-haul rates at zero, effective from 2013. We have not had a request from the Northern Ireland Executive, as far as I am aware, for full devolution of short-haul APD. Obviously, we would have to consider any such request if it was made, but the principles set out by the hon. Member for Salford and Eccles do apply when it comes to devolution within a member state of the EU. The funding would have to be found locally, so any cost from forgone APD would have to be taken, as it were, from the Northern Irish block grant. The same principle applies in relation to corporation tax and devolution.
Some people have suggested that the way forward might be to offer an APD holiday, under which new routes could benefit from no APD liability for the first few years of their operation. We recognise that that kind of approach might encourage operators to open new routes—routes that currently do not exist. However, the Government also have a number of obligations to be fair and transparent in how we levy taxes. We would probably have to offer any tax holiday policy to all airports, rather than focusing on regional or underused airports.
The result of such a policy would be that some operators of flights to certain destinations would pay less tax than others that served the same destinations. Existing operators would be placed at a considerable commercial disadvantage. It would clearly be nonsense if two different flights from the same departure airport to the same destination airport were charged different levels of tax. The operator of the more expensive flight would, we suspect, mount a legal challenge against any discrimination, which they might win. There is also the potential for airlines to game any APD holiday. For example, the operator of an existing Manchester-Dusseldorf route might easily switch to Liverpool and/or Cologne to lessen its tax bill, which would offer no advantages to the UK.
Julian Knight
The Minister has just mentioned that an operator might switch from, for example, Liverpool to Frankfurt to take advantage of an APD holiday. Surely, they could do that already, because the APD rates are far higher in this country than they are in our competitor economies.
Mr Gauke
If there was a dramatically different regime for new routes to and from the UK versus existing ones, there is a risk that there could be a certain gaming of the system. In order to qualify for a lower rate of APD, an operator might attempt to make a relatively minor change to a route, such as flying to a different German airport close to the original one, and thereby replace an existing route with a new one. That would do little to improve the use of, say, Birmingham International airport, as my hon. Friend seeks to do—given the remarks of my right hon. Friend the Member for Meriden, it might be unwise to try to increase the number of users to 36 million—and we would merely see a lot of churn, rather than the increase that my hon. Friend would like. On that and related ideas, we are considering all responses from interested parties to our consultation, and we will respond in due course.
Drew Hendry
I am grateful to the Minister for being generous with his time. I believe that he is talking quite a lot of sense on the difficulties with APD holidays, but does he agree that what we need is flexibility over route development? In other words, we need not only starter routes but more frequency on those routes. Indeed, perhaps we need public service obligations to guarantee those routes, which would allow them to bed in, to become established and to reach critical mass.
Mr Gauke
The hon. Gentleman, who is his party’s Front-Bench spokesman on transport matters, raises an important point, but I question whether APD is the correct way of achieving the objective that he seeks. In the context of APD, there are some challenges, and the gaming of the system is one risk.
Having welcomed the hon. Member for Salford and Eccles, I must point out that her shadow Treasury colleague the hon. Member for Wolverhampton South West (Rob Marris), the shadow Financial Secretary to the Treasury, told the House on 29 June:
“I would increase the rate of APD.”—[Official Report, 29 June 2015; Vol. 597, c. 1275.]
To be fair, that was before he was appointed to the shadow Front-Bench team. I do not know whether that is the Labour party’s position. I will leave that question hanging.
Mrs Spelman
The message that we are getting, and it is one that the Treasury often has to give, is that relieving the tax would generate a return for the Treasury through increased economic activity. That is the argument that everybody always uses for tax reduction. None the less, will the Minister be clear with us about the timetable for the review of the options to help regional airports, since it was announced in February?
Mr Gauke
My right hon. Friend anticipates the response that I would generally make, as Treasury Ministers are required to do fairly regularly, regarding requests for tax reductions or spending increases. I cannot add to what I have previously said about the review. We will respond in due course. This is a detailed and complex area. One thing that has emerged from the debate is the fact that there are complexities, and that unintended consequences can result from pursuing certain policies, so we wish to consider the evidence carefully. We are in the process of doing so, and we will respond in due course to the points raised in the consultation. A number of options have been set out this afternoon and, although the consultation is closed, we will want to look closely at the contributions to the debate to develop our thinking on the matter.
Rebecca Long Bailey
I refer the Minister back to his comment about my hon. Friend the Member for Wolverhampton South West (Rob Marris) mentioning in a previous debate that he would be in favour of increasing APD. As has been highlighted by many of the contributions today, we are now working in a different economic landscape in light of the fact that control over APD has been devolved to Scotland. We need to assess the economic impact of APD across the regions, because the playing field is not level. I hope that the Minister will heed my comments in that regard.
Mr Gauke
I certainly understand the point that the hon. Lady is making. To be fair, the hon. Member for Wolverhampton South West made his remarks in June, and I appreciate that that was before he was on the Front Bench. It is a bad habit of Government Front Benchers to point out remarks made by Opposition Front Benchers before they were appointed to the Front Bench, or even selected to be on the Front Bench.
We have recognised the potential impacts of APD devolution, and we are conducting a review to make sure that other cities and regions do not lose out. We are listening to interested parties and we will set out the Government’s next steps in due course. The Government have a long-term economic plan for the great nations and regions of this country, which clearly includes the west midlands. The Government are giving local people more control over the decisions that affect them and strengthening the UK economy as a whole.
Julian Knight
Thank you for your chairmanship of this debate, Sir David. I thank all right hon. and hon. Members for their contributions and the Minister for his reply. I was particularly impressed, not for the first time, by the contribution of the hon. Member for Central Ayrshire (Dr Whitford). I looked wistfully out of the window when she mentioned golf on this beautiful sunny day, and I look forward to having a round in her constituency at some point. When she mentioned Prestwick airport and Elvis, I was reminded of the famous story about Elvis creating perhaps the biggest PR gaffe of the century when he was interviewed by reporters on his one and only trip to the UK. Having landed at Prestwick airport, he came out of the plane and said that it was absolutely delightful to be in England. That, obviously, did not go down very well.
The hon. Lady spoke passionately about Prestwick and the problems that it has encountered in recent years. The Scottish Government have plans to reduce APD by 50%, and I watch with real interest to see what the economic effects will be; I imagine that they will be more considerable than our Treasury takes account of. In many other hon. Members’ constituencies, there is not the same opportunity for devolution. My hon. Friend the Member for Fylde (Mark Menzies) said that his airport was hanging by a thread and faced the potential of greater competition from Scotland post the 50% cut in APD.
Some of the most telling contributions were made by the hon. Member for Strangford (Jim Shannon), the right hon. Member for Belfast North (Mr Dodds) and the hon. Member for South Antrim (Danny Kinahan). They said that the disparity in APD rates in Northern Ireland and the Republic is creating further social and economic divides when it comes to travel, and that, frankly, they feel as though the system is broken and it is time to fix it. I believe that many hon. Members would agree with that theme.
My neighbour and right hon. Friend the Member for Meriden (Mrs Spelman) spoke about the necessity of approaching transport in a joined-up fashion and the potential that HS2 will bring. The problem is that currently, we feel as though airport duty, the idea of which is effectively to price people out of planes—
Sir David Amess (in the Chair)
Order.
Motion lapsed (Standing Order No. 10(6)).
Travellers (Mole Valley)
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Sir Paul Beresford (Mole Valley) (Con)
I beg to move,
That this House has considered Travellers and planning in Mole Valley constituency.
I am delighted to see you in the Chair, Mr Davies, and to see the Minister joining us. Having been in that position some years ago myself, I do not envy him.
Mole Valley constituency consists of Mole Valley District Council and the eastern wards of Guildford Council. It is close to London and to Epsom downs so it is attractive to Travellers from afar. Mole Valley District Council is smothered—I think that would be the right word—with building restrictions. Sites of special scientific interest, areas of outstanding natural beauty and the green belt protect, in total, an astonishing 90% of the district. The level of protection for the Guildford wards in my constituency is probably the same.
The councils and the population accept the need for Traveller sites but not without limit. For example, Mole Valley District Council has 11 authorised sites and has recently given planning permission for an enlargement of two of those sites. The majority of the sites are private. In drawing up its draft local plan, which is still in progress, there are indications that the planned housing numbers might be reduced to reflect the difficulty of allocating land for houses where the proportion of green-belt land is so high. This, however, does not seem to apply for the requirements for Travellers. The current assessment for Mole Valley alone is 42 additional sites by 2027. When looking at this, would the Minister reflect on the fact that Surrey County Council, which runs the local authority Traveller sites, has a waiting list across the whole of Surrey for 65 families, rather than the 42 just for Mole Valley alone? My first plea, therefore, is for the Traveller site requirements to be dramatically lowered for Mole Valley District Council, Guildford Council and councils with similar problems but without quite the demand when we look at it in the large.
I wish to focus on the way in which a very few Travellers manipulate the system in ways that would not be entertained by settled residents or by planning authorities looking at the action of settled residents. In saying that, I re-emphasise the number of successful, popular sites in the area that cause no difficulties and no arguments, and where there are agreements on planning.
