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Mrs Emma Lewell-Buck (South Shields) (Lab)
1. What assessment he has made of the potential effect of proposed changes to tax credits on child poverty.
Kirsten Oswald (East Renfrewshire) (SNP)
2. What estimate he has made of the administrative cost of proposed reforms to tax credits announced in the summer Budget 2015.
Wes Streeting (Ilford North) (Lab)
3. Whether he plans to make changes to the Government's proposals to reform tax credits.
Naz Shah (Bradford West) (Lab)
4. If he will bring forward transitional provisions for the proposed changes to the tax credits system.
The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne)
Last night, unelected Labour and Liberal peers voted down the financial measure on tax credits approved by this elected House of Commons. That raises clear constitutional issues that we will deal with. We will continue to reform tax credits and save the money needed so that Britain lives within its means, while at the same time lessening the impact on families during the transition. I will set out these plans in the autumn statement. We remain as determined as ever to build the low tax, low welfare, high wage economy that Britain needs and the British people want to see.
Mrs Lewell-Buck
Six thousand, eight hundred children in South Shields are growing up in families who rely on tax credits. One of my constituents told me, “Tax credits at the moment only just make it possible for families to feed and clothe their children as it is. If this Government keep making cuts on those of us who are lowest paid we may just give up hope.” The public, the experts, some of the Chancellor’s own MPs and the other place all agree that his plans will victimise working parents and their children, so will he please give my constituents some hope and shelve these ridiculous tax credit cuts?
Mr Osborne
We will give the hon. Lady’s constituents, and indeed the constituents we all represent in this House, support by continuing to deliver economic security in this country—economic security that has seen unemployment fall in her constituency by 44% since 2010. One of the ways we deliver economic security is by controlling our welfare bill and making sure this country lives within its means. That is what we will continue to do.
Kirsten Oswald
The Chancellor has singularly failed to listen to the SNP and to this House when we have said that he needs to think again about tax credits. He sounds like he is keener on dealing with peers than on listening to them, so how about he listens to the people and just drops these tax credit plans once and for all?
Mr Osborne
This House of Commons voted three times for the changes that were rejected by the House of Lords. I am sure that we look forward to the support of the Scottish National party on that constitutional question. I would make this point to the hon. Lady’s constituents: we need to have a welfare system that works. We need to move to a lower welfare, higher wage economy. We do that by introducing the national living wage and having a welfare bill that the country can afford. That is the best thing we can do for the security of the people she represents.
Wes Streeting
If the Chancellor had listened to the evidence from the outset, he would not be in this mess. If his Back Benchers had voted with their consciences, there would be an alignment of opinion between this House and the other place. Instead of manufacturing a phoney constitutional crisis, why will he not put his toys back in the pram and appreciate that he needs to go back to the drawing board with his failed policy that hits working people the hardest?
Mr Osborne
We will deliver the welfare savings that we were elected to deliver in this Parliament. We will help people in the transition to that lower welfare, higher wage economy. I remember a time when the Labour party used to support moving from welfare to work; it has entirely abandoned that approach. We will be the party that stands up for working people, and working people need controlled welfare and a country that lives within its means.
Mr Andrew Tyrie (Chichester) (Con)
Does the Chancellor agree that whatever our views may be in this House on the tax credit dispute, in overturning the settled will of the elected Chamber, the unelected Lords has exercised the powers of a Chamber of Parliament in the tax area, whereas for at least 100 years it has been well established that it has, and should have, only the legitimacy of a consultative assembly?
Mr Osborne
The Chair of the Treasury Committee makes an important point. Of course, on only five occasions in recent decades has the House of Lords blocked or rejected a statutory instrument, but never on a financial matter. We heard a whole range of opinions yesterday—from Lord Butler, the former Cabinet Secretary, to constitutional experts such as Vernon Bogdanor—telling us that this was unprecedented. We are going to have to address it—the Prime Minister has made that very clear. That is what we have to do to make sure that the elected House of Commons is responsible for the tax-and-spend decisions that affect the people of this country.
Sir Edward Leigh (Gainsborough) (Con)
I have written to the Chancellor about a lady in my constituency, Stacey, to whom I have talked at length. She earns only £11,000 a year and says that £31 a week is being cut from her budget. I know that the Chancellor will meet me to discuss that. Surely the point is that we should have the conversations here, and he will listen, and that ultimately we will be held responsible and chucked out. What is not right is that unelected people, who never have to stand again, should decide how the people are taxed and how we spend our money.
Mr Osborne
I agree with my hon. Friend on the constitutional point, which is a matter that the whole House of Commons will want to address. I take very seriously the point he raises about his constituent. I have made it clear that we will listen with regard to how we make the transition to a lower welfare, higher wage economy. When we introduced controversial welfare changes in the last Parliament, such as the removal of child benefit from higher earners and the introduction of the welfare cap, we made changes, having listened to Parliament, to smooth the transition to both those important reforms. Of course we will listen to the House of Commons in this respect, but the end goal is clear: this country cannot have an unlimited welfare budget that squeezes out other areas of public expenditure. We cannot have a situation whereby we have 1% of the world’s population and 4% of the world’s economy, but 7% of the world’s welfare budget.
Philip Davies (Shipley) (Con)
May I urge the Chancellor to stick to his guns on tax credits? Gordon Brown spent billions of pounds he did not have on tax credits, to try to buy votes at the 2010 election. Does the Chancellor agree that there is no painless way out of huge debt and that people would do well to remember that before they ever elect a free-spending Labour Government again?
Mr Osborne
I completely agree with my hon. Friend. Spending on tax credits went up three times during the last Labour Government, yet working poverty increased during that period. In other words, it had completely the opposite effect from that intended. The people who suffer when the country loses control of its public finances are, indeed, the low paid. They are the people who get turned out of work. It is not the richest in the country or the trade union barons who lose their jobs when that happens; it is the poorest in the country. What we can deliver for them is economic security. So, yes, we will listen on the transition, but we are determined to deliver controlled welfare and economic security for the working people of this country.
Sarah Champion (Rotherham) (Lab)
The Children’s Society estimates that 10,000 children living in 5,100 families in Rotherham will be punished by the tax credit changes. What transitional provisions will the Chancellor put in place to support them?
Mr Osborne
I will set out at the autumn statement how we make sure that we smooth the transition to the lower welfare, higher wage economy that the people of Rotherham and the rest of the country want. We have to make choices in this country. Are we prepared to see our country decline, our budget go out of control and jobs lost, or do we want to continue delivering the economic security that sees a record number of people in work and that has seen employment increase in Rotherham?
Dr Liam Fox (North Somerset) (Con)
The average taxpayer in this country now pays £2,000 a year in extra tax just because of the Government’s debt interest payments. Is not it time that we saw that debt tax on this country’s payslips, so that those who believe they can spend with impunity, including the unelected Chamber, recognise the cost it will provide to future generations?
Mr Osborne
My right hon. Friend is quite right to call it a debt tax. Indeed, one of the largest items of Government spending is paying the creditors we owe, who fund our national debt. That crowds out the spending that we could be putting into our education and transport systems. We have, of course, taken forward an innovation proposed by a Government Back Bencher in the last Parliament, and we now send a tax statement to every taxpayer so that they can see how much we spend on debt interest and how urgent it is that we remove this deficit and reject those who want to borrow forever.
Chris Leslie (Nottingham East) (Lab/Co-op)
On the constitutional point, will the Chancellor read out the specific sentence in the Conservative party manifesto where he promised he would cut tax credits?
Mr Osborne
I am very glad that the hon. Gentleman has a copy of the Conservative manifesto. It is an excellent document, which says we are going to deliver better schools for people, we are going to put more money into the national health service for people, we are going to invest in transport for people and we are going to make £12 billion of welfare savings.
Richard Fuller (Bedford) (Con)
It is good to see the Chancellor in listening mode. There is another group that can assist practically but which we are not talking about—companies. Are our companies in listening mode about the measures that they can take in moving their employees to the national living wage much more rapidly? What can the Chancellor say about what they are doing to help on this issue?
Mr Osborne
My hon. Friend makes a very important point. The savings we make in welfare are part of a package that includes a national living wage. Although the national living wage starts to come in next year, over 200 major companies—such as Sainsbury’s, Morrisons, Costa Coffee and many others—have already, since the Budget, introduced wage increases that match what we are proposing to do by statute, so we are already seeing the benefits of the national living wage coming into effect before it is even introduced.
Stewart Hosie (Dundee East) (SNP)
We know that there are 500,000 more children in poverty since 2010—[Hon. Members: “No.”] There are 500,000 more children in poverty since 2010, and there will potentially be 4 million children in poverty by the end of this Parliament. If the Chancellor is in listening mode, knowing that he does not need to make these cuts to balance the budget, why does he not listen to those who say, “Stop now with the policy of tax credit cuts”?
Mr Osborne
I am afraid that the hon. Gentleman is just not correct on the numbers. Child poverty is down by 300,000 since 2010, and the number of children in workless households is now 500,000 fewer than it was when the Government came to office. The truth is it is difficult to take any lectures from Scottish National party Members about balancing the books. They made forecasts for their oil revenues that would have left Scotland with a £30 billion black hole if they had ever got their way. We will go on delivering economic security for the people of Scotland, and indeed the rest of the United Kingdom, by taking the difficult decisions that his party ducks.
Stewart Hosie
The Chancellor is in denial—absolute denial. Did not yesterday, 26 October, demonstrate two things—the Chancellor has lost his political touch, and his chance of being Prime Minister has just gone up in a puff of ermine-clad smoke?
Mr Osborne
As ever, when pressed, all that SNP Members want to talk about is party political gains, rather than sorting out the mess that this country was in six or seven years ago. As a result of the changes we have made, there are hundreds of thousands more people in Scotland with jobs, businesses are investing in Scotland, as they are across the United Kingdom, and we will go on making those changes. The hon. Gentleman can go on praying in aid a House of Lords that he has spent his whole life campaigning to abolish. I will go on delivering the reforms to our economy that are needed to help Scotland to continue to grow.
Victoria Atkins (Louth and Horncastle) (Con)
At the end of the previous Labour Government, nine out of 10 families with children were eligible for tax credits, some of whom earned up to £60,000. In other words, they were paying their taxes and then getting some back. Is it not better to reduce taxes in the first place so that people keep more of their hard-earned income?
Mr Osborne
My hon. Friend speaks for her Lincolnshire constituents and for the whole United Kingdom in saying that we want to move to a lower tax, lower welfare, higher wage society. We took such a step in the Budget by increasing the personal allowance to £11,000. We also cut taxes for business, reducing corporation tax and expanding the employment allowance so that smaller businesses could take on more people. It is all about continuing to deliver the record levels of employment we see in our country, and indeed the growing economy that today’s GDP figures confirm.
John McDonnell (Hayes and Harlington) (Lab)
May I remind the House that for 3 million people out there who have done everything asked of them and have been bringing up their children and going to work, this is not a constitutional matter? Those people will lose £1,300 a year. Given what happened in the other place last night, may I reassure the Chancellor that if he brings forward proposals to reverse the cuts to tax credits, fairly and in full, he will not be attacked by Opposition Members; indeed, he will be applauded? Can he assure us that whatever proposals he brings forward, he will not support any that an independent assessment demonstrates will cause any child to be forced to live below the poverty line?
Mr Osborne
I am, of course, happy to accept any proposals that the hon. Gentleman puts forward—[Interruption.] I am happy to listen to those proposals, but there is a difference between those who say, “We want to make no savings to welfare at all; we want to abolish things like the benefit cap; we are not prepared to make any savings at all to the tax credit system”, and those who say, “Yes, we want to move to a lower welfare society, but we want help in the transition.” If the hon. Member for Hayes and Harlington (John McDonnell) has proposals to help with the transition, of course I will listen to them, but if he is again promoting uncapped welfare and unlimited borrowing, I do not think that the British people will listen to him.
John McDonnell
The Chancellor has a choice before him: he can push on with tax giveaways to multinational corporations, and press on with cuts to inheritance tax for the wealthiest few that he announced in the summer Budget, or he can reverse those tax breaks for the few, and instead go for a less excessive surplus target in 2019-20. He can avoid penalising 3 million working families with cuts to tax credits, and stick to his self-imposed charter. Is he prepared to listen to reason on this matter? Is he, or any Government Member, prepared to step up and show some leadership on this issue?
Mr Osborne
Let us remember that we inherited a tax system where City bankers were paying lower tax rates than the people who cleaned for them, and multinationals were paying no tax at all. We have introduced a new tax to ensure that multinationals do not divert their profits, and we increased capital gains tax precisely to avoid that abuse of tax rates. We will not take lectures from the Labour party about a fair tax system.
In a way, the hon. Gentleman reveals what he believes, which of course I completely respect. He says that we should abandon our surplus rule and run a deficit forever, but I profoundly disagree with that central judgment. If we borrow forever and are not prepared to make difficult decisions on welfare, we will condemn this country to decline. As a result, people will become unemployed and living standards will fall. That is not the Britain I want to see. We will go on taking difficult decisions to deliver that lower welfare, lower tax, higher wage economy, and this elected House of Commons will continue promoting the economic plan that delivers that.
John Nicolson (East Dunbartonshire) (SNP)
5. What recent discussions he has had with Ministers in the Scottish Government on a future fiscal framework for Scotland.
The Chief Secretary to the Treasury (Greg Hands)
I am currently in discussions with the Scottish Government on the design of their new fiscal framework. We met on four occasions, and after each meeting a joint statement was released providing details of the items covered. Talks have been constructive, and we are hopeful of coming to a final agreement in due course.
John Nicolson
Does the Chief Secretary to the Treasury remain committed to a funding formula based on Barnett, as promised in the vow and referred to by the Smith commission?