I wish to touch on two examples. One is in Guildford—a site on a little narrow private lane off the A246. The A246 is a busy two-lane road linking Leatherhead with the A25 to Guildford. There is, nearby, an authorised site off a similar small road to the west of the A246. The wee road I am focusing on is narrower and off to the east. There are a few properties in the lane but generally development is severely limited as the road goes through, or close to, an area of natural beauty and ancient forests, and is entirely in the green belt. A Traveller from outside Mole Valley inherited the land, squatted on it and, over a short period of time, placed a number of caravans, trucks and cars there. He ran a number of different businesses from the site, as indicated by advertisements but denied by the owner when questioned. He originally claimed that his children were living with him but that appears to have ceased apart from his 18-year-old son, who works there from time to time.
Currently, a mother and children originally from the site on the other side of the A246 are there periodically but claiming residency. This is refuted by the neighbours, who have kept tabs and notified Guildford Council. Guildford Council wrote to the mother telling her not to move on to the site. That instruction was ignored. Guildford Council has interviewed the Traveller about the children and their residency. The children are registered in the local school and with the local GP. However, that would apply from the site that they moved from in the first place; the residency is still claimed. Of course, when the council officer goes to check, she makes an appointment and, of course, forewarned is forearmed.
The planning situation is that the Traveller applied for permission for a Traveller site, which Guildford Council—correctly, in my opinion—rejected. That went to appeal, which the inspector also rejected, setting the middle of July this year as the date for the site to be vacated and set back to its original state. This was to allow the Traveller time to find alternative accommodation. Of course, nothing has happened. Instead, there has been an increase in activity and it appears to me that the presence of the children is being brought to the fore in anticipation of the council placing an enforcement notice, which, if the pattern follows, will be appealed, causing a further delay.
The Mole Valley District Council case relates to green-belt land adjacent to a farm and the River Mole. This pastoral land was sold to a handful of Travellers in 2003. Mole Valley District Council served an injunction on the families not to move on to the site, which was ignored; they moved their caravans to the site in August 2003. They then applied for a nine-pitch site in October 2003, which was refused. The appeal on that refusal was refused in November 2004. A year later, a further application for four pitches was refused in December 2005. The appeal in May 2007 refused it but allowed residency for four years, expiring in May 2011, to allow for alternative accommodation to be sought. One month before the expiry date three further applications were submitted. All were refused, all were appealed and all appeals were refused, except that temporary permission was granted until 10 April 2016. Again, that was to find an alternative site because of the children.
Since the Travellers’ 2003 arrival at the site, the area has been fenced, a fast-growing hedge has been planted and a number of caravans and a few other buildings of a more permanent design have been placed there. Also, to my amusement, two large, high, wrought-iron electrically-operated gates have been erected between pillars, as if they were the entrance to a minor stately home.
The farmer adjacent to the site has, with considerable difficulty, obtained planning permission to enlarge his home to accommodate his modest family. The difficulty he had was that the same planning regulations applied to him as to his Traveller neighbours. I suppose he could have gone ahead and built to his desire and then run a long series of applications and appeals using his children to squeeze the authorities. He did not. He went through the proper procedures, slowly and carefully, and got the appropriate permission. If he had not done so, as I am sure the Minister would agree with me and the planning authority, it would have forced him to demolish. Interestingly, that happened to a neighbour in the Guildford case, whose property happened to be three inches too large and had to be pulled down and rebuilt.
Both of the Traveller examples I have given are a flagrant abuse of our system. Our system was made for people to recognise it and to use it for the benefit of themselves and the community. Neither group of Travellers is from Guildford or Mole Valley, yet the councils feel—or, in the case of Mole Valley, have been told—that they have a responsibility for the families. If those families had arrived asking for social housing, they would have been told, “No.” They would have been told that they were intentionally homeless.
I ask for four small things. First, as I mentioned at the beginning, I ask for a reduction in the expected required numbers to reflect the green belt and similar restrictions for the authorities I mentioned and others like them. Secondly, I would be interested in the Minister’s interpretation of his recent changes in the regulation. Could they influence cases where the children are being used to manipulate planning? I realise that he cannot specifically use the two examples that I have mentioned, but he can talk broadly enough for me to be able to interpret with a bit of help.
Thirdly, does the Minister accept—I hope he does—that, in cases where the Travellers are not originally from the council area, the local authority should not be landed with the responsibility for accommodation or sites? Effectively, the Travellers are homeless by their own hand.
Finally, as we probably will not get quite what I would like out of this debate, is the Minister willing to accept a small—I mean small—delegation from Guildford and Mole Valley to come with me to discuss the problems? These are not the only Traveller problems in the area, and the problems will continue unless we can finally put a stop to this. As the Government have said, and as the Minister has said, the same should apply to settled families as applies to Traveller families.
The Minister for Housing and Planning (Brandon Lewis)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Mole Valley (Sir Paul Beresford) on securing this debate about planning for Gypsies and Travellers in his constituency. He has outlined examples that many of us have experienced either as councillors or Members of Parliament, let alone as Ministers. There is frustration in communities about such behaviour. I make it clear that we are committed to encouraging sustainable development, and it is important that local authorities plan for the future of their communities, including Travellers, in a way that is locally appropriate.
The Government attach great importance to the protection of our green belt. The green belt prevents urban sprawl by keeping land permanently open, and we do not want to see that protection eroded. We understand that green belt is highly valued by local people in my hon. Friend’s constituency and across the country. That is why our policy makes it clear that most forms of development on the green belt are inappropriate and should not be approved except in very special circumstances. He raised four particular queries at the end of his speech, and I should be able to address all four in the next few minutes.
Local planning authorities should ensure that substantial weight is given in their planning decisions to any harm to the green belt. We have made it clear that Traveller sites, whether temporary or permanent, are inappropriate development in the green belt and that local planning authorities should strictly limit the development of new Traveller sites in the open countryside. Increasing the amount of authorised site provision should not be at the cost of the countryside, the green belt, other sensitive areas, such as the ones he outlined, or the interest of the settled community.
This is a challenging issue, and I share my hon. Friend’s concern that planning decisions can sometimes appear to fail to find the right balance between adequate supply and protection of our treasured landscape. However, applications for such sites undergo rigorous scrutiny by the local planning authority, informed by comments from local communities, and such decisions are rightly for the local planning authority to take. He has outlined a number of examples where appeals have held up the local authority’s decision.
As Members will know, the previous coalition Government consulted on proposals to ensure fairness in the planning system, to strengthen protection of the green belt and the countryside and to address the negative effects of unauthorised development of land. We announced new planning policies in August 2015, including an updated planning policy for Traveller sites, implementing many of the proposals on which we have previously consulted. We changed the planning definitions of Gypsies and Travellers so that they now refer only to those who lead a genuinely nomadic lifestyle. We believe that if a Gypsy or Traveller has ceased to travel on a permanent basis, they should have their planning applications considered under national planning policy with the rest of the settled community, with everybody being treated exactly the same.
Through the Housing and Planning Bill we are seeking to ensure that the assessment of housing need covers Gypsies and Travellers and the settled community together, fairly addressing the perception that some groups receive favourable treatment—that is not the way forward. We have also introduced policies further to protect our green belt and sensitive sites. If a local planning authority cannot demonstrate an up-to-date five-year supply of deliverable sites, it should no longer be a significant material consideration when considering applications for the grant of temporary planning permission in those areas. We have made it clear that, subject to the best interest of the child, unmet housing need and personal circumstances are unlikely clearly to outweigh harm to the green belt and any other harm so as to establish very special circumstances.
Local authorities should also strictly limit new Traveller sites in the open countryside. We have made it clear that, in exceptional circumstances where a local authority is burdened by large-scale unauthorised sites that have significantly increased their need, there is no assumption that the local authority is required to meet that Traveller site need in full.
The Government are concerned about unauthorised development of land, which can cause irreparable damage to the environment, endanger the safety of occupants and neighbours and undermine confidence in our planning system, which is a point my hon. Friend rightly raised. We have already introduced measures through the Localism Act 2011 to enable councils to deal effectively with those who choose to ignore planning rules. Those measures give local councils the powers to deal effectively with retrospective or misleading applications. Again, he gave a good example of where that has happened. All should be treated the same.
Our new policy goes further by ensuring that intentional unauthorised development is a material consideration that should be weighed in the determination of planning applications and appeals. My hon. Friend rightly said that I cannot comment on individual sites in and around his constituency, not least because the circumstances of each case are unique and because of the quasi-judicial role, but I appreciate how controversial some Traveller sites can be. We have made it clear that that is no reason for local planning authorities to fail to provide the sites that Travellers need, as required by policy, within planning rules by which we all abide. Delaying the establishment of a robust supply of sites to meet need in a way that is consistent with policy as a whole merely exposes local planning authorities to unplanned development, which may prove more controversial in the long term than the provision established during a local plan process.
The previous coalition Government rightly did away with Labour’s top-down approach to planning, under which targets for Traveller pitches were forced on local authorities by unelected regional bodies. Instead, “Planning Policy for Traveller Sites” outlines local authorities’ responsibility to plan for their Traveller communities, just as they are required to plan for the rest of their communities. Our policy aims to increase the number of Traveller sites in appropriate locations, in line with objectively assessed need—no more, no less.
Sir Paul Beresford
Will the Minister reflect on my point that, using the current procedures, it is estimated that Mole Valley District Council will have to find 42 sites by 2027, but the waiting list for Surrey as a whole is only 65? Will he therefore reflect on the possibility of changing the rules sufficiently to reduce the number required by the current regulations?
Brandon Lewis
If my hon. Friend bears with me for a moment or two, I will address directly that point and his four other points.
We are ensuring that we provide fair treatment, which is why we share my hon. Friend’s concerns about unauthorised encampments and the disruption and expense that they cause for local communities. On that direct point, areas should consider their housing need when they develop their local plan, which also contains a duty to co-operate. There is therefore an issue about working with neighbouring authorities on a fair spread of Traveller sites, as they would for any other part of their housing need. That links to his fourth point, which was a request to come to see us with a small delegation from the authority. I am happy to arrange that meeting with Baroness Williams, the Under-Secretary who deals with such issues on a day-to-day basis. I will liaise with her after this debate and arrange for the delegation to come in to have that conversation.
Councils and landowners often think that they are powerless to stop unauthorised encampments, but I am keen to stress that extensive powers are open to them. My hon. Friend may be aware that in March 2015 the Minister for Policing, Crime and Criminal Justice and I sent a joint ministerial letter to council leaders and police and crime commissioners, and I am happy to let him have a copy of the letter. We expressed our concern that local authorities and the police are not seen to be doing enough to stop unauthorised encampments. To accompany the letter we reissued a summary of the robust powers that councils and landowners have to remove unauthorised Traveller sites.
I will just make a couple of final points. I have touched directly on the issue about the changes around children and their assessed need as opposed to the needs of the green belt itself. Indeed, that answers my hon. Friend’s question about the local planning process that deals with the housing need for the area, so that the needs of Travellers are dealt with alongside those of everybody else in the area. He made a very relevant point in that regard.
We are committed to encouraging sustainable development. It is important that local authorities plan for the future of their communities and deliver the housing that is needed. Travellers are part of our communities and local authorities must ensure that they have appropriate provision, but Travellers should be treated in the same way as everybody else and abide by the same planning rules.
We attach great importance to the protection of our green belt, and local planning authorities should ensure that substantial weight is given in planning decisions to consideration of any potential harm to the green belt; I expect to see that happening right through the planning system. Traveller sites, whether temporary or permanent, are inappropriate developments in the green belt, and personal circumstances and unmet need are unlikely to clearly outweigh harm to the green belt and any other harm.
We have updated planning policies for Gypsies and Travellers to ensure fairness in the planning system, to strengthen protection for the green belt and countryside, and to address the negative effects of unauthorised development of land. The Housing and Planning Bill will take that process one step further.
Question put and agreed to.
Individual Electoral Registration
(9 years ago)
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Nick Smith (Blaenau Gwent) (Lab)
I beg to move,
That this House has considered the matter of individual electoral registration.
For Parliament, 2015 has been a year for celebrating our democracy. Across the country, in schools, festivals and in the media, people have joined us in celebrating a journey that started 800 years ago with the signing of Magna Carta and led to our sitting here today. However, this year could end with a body blow to our democracy that could have repercussions for years to come.
The transition to individual electoral registration should reach its end in December 2016; instead, it has been brought forward by the Government to December 2015. The effects could be disastrous. According to the latest projections from the Electoral Commission, 1.9 million people are at risk of being removed from the electoral register. That number will drop as canvassers go door to door this autumn. Nevertheless, reasonable estimates produced by the Labour party suggest that close to a million people will be dropped from the register. That is a million people whose voices will no longer be recognised and who will be ignored when the Government begin to redraw the political landscape with the new boundaries.
That move goes against the advice of the independent Electoral Commission. It will not be subject to a vote in Parliament nor, apart from now, will MPs be given a certain chance to debate the important issues at stake. That is why today’s debate is so important. We need a Parliament that represents all its constituents in all its constituencies, but instead my borough of Blaenau Gwent had lost 1,736 people from the register by the time of the general election. It is projected that Wales will lose 68,000 people from the register in December, and that is unacceptable.
When the Labour Government legislated for the move to IER we put in a transition period with strong safeguards, but we can see from the numbers squeezed off the register by the current rushed transition that the Conservative Government’s haste will soon leave many people repenting at their leisure. There might be a view that this was a safe time to finalise the transition, as we have just completed a general election.
Nick Thomas-Symonds (Torfaen) (Lab)
I congratulate my hon. Friend on securing this debate on an issue that is absolutely key to our democracy. Does he agree with me that if there is to be the change to IER, together with the forthcoming change to the constituency boundaries, the Government’s responsibility to increase the safeguards, rather than bring forward the date by a year—as has happened—will be reinforced?
Nick Smith
The MP for my neighbouring constituency makes an important point, which gets to the crux of our discussion. May 2016 will feature big elections for the Welsh Assembly, the Scottish Parliament and the Mayor of London. People’s votes, across the UK, will be vital in shaping the country once more, and the boundary review of 2016, on which my hon. Friend touched, will shape it on a much more fundamental level.
Those people who are removed from the register in December 2015 will not be counted for the purposes of determining their representation in Parliament. If the shape of a constituency is drawn based on its reduced number of voters, we will soon be faced with a distorted electoral map. Large urban areas with multiple-occupancy housing and regular home movers are the areas that are set to be hit and, on a party political level, the urban areas affected coincide with traditional Labour representation. I would like to think that the Government would not rush in the IER process to tip the scales in their favour for future elections. However, how can we have confidence in the boundaries, even in London, when Hackney faces a nearly 23% drop-off in the number of registered voters? The average loss in Britain is calculated at almost 4%. The 10 poorest areas in Britain face an average projected loss of 6.2%.
We are in danger of shrinking the voice of our poorer communities. For people in those communities, falling from the register has consequences beyond that of losing the vote. It means, for example, losing the chance of obtaining safe, affordable credit in areas where loan sharks may ply their trade. It means public service provision dipping even lower, affecting everything from school places to GPs. My major concern is that it is already too late to fix that problem before the December deadline.
The student population is a good example of my last point.
Christina Rees (Neath) (Lab)
Does my hon. Friend agree that the Government should note the Association of Electoral Administrators’ recommendation that legislative changes should be implemented to allow electoral registration officers to block-register people in institutions such as sheltered accommodation and university halls of residence?
Nick Smith
My hon. Friend makes an important point on behalf of those people who do the hard yards in our democracy—electoral registration officers. They do not have a fashionable local government job, but they do their very best to boost our democracy and, as my hon. Friend says, they have been undermined in this instance.
To be fair, before the 2015 general election coalition Cabinet Office Ministers, the Electoral Commission and the National Union of Students sent a letter to university vice-chancellors across the UK asking for their support to ensure that students were registered to vote. Consequently, there was a big drive in universities to boost registration—fair do’s. We are now in a new academic year, however, with thousands of admissions to and departures from the universities, so the HOPE not hate group rang 54 universities asking about their work this year. Every university that responded said it was scaling down its efforts as there was no general election this year, with just four of them referring to plans to inform the new intake about voter registration in their welcome packs. That is a microcosm of the larger problem in high turnover areas. Without a sustained programme of action, any voter drive will work for a short period only.
Labour is doing its bit with the “missing million” push this weekend, led by my hon. Friend the Member for Ashfield (Gloria De Piero). It is one of our biggest registration drives ever. Labour students will be around campuses, colleagues will be touring community groups and local parties will be going door to door. That sort of work cannot, however, be sustained by volunteers alone, no matter how committed they are. A lot of the push has had to come from local authorities, who deserve credit for working hard despite the wider cuts and the new demands of the IER system.
Although information such as dates of birth and national insurance numbers is a good protection against fraud, it places further demands on electoral registration officers and that is why we need to support them by using all the available tools to find as many voters as possible. That means Departments and local authorities linking up their information and streamlining their processes. On this side of the House, my hon. Friend the Member for Sheffield Central (Paul Blomfield) deserves credit for doing that with his local university, the University of Sheffield, where they have integrated voter registration into the student registration process, leading to 64% of students registering to vote. That is a success story—fair do’s.
The more innovative methods we can use to take advantage of what we already have, the better. In my work on the Public Accounts Committee, I have seen some of the new ways in which Her Majesty’s Revenue and Customs is working. Since 2012, it has been making use of credit reference agency data to good effect. It has checked addresses and other information to see if everything is up to date and correct. That helped HMRC to reduce tax credit losses by £280 million between 2011 and 2014. Further afield, in California, a Bill has recently been signed that allows residents to be registered to vote when they obtain or renew a driver’s licence or a state identity card. The point is that we need to use more good and accurate databases to increase voter registration to protect and build our democracy.
Emily Thornberry (Islington South and Finsbury) (Lab)
It is a pleasure to have the opportunity to intervene in the debate. I compliment my hon. Friend; he was an excellent agent in Islington South in 2005 and has been an even better MP since for Wales.
Is it not right that we should all be democrats? We should all be trying to work to ensure that as many people as possible exercise their democratic right to vote. It is extraordinary, is it not, that the Government seem to be putting barriers in the way of people being on the register in order to exercise the power they should have simply because they are citizens?
Nick Smith
I thank my hon. Friend for her intervention. She does a brilliant job of boosting voter registration in Islington.