Greg Hands
The Government remain committed to the Barnett formula and to delivering all aspects of the Smith agreement during the fiscal framework, and in the Scotland Bill that is currently before this House.
Mr Peter Bone (Wellingborough) (Con)
Will the excellent Minister think again on that answer, because my constituents have £2,000 less per person on public expenditure than constituents in Scotland and we pay the same taxes? How can that be fair?
Greg Hands
It is worth noting that the Barnett formula will continue, but diminish in importance. For the first time, more than half the Scottish Government’s budget will come from Scottish taxpayers rather than a grant from the UK Government. That will add extra accountability to the Scottish Government.
John Howell (Henley) (Con)
6. What assessment he has made of recent trends in the level of employment.
James Morris (Halesowen and Rowley Regis) (Con)
7. What assessment he has made of recent trends in the level of employment.
The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne)
We have a record number of people in work. Today’s GDP data show that Britain continues to outperform other western economies, but there are clear global risks and there is still much more to be done to fix our economy. In the autumn statement, we will take more steps to ensure the recovery is felt right across the country, make long-term investments for the future, and, crucially, continue to make the tough decisions required so that Britain lives within her means.
John Howell
The total number of unemployed in my constituency is 219, with youth unemployment at only 36. Will my right hon. Friend join me in praising institutions such as the Henley college, which is providing excellent apprenticeship training?
Mr Osborne
It is very good to hear about the success the people in my hon. Friend’s constituency have had in finding work over recent years and the clear business confidence that exists in Oxfordshire. The Henley college is doing an excellent job in making sure that young people have the skills they need to take the opportunities now out there in the jobs market. We will, of course, go on helping such institutions by increasing the number of apprentices we fund in this country, so that we deliver the 3 million apprenticeships mentioned in our election manifesto.
James Morris
Unemployment in my constituency has fallen by 50% since 2010, but, given the recent news about the difficulties in Caparo in the west midlands, we must not be complacent. Does the Chancellor agree that we need to do more to invest in training and skills, such as the new advanced science, engineering and technology centre at Halesowen college, so we can equip local people with the skills they need to take future opportunities?
Mr Osborne
I visited with my hon. Friend a number of the very successful businesses in his constituency; they are exactly the kind of small and medium-sized businesses that are the backbone of the British economy. They need help with their training, and Halesowen college can help to provide that training to the young people in the area, so they can get the jobs that are being created in his area.
Caroline Flint (Don Valley) (Lab)
The Chancellor claims he is on the side of working people but, as far as I can see, he has been afraid to publish an impact assessment of changes to working tax credits on people taking up or remaining in work. Will he guarantee, given last night’s decision and the delay, to look at that and that, in any proposals, he will include an impact assessment on people taking up work, increasing their hours or staying in work and how that affects employment levels?
Mr Osborne
We have published an impact assessment, an equalities assessment and a distributional analysis of the measures we produced in the Budget. None of those were ever produced by any Labour Chancellor, so we continue to provide the information that people seek. What matters above all is getting the central judgment right about fixing our economy, making sure we deal with our deficit, and going on delivering economic security for the people the right hon. Lady represents.
Mark Durkan (Foyle) (SDLP)
The Chancellor is fond of telling us about 2 million more people in employment, and then he usually does a little facial lap of honour of the Chamber. Has he estimated how many of those 2 million people would be hit by his proposed changes to tax credits? How many would he be comfortable with still hitting in any revised changes?
Mr Osborne
The measures to save welfare—as I say, we will help with the transition—come alongside the increase in the national living wage, the increase in the personal allowance and the action we have taken to cut social rents. They are all part of a package that is delivering economic security to the people in Northern Ireland and across the United Kingdom. The hon. Gentleman remembers what the situation was like five or six years ago in Northern Ireland: high unemployment, a lack of business investment and people looking for work. Now we are in a situation where jobs are being created and people are finding work. Do I say that everything has been done that needs to be done? Absolutely not. We have more to do to bring jobs and investment to Northern Ireland. Let us work together to make that happen.
David Morris (Morecambe and Lunesdale) (Con)
My local council keeps bleating on about cuts, saying how they are going to affect everybody living there. But, on the front page of a newspaper, a management consultancy company that the council brought in said that in my constituency and the region, 10,000 jobs are going to be created over the next five years. [Interruption.] Yes, very lucky. Does the Chancellor agree that his economic policies have put that on track and that my area of the world is going forward, making it better for the people who live there?
Mr Osborne
My hon. Friend is absolutely right. As a result of the combination of him being a very effective local MP and the fact that we have a Conservative Prime Minister and a Conservative Government, we are delivering more jobs into my hon. Friend’s part of Lancashire. Indeed, I remember on visits with him seeing the work being done on the link road to the port, which for decades—including when there were Labour MPs representing the constituency—was campaigned for, but never delivered. Now it is actually being built and delivered as a result of my hon. Friend’s local efforts.
Rob Marris (Wolverhampton South West) (Lab)
Contrary to what the Chancellor believes, my party does want to deal with the deficit; we just think he is going about it the wrong way. We are worried about certain employment trends. The Solar Trade Association, for example, has warned that up to 27,000 jobs could be at risk due the Government’s announcement of the withdrawal of support for solar energy schemes. What steps do the Government propose to take to avoid large-scale redundancies and this employment trend in the solar industry and what support will the Government offer to the industry?
Mr Osborne
Of course we are in a constant dialogue with the solar industry, and solar energy use has dramatically increased over the last five years, but so have the costs of that technology. Quite reasonably, then, we have reduced the subsidy going to solar. There has to be consistency in what Labour Members argue for. On the one hand, they say, quite reasonably, “Please deal with the energy prices that are affecting the steel industry”, but then their spokesman gets up and says, “Please add more cost on to energy bills in order to subsidise renewables.” The trouble is we cannot have both.
Nigel Adams (Selby and Ainsty) (Con)
8. What support his Department provides to people affected by large-scale redundancies.
The Chief Secretary to the Treasury (Greg Hands)
I recognise that all job losses are deeply concerning for those affected. In the case of large-scale redundancies, the Jobcentre Plus rapid response service can provide support for affected workers. The rapid response service stands ready to provide support, and is already working at Kellingley colliery in my hon. Friend’s constituency. We may consider further intervention in exceptional cases where the impact is particularly significant.
Nigel Adams
I, too, welcome the support and retraining packages for steelworkers. As my right hon. Friend rightly says, several hundred workers at Kellingley colliery are facing redundancy later this year, and a further 240 power station workers at Eggborough are going through a consultation and are very worried about their future and their jobs at the station. Will the Chief Secretary urgently meet me to discuss a similar support and retraining package for those workers in my constituency?
Greg Hands
I totally recognise the difficulties faced by many people in my hon. Friend’s constituency. One thing I will say is that my hon. Friend is a real champion for jobs in his constituency. Only last week, he ran his fifth annual jobs fair for his constituents, and that is part of the reason why unemployment there went down by more than 1,000 in the last Parliament. I will, of course, be happy to meet my hon. Friend to discuss further what training and support is available for the constituents affected.
Helen Goodman (Bishop Auckland) (Lab)
Seventeen hundred people in Redcar have lost their jobs, and throughout the north-east it is expected that total job losses will be 9,000. Will the Minister tell those people how long it will take for his measures to take effect and for them to have jobs again?
Greg Hands
We are taking a number of measures in relation to steel. We are tackling unfair trade practices, and voting and speaking on that basis at EU summits. We are doing something to deal with high energy bills and we are making sure that more public contracts go to UK steel producers. At the end of the day, the one thing the UK Government cannot do is deal with the world steel price at the moment. We are offering comprehensive packages, particularly in Redcar, and we are making sure that the situation is as good as it can be at the moment.
Callum McCaig (Aberdeen South) (SNP)
9. If he will take further fiscal steps to support research and development.
The Chief Secretary to the Treasury (Greg Hands)
The Government have made a long-term science capital commitment, investing £6.9 billion in the United Kingdom‘s research infrastructure up to 2021. In the last Parliament we maintained the ring-fenced science budget, in cash terms, at £4.6 billion per annum, and in 2013 we provided £1.75 billion of support in research and development tax credits. Further decisions on support for research will be made as part of the forthcoming spending review.
Callum McCaig
The Government’s record on R and D does not match their rhetoric. Only yesterday, some of the leading companies in the United Kingdom expressed the fear that the Government’s reported plan to replace R and D tax credits with interest-paying loans could hit R and D investment and send it abroad. Will the Minister reassure Parliament and business that R and D grants will continue to be made available to help our businesses to innovate and remain competitive?
Greg Hands
Future plans for R and D tax credits are, of course, a matter for the spending review, but I disagree with what the hon. Gentleman has said in the light of what we have done in the last five years. According to a recent evaluation by Her Majesty’s Revenue and Customs, each £1 of tax forgone on R and D tax credits stimulates between £1.53 and £2.35 of additional R and D investment. During the last Parliament, the Government increased the generosity of the R and D tax credit scheme for small and medium-sized enterprises from 175% to 270%.
Mark Pawsey (Rugby) (Con)
Both the Chancellor and the Prime Minister recently visited the Manufacturing Technology Centre, which is in my constituency. Does the Minister agree that such collaborations between the academic world and manufacturing industry show the way forward?
Greg Hands
I absolutely agree with my hon. Friend, particularly when it comes to innovation. The Global Innovation Index ranked the United Kingdom second in the world in 2013. We have been ranked first for the reach, impact and well-roundedness of our research and first for our research productivity, which is 3.87 times the world average.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
10. What plans he has to provide local authorities within the northern powerhouse with additional funding and powers to raise funds to support those authorities in carrying out newly devolved responsibilities.
The Chief Secretary to the Treasury (Greg Hands)
By the end of this Parliament, local authorities will be able to retain 100% of local taxes to spend on local services, and areas with city-wide elected mayors will be given even greater flexibilities in relation to business rates. Each devolution deal will be bespoke, but the deal agreed last Friday with the North East combined authority includes a new £30 million-a-year funding allocation which will bring together funds to deliver a 15-year programme of transformational investment in the region.
Chi Onwurah
The north-east is keen, indeed determined, to slip Whitehall’s leash, but some fear that hard-pressed civil servants will seek to devolve cuts while retaining control of spending. To avoid that, will the Chancellor commit himself to complete transparency in respect of the budgets of the devolved functions, and to publishing the full funding figures for the years before and after the spending review?
Greg Hands
Of course we will publish information, but I remind the hon. Lady that the deal that was signed last Friday commits us to £30 million a year of additional funding. If she does not think that that is a good deal, perhaps she should listen to Simon Henig, the chairman of the new North East combined authority. He is a member of her own party, but it seems that she does not want to listen to what has been said by a member of her own party. He said:
“The agreement being signed today will bring significant economic benefits and opportunities for businesses and residents.”
The hon. Lady should be welcoming that.
David Rutley (Macclesfield) (Con)
25 . Last week’s announcement of £130 million for the new “China cluster” at Airport City Manchester, and the announcement of a new flight from Manchester to China, further underpin the northern powerhouse. Is it not clear that, for all the Opposition’s droning on about regional policy over recent decades, it is this Government and this Chancellor who are delivering a clear vision for the north?
Greg Hands
Last week’s state visit by the President of China was exceptionally successful, including the Manchester leg of his journey. Various announcements have been made in Manchester concerning the northern powerhouse, but particularly important was the announcement of the first direct flight connecting Manchester and the northern powerhouse region to China. I am sure that that will prove vital to the connectivity of the northern powerhouse, and will ensure that inward investment is brought into the region.
Richard Burgon (Leeds East) (Lab)
Last week, credit rating agency Moody’s concluded that the Chancellor’s decision to fully devolve business rates to local authorities will lead to an increase in council debt levels and fragmentation of the creditworthiness of local government, and will leave many local councils, including Lancashire County Council, with their credit rating downgraded. In the light of that analysis, what safeguards can the Chancellor promise will be put in place to ensure that poorer areas of the country, including in the Government’s so-called “northern powerhouse”, do not lose out on vital revenue as a result of this Government’s reforms?
Greg Hands
The hon. Gentleman needs to know that over many years a large number of local authorities have been calling for precisely this kind of devolution of the tax base so that they have control over their own decisions and the funding given towards them. Many of the local authorities calling for these additional powers have been the Labour authorities in inner-city areas, particularly in the north and the northern powerhouse. We intend to deliver on that to make sure that there is devolution in this area.
David Mowat (Warrington South) (Con)
11. What progress his Department has made on implementing ring-fencing proposals to enhance the stability of major banks.
The Economic Secretary to the Treasury (Harriett Baldwin)
The Government are fully committed to implementing a robust and effective ring-fencing regime, and we remain firmly on track for the separation of banks by January 2019. We passed the last legislation implementing the Independent Commission on Banking ring-fencing recommendations this year, and the Prudential Regulation Authority is currently consulting on the second tranche of implementation rules before publishing the final rules this year.
David Mowat
I thank the Minister for that answer. In 2012, the then Governor of the Bank of England said that unless these regulations were tightly specified there was a risk of their being watered down before implementation in 2019. We now see Barclays joining RBS and Lloyds in requesting significant waivers. Will the City Minister reconfirm the Government’s commitment to Vickers and the design principles within the legislation?
Harriett Baldwin
Of course, the Government remain as committed as ever to implementing a robust ring-fencing regime, as recommended by the Independent Commission on Banking. Obviously, I am not going to comment on speculation about how individual banks would like to implement their ring-fencing rules, because that is a commercial decision for banks, as long as they remain compliant with the considerable restrictions imposed by the legislation. Their deadline is the start of 2019.
John Pugh (Southport) (LD)
There is a lot of crying wolf and worried bleating from the banks on this subject of ring-fencing. Is the Minister aware of any banks that have decamped to foreign parts because of it?
Harriett Baldwin
The Government are delighted that the UK recently, once again, topped the poll as the No. 1 location for a global financial centre. We believe that our legal system, language, geographical location and brilliant skilled workforce, and many other factors, contribute to this being an excellent place to locate a global financial services firm.
Neil Carmichael (Stroud) (Con)
12. What steps he is taking to tackle the productivity gap.
The Exchequer Secretary to the Treasury (Damian Hinds)
My hon. Friend is absolutely right to highlight the importance of increased productivity, which, along with growing employment, will drive growth, raise living standards and ensure a better quality of life for our citizens. Our productivity plan set out a range of reforms designed to make sure that the UK remains a dynamic, open and enterprising economy, supported by long-term public and private investment in infrastructure, skills and science.
Neil Carmichael
Does the Minister agree that the recent report by the Governor of the Bank of England highlighting Britain’s membership of the European Union in positive and authoritative terms suggests that if we make sure that we do get productivity right and do protect our financial services, the prospects for our economy will be very good, both dynamically and in terms of growth?
Damian Hinds
As my right hon. Friend the Chancellor has noted, the best outcome for the UK economy is that we achieve major economic reform of the EU. We want the UK to play a leading role in creating a dynamic, competitive and outward-focused Europe, delivering prosperity and security for every country in the EU, particularly by accelerating the integration of the single market.
Derek Twigg (Halton) (Lab)
One important factor in increasing productivity is ensuring that companies are able to invest in new plant and machinery. Is the Minister convinced that banks are doing all they can to lend to companies to ensure that they can make such investment to improve productivity?
Damian Hinds
The hon. Gentleman is right to identify the importance of private investment. It is one reason why we have brought in the highest ever permanent level of the annual investment allowance, and of course banks play a crucial role in identifying those opportunities.
Suella Fernandes (Fareham) (Con)
Does the Minister agree that raising productivity is the route to raising living standards for everybody, and that this Government’s commitment to cutting corporation tax, our historically high investment in infrastructure and the planning reforms will all contribute to achieving that aim?
Damian Hinds
I agree with all that. It is rising productivity that underpins rising real wages and therefore improving living standards.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Mr Speaker,
“We don’t export enough; we don’t train enough; we don’t save enough; we don’t invest enough; we don’t manufacture enough; we certainly don’t build enough, and far too much of the economic activity in our nation is concentrated here in the centre of London.”
The Chancellor may recognise his own words from his Mansion House speech in July. Why was he so damning of his own record?
Damian Hinds
My right hon. Friend the Chancellor has been absolutely consistent in identifying the need to rebalance the economy and export more. I am afraid that this country’s productivity gap has existed for a very long time—I am not even going to try to pin the blame entirely on the previous Labour Government; it has existed for longer than that. We need to fill that gap and address the shortcomings that our economy has had over a long period. The productivity plan that this Government are bringing in is doing just that.
Seema Malhotra
I thank the Minister for his answer. The Chartered Institute of Personnel and Development has said that his productivity plan is “fatally undermined” by insufficient measures to improve the skills of the workforce. Could that be just one reason why the UK’s productivity gap compared with other G7 countries has widened to the largest on record since 1991?
Damian Hinds
The hon. Lady is right to identify the importance of skills, and that is why human development is absolutely at the heart of the productivity plan. The apprenticeship levy is a really important structural reform to help the delivery of 3 million apprenticeships. Then there is the network of institutes of technology and all the excellent work being done in the Department for Education, working on basic skills, including English and maths, which we know are vital and of such high value in the marketplace to both employers and employees.
Caroline Ansell (Eastbourne) (Con)
13. What plans he has to raise the personal allowance during this Parliament.
The Financial Secretary to the Treasury (Mr David Gauke)
The Government are committed to raising the income tax personal allowance from £10,600 to £12,500 by the end of this Parliament. That is alongside our commitment to raising the higher-rate threshold to £50,000. More than 30 million individuals will benefit from those changes. This year’s summer Budget confirmed that the personal allowance will increase to £11,000 next year and to £11,200 in 2017-18.
Caroline Ansell
I thank the Minister for that answer. Raising the personal allowance is one of the most powerfully progressive things that we are doing in moving towards a lower tax, higher pay society. Income tax cuts will mean that nearly 5,000 people in my constituency will be lifted entirely out of paying income tax. Does that not show that Conservatives are on the side of working people?
Mr Gauke
My hon. Friend is absolutely right. Those working 30 hours a week on the national minimum wage will be taken out of income tax altogether and kept out of income tax. That contrasts with the position in 2010 when people earning just £6,500 were paying income tax. Those people have recently seen an increase in their marginal rate from 10% to 20%.
Joan Ryan (Enfield North) (Lab)
Raising the personal allowance is not a panacea; it will do nothing to address the deep levels of poverty among the working poor. Is the Minister concerned at all at recent Office for National Statistics figures showing that 6 million jobs pay less than the living wage?
Mr Gauke
The best way to address poverty is to ensure that we have a strong economy—jobs growing, increasing productivity, making sure that we have the business investment that we need. This Government are delivering a pro-business approach that is good for job creation, which is why there are more people in work than we have seen ever before.
Karl Turner (Kingston upon Hull East) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The First Secretary of State and Chancellor of the Exchequer (Mr George Osborne)
The core purpose of the Treasury is to ensure the stability and prosperity of the economy.
Karl Turner
But for the Government’s defeat in the other place, 4,000 struggling families in east Hull would have lost, on average, £1,300 a year. Now that the Chancellor is in listening mode, would he please commit to dropping this vicious assault on hard-working families?
Mr Osborne
In Kingston upon Hull, which the hon. Gentleman represents in this House, unemployment has fallen by 32% since the Government came to office in 2010. That is because we have delivered economic security and committed to the fact that Britain should live within her means. Yes, of course we will listen, as I have said, during the transition we make to that lower welfare, higher wage economy, but we have to go on making savings in our welfare budget or else it will crowd out spending on our national health service and education system. That will mean that Hull does not have the resources it needs to thrive and prosper.
Lucy Allan (Telford) (Con)
T6. Wage increases reduce the burden of tax credits on the taxpayer. What assessment does the Chancellor make of wage increases in my constituency, in the west midlands and in the UK?
Mr Osborne
We have very strong wage growth at the moment in the west midlands and across the country. That is, of course, very welcome. The introduction of the national living wage will benefit, I think, around 300,000 people in the west midlands, including my hon. Friend’s constituents. That is part of a package to support the working people whom she represents and to give economic security to that west midlands engine that we all want to see.
Rushanara Ali (Bethnal Green and Bow) (Lab)
T2. Following last night’s votes, the Chancellor said that he would listen. Will he confirm that he will not be writing to the 3 million families before Christmas delivering the devastating news that their tax credits will be slashed? Surely the Chancellor—an aspiring future Prime Minister—does not want to go down in history as Scrooge delivering devastating news to millions of people. Or does he?
Mr Osborne
Obviously, we will inform families once the changes that we have made become law.
Damian Collins (Folkestone and Hythe) (Con)
T7. The channel tunnel and port of Dover are very important pieces of national infrastructure. When there are disruptions to services, as we saw in chaotic scenes this summer, they cause misery for people in Kent. Will my right hon. Friend agree to meet me and other Members from Kent to discuss what funding can be made available to find a long-term solution to managing road freight in Kent and ending the misery of Operation Stack?
Mr Osborne
Of course I would be very happy to meet my hon. Friend and other Kent MPs affected by the traffic jams that build up when there is disruption at the channel tunnel. We have made available Manston airport as a temporary measure to help alleviate the congestion caused by Operation Stack. There is a proposal from Kent about a much bigger investment in a longer-term solution and I will be happy to talk to my hon. Friend and his colleagues about that.
Carolyn Harris (Swansea East) (Lab)
T3. Given the growing evidence that fixed-odds betting terminals are being used as a prime vehicle through which to launder money, will the Chancellor assure the House that there will be a prominent focus on the machines in his upcoming anti-laundering action plan?
The Economic Secretary to the Treasury (Harriett Baldwin)
The hon. Lady will be aware that we are in the process of considering how we implement the fourth anti-money-laundering directive. We will be looking closely at the evidence, and I encourage her to get in touch with me.
James Morris (Halesowen and Rowley Regis) (Con)
T8. The Black Country local enterprise partnership has done an excellent job in bringing jobs and investment to the black country, but does the Chancellor agree that the time has come for local enterprise partnerships to work together with the west midlands combined authority to deliver further growth, jobs and investment for the west midlands region? [Interruption.]
Mr Osborne
I hear the hon. Member for Wolverhampton South West (Rob Marris) saying, “Well said!” Let me make this point. In the west midlands we have the real prospect of a further big devolution to the combined authorities with an elected mayor. We are working with the local authorities, the three excellent local enterprise partnerships and the local MPs. We are close to an agreement, but let us try to get it over the line. That would give the people of the west midlands the control over local decision making that we have now given to the people of south Yorkshire, Manchester, the north-east and Teesside.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
T4. In my constituency, there are 9,000 families with children claiming tax credits. Some 5,500 of those are working families. The Chancellor said that he is listening but has dismissed every proposal so far. Millions of families need him to change course and make work pay. Will he listen now and introduce transitional relief so that those working families will not be out of pocket by £1,300?
Mr Osborne
We are listening, and we are listening in particular to what we can do to help with the transition to the lower welfare, higher wage economy that we want to see in the hon. Lady’s constituency and across the country. We will also take steps, as we always do, to ensure that work pays by increasing the personal allowance—we are committed to increasing it to £12,500 in this Parliament—by introducing the national living wage, which will help many thousands of people in her constituency, and by supporting the businesses in her constituency, without which we would not have the jobs that are now employing local people.
Chris Green (Bolton West) (Con)
Since 2010, more than 37,000 of my constituents have had their taxes cut, enabling them to keep more of what they earn. Some of them have begun to accumulate savings for the first time. Can the Chancellor assure my constituents that the Government will continue to cut their taxes and support them with their future saving?
Mr Osborne
I can absolutely give that assurance to my hon. Friend, who represents his constituents in Bolton so well. We will go on delivering lower taxes to help the working people in his constituency. We will also ensure that we go on supporting savings in his constituency. We are introducing a new savings allowance and a help-to-buy ISA to help the people he represents to get on the housing ladder.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
T5. The Chancellor seems to have taken issue with being told to think again by the other place last night. Will he now reflect on how thousands of my constituents—people who work hard and do the right thing—must feel at the prospect of losing thousands of pounds every year as a result of his actions?
Mr Osborne
As I have said, the people who suffer the most when the economy fails and when the country fails to control its public finances are precisely the people the hon. Lady is talking about: the low paid. They are the people who lose their jobs. They are the victims of economic insecurity. We are determined to deliver economic security and a controlled welfare bill—which, after all, the people she represents have to pay for through their taxes—and we will set out how we will ease the transition to that lower welfare, higher wage economy.
Richard Graham (Gloucester) (Con)
The coalition Government freed pensioners from mandatory annuities and encouraged saving through ISAs and auto-enrolment. However, tax relief on contributions to pensions is expensive and favours higher-rate taxpayers much more than others. Does my right hon. Friend agree that that is an area in which sensible reform could be considered, in order to help to balance the budget without disincentivising saving?
Mr Osborne
My hon. Friend is right to say that we have taken significant steps to encourage saving, not least by giving pensioners control over their pension pots in retirement and by trusting those who have saved all their lives with the money that they have earned and put aside. He is an expert in these matters, and he will know that we are open to consultation on the pensions taxation system at the moment. It is a completely open consultation and a genuine Green Paper, and we are receiving a lot of interesting suggestions on potential reform. We will respond to that consultation fully in the Budget.
Kirsten Oswald (East Renfrewshire) (SNP)
T9. Will the Chancellor confirm that there is nothing in the passing of the charter for budget responsibility that will restrict the Scottish Government’s ability to borrow, which is already enshrined in statute under the Scotland Act 2012?
Mr Osborne
I am happy to confirm that the deal we struck with the Scottish Government on capital borrowing remains intact. Indeed, we want to strike a new agreement with them involving a new fiscal framework, and we are having a good discussion around capital borrowing powers, resource borrowing powers and the mechanism to ensure that Scotland genuinely sees the benefits and bears the costs of any decisions taken by the Scottish Government. That represents the true nature of devolution, which I am sure the Scottish National party wants to see, so let us make sure we get that agreement.
Johnny Mercer (Plymouth, Moor View) (Con)
I welcome my right hon. Friend’s comments last night on transitional arrangements, but does he agree that we simply must reform this crazy tax credit system, which enforces low pay, and that we will take no lessons from the Opposition, who have failed cities such as mine when it comes to helping the working poor? This tactic of bribing our lowest earners and most vulnerable people, not to improve social mobility or to help them but simply to win votes, is deplorable and must end in this country for good.
Mr Osborne
My hon. Friend makes a powerful point: we have created a welfare system that subsidises low pay, and surely it is better to increase that pay. That is why we are introducing the national living wage and I know that will help many of the people my hon. Friend represents in Plymouth.
Mary Glindon (North Tyneside) (Lab)
T10. Under the devolution deal, the Chancellor has committed £30 million a year to create a new investment fund for the north-east. Will this be wholly new money or will existing grants be cut? Where is the guarantee that he will not be robbing Peter to pay Paul?