The Government are rushing the introduction of individual electoral registration. Next year’s elections are important and the boundaries for future constituencies will rely on an accurate register. The Government say that they want to boost our democracy, but their action undermines it. How many times have we, in this place, around this room, knocked on doors come election time, to be greeted by a person who has lost their opportunity to vote because of a registration problem? I see lots of nods. Why do we want to reject hundreds of thousands of students across the country by squeezing them off the register and telling them that their vote does not matter? Why do we want to undermine our voting system and threaten to exclude private renters, people from black, Asian and minority ethnic communities, the unemployed and lower-paid workers?
The Government must listen. They must hear the genuine concerns and allow more voters on to the register; otherwise, they do our democracy a great disservice.
Several hon. Members rose—
Philip Davies (in the Chair)
Order. It may help if I clarify for those who are new to 60-minute debates, an innovation in this Parliament, that the Chairman of Ways and Means has said that we should give the two main Opposition parties five minutes each and the Minister 10 minutes at the end. It is therefore my intention to get to the Front Benchers no later than 5.10 pm.
Helen Hayes (Dulwich and West Norwood) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Blaenau Gwent (Nick Smith) on securing this debate. I am pleased to have the opportunity to speak on an issue that is of the utmost importance to many of my constituents.
The key question on individual electoral registration is why the Government appear set on ignoring the advice of the Electoral Commission, an independent body that has undertaken rigorous research in this field. It clearly stated:
“Taking into account the data and evidence which is available to us at this point, and the significant polls which are scheduled for May 2016, we recommend that Ministers should not make an order to bring forward the end of the transition to IER. We recommend that the end date for IER transition should remain, as currently provided for in law, December 2016.”
The reasons for the Electoral Commission’s concerns are twofold: concerns about the completeness of the register and about the lack of participation by eligible voters who will drop off the register, who total some 1.9 million. In one of the boroughs I represent, Lambeth, an estimated 7% of the current electorate will drop off the register in December 2015 according to the best estimate of the local authority.
What do we know about those most likely to be in that 7%? We know from experience in Northern Ireland that they will be young—students who have moved away but whose main home remains their parental home, who may be away at the time of the electoral register canvass visit and mailing, but who may be at home at the time of the next election. In the past, they have been able to rely on their parents completing the form on behalf of the whole household. We also know that the 7% will include people who move frequently, such as the 40% of residents of Lambeth who currently live in the private rented sector, which the Government refuse to regulate properly. As their tenancies come to an end, they are forced to move on. Registering to vote will often be the last thing on their mind in what is often a stressful situation.
We also know that the 7% will disproportionately include voters from black and minority ethnic communities. I commend the work that Operation Black Vote has been doing on individual electoral registration. I visited its well-equipped voter registration bus a few months ago. Despite that work, it will nevertheless remain the case that the 1.9 million voters who drop off the register will disproportionately be from minority communities. I am not clear that the Government have undertaken an equality impact assessment of the decision to bring forward IER. The decision will have significant equalities impacts and those should be properly measured and taken into account before it is implemented.
We also know that voters who will drop off the register will disproportionately be on low incomes. They are exactly those voters who by May 2016 will be suffering the impacts of the Government’s decision to cut tax credits, which is being debated elsewhere this afternoon. We know that for all those people the consequences of dropping off the register will extend beyond their disenfranchisement, affecting their credit rating and forcing them to borrow where they need to from more expensive and unscrupulous sources.
Voting is a universal right. It is not the preserve of residents whose housing has been settled for many years, who have higher incomes or who are older or white. The Government should be taking their responsibility to ensure universal voting rights seriously and follow the recommendations of the Electoral Commission to stick with December 2016 as the start date for IER. In the meantime, the Government should be resourcing local authorities to extend their canvassing work, particularly in areas with a high proportion of students or private rented accommodation and in areas of high deprivation.
Rachael Maskell (York Central) (Lab/Co-op)
One of the problems we have with local authorities is the resourcing to be able to support the process. Does my hon. Friend recognise that authorities such as York will next week be sending out their first tranche of people to canvass constituents? That leaves only a two-week window to get people on to the register, because it is now taking three weeks to process the family inquiry form to put people on the register.
Helen Hayes
My hon. Friend makes a very good point, and I agree with her entirely. The resourcing for local authorities on this issue has been entirely inadequate.
The Electoral Commission report explicitly says that it does not consider the 1.9 million voters who would drop off the register to represent a high risk of fraudulent voting activity, so I do not think that a proportionate reason for bringing forward the introduction of IER when the risks of disenfranchisement remain so high. I remain completely baffled about why the Government are not taking the Electoral Commission’s recommendation seriously. I hope that they will look again at the risks and change their decision.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I thank the hon. Member for Blaenau Gwent (Nick Smith) for securing this debate. There is a sad irony to this issue. Individual electoral registration is to be adopted as a replacement for household registration, where previously one member—the patriarch, if you like, Mr Davies—doled out the franchise to his dependents. By bringing forward the transfer to the new system a year early, the Government will effectively maintain the electoral advantage and status of long-established households at the expense of transient and, in particular, young voters.
The measure could be interpreted as a cynical exercise in the further disenfranchisement of young voters, in urgent haste to influence the next round of elections in the Scottish Parliament, English local authorities and the Welsh Assembly. That approach to voter registration as a whole is bad news for democracy. More and more young people will either lose or never even have the opportunity to adopt the practice of voting. There is a real need for sufficient time and greater imagination and innovation to ensure that the new system works effectively.
I will make a few suggestions. A voter voucher could be sent to every 18-year-old—or even to 16-year-olds, when we come to that question—on their birthday to encourage them. We could have registration events in schools, colleges and universities. We have heard something about the activities that are already happening at some of them. Importantly, we could have citizenship on the curriculum. It is especially important to teach young people the nuts and bolts of how to vote and not to assume that people can do it automatically. People are shy of putting themselves in unfamiliar situations; they need to be helped to do that and supported along the way. There are wider questions about voting technologies and how to make the individual voter’s vote actually make a difference. There are also wider questions about young people’s engagement with democracy, voting for 16 and 17 year-olds, youth councils and youth parliaments.
I take this opportunity to decry how the Welsh national identity is ignored on election registration forms and to demand that the Minister makes good that archaism and commits to ensuring that people can record their nationality as Welsh, rather than British. Wales has a Welsh Government working on behalf of the Welsh people, and I am glad to say that we can record our nationality as Welsh on census forms. The Government do themselves no favours, however, with that lack of respect on registration forms. However inconvenient Wales may be, we cannot be defined out of existence.
Wayne David (Caerphilly) (Lab)
It is worth emphasising that being on the electoral register is absolutely fundamental to democracy in this country, but for obvious reasons unless someone is on the electoral register they cannot decide whether they want to vote. Whether they wish to exercise their franchise is up to them, but to deny people that choice undermines the concept of British democracy.
Individual electoral registration is a sound principle and makes good sense. When the Labour party was in government, we brought forward the concept of individual electoral registration, which was subsequently taken up by the coalition Government. Individuals within a household should have responsibility for their registration, rather than relying on the head of household to do it for them. It is a good means of empowerment and of bestowing responsibility on individuals.
As I cast my mind back to the passage of the Electoral Registration and Administration Act 2013, however, I remember that we the Opposition expressed practical concerns about how the laudable principle of IER was going to be put into practice. Many of those concerns have been borne out by the passage of time. We had a concern that the Government were placing an undue emphasis on the suggestion that there was widespread fraud. As we all know, there are occasional instances of fraud, but, by and large, our system has been transparent, straightforward and honourable given how people have behaved under it. Instances of fraud are few and far between. We felt that that had been elevated into a principle to allow the Government to introduce measures that would make it very difficult for many people to register. That is worth bearing in mind in our discussion today.
Secondly, we were concerned about how the dovetailing of the present system would work with the introduction of a new system—the move from household registration to individual registration. We thought it important to have sufficient resources to ensure that that was done properly and also that there was a sufficient period of time for that to happen. My concern, therefore, is why the Government have decided, despite what was agreed by Parliament, that a full implementation date for IER would be December 2015. Why have they decided to bring it forward by a year? I will return to that point later.
Individual electoral registration is important for next year because we are concerned to make sure that we have as many people as possible on the register to participate in a whole raft of important elections. Also, it is possible that we will have the referendum on Britain’s membership of the European Union. That is very important indeed. So there are good electoral reasons to make sure that as many people as possible are on the register.
My concern is about bringing forward the date for registration for the full implementation of IER from December 2016 to December 2015. Throughout the passage of the Electoral Registration and Administration Act 2013, we had a lurking suspicion, which reared its head frequently, that the Government were really interested not in democracy and full participation, but in political advantage. We had that concern all the way through the passage of the Bill. Occasionally, the Government blew the gaff and it was pretty clear what they were trying to do. It has to be said. There is no clearer example than when the Government tried to introduce full IER without the necessary preparation and safeguards for December 2015 so that it would happen to coincide with the boundary review beginning on exactly the same date. We all know the Boundary Commission takes as essential and fundamental to its work the state of the electoral register at the point it starts its work.
Is it simply a coincidence that the two processes are coming together? I suggest not. If we look at the work done by the Electoral Commission, we see clearly that despite the rhetoric and the warm words of the Government, many people will not be on the electoral register by December this year. The Electoral Commission says that the number could be as high as 1.9 million, although we accept that that number will deplete as we move closer to December this year. Other people have suggested the number will be slightly less. Some have suggested it could be as low as 1 million people. Nevertheless, it is true that a heck of a lot of people will not be on the electoral register—not because they have been on it fraudulently, but because, for reasons well explained by others, they have not been able to register and will therefore not be included on the register. They will not be able to vote and will not be taken into account when the next boundaries for the parliamentary elections in 2020 take place.