Mr Osborne
It is additional new money and it is a long-term commitment to the north-east of England. Of course, we could not have reached this agreement without the support of the local Labour council leaders who have come together through the combined authority to strike what I think is an historic deal. There has been lots of conversation over many years about devolving power to the north-east; now we are going to have the elected mayor with powers that are currently exercised in London being exercised in the north-east. That is proper devolution.
James Heappey (Wells) (Con)
Last week Mudgley cider producer Roger Wilkins told the local press that cider is
“an agricultural lubricant, an agricultural wine for the working man”.
Will the Chancellor continue to support hard-working people and lubricate the Somerset economy by cutting tax on cider?
Mr Osborne
I very much remember my visit, I think with the Prime Minister, to a cider producer in my hon. Friend’s constituency before the election. It turned out to be an extremely productive visit of which he is the living representative. He will know that in 2010 we reversed the cider tax that was being proposed by the previous Labour Government and we have been able to help cider producers. I think the industry is incredibly important and I will take what steps I can to support it in the future.
Marie Rimmer (St Helens South and Whiston) (Lab)
The Resolution Foundation has found that all tax and benefit measures announced, including the national living wage, will push an additional 200 children into poverty by 2016. Two thirds of those children will be in working families. By 2020 up to 600 further children will be pushed into poverty. Chancellor, you said you would listen to the Lords, and indeed the bishops, last night; will you now share with the House what constructive action you will take to protect the poorest families and children?
Mr Osborne
The hon. Lady raises her question in a perfectly fair way. I will listen to the concerns that have been raised in this, the elected Chamber, about the transition of the welfare reforms we have put forward precisely so that we continue to help working families. Those families are best helped when we have economic security, a controlled welfare budget and a system where we do not subsidise low pay but we increase wages through the national living wage. We will make sure in the autumn statement that we help working families.
Several hon. Members rose—
Mr Speaker
I did not want to interrupt the question because I understood the hon. Member for St Helens South and Whiston (Marie Rimmer) was getting to her point. I understand why Members like to put their inquiries directly to the Minister, but may I please appeal to Members not to use the word “you” in their questions? We go through the Chair in debates for good reasons. I have no proposals on these matters. The Chancellor might have; we shall see.
Christopher Pincher (Tamworth) (Con)
Over the last three years unemployment in Tamworth has fallen faster than anywhere else in the country. As my right hon. Friend is in listening mode, will he tell the House whether he has heard any sensible representations from the shadow Chancellor or others about how to decrease business taxation and regulation to create more jobs in the west midlands?
Mr Osborne
I am sorry to say I have not, because the only proposals that have so far been put by the Opposition are for an increase in business taxation—that was in their election manifesto—and a wealth tax, which at the weekend, the shadow Chancellor was talking about potentially introducing in this country. So his proposals—and to be fair to him he has been entirely consistent on this for 30 years—are essentially for a high tax, big state economy where, frankly, private businesses do not have such a big role to play. I think that is the wrong direction for our country.
Patrick Grady (Glasgow North) (SNP)
How much would the Chancellor save for the public purse by abolishing the House of Lords?
Mr Osborne
That is a very decent proposal for the autumn statement, to which we will give proper consideration. People who have been in Parliament with me for the last 14 years know that my view is pretty clear—we should have an elected House of Lords—but of course that view has not prevailed in this Chamber in the years I have been both on the Opposition and Government Benches. However, I do think that while we have an unelected House of Lords, it should respect a constitutional convention that has existed for 100 years, and we need to look at that now.
Several hon. Members rose—
Tax Credits
(8 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I seek leave to propose that the House should debate a specific and important matter that should have urgent consideration—namely, the uncertainty caused to millions of UK families following the vote on tax credits in the House of Lords yesterday. Accordingly, therefore, I would like to apply for an emergency debate under Standing Order No. 24.
Across the UK there are 7 million working-age families with children eligible for tax credits, and the impact of this Government’s proposed tax and benefits changes will be to reduce their incomes by an average of almost £1,300 a year. In Scotland, over 200,000 working families with around 350,000 children are set to lose out. That is an enormous and disproportionate impact on parents who are working hard in low-paid jobs to support their families.
But yesterday’s vote in the House of Lords, when peers passed amendments for the cuts to be put on hold, subject to independent analysis, and for transitional protections to be put in place for three years for those affected by them, throws the Government’s plans into chaos and leaves low-income families in the dark. Members of this House need to know how the Government intend to respond, and need to know as a matter of urgency.
Yesterday in the House of Lords the wheels came off the wagon quite spectacularly for the Government’s austerity reforms, in spite of a valiant whipping effort that saw 93% of Tory peers turn up to support the Government. The degree of Cross-Bench concern about the injustice of these measures is almost unprecedented. I know I am not the only person on this side of the House—or, indeed, the other side of the House—who berates the House of Lords as an affront to a modern democracy. But when even our unelected, unaccountable and, in my view, rather bloated second Chamber unites to tell the Government they have got it very wrong, it is incumbent on the Government to listen. When even the leader of the Tory party in Scotland tells her own Government that these cuts to tax credits are “not acceptable” and that they need to think again, it is incumbent on the Government to listen.
The Government have tried to present these austerity cuts as part of a package of measures, but we know that their paltry increases to the minimum wage fall very far short of a real living wage. This Government have made a choice to put parents with low-paid jobs on the frontline of their failed austerity agenda and we need answers from them urgently. What transitional arrangements are now being put in place for the millions of working families who are set to lose out? Will they give us a cast iron assurance that they will not now flood the other place with more Tory appointees who turn up like phantoms to do their dirty work?
Mr Speaker
I have listened carefully to what the hon. Lady has said and I have to give my decision on this matter without stating any reasons. That is the requirement upon the Chair. I am afraid that I do not consider that the matter which the hon. Lady has raised is appropriate for discussion under Standing Order No. 24, and I cannot therefore submit the application to the House.
I said that I am not required to give any reasons and, indeed, there is a sense in which I am required to give no reasons. I do, however, think it is important for people beyond this House to find our procedures entirely intelligible, and I think it worthwhile to note that these important matters have just been debated, they will be debated further today, and there is a scheduled debate on them on Thursday.
Members have other means by which to pursue these matters and I feel sure they will, but the hon. Lady has very properly asked me whether I think this should be debated as an emergency debate under Standing Order No. 24, and, having reflected upon what she said, my answer on this occasion is no.
Dr Liam Fox (North Somerset) (Con)
On a point of order, Mr Speaker. Across the House there is a great deal of genuine concern about the implications of the events in the unelected Chamber last night, and many of us would welcome your initial view on the constitutional implications of that. Many of us believe that those with no accountability for taxation have a moral duty not to vote on such issues, and many of us would go further and believe that it is a bit rich to question, for example, the democratic deficit in the European Union when we have an unelected and appointed Chamber as part of our own legislature.
Mr Speaker
Just before I respond to the right hon. Gentleman, I will hear the hon. Member for Monmouth (David T. C. Davies).
David T. C. Davies
Further to that point of order, Mr Speaker. I looked through the Standing Orders last night and discovered that what the hon. Member for Banff and Buchan (Dr Whiteford) called an “unelected, unaccountable and somewhat bloated” second Chamber actually has no power at all to reject European Union treaties, such as that on the Transatlantic Trade and Investment Partnership, but it seems that it does have the power to reject the will of this elected House. As a doughty defender of elected Members of Parliament, will you issue guidance as to how we may ensure that the will of this elected House prevails?
Mr Speaker
I think I will do a wrap-up at the end. Let us hear from the hon. Member for City of Chester (Christian Matheson), and then we must hear from Mr Rees-Mogg—the day would not be complete without him.
Christian Matheson
Further to that point of order, Mr Speaker. I am pleased to hear the late conversion of Conservative Members to democracy and the rejection of an unelected Chamber, but can you give me some guidance? Is there not a constitutional role for the other place in giving pause to this House when it has made a decision that is out of sync with feelings in the country, so that the House can look at that decision again?
Mr Speaker
Order. I say to the hon. Member for Eltham (Clive Efford), who is a very distinguished taxi driver by profession, that he will be aware of the cab rank principle, and also of the principle of waiting in a queue for one’s turn. We will come to him. Don’t worry, he will not go cold. We will look after his interests, I am sure.
Mr Rees-Mogg
Further to that point of order, Mr Speaker. I wonder what you will do to remind their lordships of our declaration of privilege from 1678, declaring that all financial matters pertain to this House, a privilege that the House of Lords has now ignored only three times since 1860. As our mouthpiece, will you bring that to the attention of their lordships in no uncertain terms?
Alex Salmond
Further to that point of order, Mr Speaker. I am becoming increasingly concerned about the outbreak of revolutionary fervour among Conservative Members. Has there ever been a precedent for a Chancellor of the Exchequer being outflanked as a defender of the working classes by the House of Lords?
Mr Speaker
I think Mr Efford is about to burst, so we had better take his point of order.
Clive Efford
I wait at your pleasure, Mr Speaker.
Further to that point of order, may I point out that we have had a general election this year, and that during the campaign the Government were consistently asked whether they had any intention of cutting tax credits? They consistently said that that was not their intention. It is parliamentary convention that the House of Lords does not overturn manifesto commitments, but that measure was not in the Conservative manifesto and there is clear concern in the country about it. It is right that the House of Lords should ask the Government to think again.
Mr Speaker
One does not have to put one’s hand up, Mr Docherty, but it will be a pleasure to hear your point of order before I respond.
Martin John Docherty
Further to that point of order, Mr Speaker. It seems that the House of Lords—the unelected, unaccountable, bloated Chamber through the other side of the doors—is causing some angst today. Will you forgive my ignorance as a new Member, Mr Speaker, and highlight to me and many of my Scottish National party colleagues why, while we cannot vote on some issues in this House, the unelected and unaccountable barons and baronesses of the Scottish peerage will be able to vote on them in the other?
Mr Speaker
The short answer to the last question, which I think had something of the character of a rhetorical inquiry, is no.
Let me say, with all courtesy to the House, that I was keen to hear all the points of order before responding. I intend no discourtesy to the House when I simply say this: the responsibility of the Chair is for order. Nothing disorderly has occurred. There has been no procedural impropriety; that would not have been allowed. Whether people like what happened last night, because of the substance of the issue or their views on constitutionality, is a matter for each and every one of them. In terms of where matters rest, as I said last night from the Chair in response to a point of order from the shadow Chancellor, this is now a matter for the Government to take forward as they think fit.
With reference to the point of order from the Chair of the Welsh Affairs Committee, the hon. Member for Monmouth (David T. C. Davies), the hon. Gentleman flatters me. He does not need guidance from me on how to go about his duties, and neither does any other right hon. or hon. Member. It is not for the Chair to put a gloss on what transpired last night. I think, in truth, that Members are actually not all that interested in my gloss or my response to their points of order; they simply wanted to get their views on the record, and that they have done.
Mr Speaker
I will indulge you with one further point of order, Mr Rees-Mogg.
Mr Rees-Mogg
I am grateful to you, Mr Speaker. I want to refer back to this House’s claim of privilege, which we have made for many centuries. I would have thought that you were the defender of this House’s privileges and that this is beyond the immediate political debate.
Mr Speaker
The matters that are currently in dispute are inevitably of what I will call a high-octane character. In such circumstances, if I may very politely and respectfully say so to the hon. Gentleman, I do not think it helps matters if the Chair adds in substantive terms, without exceptionally good reason, to the total number of evaluative comments that have already been made. I think it would be better not to do so. I do jealously guard the rights of this House, but I have to rest with what I have said—that nothing procedurally improper has taken place. Let us wait to see how matters are taken forward. As I said to the hon. Member for Gainsborough (Sir Edward Leigh) last week, in the final analysis each House knows what its powers are and are not.
Mr David Winnick (Walsall North) (Lab)
Further to the point of order, Mr Speaker, I wonder whether it would be in order for a motion to be debated on the Floor of the House congratulating the House of Lords on what it decided yesterday.
Mr Speaker
The short answer to the hon. Gentleman is that it would be entirely orderly if he, for example, secured a Backbench Business Committee debate. It is not for me to encourage such a debate, nor to discourage it, but the answer to his question is as I have stated.
Benefit Sanctions Regime (Entitlement to Automatic Hardship Payments)
(8 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Ms Tasmina Ahmed-Sheikh (Ochil and South Perthshire) (SNP)
I beg to move,
That leave be given to bring in a Bill to amend the system of benefits sanctions; establish automatic hardship payments where sanctions have been imposed; and for connected purposes.
There are people in my constituency who have no food to eat today. Until recently, they had been claiming employment and support allowance or jobseeker’s allowance. Their social security payments have been stopped; they have been sanctioned. As things currently stand, they have no immediate right of appeal. Some of these people may have made a mistake in their paperwork or have been late for an appointment. They may lack the necessary IT skills to use Universal Jobmatch or have been asked to do something by jobcentre staff that they did not do. Whatever their actions, the consequences carry too heavy a burden. These people are now left with absolutely no means to sustain themselves. On every level, this is an unacceptable state of affairs. This is the central issue that my proposed Bill addresses. It will ensure that all those who are sanctioned automatically and immediately receive a hardship payment, and that those payments will not require to be repaid.
The current system has punished military veterans for selling poppies. It has removed the sole source of income from those who failed to complete their medical examination because they were having a heart attack at the time, and it has withheld money from people who failed to complete their job search evidence form on Christmas day. Indeed, one of my constituents was recently sanctioned on the strength of hearsay evidence that she had been incarcerated, despite that being wholly untrue. It cannot be right that sanctions are applied on that basis.
The system that administrates those punishments is deeply and fundamentally flawed. Many of those affected are not even aware of their rights. I have met constituents who were not told by staff at their local jobcentre about hardship payments or even how to appeal. That is why my proposal gives those facing sanctions an automatic right to those payments. That will ensure uniformity in their application.
In my view, anyone who lacks the means to buy food or heat their home is a vulnerable person. There is currently a formal appeals process. When invoked, 50% of those appeals against sanctions—half of them—are upheld. This is a system that is, at best, 50% correct. If another process in this land resulted in half of the judgments being overturned, there would be a national outcry.
The human impact of sanctions is such that Department for Work and Pensions staff have been required to receive guidance on how to deal with victims suffering from mental health issues who are pushed towards self-harm or suicide. It is right that staff have measures in place to help them support vulnerable people who have been driven to their limit, but it is tragic that that is a central part of our welfare system.
The DWP has not been able to use its experience to provide any credible evidence whatsoever that the system of financial penalties works to get people back into stable employment. I am particularly disappointed that the Government failed to act adequately in their response last week to the Work and Pensions Committee report. This Chamber has heard time and again that this is an ideological crusade against the poor, not an evidence-based mechanism to help people find work. It is driving people in this country to food banks.
Organisations such as the Trussell Trust and local food banks such as The Gate in Alloa exist because they identified a need that needs to be met. They should not be a necessary extension of the UK’s failing benefits system, but they are. The social security system as it exists today is not doing what it says on the tin, and the vulnerable cannot wait any longer for this Government to get it right.
Research carried out by the Child Poverty Action Group has found that 20% to 30% of food bank users said that their household’s benefits had recently been stopped or reduced because of a sanction. The same research showed that deciding to accept help from a food bank was often difficult, and it was described by participants as “unnatural”, “embarrassing” and “shameful”.
What does it say about us if fellow citizens have to rely on charity to sustain themselves? The protection of the vulnerable should be a central tenet of any Government’s work. It is not a peripheral responsibility and it should certainly not be devolved to the kindness of others.
Other research from Oxfam, presented as evidence to the Work and Pensions Committee earlier this year, shows that when women are sanctioned it tends to disproportionately affect others, because caring responsibilities often fall to women. Furthermore, charities such as the Single Parent Action Network and Gingerbread have seen a reduction in the number of DWP advisers who are aware that they are able to use flexibility when dealing with lone parents who would otherwise face financial sanction. That leads to a significant number of lone parents being sanctioned erroneously, only to have the decision overturned. According to Gingerbread, the figure is 42% for lone parents, compared with 31% of all claimants. The current regime impacts greatly on women, and that is why I am particularly proud that my Bill has the cross-party support of nine female MPs.
Six months ago the Work and Pensions Committee called for a broader, independent review of benefit conditionality and sanctions, because of its concerns about the effectiveness and operation of the current process. After considering the balanced, cross-party report for half a year, last week the Government rejected its central proposal. Instead of a fundamental review of the whole system, the Government propose what they call a yellow card system. A yellow card is something players get during a football or rugby match. This is no game. Such terminology is unhelpful and wholly inappropriate.
A complete rethink of the process is required. The tired old argument that it helps people to find work has not been proven, while the evidence of the despair and poverty inflicted on its victims is growing larger by the day. It must be reformed in this place, because the limited powers over welfare offered by this Conservative Government to the Scottish Parliament specifically preclude measures to mitigate the system I have described today. The Scottish Parliament should be given the powers required to build a humane system of social security, not piecemeal powers that can only mitigate the negative impact of Tory policies. From the sanctions regime to the tax credits fiasco, this Government continue to punish the poor. This relentless assault must come to an end.
The Bill will not address all the serious problems of this punitive system. I wish it could. I continue to support a full moratorium on all benefits sanctions until an independent and fundamental review of the whole process takes place. Under the particular parliamentary process in question, however, I believe I have proposed a simple and pragmatic measure that would address the fundamental issue of people being knowingly left in destitution.
This Bill will ensure that those who are sanctioned will automatically and immediately receive a hardship payment, and that those payments will not need to be repaid. No one should be left without by our social security system. This Government should not abandon those people who need their help the most. Ministers must reconsider their position on that fundamental issue. It is the right thing to do. My proposal would be a positive first step in protecting the vulnerable in my constituency and beyond.
The sanctions system is why an increasing number of people and their families, in every part of our country, do not have the means to eat today. It is one of the key reasons that food bank use in Scotland and across the whole of the UK is at an all-time high. The system supporting it is flawed and needs urgent reform. That is why this Bill is necessary, so I urge this House to support me today.
Philip Davies (Shipley) (Con)
I rise to oppose the Bill, but congratulate the hon. Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) on promoting it. She used to be a member of the Conservative party, but she has certainly regressed since those heady days. It seems a long time since she espoused any Conservative principles—she certainly did not do so today.
I would not want people who are listening to this debate to run away with the idea that people across the country and across this House are opposed to benefits sanctions in the way set out by the hon. Lady. In fact, many of us are very supportive of the sanctions regime. To start with, we should point out that sanctions have always played a part in this country’s benefits system—it is not this Government who introduced them. They have always been an essential part of the benefits regime, to make sure that people do what they are requested to do in return for those benefits.
Many of my constituents contact me to say that they think that the requirements on people who claim benefits, which taxpayers pay for through their taxes, should be even more onerous, not less so, as the hon. Lady seems to suggest. I refute her starting point, which is that sanctions are a bad thing. In my opinion sanctions are a good thing, and the least the taxpayer should expect is that people abide by the requirements that are understandably made of them in return for claiming benefits.
On the hardship fund, which the Bill directly refers to, the hon. Lady seemed to peddle some information that may not turn out to be quite as it seems. It should be pointed out that jobseekers who are sanctioned can apply for a hardship payment that is equivalent to 60% of their normal benefit claim, and those on jobseeker’s allowance who are seriously ill or pregnant can receive 80% of their normal benefit payment. If the hon. Lady wants it to go any higher than that, and if people are just going to have their sanction replaced in full by a hardship payment, there would be no point in having any sanctions in the first place, so I refute her point.
The hon. Lady should have pointed out in her remarks—this makes her Bill rather redundant—that those with children, all ESA recipients and anyone categorised as vulnerable can claim hardship payments from day one of their sanction. She omitted to say that in her speech. She was trying to give the impression that that is not the case, but it is the case. Although other jobseekers cannot claim for the first 14 days of a sanction, the most vulnerable people are already protected. Contrary to the point she made, claimants are regularly told about the availability of hardship payments throughout their claimant journey, and improvements have been made to the payment process to ensure that payments are made within three days. The vast majority who apply do receive hardship payments.
The hon. Lady mentioned the independent review of sanctions and the Select Committee report. She should bear it in mind that Matthew Oakley, who led the independent review of JSA sanctions, said that sanctions are
“a key element of the mutual obligation that underpins both the effectiveness and fairness of the social security system”.
She did not manage to point that out in her remarks. She spoke about the Select Committee report, but the Chairman has said that he was
“pleased that the Government has accepted many of the Committee’s criticisms of its approach and…the recommendations for change.”
Hardship payments are already available to the most vulnerable people from day one of a sanction, and most people in the country support the principle of sanctions when claimants do not fulfil their obligations. I must say, Mr Speaker, that there is a book as thick as you like of the reasons people may avoid being sanctioned. The idea that people can just miss a five-minute appointment once and are automatically sanctioned is for the birds. That may well be the tale they go and tell the hon. Lady in her surgery, perhaps because they want her sympathy when they go and tell her their tale. I suspect that the truth about why they have been sanctioned is often very different from the tale they tell her. I am sorry that she just seems to accept what they say hook, line and sinker, without any criticism whatever. I know that SNP Members do not like to hear any criticism. They are not used to it in Scotland, but they had better get used to it in this House. [Interruption.] SNP Members would do well to listen to other people’s opinions from time to time. They may learn something. [Interruption.]
Mr Speaker
Order. Mr Angus Brendan MacNeil, you have yet to reach the apogee of statesmanship, which is my long-term ambition for you. Calm, like the colleagues to your left and right, is the right course—calm!
Philip Davies
To try to get the hon. Gentleman to become a statesman may be beyond even you and your skills, Mr Speaker.
Given that the most vulnerable already have access to hardship payments from day one and that the sanctions regime in itself is a good thing, given that what the hon. Lady proposes goes way beyond the recommendations of the Oakley review and even way beyond the recommendations of the Select Committee, and given that people are already informed about the hardship payments throughout their claimant journey, her Bill is not only bad—if anyone adopted her strategy—but completely unnecessary.
I do not intend to deprive the hon. Lady of her day in the limelight by pressing the Bill to a Division, but I thought it worth while pointing out that many Members of the House and, more importantly, many people in the country, do not accept her criticisms of the sanctions regime for benefits.
Question put (Standing Order No. 23) and agreed to.
Ordered,
That Ms Tasmina Ahmed-Sheikh, Hannah Bardell, Mrs Sharon Hodgson, Caroline Lucas, Ms Margaret Ritchie, Liz Saville Roberts, Naz Shah, Dr Eilidh Whiteford and Corri Wilson present the Bill.
Ms Tasmina Ahmed-Sheikh accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 4 December, and to be printed (Bill 85).
Welfare Reform and Work Bill (Programme No. 3)
Ordered,
That the Order of 20 July 2015 (Welfare Reform and Work Bill (Programme)) be varied as follows:
(1) Paragraphs (4) and (5) of the Order shall be omitted.
(2) Proceedings on Consideration shall be taken in the order shown in the first column of the following Table.
(3) The proceedings shall (so far as not previously concluded) be brought to a conclusion at the times specified in the second column of the Table.
Proceedings | Time for conclusion of proceedings |
|---|---|
New Clause 1; new Clause 8; amendments to Clauses 9 to 12 | Two hours after the commencement of proceedings on the motion for this order |
Remaining new Clauses and new Schedules, amendments to the remaining Clauses of the Bill, amendments to the Schedules to the Bill and remaining proceedings on Consideration | One hour before the moment of interruption on the day on which those proceedings are commenced |
(4) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.—(Guy Opperman.)
Mr Speaker
No. This is the programme motion. It is a good job the hon. Gentleman did not want to contribute, because he cannot—because it has been carried and we are moving on—but he will get his opportunity.
Welfare Reform and Work Bill
(8 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
15:04 - The House divided: - Ayes: 281 / Noes: 320 - Question accordingly negatived.
15:18 - The House divided: - Ayes: 285 / Noes: 319 - Question accordingly negatived.
18:00 - The House divided: - Ayes: 287 / Noes: 315 - Question accordingly negatived.
18:13 - The House divided: - Ayes: 284 / Noes: 315 - Question accordingly negatived.
19:00 - The House divided: - Ayes: 317 / Noes: 285 - Question accordingly agreed to.
Owen Smith (Pontypridd) (Lab)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
New clause 8—Tax credit reforms—
“The measures in this Bill and (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015 relating to the award of tax credits and the relevant entitlement within Universal Credit shall not take effect until the Secretary of State has implemented a scheme for full transitional protection for a minimum of three years for all families and individuals currently receiving tax credits before 5 April 2016, such transitional protection to be renewable after three years with parliamentary approval.”
Amendment 49, in clause 9, page 12, line 2, leave out from “relevant sums” to end of subsection and insert
“is to increase in line with the consumer price index.”
Amendment 50, page 12, line 6, leave out from “child benefit” to end of subsection and insert
“are to increase in line with the consumer price index.”
Amendment 51, page 12, line 8, leave out subsections (3) and (4).
Amendment 52, in clause 10, page 12, line 36, leave out from “relevant amounts” to end of subsection and insert
“is to increase in line with the consumer price index.”
Amendment 53, page 13, line 1, leave out clause 11.
Amendment 54, in clause 11, page 13, line 8, leave out “2017” and insert “2022”.
Amendment 55, page 13, line 31, leave out clause 12.
Owen Smith
I rise for a second time to speak to new clause 1 in my name and those of my hon. Friends the shadow Chancellor, the shadow Chief Secretary to the Treasury and my shadow Work and Pensions team. The new clause is very straightforward. It would repeal the Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015.
It is a shame that the Secretary of State for Work and Pensions is not in the Chamber to debate this important measure. I do not know what else he is doing, but he has been noticeable by his absence from the debate on tax credits in recent days. I have been to 25 studios and other arenas to debate the issue. I have looked high and low for any Minister of any stripe with whom to discuss it, and they have been noticeable by their absence. I am therefore delighted that there are three Ministers of the Crown on the Front Bench to contest the issue. That is a first in recent weeks, and I am very pleased to have this opportunity.
It is a shame that the Secretary of State for Work and Pensions is not in the Chamber. If he was here, I would have started by reminding him of something he has said in the House—indeed, he has said it on several occasions over the years—which is that he is a great believer in second chances. He has said that he believes that Britain should be
“a nation of the second chance”.
Opposition Members entirely agree with the Secretary of State. Indeed, that is one of the very few things on which I do agree with him. We should believe in second chances. I therefore say to Ministers and to the House that we have a second chance today. We have a second chance following yesterday’s vote in the House of Lords, which has called on this House to think again. In doing so, I think that the other place spoke not just for itself but for the entire country. It has asked us to think again and to give a second chance to repeal tax credits regulations that will hit so many people across this country.
In touring the studios in recent days, I have quite often heard the suggestion that the vote in the other place yesterday presaged a constitutional crisis in this country. In truth, what it did was to stop a financial crisis for the 3 million families who will be hit by the tax credits regulations when the changes are implemented next year. The message to us from the other place is quite simply to pause: for Ministers to pause before they lick the envelopes of the 3 million letters that they intend to post out at Christmas to tell such families across the country to anticipate a 10% reduction in their incomes, which is an average reduction of £1,300 for each of those 3 million working families. If the Government proposed to cut the salaries of Members of the House by 10%, there would be uproar on the Government Benches—indeed, on all Benches. Working families in this country, and people who are doing difficult low and middle-income jobs—there are 3 million of them, or more—are being told that next year they will face a 10% cut to their incomes at a stroke of a pen. It is not adequate.