Why have the Government decided to ignore the objective and impartial advice of the Electoral Commission? There are plenty of instances where the commission says things that Labour does not like. It is not a Labour poodle, but an objective body. It has looked at all the information, analysed all the facts and figures, and come to the best conclusion. I will quote from its detailed report issued in June this year:
“If the transition ends in December 2015, there is a potential benefit to the accuracy of the register–with any retained entries which are redundant or inaccurate being removed”—
I accept that—
“but also a risk to the completeness of the register and to participation, with retained entries relating to eligible electors being removed...In contrast, if the transition continues to December 2016”,
as Parliament wanted,
“the main benefit relates to completeness–with entries for any eligible electors who are not registered individually retained on the registers”.
Surely we all believe in democracy and that there should be as many people as possible on the electoral register. We should not seek to manipulate this critical democratic process for party political reasons. I know the Government have decided to bring forward the date for full implementation, but even at this late stage I ask them to keep in mind the democratic principle that our election method should be above party political considerations. We are talking about the democracy of this country and, dare I say it, that is more important than the Labour party’s interests—or, indeed, the Conservative party’s. We are talking about democracy and that should be of concern to everyone.
Tommy Sheppard (Edinburgh East) (SNP)
It is a pleasure to make my first speech under your chairship, Mr Davies. There is no opposition from my party to the principle of IER. We can all agree it is high time to move away from the Victorian process of the patriarch registering the household and to individual registration. However, the process of transferring the responsibility from the state to the individual means that not all individuals are equal. We know that in many areas there have been problems with some groups being able to take advantage of their ability to join the electoral register: people who live in the private rented sector, students, and people who are recent migrants or who have no fixed abode in communities and are moving around. Also, there are people with various problems—poverty, addiction or other social problems—who are very much on the margins of society and, frankly, registering to vote in an election is not at the top of their list of priorities. Such factors do not affect all constituencies equally. I guess that is why we have an apparent imbalance of interest in the debate today. I guess there is a disproportionate interest the other way round in a debate on tax credits, but who knows?
In Scotland we have had an exercise in our recent history that I think has set the gold standard in electoral registration. During the Scottish referendum, we reached registration levels of 95% plus—previously unseen in these islands and lauded by everyone as a remarkable achievement. I recall asking the then First Minister Alex Salmond, now my right hon. Friend the Member for Gordon (Alex Salmond), what his most vivid memory of the entire referendum was, and he said the thing that stood out for him most was being in the city of Dundee in late August in the bright sunshine and having a queue of more than 200 people waiting in line around the block to sign up before the deadline for registration. Such was the enthusiasm of people wanting to participate.
We will wait and see what the effect will be in December in terms of the drop in the register as a result of moving to the new process, but the initial indications are not good. The interim register in April was 3.4% down on the register on which the referendum took place. That is in part because of the presence of 16 and 17-year-olds, but if we compare over-18s on the register, there is still a drop of 1.8%, which is a fairly significant drop. Hundreds of thousands of people could lose their right to vote.
It strikes me that we need to do two things. First, we need processes that are external to Government, but wherein the Government encourage people to take part in the electoral process to begin with. That should be done, as the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) says, through schools, through advocacy and through trying to educate people about the importance of their being on the register. We need state and local government-funded publicity campaigns to drive people towards that process.
Secondly, we need to look at the processes involved and how we can make them a lot simpler and easier. It is ridiculous that when a woman gets married and decides to change her name, she then has to provide two further pieces of identification in order to re-register to vote. Surely it is the state that is agreeing to the marriage and recording it in the first place; I would not think it beyond our wit, in the 21st century, to find a way to transfer that information to the electoral register.
Emily Thornberry
I am listening carefully to the hon. Gentleman. The problem that I have is that because of his fear of patriarchy, he is saying that individual people should grasp their right to vote. That is putting the whole thing on its head. It should be everyone’s right to vote. It seems obvious to me that the state should ensure that people have the right to vote; it is then for the individual to decide whether they want to.
Tommy Sheppard
I agree, of course, that without question everyone should have the right to vote. I am trying to suggest that it is the state’s duty to promote the availability of that right and to encourage people and advocate that they take it up.
I agree completely with the points that the hon. Member for Dwyfor Meirionnydd made about identity. I asked my electoral registration officer why people could not indicate in the relevant place that they felt themselves to be Scottish—I represent the capital of Scotland. The electoral registration officer said that they would happily change the form but could not do so because it would need to be changed on the Cabinet Office portal. I wrote to the Minister on that on 3 September and am still awaiting a reply. I am not trying to bounce him into replying today, but I shall be grateful if he will speed up the process.
I do not want to pre-empt what the Government are going to say, but I guess they would say that they have brought the date forward because they are extremely confident that everything will be all right on the night and okay in the end. Surely the question today is: what if it is not? What is plan B? We need to be prepared. When the registers are announced in December, if there is a dramatic drop-off in some areas, it is the Government’s responsibility to take emergency action to ensure that people are not disfranchised in the elections and referendums that are coming next year.
Gloria De Piero (Ashfield) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies.
I join others in congratulating my hon. Friend the Member for Blaenau Gwent (Nick Smith) on bringing the extremely important matter of individual electoral registration to Westminster Hall at this crucial time for our democracy. As he says, this change represents a potential body blow to our democracy, as 1 million people might be ignored.
We should all reflect on the comments of my hon. Friend the Member for Torfaen (Nick Thomas-Symonds), who pointed out that the boundary review is intrinsically tied up with the process of individual electoral registration, which could distort the electoral map. My hon. Friend the Member for Neath (Christina Rees) mentioned the Association of Electoral Administrators, which points out that the block registration of those in sheltered or university accommodation is crucial—so why has it not happened? My hon. Friend the Member for York Central (Rachael Maskell) pointed out that in her constituency they are trying to do all this work in just a two-week window.
My hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) made the point that we must all be democrats and should not be putting barriers in the way of democracy, and my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) asked an extremely important question, which I hope the Minister will answer, about whether an equality impact assessment has been conducted. Finally, my hon. Friend the Member for Caerphilly (Wayne David) pointed out that the issue is not the principle of IER but having a reasonable time to adjust to it.
In the short time remaining to me, I have some additional questions for the Minister. Will he tell us one good reason for the change of date, other than politicking to give the Tories an electoral advantage? The Opposition have suggested a number of common-sense solutions. Why have the Government refused measures such as the block registration of students this year? We also suggested that the Government work with letting agencies to take such simple measures as reminding new tenants to register and helping them to do so, but they have not carried out any of them. In my constituency 900 people are predicted to fall off the register, but look at Hammersmith and Fulham and we are looking at the loss of 8,000 people. Does the Minister agree that that would be unacceptable?
I will finish by coming back to the words of the Electoral Commission. It has said that the proposed change to the IER implementation date poses
“a risk to the completeness of the register and to participation”.
I remind the Minister that the Electoral Commission is an independent body set up by Parliament and has no partisan axe to grind. Why do the Government believe that their party political agenda should override the advice of a body that exists to increase trust and participation in our democracy? Will the Minister reconsider and stop this rush to implement a change that poses profound risks to participation and the completeness of the register? I urge him to heed the Electoral Commission’s sound advice.
The Parliamentary Secretary, Cabinet Office (John Penrose)
It is a pleasure to serve under your chairmanship for what I think is the first time as well, Mr Davies. Thank you for guiding us safely through the debate.
Perhaps I will surprise the hon. Member for Blaenau Gwent (Nick Smith) by saying that there is a great deal on which we can agree. In fact, there is a great deal on which all the speakers can agree. For example, I agree with the hon. Member for Edinburgh East (Tommy Sheppard) that the existing processes for sorting out registration and chasing after people in the under-represented groups leaves a great deal to be desired. Often, those processes are set in stone in an analogue age, and we are now in a digital world. They are long overdue for some updating and modernising.
If the hon. Member for Edinburgh East, or anyone else present, would like to come along to Policy Exchange on Thursday, I will be giving a speech on how we need to update and modernise our approach to registration, because I agree with the underlying tone of many of the remarks made today: we have a major problem with not all but some groups in society that are under-represented. We have heard a list of some of them today. People in the private rental sector are difficult to keep track of, as are young black males in particular but many ethnic minorities—it is difficult to persuade them to register, even if we can find them. Students have also been mentioned.
The group that is probably worst represented of all and has not been mentioned so far is expatriate voters. Even of those who are legally allowed to vote and are enfranchised—those who have been abroad for less than 15 years—only between 3% and 5% are registered to vote. That is after the previous Government threw quite a lot of money at the problem in the run-up to the general election and raised the proportion from a paltry 1% to a relatively risible 3% or 5%—that is all. That is a good, if extreme, example of a fundamental problem. We need to update and modernise what we are doing on voter registration.
Nevertheless, it is important that if, when and as we do that—I completely agree with the sentiments expressed: we need to do so—in the vast majority of cases we are going to find people who are not registered at all. A large number of people are missing from the registers entirely, either pre or post-IER. What we do to end the transition to IER will not affect the people who are not currently on the register. We need to update and modernise because it is right and democratic, but let us not fool ourselves that it will have a great deal of impact on the decision about when we end the process of individual electoral registration, because these people are overwhelmingly not on the register as it stands.
Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)
On that point, the Minister will know from previous exchanges on this subject that last year the University of Sheffield used flexibilities that his Department gave it significantly to improve the number of students registered. We heard from my hon. Friend the Member for Blaenau Gwent (Nick Smith) that that is not being repeated by other universities this year. If we had a further year—if the Minister had not brought this scheme forward by a year—we could have a much more complete register of students in a year’s time.
John Penrose
I invite the hon. Gentleman to come along and hear my speech on Thursday at Policy Exchange, where we will talk about not just that but other initiatives, which I will mention briefly in a minute. Even if we were able to extend what has been done successfully the University of Sheffield and Sheffield Hallam to many other universities, given that the people we are talking about are not on the register, either before or after individual electoral registration, the date at which we end the transition to IER would make no difference to whether they are registered. This is something worth doing, regardless of whether we are doing IER and the transition. It is worth doing at all times, in all places, in any case. The transition date will make no difference to those people.
I completely agree that it is important that we roll out some of the exciting innovations that are being tried in places such as the University of Sheffield and Sheffield Hallam for students. There are all sorts of other things we could do with the online registration process. It is now possible to register to vote online in less than three minutes—less time than it takes to boil an egg. It is an incredibly convenient and simple process.
However, we make it more difficult for people to renew their registration after they have been registered for a year. The hon. Member for Edinburgh East said, and I am sure we all agree, that there is a natural seasonality to electoral registration: registration rates tend to dip after a major electoral event, such as a general election or the Scottish referendum, because people are less interested and registration is less relevant to them if there is no poll in which they can vote in the next 12 months. Some of those people re-register nearer the time, but we should ask ourselves why we ask all those people to re-register every single year once they have made their individual decision to register to vote. We do not ask them to re-register for their tax credits, their TV licence or their benefit claims every single year.
Everybody in this room, except perhaps the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts)—I am not sure whether she is in favour of this principle as a fundamental—accepts the noble cause of individual electoral registration and ensuring that people make an individual decision to register to vote. However, we need to ask ourselves whether it is necessary to ask people to renew that vow every year. Are we still being true to individual electoral registration if we relax it and make a decision on it every couple of years? That would allow us to deal with some of the natural electoral seasonality that the hon. Member for Edinburgh East mentioned.
There is a huge amount we can do, and there is a huge amount that I believe should be done. I hope, based on hon. Members’ comments today, that there can be some sort of cross-party agreement on some of these things, which could then be introduced. There may not be cross-party agreement on everything. The hon. Member for Ashfield (Gloria De Piero) gave a couple of examples, and we do not necessarily agree on all the detail.
Gloria De Piero
Can the Minister give me examples of any measures that will be introduced in the next six weeks?
John Penrose
I cannot, partly because I have not given the speech yet, and partly because, as I said to the hon. Member for Liverpool, West Derby (Stephen Twigg), registering people who are not on the register needs to happen, regardless of when the transition from the old system to individual electoral registration ends, because the transition will not affect people who are not already on the register. It is a parallel process that needs to be done anyway.
Wayne David
That is missing the point entirely. We are asking the Minister to give us one good reason why it is better to introduce IER in December 2015, rather than December 2016. We are still waiting.
John Penrose
I was just coming on to that. I want to address the fundamental point about how we are going to deal with the problem of under-represented groups on our registers, which is crucial and underlies many of the concerns.
Let me move on to the timing of the transition to IER. As we have heard in many speeches today, there is a presumption that this process is going remove eligible voters from the electoral roll. I want fundamentally to question that presumption. During the course of a year a large number people on the electoral register—a very large number in some places, and in other places fewer people—move house. Some sadly die, and there are fraudulent entries in some parts of the country, although not in all—the hon. Member for Caerphilly (Wayne David) rightly said that fraud is not an issue in all parts of the country. That is the natural state of any database. It is natural for any electoral register to contain such data errors.
We have to sort through the 1.9 million people whose entries are incomplete and who had not made the transition as of the general election date of May this year to find which are genuine voters with a pulse—people who are eligible to vote. We need to identify them, confirm their ID in the way that we have been discussing and ensure that they are confirmed on the electoral register. Then the only entries left will be the people who are no longer there—the people who have moved, died or were never there in the first place because they were fraudulent.
John Penrose
I will in a second. Let me finish this point.
That crucial distinction is absolutely central. It is not my intention—I am a democrat, like everybody else here—to get rid of any valid elector from any electoral roll anywhere.
John Penrose
I will give way to the hon. Member for Blaenau Gwent first.
That is why we have made it so simple for people to register to vote and why by the end of the year, with the £3 million of extra funding we have introduced, the remaining 1.9 million entries on the electoral roll will have been contacted up to nine times over the past 18 months—in some cases, more. They will have had their doors knocked on and their phones rung, and they will have had letters and emails. At the end of that process, the chances of a genuine voter with a pulse who lives in a particular area being disfranchised are vanishingly small. Even if, by some terrible mischance, after all that effort they are genuinely disfranchised and should be able to vote, it takes less time than it takes to boil an egg to re-register.
Nick Smith
It is good that people can vote online now, and I know it is a very efficient process. Of the 1.9 million people we are all worried about, what is the Minister’s assessment of how many will be registered after the numerous interventions he is talking about? How many extra people does he believe will be on the register?
John Penrose
I do not have that number yet because, as a number of the hon. Gentleman’s colleagues said, the autumn canvass is still going on. Because by definition those people were, without getting too Rumsfeldian about it, known unknowns, we were not sure how many were genuine people with a pulse and how many were data errors. Nobody will know the answer to that question until the autumn canvass process is complete.
Given that over 18 months those people will have been contacted nine times—in some cases more—in a variety of different ways, the chances of genuine voters being disfranchised is tiny. The fact is that the only entries left on the register, which will then be deleted, are the ones who are no longer there, not real voters. I hope we can all sign up to that crucial distinction. I am sure—we have heard this from a number of colleagues—that we would all sign up to the principle of keeping a clean register, which underpins the health of our democracy.
Christina Rees
If the transition is brought forward a year, that leaves less time to check out those 1.9 million people. That applies only to the people who were on the register in the first place. What about 18-year-olds and other people?
John Penrose
Look at the number of reminders we get about everything else in our lives. We do not remind people nine times about their TV licence or anything else, and we certainly do not take 18 months. With this process, we have gone not just the extra mile, but the extra 10 miles. Once the point has been reached at which the remaining register entries can only be people who have moved away or died or were fraudulently there—those who are not real voters—it seems pointless to wait.
Several comments were made about the Electoral Commission. Although that is an august body, I gently remind hon. Members that there is another body: the Association of Electoral Administrators. Its members are the people in charge of administering elections up and down the country and they are in favour of the change. This is not a one-way street. An awful lot of objective, independent non-politicians think that the idea is good because the transition is sensible and they are reminded of what happened in Northern Ireland, where the change was made in one day, not 18 months and let alone two and a half years. Northern Ireland has been using the system happily for several years.
Stephen Twigg
I am grateful to the Minister for his generosity in giving way. He referred to Donald Rumsfeld’s known unknowns, but are not the unknown unknowns the bigger problem? I refer to the students who were not living at a university address last year, but are this year. Due to the lack of the focus that universities had last year, as previously described, fewer such students will be on the register. The Northern Ireland example is particularly relevant here, because schools and colleges there have a duty to work with the electoral registration officer to get 17 and 18-year-olds registered. We argued for that in the previous Parliament, but the coalition Government sadly did not agree to it. Would the Minister agree to that, even at this late stage?
John Penrose
At the risk of sounding like a broken record, the hon. Gentleman makes an entirely valid point about the importance of getting attainers and students on the register. We have already discussed some of the good examples going on in Sheffield that bear examination and could be copied.
As I mentioned before, because such people are not on the register at the moment, getting them on the register is something that we should do and is a challenge that will recur every single year forever as long as there are students, universities and colleges. It makes not a jot of difference, however, to the timing of the ending of the transition to IER if such people are not on the register already, because they cannot be crossed off and potentially disfranchised. I hope that the hon. Gentleman accepts that fundamental piece of logic.
Stephen Twigg
I understand the logic of the Minister’s argument, but universities have not had a lot of time to learn from the Sheffield experience. I know from talking to universities in Liverpool that they have not adopted the Sheffield system this year. With more time and a concerted effort from Universities UK, the Government and ourselves, we could get all universities doing it next year.
John Penrose
That is an interesting and intriguing idea on which I would welcome cross-party discussions if the Labour party is interested. It is just one example of a whole series of things that could be done. The hon. Member for Ashfield, the Opposition spokeswoman, mentioned letting agencies. I am unsure whether I agree with block registration, because it strays perilously away from the turf of individual electoral registration. Again, I am open to being convinced on that, but it is a potential danger that I might not want us to go near. There are many other such opportunities.
The hon. Member for Edinburgh East referred to data cross-matching. A large number of local authorities say, “Look, we have all this data from a range of other sources that we are itching to use.” We could effectively do nine tenths of the annual canvass automatically in a trice just by running some cross-matching between existing databases and the electoral register. We could prove that 90% of people have not moved and are in the same situation. We could then focus our annual canvass efforts on the 10% who do not match up and who are causing the problem, on under-represented groups or on places that seem to have empty houses when we know that people are living there.