Mark Spencer (Sherwood) (Con)
In 2010 the tax credit system supported people on wages in excess of £60,000. Will the hon. Gentleman say what level of income should mean that people can no longer get support through the tax credit system? How much would someone need to earn before they do not need that support?
Owen Smith
I will start with a different figure, because 5,000 of the hon. Gentleman’s constituents who will be hit by this change should ask him what he thinks is fair or just about asking them—hard-working families in his patch—to take a 10% cut to their income. That to me is the substantive issue, and the smoke and mirrors produced by the hon. Gentleman and other hon. Members about the constitutional crisis or the offsetting mitigating prospects for other changes elsewhere in the Government’s finances do not answer the central question: is it right or fair to ask hard-working families to take such a cut to their incomes?
Tax credits have changed enormously. It is untrue to say that they were simply the creation of the previous Labour Government because successive Governments have helped family or income support to evolve over many years—arguably, such measures were first introduced in this country in the 1920s and they have gone through different iterations. Different Governments have used different ways to try to do what we all believe in, which is to make work pay and keep people in work. Thresholds are flexed and levels have changed, and the amount of money we spend on tax credits has changed over time. However, it is a net positive for us as a society and for our economy to keep people in work, and this cut will diminish work incentives for the people that the hon. Gentleman and I hope to support.
Mark Spencer
The hon. Gentleman is being generous in giving way. He must recognise that the system creates circumstances in which some employees turn down promotions and overtime because that would dramatically affect their tax credits. Surely it is better to have a system where people who want to work extra hours or take a promotion would be better off if they did so.
Owen Smith
I have heard that argument a lot recently, and there is no evidence to support such a contention. It is nice to believe that were we to reduce the amount of money people have—withdraw the subsidy, as the hon. Gentleman would say—some employers would increase their payments to people and wages would go up, but I do not suggest that that is true or that any evidence supports it. Tax credits have been a necessary subsidy for low wages, and I welcome and applaud the decision by the Government to increase the national minimum wage. That is the right thing to do, which is why Labour called for it before the election—the Government could get on with it a little faster and stop spinning it as a national living wage when we know it is not, but it is a welcome step. There is no evidence to suggest that if we withdraw the subsidy at a stroke, employers will think, “I’d better put up wages for my workforce because they will struggle to survive on what they earn.”
Hywel Williams (Arfon) (PC)
Surely the answer to the first question from the hon. Member for Sherwood (Mark Spencer) is that tax credits must ensure a decent, reasonable standard of living. Such standards have been defined over many years by large numbers of people in research institutions—I will not trouble the House with those matters now, but they are well understood.
Owen Smith
Let me be clear: tax credits are a success. They have kept people in work in this country, and we have seen a shift in the volume of single parents in work.
Owen Smith
I will in a moment.
In 1997 about 43% of single parents were in work in this country, and today it is 65%. The reason for that is tax credits. Tax credits have made it possible for thousands of constituents in my patch—and in the constituencies of all Members—to stay in work despite the decline in wages.
Barbara Keeley (Worsley and Eccles South) (Lab)
My hon. Friend is rightly making a good speech about working families, but Ministers have made little mention of the impact that cuts to tax credits will have on working family carers. A carer in receipt of carers allowance who works 16 hours a week on the minimum wage and claims working tax credits will be badly hit by these cuts. Conservative Members talk about people working more hours, but those carers are already working for a minimum of 51 hours a week and they cannot work more. Does my hon. Friend believe that working carers must be protected from Government cuts, because Ministers do not even seem to recognise that issue?
Owen Smith
Yes, and if the Government are to provide us with any sort of detailed, worthwhile impact assessment, they should undertake precisely that sort of calculation. They should look at what net benefit to our economy and society is made by working mothers, carers, and those whose efforts are not being calibrated by the Government, because those people will lose out as a result of the changes to tax credits.
Helen Hayes (Dulwich and West Norwood) (Lab)
Does my hon. Friend agree that of the 7,700 families in my constituency who will lose £1,300 a year if the Government go ahead with this cut—three quarters of whom are working—those living in the private rented sector will find the cuts hardest to bear? The Government refuse to regulate that sector, and in my constituency people’s rent has risen by an average of 11.6% in the past year. The Government should consider further the punitive effects of this cut on those families.
Owen Smith
My hon. Friend is completely correct, but this cut does not affect only those who are renting and suffering from sky-high, exorbitant increases in private rent; it also affects owner-occupiers. The Government purport to speak for owner-occupiers, but those people will be proportionately harder hit by this measure than many others. Reduced eligibility for tax credits will mean that some people will receive more in housing benefit—there is an offsetting increase in housing benefit costs as a result of the decrease in eligibility for working tax credits, but owner-occupiers will not get that increase.
Earlier someone mentioned the impact of these cuts on our economy, and the self-employed will also be hard hit by these changes. Around 60% of small businesses, some 5.2 million across the country, are sole traders, and according to the Royal Society of Arts, 90% of the increase in jobs—the “jobs miracle” that the Government like to talk about—have been in self-employment in recent years.
Owen Smith
Well that may or may not be true, but it is a very large proportion. Without doubt there has been a welcome increase in employment and self-employment, but my point is that 60% of self-employed sole traders are currently eligible for tax credits.
Owen Smith
I will in a moment.
That is why the Bow Group, the Adam Smith Institute, Lord Lawson and many other respected Conservative economists think that this change is a false economy. Not only will it damage the incomes of working people; it will damage our economy. The Bow Group—which you will remember well, Mr Speaker—said that these cuts will be “devastating” for our economy.
Melanie Onn (Great Grimsby) (Lab)
An employer contacted me this week in despair because employees have been reaching out to him and asking for more hours to mitigate the loss in income from the changes to tax credits. At the same time, he has to consider reducing staff numbers to meet the requirements of the new increased minimum wage. Does my hon. Friend agree that the changes will result in reductions to household incomes, as well as job losses?
Owen Smith
I fear that may be correct, and Government’s lack of forethought, analysis and scrutiny on these measures, and the way they have tried to bowl them through both Houses in double quick time, is a measure of their fear that such analysis will reveal the fundamentally misconceived economics behind these cuts, which are unfortunately designed to make an ideological political point.
Oliver Dowden
The hon. Gentleman talks endlessly about the success of tax credits. Will he explain why spending on tax credits under the previous Labour Government rose from £6 billion to £30 billion, while at the same time in-work poverty rose by 20%? Why does he think that happened, if tax credits have been such a great success?
Owen Smith
The hon. Gentleman should start by explaining to the 3,700 constituents in his constituency who will lose out as a result of the measures for which he will no doubt vote and speak today—[Interruption.] I will answer the specific question he asks. The truth is that under the previous Labour Government, when this iteration of tax credits was introduced, the steady state amount of money we spent on tax credits was £23 billion per annum. In 2009-10, after the crisis, that went up to £30 billion. The bankers’ recession saw a spike in the necessary spending on tax credits, and it has stayed at £30 billion under his Government—another measure of this Government’s rotten economic record.
Maria Caulfield
Many of my constituents have contacted me to say that they are just above the tax credit limit and that their hard-earned taxes are subsidising low pay. What does the hon. Gentleman say to them?
Owen Smith
I would first of all say to the 3,000-odd people in the hon. Lady’s constituency of Lewes who are going to be hit by the changes that they should be ringing her up and asking her why on earth she is voting for a 10% reduction in their income. I think they would be interested to hear her justification.
Steve Rotheram (Liverpool, Walton) (Lab)
Does my hon. Friend agree that the changes are obviously a problem for some Government Members, and that they are in absolute denial about them? Does he agree that the Government’s inertia over intervention to save steel jobs and last night’s defeat in the Lords firmly put to bed the falsehood that the Tories are the party of the workers?
Owen Smith
Completely. It is one of the more risible statements I have heard from the Government. It is, once more, a measure of the contempt with which they hold certain sections of the British public that they think they can pull the wool over the eyes of people. They describe themselves, laughably, as the party of labour and the party of the workers, while they are cutting the wages of working people: 3.3 million families will be hit to the tune of £1,300; 200,000 children will be put into poverty next year, and 600,000 children over the period; and 70% of the cuts will fall on working mothers. The tax credit cuts will destroy the “economic miracle” the Tories like to talk about. Some 90% of the cuts will be devastating for the people involved. The statistics speak for themselves. After I have given way to my hon. Friend, I will describe the human impact of the cuts.
Conor McGinn (St Helens North) (Lab)
Does my hon. Friend agree that there is an inherent contradiction in the Government’s policy? The parents of a young family who came to see me in my constituency last week told me that they work hard, pay their way and are trying to do the right thing to set an example for their children. Should the Government not be supporting them, rather than punishing them?
Owen Smith
Indeed they should. I cannot understand how on earth even this Chancellor, who is pretty slipshod on occasion when it comes to analysing the impact of his measures, can have allowed this one to slip through the net. A pasty tax and a caravan tax maybe, but a £4.4 billion hit on the very workers he purports to support is truly extraordinary.
Let us look beyond the statistics for a moment. On Friday, I was out in my constituency in the village of Beddau, a former pit village at the heart of Pontypridd. Entirely by chance, I met a young woman called Kirsten who was bringing her daughter Maisie home from school. Kirsten is a nursery manager in a small private-run nursery just outside the village. She works 21 hours a week. They are all the hours available, as the nursery is open only in the morning and she works all five mornings. She then brings her daughter home from school and looks after her. She earns £611 a month. That is what she earns from her 21 hours of work at £8 an hour. That is well above the minimum wage and well above the new minimum wage we will see next year. She is set to lose £1,300 of her £7,000 earnings as a result of the cuts. That is an enormous drop for her to contemplate. She said to me that she simply did not know how she would manage. She did not understand how, without the £128 she receives in tax credits each month, she will be able to make ends meet.
I sat down with Kirsten and talked through what she needs to pay out for each month: the housing association three-bedroom house she lives in, council tax, insurance, and running her car to get back and forth to the nursery and to pick up her child. There is nothing left over. The £128 she spends from the tax credits she rightly receives pays for food, new clothes and her child’s books for school. It is just beyond the ken of ordinary people that the Government could be asking them to pay the price for the bankers’ recession, which has led to the crisis in our economy and a Tory Government cutting the incomes of working people.
Ian Lavery (Wansbeck) (Lab)
Does my hon. Friend agree, when the issue of family tax credits is all boiled down and the arguments have been fine-tuned, that this is simply an ideological attack by the Government on the lowest paid in our communities? Does he agree with the Institute for Fiscal Studies, which says that low-paid people are being specifically targeted?
Owen Smith
I completely agree. It is extraordinary for the Government to describe tax credits as “a bribe”. That is how successive Ministers, including the missing Secretary of State for Work and Pensions, have gone out of their way to describe tax credits for working people. They do not talk about protecting pensioners’ benefits as a bribe by the Conservative party to pensioners—and I would never say that; it is entirely just to protect pensioners’ benefits. By describing tax credits as a bribe, they are even seeking to demonise working people on low and middle incomes who are doing the right thing. That is entirely wrong.
Helen Whately (Faversham and Mid Kent) (Con)
I am listening carefully and I hear a great deal of criticism. What I have not heard from Labour Members are proposals on how welfare should be put on a more sustainable footing, on how they would like to see work pay, and on how they would reduce the deficit and the debt. Are they instead proposing cuts to public services?
Owen Smith
No, obviously I am not suggesting that for a minute. That is a nonsense thing to say. Let me walk through what the Government are proposing.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
Does my hon. Friend share my concern that under the coalition Government the projected savings that were meant to come from changes to housing benefit and employment and support allowance never materialised? Savings of £10 billion were not made by the previous Government. Perhaps Government Members should be challenging their Secretary of State and calling for his resignation.
Owen Smith
Of course they should. If they had any guts they would do precisely that. There has been an abject failure on housing benefit. The bill has gone up and up and up. If the Bill is passed—I sincerely hope it does not pass after yesterday evening’s decision—housing benefit spending will go up some more. We know the Government have failed on that and they will continue to fail in the future.
Let us look, for a moment—
Owen Smith
I have given way once. I will move on and give way again in a moment.
Mr David Anderson (Blaydon) (Lab)
My hon. Friend the Member for Wansbeck (Ian Lavery) mentioned the word “bribe”. Is not the real bribe in the Bill the bribe that will be given to the children of dead millionaires through the changes to inheritance tax, to the detriment of the people who will be hit by tax credit cuts?
Owen Smith
I am glad I gave way, because my hon. Friend makes the excellent point that politics is always a choice. Politics is about priorities. Politics is about who we stand up for, who we speak for and whose side we are on. It is very, very clear that, in the Bill and in this House, the Conservative party is on the side of millionaires and the wealthy, and are standing up against the ordinary working people of Britain, who will not forgive them for doing so.
Paul Scully (Sutton and Cheam) (Con)
The hon. Gentleman talks about choices, and spoke earlier about a £4.4 billion hit. Is he proposing, instead, a £4.4 billion subsidy for the large companies that Labour Members continue to criticise on a daily basis to cover the shortfall in wages that they should be paying?
Owen Smith
No, I am talking about £4.4 billion-worth of support that is offered to working people in this country, including 3,800 in the hon. Gentleman’s constituency. He has a choice to make on their behalf today. Is he going to stand up for them? Is he going to speak for those almost 4,000 families in his constituency, or is he going to roll over and vote with the Government to cut their wages by 10%? That is the choice he faces, and it is a very real political choice for him. As he is a new Member, he should think very carefully about that.
Let us deal with what the Government are proposing by way of mitigation. We heard a lot from the Chancellor yesterday evening. He looked a little ratty as he told the cameras that he was going to think again—he was obviously not very keen on having to do it—but there was at least some hint that there would be transitional measures. We have had hints over recent days as to what they might be. Let me run through a few of them and put the Government on notice that we will scrutinise extremely carefully, as we have done today, the net impact of any such measures.
First, there is the minimum wage. It is welcome that the Government propose to increase it from £6.50 to £7.20 next year and thereafter to get it up to £9.20 by 2020—it is a good measure. Unfortunately, however, even if the Government were to take it to £9.20 on 1 April—the day on which tax credit cuts are introduced—it would not offset the losses for average families, not by a long chalk. Most families on 40 hours a week with one parent earning would, if they were earning around £15,000, still lose £600 a year. The minimum wage increase is clearly not going to offset the losses.
The second element that has been talked about is childcare allowance. Even if the Government were to move straight away to the proposed 30 hours a week for England—again, a welcome measure, although it looks rather under-resourced to me, given that we were told it would cost us over £1 billion if we were to implement it and the Government are planning to invest around £300,000; we will see what happens with that—that same family, banking the £9 minimum wage, would still be around £500 worse off.
Let us build in the third element, which is of course the increase in the personal allowance. The Government have made other welcome measures in increasing the personal income tax allowance from £6,500 to £11,000 and they are talking about taking it up to £12,500 at the end of this Parliament. Again, that is a welcome measure, but it misses the target. Those people who earn between £3,500 and £12,500 will all be worse off if the Government start taking away their tax credit entitlement. They are two different tribes. It is completely fallacious to suggest that if we give extra money by increasing the personal allowance or the national minimum wage, we will offset the losses. Only 25% of the losses will be offset by the national minimum wage and only for 25% of the population. It is very straightforwardly a con. As we heard in the excellent evidence session before Thursday’s debate, the Resolution Foundation said very clearly that if we need to deal with the question of tax credits, the answer is, unfortunately, tax credits.
Steve Rotheram
Does my hon. Friend agree that the 6,700 families that will lose out from the tax credit cuts to their incomes will not be compensated, and that it is arithmetically impossible that the Government’s proposed changes would do that?
Owen Smith
There is no need to take just my word for that; it is precisely what Paul Johnson of the Institute for Fiscal Studies said—that it is arithmetically impossible for the Government’s offsets, which I have just listed, to compensate for the losses that these hard-working families in all our constituencies are going to face. The Government know that that is true, which is why they have been so absent from the television studios in recent days. They do not need to hear the truth from me: they know it.
Tom Brake (Carshalton and Wallington) (LD)
On the issue of offsetting losses, the hon. Gentleman will be aware that in my constituency, for example, 4,000 families will be affected, losing £1,000 each, which amounts to £4 million being taken out of the local economy. Has he considered the impacts of that?
Owen Smith
I have considered the impacts. I think that reducing aggregate demand by taking money out of the pockets of working families—the people with the highest propensity to spend money locally in the economy—is a foolish thing to do. It is a false economy. We know that to be true economically, so why on earth would the Government want to do it?
Barbara Keeley
I want to add a little detail. Conservative Members seem to be raising the cases of people who do not benefit from working tax credit and are questioning it on that basis. Perhaps the example I quoted earlier will help. The carer on carer’s allowance will get £62 and is able to earn a maximum of £110, which is a disregard. That is what carers are on, and they will be hit very hard by the loss of working tax credit. These people are earning a maximum of only £172. The important point is that there are 689,000 such people—those wonderful carers committed to looking after family members. Only one Conservative Member seems to have recognised that issue, which is a massive one. It is not quite as massive as the 3 million families affected, but it is still important. Ministers need to reflect on and explain why they are doing this to 689,000 carers up and down the country.
Owen Smith
Why on earth have the Government not conducted any sort of analysis to illustrate the benefits to our society and economy that those 700,000 carers are contributing? We all know in our hearts that they are making an enormous contribution, and we all know in our heads that they are precisely the people who are going to lose out. It is working mothers, carers and people who cannot expand their hours who are going to lose money, but they are doing the right thing; they are in work, striving hard. They might well be better off if they were not, and the crazy thing about the Bill is that in future they will be better off not working so hard. The work penalty and the disincentive to engage in extra hours and work harder, even once people have a higher than minimum wage, is screaming out at the heart of the Bill. It is a fundamental economic error, and it is being done for ideological purposes. The Tories are seeking to present those people—working people—as scroungers, and they are trying to present tax credits as benefits and a bribe.
Dr Andrew Murrison (South West Wiltshire) (Con)
Will the hon. Gentleman give way?
Owen Smith
I will not—I have already given way a lot—but I will quote to Conservative Members some of their own people, who have recognised how mistaken this policy is. Let us take Lord Lawson, for example—hardly a bleeding-heart liberal, and someone I remember standing next to Mrs Thatcher during those dog days for my part of the world when the pits closed in south Wales. Lord Lawson referred in the other place yesterday to
“the great harm, or a great deal of the harm”,
being done “at the lowest end”. He continued:
“That is what needs to be looked at again; that is what concerns me.”
He said that the Chancellor would, of course,
“listen to this debate, but it is not just listening that is required. Change is required.”—[Official Report, House of Lords, 26 October 2015; Vol. 765, c. 1005.]
Let me also cite the hon. Member for South Cambridgeshire (Heidi Allen), who I thought spoke brilliantly, eloquently and forcefully last week. I shall quote just one part of her speech. She said:
“To pull ourselves out of debt, we should not be forcing those working families into it.”—[Official Report, 20 October 2015; Vol. 600, c. 876.]
We should not be forcing working families into debt to deal with the debt that the country has been left by the bankers’ recession and the failure of the Tory Government to fix it.
Oliver Dowden
The hon. Gentleman has still not answered a very simple question. If this measure saves more than £4 billion, how will the Labour party find that money? Will it cut spending on other measures such as health and education, will it increase taxes, or will it increase borrowing? There are only three options. Which one will the hon. Gentleman choose?
Owen Smith
I repeat that the hon. Gentleman should really answer the question asked by the 3,700 people in his constituency who will lose out if he votes with the Government today.
Neil Coyle
The National Audit Office has suggested that as a result of the incompetence of the coalition Government and the Secretary of State for Work and Pensions, £140 million was wasted on the early stages of universal credit. Is my hon. Friend aware that that could have helped 108,000 people who are now being punished for that failure and face the withdrawal of tax credits, or 21,500 people over the course of the current Parliament? Should the money not have been better spent?
Owen Smith
That is a brilliant point, and extremely well made. There are myriad examples of waste and incompetence in the handling of our DWP budget under this Government, not least the enormous increase in housing benefit.
Ms Karen Buck (Westminster North) (Lab)
Does the Conservative party not fail to understand what tax credits are all about? The tax credit policy was successful in that it moved people into work, and, in particular, underpinned the major progress that was made when single parents were allowed to move into work. When we talk about saving money, should we not see that in the context of the tax credit policy’s success in moving people from worklessness into sustainable employment?
Owen Smith
My hon. Friend speaks with enormous experience and expertise, and she is completely right. As I said earlier, tax credits are a policy success. In 1997, 43% of single parents in Britain went out to work; today, the figure is 65%. There has been a 50% increase in the number of single parents who are in work, and that is a measure of the success of tax credits.
Owen Smith
I will give way in a moment to the hon. Gentleman, who represents a great city—a working-class city—but before I do so, I ask him to reflect on the views of one of his colleagues, the hon. Member for Plymouth, Moor View (Johnny Mercer), who said last week that
“it would be remiss of me not to recount the extraordinary levels of feeling in Plymouth last weekend. This bright, vibrant, exciting and…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.” —[Official Report, 20 October 2015; Vol. 600, c.882.]
The hon. Gentleman knows, and I know, that that stands for his constituency in Cardiff too, and I hope he will reflect on it when he addresses the House.
Craig Williams
The hon. Gentleman has talked about policy success. Cardiff truly is a working people’s city. Will he comment—so far, he has not done so—on the Government’s leadership on the national living wage? What would he say to the staff of Morrisons, Costa Coffee, Sainsbury’s, Lidl, British Gas and IKEA, who are already benefiting from those companies’ attempts to follow the lead taken by this Conservative Government and match the living wage?
Owen Smith
I know that the hon. Gentleman is relatively new to the House, but he really ought to be present for the beginning of debates. I said at the start of my speech, and indeed on two other occasions, that I welcomed the Government’s moves. I applaud them for what they are doing in increasing the national minimum wage, although I repeat that it is utterly bogus to describe it as a national living wage. It is not a national living wage, which is why the Living Wage Foundation will not describe it as such. I wish that the Government would give us a true national living wage, in London and elsewhere.
The hon. Gentleman has, in his wealthy, leafy part of Cardiff, more than 3,000 constituents who benefit from tax credits. I ask him to look into his heart and reflect on whether it is right, for whatever purpose—ideological or economic—to ask those hard-working families to pay this bill. It is not fair, it is not just, and I do not think that it should go ahead.
Dr Murrison
I am listening carefully to what the hon. Gentleman has to say. I would be extremely sympathetic to a credible case based on proper transitional arrangements and mitigation, but, as I am sure Lord Lawson would admit, it has to be paid for. I wonder whether the hon. Gentleman can shed any light on how we can close the gap in relation to the £4 billion that has been cited. All that I have heard from him so far is polemic; I have not heard any credible proposal that would enable us to square the finances.
Owen Smith
The hon. Gentleman could, of course, start by deciding not to do what the Government did this week when they offered an inheritance tax cut for properties worth more than £1 million. That would provide about £1 billion. He could decide to reverse the 50p tax rate cut for millionaires; that would provide another £3 billion. He could choose to do what the Chancellor has already chosen to do in the past, and delay the point at which the Government get the budget into surplus. He has moved the goalposts once; why does he not do it again? He is very good at it. He has practised. He has already had one crack at it.
Ian Lavery
My hon. Friend has been asked numerous times what the Labour party would do about the £4.2 billion. Will he now explain, categorically and in the simplest terms, that we would not do what the Government are doing, which is taking £4.2 billion from the lowest paid in society? People are losing £1,300 a year, and 200,000 kids are being pushed into poverty. That is not what we are going to do.
Owen Smith
I am delighted to say that I agree 100% with my hon. Friend. Let me be really clear: our view today is that the Government should repeal these measures. Our view is that it is wrong to seek to balance the books, in this or any country, on the back of the working poor—those with low and middle incomes who are doing the right thing. This is the wrong thing to do, and we will not do it.
Let me end by reflecting a little on what this whole unedifying spectacle means for the public, and to the public. I think we can agree that politics has been held in pretty low esteem in this country in recent years. People feel that we, as a political class, are not straight with them. They feel that we do not keep our word, or say what we mean.
Owen Smith
I will not give way again.
The problem with this change is that it will simply compound that fundamental mistrust. Before the last election, the Prime Minister said, on live national television, that he was not going to cut child tax credits, but he is going to do so. That was a fundamental misleading of the British public. Other Ministers also made categorical statements. When asked whether the Conservative party would cut tax credits, one of them said:
“"No; we are going to freeze them for two years; we are not going to cut them.”
That was a fundamental untruth, and the country knows it.
Unfortunately, when that is added to the Government’s smoke and mirrors and what they say about how they intend to offset the impact of these cuts, it is clear that we as a group—and the Conservatives as a political party—are deepening what is already a profound mistrust in our politics. For the Conservatives to describe themselves as the workers’ party is laughable. Theirs is the party that is cutting the incomes of the workers of Britain, and they should be ashamed of that. They should stand up today and vote with us for new clause 1, and repeal the tax credit cuts.
John Redwood (Wokingham) (Con)
Prosperity, not austerity: that is what we want. My consistent advice to Ministers dealing with economic matters and benefits is that they should always have at the forefront of their minds the need for everything they do to promote less austerity and more prosperity for the many, because we wish to have a more prosperous people. The outlines of how we do that are clear, and I fully support the Government’s vision and objectives.
The first thing to do is promote work. We need to make sure that people come out of unemployment and into work; that people who are working part-time but want to work full-time have the opportunity to go on to work full-time; and that people in full-time work that is not well paid have the chance to be promoted into a better-paid job, and to get better skills and training and work with their employer so that they can have a more productive and better-paid job. In that area, this Government and the predecessor coalition have been so much more successful than the Labour Government of 2005 to 2010. We know how austerity for the many is created: by following the Labour Government’s policies of 2005 to 2010, when they increased borrowing and spending, and combined that with over-lax regulation of bank capital and cash, which I warned them about prior to the crunch. When they put those three things in a heady mix, they brought the economy down, a large number of people lost their job altogether, a large number had to take a pay cut to keep their job and most people lost their bonuses or their opportunities to work overtime because the great recession that was unleashed on this country did so much damage. The first thing, therefore, that the British people want is to be secure in the knowledge that the economic policies being used are prudent and sensible, so that there is more chance of more people working and of people having better- paid jobs.
Ms Buck
The right hon. Gentleman makes a good point about the importance of allowing people to keep more of their money when they work longer hours. How does he square that commitment with the fact that the changes coming in next April will increase the tapers on higher earnings so that people will be subject to 80p in the pound withdrawal rates when they do work extra hours?
John Redwood
The problem with welfare reform, as all who have wrestled with it well know, is that we either have a large number of people facing a moderate rate of withdrawal or we have a more limited number of people facing a high rate of withdrawal. All the time that we have means-tested benefits—our system is still riddled with them—means that we will have to make that difficult choice about whether there is a fast move off benefit when people’s income goes up or a slower move. That will mean we either have fewer or more people affected by the taper. Labour never solved the problem of the taper. The Labour Government had lots of difficult tapers and high marginal rates of tax and benefit withdrawal.