With those points, I hope that the debate has begun to unpick the two important parallel but distinct issues. One is the question of how to get more under-represented groups to register. The other is how to deal with data errors in respect of the 1.9 million people, as of last May, and how we distinguish between real voters, ensuring that they are confirmed and not disfranchised, and the errors that need removing to guarantee the strength of our democracy.
Nick Smith
It has been a pleasure to serve under your chairmanship, Mr Davies. We have had a really good debate. I want to thank Opposition colleagues who have contributed and added value. Strong contributions included that from my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes), who made an important point about the equality impact assessment.
John Penrose
I have just remembered that I did not answer the question asked by the hon. Member for Dulwich and West Norwood (Helen Hayes). There was indeed an equality impact assessment.
Nick Smith
My hon. Friend the Member for Caerphilly (Wayne David) talked about the fundamental importance of registration for our democracy. The hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) had some good ideas about voter vouchers for 18-year-olds. The hon. Member for Edinburgh East (Tommy Sheppard) talked about how exciting campaigns can boost registration, which is the gold standard for us all.
We want exciting campaigns that energise our voters and promote democracy. We had interventions from my hon. Friends the Members for Neath (Christina Rees), for Islington South and Finsbury (Emily Thornberry), for Torfaen (Nick Thomas-Symonds) and for York Central (Rachael Maskell). My hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) probed an important point about student registration.
In this important debate, I have tried to emphasise that bringing forward individual electoral registration at this time is a body blow to our democracy. Colleagues have highlighted under-registration in their constituencies, where key groups of people, such as those in rented accommodation and young people, are being squeezed off the register. The Minister made some constructive comments, and I look forward to reading his speech once he has given it in a few days. I would be grateful if he sent me a link.
Nick Smith
All here present are good democrats who want to see progress in this area. Nevertheless, the Minister has failed to provide the Government’s assessment of how many of the 1.9 million people will be on the register after the Government’s intervention. It is a shame and a great pity that he failed to answer that important point. The Government have failed to listen to independent organisations such as the Electoral Commission and have done our democracy a disservice as a result. I hope that the Minister will take on board the messages of today’s debate, rethink the Government’s strategy and decide to build our democracy, rather than undermine it.
Question put and agreed to.
Resolved,
That this House has considered the matter of individual electoral registration.
Written Statements
UK Steel Industry
The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
The steel industry across Europe and around the world is facing challenges on a scale unprecedented in recent history. The situation facing the people of Redcar, Scunthorpe, and other communities across the UK where the local economy is built on steel is unbearably difficult.
There is no straightforward solution to any of the complex issues involved, but this Government have no intention of simply standing aside.
We have already announced a package worth up to £80 million to support people who have lost their jobs as a result of SSI’s liquidation, and to mitigate the impacts on the local economy.
We have asked Amanda Skelton, chief executive of Redcar and Cleveland council, to chair a local task force. We have ensured money is in workers’ pockets quickly via the redundancy payments service. We have brought workers and opportunities together at a jobs fair, at which more than 1,000 vacancies were showcased by more than 50 local employers. We have provided additional flexibilities to local FE colleges to allow people to take up training to enhance their future job prospects. And we have set aside money to fund those proposals from the task force which will make an immediate and lasting impact on the local economy.
We will do what we can to soften the blow of any further redundancies among steelworkers.
Alongside our immediate help for laid-off steelworkers, we are also taking steps to ensure there is a future for Britain’s steel industry in what is an exceptionally difficult market. Excess capacity in global steel is enormous—about 576 million tonnes last year, almost 50 times the UK’s annual production. The price of steel slab has fallen by a half in the past year alone. And in the three years since SSI restarted production at Redcar, the plant has lost more than £600 million.
There are limits to what we can do in response. No Government can change the global price of steel or dictate foreign exchange rates.
To identify where progress can be made, on Friday I hosted a top-level summit with the key players from the UK steel industry. Bringing together industry leaders, trade unions, Members of Parliament and senior figures from Government, the summit created a framework for action that will help us to support steelworkers now and in the future.
We will drive up the number of public procurement contracts won by UK steel manufacturers and their partners through fair and open competition. This Government are committed to a major programme of infrastructure spending, and while we must always secure the best possible deal for British taxpayers that does not have to mean the lowest price. The new Public Contracts Regulations give us more scope to offer greater flexibility around how we include social and environmental considerations in our procurement activities. We intend to help other Departments and business take full advantage of these flexibilities building on what was learnt from projects like Crossrail.
We will consider what lessons can be learned from other countries in the EU and beyond. This will include the resilience of the steel sector in competitor countries and market penetration of national manufacturers.
We will look at what Government can do to boost productivity and cut production costs. This includes addressing energy and environmental costs, regulation, skills and training. An extensive review of business rates is already under way and the Government will look very closely at all proposals.
These steps will come on top of action we have already taken. For example, we have already paid out more than £50 million in compensation to energy-intensive industries in the steel sector. We also plan to offer further compensation in respect of feed-in tariffs and the renewables obligation; this constitutes state aid, which must be approved by the European Commission. The approval process is under way but it is taking longer than anticipated, and longer than I would like. My Department is working closely with the Commission to answer their concerns and impress upon them the importance of prompt approval.
I also plan to meet Commissioners next week to reinforce our concerns about unfair trade issues and gain their support for further action. We have already taken action by voting to support the extension of duties on wire rod and will continue to consider future cases on their merits where there is clear evidence to support doing so.
We showed, following SSI’s closure, that we will not hesitate to support local partners in dealing with the impacts of large-scale redundancies. I am sure that also applies in Scotland and Wales where some of the responsibilities are devolved.
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ECOFIN
(9 years ago)
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The Financial Secretary to the Treasury (Mr David Gauke)
A meeting of the Economic and Financial Affairs Council was held in Luxembourg on 6 October 2015. Ministers discussed the following items:
Mandatory automatic exchange of information in the field of taxation
Ministers reached a political agreement on the text of a Council directive on mandatory automatic exchange on information on tax rulings.
Current Legislative Proposals
The Council took note of ongoing work on financial services dossiers.
Implementation of Banking Union
The European Commission provided an update to Council on the status of transposition of the bank recovery and resolution directive (BRRD), on ratification of the intergovernmental agreement on the single resolution fund and on the transposition of the directive on deposit guarantee schemes.
Capital Markets’ Union
The European Commission presented its action plan on Capital Markets’ Union as released on 30 September, followed by an exchange of views.
European semester—Lessons Learnt
Council held an exchange of views on ways to improve the European semester, based on lessons learnt from the 2015 semester process.
Stability and Growth Pact
Ministers received an update on the current state of play on discussions on common positions on flexibility in the stability and growth pact.
Preparation and follow-up of international meetings
Council received an update on discussions at the G20 Finance Ministers’ meeting on 4-5 September in Ankara. Ministers then endorsed EU terms of reference for a meeting of G20 Finance Ministers in Lima on 8 October and endorsed an ECOFIN statement for the IMFC meeting in Lima on 8-11 October.
[HCWS255]
Right to Rent Scheme
(9 years ago)
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The Minister for Immigration (James Brokenshire)
I am announcing today the roll out of the second phase of the measures relating to the private rented sector as prescribed by sections 20-37 of the Immigration Act 2014, otherwise known as the Right to Rent scheme. Where these provisions apply, landlords are prohibited from renting accommodation to people who are disqualified from a right to rent by virtue of their immigration status.
The provisions will come into force across the whole of England as of 1 February 2016.
The provisions were implemented on a phased basis starting on 1 December 2014 in Birmingham, Wolverhampton, Dudley, Walsall and Sandwell, in line with the commitments made by the then Government. The impacts of the first six months of the scheme have been subject to an evaluation exercise. I have considered the findings of the evaluation and the advice of a panel of experts in arriving at this decision. The evaluation can be found at: www.gov.uk
The Government have continued to engage with the private rented sector and the new Immigration Bill 2015, introduced to Parliament on 17 September 2015, provides new powers to evict illegal immigrants and offences where unscrupulous or rogue landlords choose to flout the law and are exploiting illegal immigrants for their own gain.
This demonstrates the Government’s determination to control immigration in the interests of the whole country and in ensuring that people here unlawfully are not able to enjoy a settled life here in defiance of our laws.
[HCWS253]
English Votes for English Laws
(9 years ago)
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The Leader of the House of Commons (Chris Grayling)
The Government wrote to the Procedure Committee on Monday 19 October 2015, in response to the publication of its report on “Government proposals for English votes for English laws Standing Orders: interim report” (First report of Session 2015-16—HC410). The Government are grateful to the Chair of that Committee for agreeing that the Government response, reproduced below, could be unusually published by written ministerial statement. This allows speedy and transparent publication of this information to Members of Parliament, and others, ahead of the debate on the issue on Thursday 22 October 2015.
The Government are grateful to the Procedure Committee for publishing its interim report in advance of the debate and decision on the proposed Standing Order changes to implement English votes for English laws on 22 October 2015. The Government are also grateful that the Committee was willing to indicate its initial findings by way of a letter of 10 September to the Leader of the House of Commons, subsequently published on its website. This letter was important in allowing the Government to reflect the Committee’s views in the updated proposals published on 15 October 2015.
The Government’s proposals deliver their commitment to introduce English votes for English laws. The Government are determined to strengthen the Union and are devolving more powers across the United Kingdom, and now is the time to give the English more say. These plans provide a fair balance by giving England, and Wales, more control over decisions which they alone are affected by, while ensuring that Westminster continues to be a place where those from across the UK govern in the best interests of those living within the Union.
The Government’s responses to the recommendations of the Committee are indicated below.
Recommendation: In the experimental phase following the introduction of any new Standing Orders, we consider that the Speaker should not give the reasons for his decisions on certification to the House. We nevertheless consider it inappropriate that the role of the Speaker should be confined in this way through Standing Orders proposed by the Government, and we recommend that the matter should be left to the Speaker’s discretion, so that he may choose to enter into the spirit of this experiment by being himself free to experiment. (Paragraph 45)
The Government are content to give the Speaker the discretion on whether or not to give reasons for his decisions on certification to the House. The Government will reflect this when it tables updated Standing Orders by omitting the phrase
“without giving the reasons for the decision”
from Standing Orders 83J(9), 83L(6), 830(10), 83P(5) and 83U(7). We note the Committee’s view, following evidence, that the Speaker should not give the reasons for his decisions on certification during the experimental phase following the introduction of any new Standing Orders.
Recommendation: We recommend that provision should be made for the Speaker to consult two senior members of the Panel of Chairs, to be appointed by the Committee of Selection, if he chooses before determining his opinion on certification, but should not be obliged to do so. This provision would, we believe, help underpin the House’s confidence in the Speaker’s decisions. (Paragraph 47)
In response to earlier discussions, the Government considered this issue and the updated Standing Orders published on 15 October 2015 contain an additional sub-paragraph relating to the certification of Bills, clauses and schedules (SO 83J (8)(a)), and similar additional paragraphs at SO 83P(4), S0 83U(6), SO 83L(8) and SO 830(13).
These new additions enable the Speaker to consult two members of the Panel of Chairs to assist him in the process of certifying Bills, clauses and schedules as relating exclusively to England or England and Wales, should he wish to do so. The two members of the Panel of Chairs should be appointed on a Session-by-Session basis by resolution of the Committee of Selection. We agree that this will help underpin the House’s confidence in the Speaker’s decisions.
Recommendation: We recommend that, in considering the interaction of the proposed new procedures with the present procedure for programming stages of Bills, the Government should allocate set periods of time for the consideration of amendments or groups of amendments, for elements of consent stage and for Third Reading. Without such protected time, there is a high risk of bringing the procedures of the House in considering legislation into further disrepute and of failing to show the electorate that we take our task of making the law seriously and are prepared to give sufficient time to do the task properly. (Paragraph 92)
The Government accept the principle of the Committee’s recommendation, that adequate time should be given for the scrutiny of legislation. The Government will consider all legislation on a case-by-case basis and note that the Committee will undertake detailed monitoring of the time spent on the various elements of the new consent stage, as part of its review following the introduction of the revised Standing Orders.
Recommendation: We recommend that the Government amend their proposals for Standing Orders to provide that Bills and instruments be sent for the Speaker’s decision on certification only after the House has debated and agreed to a motion to this effect moved by a Minister of the Crown. (Paragraph 98)
The Government have given this matter careful consideration, and note the Committee’s desire to ensure that the House’s time and resources are allocated to items which are politically important. However, the Committee also recognises that there are implications for the development and drafting of legislation, which needs to be undertaken in the anticipation that these proposals will apply to it. The requirement for a separate decision having the effect of applying the procedure to Bills and instruments could add additional time and complexity to the system, and introduce uncertainty. The consequence of these proposals on the resources of the House, in the longer term, is a matter that the Procedure Committee may wish to consider.
Recommendation: We recommend that Departments should as a matter of course instruct parliamentary counsel to draft legislation intended to apply to England or England and Wales only with the express intention of meeting the certification tests. (Paragraph 99)
The Government will be as helpful as possible to Members in identifying those provisions of a Bill which are likely to be certified. In practice, this information will be in supplementary material to a Bill such as the explanatory notes rather than in the Bill itself but parliamentary counsel will, so far as practicable, take account of the need to assist Members when drafting the Bill.
Recommendation: We recommend that the Government’s proposals be amended to provide that certified amendments, new clauses and new schedules, whether made in Committee or proposed on Report, only pass Report stage if they are unopposed or, if put to a vote, when an appropriate double majority in the House has voted in favour. (Paragraph 100)
The Committee’s proposal to introduce double majority voting as suggested aims to make the procedure simpler. However, the Government believe that the proposal would actually increase complexity and unbalance the proposals away from Members of the relevant constituencies having a specific body through which to have their voice heard.
As outlined in the report, the suggestion does not indicate how it would deal with clearing unamended certified provisions at Report. In the absence of a clause or schedule stand part debate, a Legislative Grand Committee would still be needed to clear these.
Where there has been amendment since Second Reading, a different sort of certification would be required depending upon whether the amendment had been made in Committee or on Report. If made in Committee, it is not clear what the subject of the vote would be at Report stage. It could not be on the clause/schedule as amended because there is no clause/schedule stand part debate. A separate procedure would need to be devised and separate votes at Report on clauses amended in Committee which would alter the nature of Report stage.
For amendments proposed on Report, there would be added complexity because these amendments would have to be certified before, and as they are tabled, during Report stage. A new process would have to be devised for certifying amendments because, except on Commons consideration of Lords amendments and for special cases (S083L(4)), it is Bills, and clauses and schedules that are already in Bills, that are certified and not amendments. The test for the amendments would have to be whether, if agreed, they would produce an England or England and Wales clause or schedule. This would not be easy for Members to follow during what is the most important stage of the Bill.
Finally, the proposal suggests, if there were a disagreement between the House and Members of the relevant constituencies, that there would be a full and nuanced debate on the substantive issues at the Legislative Grand Committee stage. However, this would introduce another stage to the process because, even after this, there would still have to be a process for resolving the disagreement.
Recommendation: We recommend that the Government’s proposals should be amended to make it clear that all Members can speak and intervene in Legislative Grand Committee proceedings in the Chamber at the discretion of the Chair. We note that in common with analogous proceedings in Delegated Legislation Committees, Members who are not members of a Legislative Grand Committee will not be able to move motions, propose amendments or vote. (Paragraph 103)
The Government were grateful for an indication of the Committee’s view on this issue in its letter of 10 September 2015 and was able to reflect this in the updated proposals published on 15 October 2015. New text has been proposed in paragraph SO 83W(8) in the Standing Order relating to Legislative Grand Committees. This paragraph makes clear that any MP may take part in debate at Legislative Grand Committee stage, though only members of the Legislative Grand Committee may vote, make any motion or move any amendment.
Recommendation: We recommend that the procedures be piloted on statutory instruments, and no more than three Bills, in the remainder of the 2015-16 Session. The House should be invited to agree to the Bills to be piloted under these procedures, using the process we have outlined in paragraph 98 above. (Paragraph 104)
The reality is that it seems likely that there will be a limited number of Bills to which the proposals will apply in the remainder of this Session of Parliament, and the Government and relevant Committees will be able to undertake the necessary review based on the experience of those Bills and instruments. While this is not a pilot in the exact terms of the Committee’s report, the outcome will be very similar.
Recommendation: We recommend that the new procedures should not be applied to any Bill in the 2016-17 Session until after we have reported on our evaluation. (Paragraph 105).
The Government are seeking to implement a manifesto commitment. Introducing a system in the knowledge that it will be concluded at the end of a Session and then reintroduced, possibly in amended form, halfway through the next Session of Parliament may cause confusion for Members of Parliament, Government Departments and members of the public, not least in the example of carry-over Bills, which might be part way through their amending stage at the end of the current Session.
The Government take the work of the Procedure Committee seriously, and will reflect fully on any evaluation of the proposals the Committee may choose to undertake in order to make the proposals work as effectively as possible.
[HCWS251]
Draft Wales Bill
(9 years ago)
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The Secretary of State for Wales (Stephen Crabb)
I am pleased today to publish the draft Wales Bill for pre-legislative scrutiny.
The draft Bill sets out the Government’s plans for a stronger, clearer and fairer devolution settlement for Wales that will stand the test of time. It implements the commitments made in the St David’s Day agreement and set out in the Command Paper Powers for a Purpose: Towards a lasting devolution settlement for Wales (CM 9020), published in February.
The key measures include a new reserved powers model for Welsh devolution, similar to the one which currently operates in Scotland, providing a clear and complete boundary between devolved and reserved subjects. The draft Bill devolves important new powers for Wales in areas such as energy, transport and local government and Assembly elections. It also provides greater powers to the Assembly over its own affairs, including the ability to change its name.
The new devolution settlement provided for in the draft Bill will create a stronger Wales within a strong United Kingdom. It will work better for the people of Wales and allow more time for the Welsh Government to focus on delivering growth, jobs and better public services.
I am grateful to the Welsh Affairs Committee for agreeing to undertake pre-legislative scrutiny of the draft Bill and I look forward to receiving their report. The Government will continue discussions with the Welsh Government on the detail of the reserved powers model alongside pre-legislative scrutiny. It is vital that we deliver a robust new devolution settlement that works for the people of Wales.
[HCWS254]