That brings me to the second fundamental pillar of the Government’s strategy, which I support, after the promotion of work and better-paid work: taxing people less, particularly those on lower incomes. Both the coalition and this Government have worked away at that, by trying to get more people out of paying income tax. As my right hon. Friend the Chancellor thinks about his pre-Budget judgment and his autumn statement judgment later this year—he is rightly in listening mode—I trust he will think about the tax element in his policy mix, because the more he can do to take people out of tax or to lower the tax rate upon them, the more he will succeed in promoting prosperity and the more he will offset the impact of benefit changes.
Hywel Williams
The right hon. Gentleman talks about prosperity, but he will know as well as I do that small businesses are one of the chief drivers of it. How does he square that with the cuts to small businesses and single earners’ income from their self-employment?
John Redwood
The Government are trying to encourage people to earn more in self-employment—that is the whole point of the policy. The idea is to create better incentives so that it is worth while people working more and longer hours if they have not had sufficient hours of work and not a sufficient income, and they keep more of the money they make by being in self-employment. That is true for them as well as for people in employment.
John Redwood
The hon. Gentleman has had one go and I am sorry he messed up his question.
Barbara Keeley
I have raised in this Chamber a number of times the issue of the almost 700,000 carers who are working but can work only 16 hours at the minimum wage. Many Conservative Members in this debate and in earlier debates have talked about people increasing their hours, but some sets of people cannot increase their hours—my Front-Bench colleague the hon. Friend the Member for Pontypridd (Owen Smith) has mentioned them and I mention them. What does the right hon. Gentleman say to almost 700,000 working carers who cannot give themselves more hours, are not allowed to earn more than £110 a week and will be hit badly by this cut to working tax credits?
John Redwood
Yes, some people cannot increase their hours or, for good reason, do not want to increase them because they are already working long hours. I have already described the actions they or their employers can take, and that the Government can encourage. We want these people to have better opportunity and more skill, and to work with their employers to raise productivity to justify pay rises. The Government, with the full support of the Opposition, are using the force of the law to increase minimum wages, as part of the policy of driving wages upwards. But the only way we can succeed in getting wages in this country up to levels we would all find acceptable is through a productivity revolution. It has to come by working smarter and better, not necessarily by working longer hours or by working harder, with the right investment and the right back-up from employers, so that people can earn more and justify higher earnings.
Owen Smith
Does the right hon. Gentleman accept that we are talking about two tribes here? It is not necessarily people who are on working tax credits who are on the minimum wage—indeed, the overlap is only about 25%, so an increase in the minimum wage will miss 75% of those tax credit recipients.
John Redwood
I do not think it is very nice to say that people belong to “tribes”; we are in one country and we are trying to promote the greater prosperity of the many. I am surprised by that lapse of language, but the hon. Gentleman is right to say that some people who will face a reduction in tax credits are not going to benefit from the minimum wage because they are already earning more than that. That is clearly true.
John Redwood
If the hon. Gentleman would listen carefully, he would know that that is why I say I support a strategy for prosperity that first promotes more people into better pay. I am not just talking about those who are currently on a low wage; I want someone on a better wage also to have the opportunity for more pay. Some of my constituents do; they will be promoted, they will work for smart employers in smarter ways, and they will get pay rises, although not all will. The more the Government can do to help, encourage and support, so that many more people can get those opportunities of better pay, the more we will like it. I hope the Opposition parties will agree that that is the best way to greater prosperity. It is also the best way to better jobs. If someone goes to work every day thinking that next year they might have a better job, a pay rise or a bonus they can benefit from, they will go with more of a spring in their step than if they are going to a low-paid job with a bad employer who is not giving them any options and not giving them a break in life. [Interruption.] I see that some Opposition Members think that that is a funny idea, but I hope they would join me in recommending this approach to employers in their constituency as well as in mine, as that is how we create a more prosperous society. I am just trying to stress that we also need to get taxes down.
That deals with the second pillar of this excellent strategy. We need better work and more better-paid work, and less tax on that work so that people are more prosperous. We then come to the difficult bit, which is the point of the row today, all of last week and probably all of next week, by the looks of how Parliament is going at the moment. The issue is: at what rate do you withdraw the benefits support as people become more prosperous because they are in work, not out of work, because they are in better-paid work and because they are paying less tax? There are difficult judgments to be made, and I am very pleased that my right hon. Friend the Chancellor is in listening mode. I look forward to his autumn statement—unlike the Labour party, I will be looking at all three elements of the package. I will be looking at pay and tax, as well as benefit withdrawal.
Perhaps unlike Labour, I want to end up in a world where far fewer people are on benefits, because their pay and the tax cuts are sufficient to give them a better lifestyle. We will then have a more affordable welfare system that enables us to run an economic policy more likely to deliver better prospects, more jobs and more success for business. As some of my Conservative colleagues have sought to point out, the problem the Opposition face is that no answer is coming from them. We know that they were able to overspend, over-borrow and crash the economy. We are now waiting to hear from them about how they would get the money under control, were they to be trusted again with government. We know that they do not want to cut non-benefit expenditure, so surely they have to accept the case I am making: that we need to get more people out of benefits altogether, and that requires a combination of the good things—promoting work, promoting better pay and lower taxes—and the not-so-good things, such as actually having to make some difficult choices on benefits.
Naz Shah (Bradford West) (Lab)
What answer do I give my constituents? They have a spring in their step because they are getting all these promotions and things the right hon. Gentleman talks about, yet 34,000 children in my constituency who are on tax credits will be thrown into poverty. Can he explain that?
John Redwood
We have just been talking about how we can avoid that. We have been talking about how we can get those people out of poverty and into prosperity and how we can promote, in the hon. Lady’s constituency and elsewhere, more jobs, better businesses and lower taxes, which must be the medium to long-term answer.
Owen Smith
I am grateful to the right hon. Gentleman, who is being gracious in giving way. He talks about us all wanting to avoid a disincentive to work extra hours, but does he not accept that that disincentive will be increased by reducing the lower earnings threshold and increasing the taper, thereby increasing the amount of money that is taken away for every extra hour worked and every extra pound earned?
John Redwood
I have already been quite honest in saying that Governments face a difficult choice in this regard: do they want fewer people facing a sharper taper, or more people facing a gentler taper? There are no easy answers. I look forward to hearing the Government’s judgment when they have completed their listening and thinking. Again, the Opposition are refusing to see all three parts of the package. It is not possible to answer the hon. Gentleman’s question as simply as he would like, because working out whether people are better off or worse off, and by how much, depends on what else happens with taxation, rates of pay, inflation and all the other things that are going on.
My advice to the Government is that their strategy is absolutely right: get more from pay, more from tax cuts and then cut the benefits, because people will not need them as much. They must listen carefully to criticisms, for example if their changes are going too far and too fast, or if they catch some people we do not want to catch. I am sure that my right hon. Friend the Chancellor will want to return to those points in his autumn statement and tell us his thinking. However, the direction of travel must not be simply to make big increases in benefits again; it must be to find other answers so that more people can enjoy prosperity from work, earnings and lower taxes.
Helen Hayes
I wonder whether the right hon. Gentleman would like to comment on two issues. First, is there any legitimacy or authority in the Government’s approach to cutting tax credits, given that the Prime Minister repeatedly denied that he would do so in the run-up to the general election? Secondly, there is unequivocal evidence from the Institute for Fiscal Studies and others that the maths on the issue simply do not add up, and that asking people to work harder for less is, quite simply, an unacceptable proposition.
John Redwood
I agree with the hon. Lady’s latter point, because I do not want people to have to work harder for less. I have just described the world I want to live in, and how I want that world, which some of my constituents enjoy, to be available to many more. I want people to work smarter and with more skill so that they can earn more because their companies can afford to pay them more. With regard to the Prime Minister’s promise in the run-up to the general election, I heard him rule out cutting child benefit, and I understand that there are no proposals to cut child benefit.
When I was asked about welfare in the run-up to the general election, I made it clear that I wanted the total welfare bill to come down and that I expected to see welfare reform, including some reductions in welfare payments and eligibility. Personally, I do not think that I have anything to answer on that score. I was entirely honest with my electorate, and they kindly trusted me with the job again, and with a bigger majority. There are many people in this country with a grown-up view about welfare, who do not want it to penalise those who really need it but who think it is high time we reformed it so that we depend much more on work and tax reduction on lower and middle levels of pay than we have done in the past.
Therefore, I urge my right hon. Friend the Chancellor the preserve the spirit of his reforms but to look very carefully at the detail, because we do not want to see bad cases of the type that Opposition Members have been conjuring out of thin air without proper facts. Above all, we do not want to go back to Labour’s boom-and-bust economy, where generous welfare, far from creating more jobs and prosperity, helped bring the whole thing down.
Neil Gray (Airdrie and Shotts) (SNP)
I rise to speak to the amendments in this group tabled by the Scottish National party. We also support new clause 1, which the shadow Minister moved earlier. Let me pay tribute at this stage to the efforts of my hon. Friends the Members for Ayr, Carrick and Cumnock (Corri Wilson) and for Livingston (Hannah Bardell) who worked so assiduously on the Bill Committee on behalf of the SNP, and to my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) for her work on these matters in the Work and Pensions Committee.
My wife has always suggested to me that it provides context and depth to a speech if it includes a quote early on. On this occasion, and in relation to tax credit cuts, I have a quote that was timeously delivered in the past few days:
“It’s not acceptable. The aim is sound, but we can’t have people suffering on the way… The idea that there’s a cliff edge in April before the uptake in wages comes in is a real practical human problem and the Government needs to look again at it again”.
Who is that quote attributed to? That was said by Ruth Davidson MSP, leader of the Conservative party in Scotland, as she called on this Government to have some movement on the issue by the autumn statement.
After last night’s vote in the other place, it is time for the Government to rethink these outrageous proposals. They have managed to unite a considerable swathe of political and civic society against the plans. In fact, after last night the Chancellor really stands alone in continuing to push for the cuts. If the Chancellor, the Prime Minister and this Government will not listen to Opposition Members, if they will not listen to charitable and third sector organisations, and if they will not listen to anyone else, surely they should listen to the leader of their own party in Scotland.
The SNP is completely opposed to the UK Government’s continued attack on low-income families, and we support Labour’s amendment to repeal the regulations, which will affect 350,000 children in 200,000 families in Scotland. Let me say this loud and clear: the SNP will oppose these ideological, regressive and utterly punitive tax credit cuts with every opportunity open to us today and every day, because we realise the damage they will cause to working family incomes, to levels of poverty across these isles, including child poverty, and to social cohesion in every community in the United Kingdom.
The amendments that my colleagues and I support in this group would bring about the repeal of these tax credit regulations and overturn the proposed cuts. However, should the Government decide to press on with the cuts in the face of hostility across this Chamber, and from Conservatives up the road, they must consider forms of mitigation. They must act to protect vulnerable families with a delay and a fully implemented transitional period, as is covered in our new clause 8, which we will be pushing to a vote. In the light of last night’s vote in the other place, I expect that is already being considered by the Government.
New clause 8 would mean that the measures in the Bill and in the 2015 tax credits regulations relating to the award of tax credits and the relevant entitlement within universal credit would not take effect until the Secretary of State had implemented a scheme for full transitional protection for a minimum of three years for all families and individuals currently receiving tax credits before 5 April 2016, and such transitional protection should be renewable after three years with parliamentary approval.
The transitional arrangements are important, as none are put in place by the Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015. This means that the tax credit cuts will be implemented immediately in April 2016. In fact, tax credit recipients will apparently be getting an unwelcome letter detailing the cuts to their award just weeks before Christmas. This will give working families no time to plan effectively for an average cut of £1,300. For families living wage packet to wage packet, utterly dependent on tax credits to keep them above the breadline, the cut will be devastating and impossible to plan for in such a short time.
Amendments 49, 50 and 52 would ensure that relevant benefits, child benefit and tax credits increased in line with the consumer prices index. Amendment 51 is consequential, while amendments 53 and 54 would ensure that the current child tax credit arrangements remained in place. Amendment 55 would remove changes to the entitlement to the child element of universal credit. These amendments were pushed by my colleagues in Committee. The Government did not accept any of them, but they pledged to come back with more information, which has not yet materialised.
Why on earth have the Government decided to rush the Bill from Committee, which only finished on Thursday, to this final stage today? If they are serious about introducing more detail and explaining the expected mitigation measures, why not flesh that out? The rush suggests that the cuts are purely about making savings and therefore ideologically driven. The changes are fundamentally regressive. They disproportionately target those in low-income households and punish them for the Government’s ideological obsession with austerity—an obsession that is failing socially and economically.
The SNP stood on a manifesto that was fundamentally anti-austerity but which also plotted a more responsible path to reducing the deficit. We have argued for a 0.5% increase in departmental spending per year for this Parliament, which would have released £140 billion to invest in capital projects to boost growth and narrow income inequalities. Our plan would also have resulted in a budget deficit of just 2% by the end of the Parliament, and it was backed by an International Monetary Fund report in June that highlighted how reducing income inequality not only reduced poverty but boosted growth. By extension, the policy of cutting tax credits and thereby increasing income inequality will drive more of our citizens into poverty and harm growth and therefore harm the Government’s apparent aim of reducing the deficit. So, as well as being socially destructive, this policy is—to extend the IMF’s thinking—economically incompetent.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
Does my hon. Friend agree that the SNP has come up with a responsible approach to delivering sustainable growth that will drive up wages and employment, by contrast with what the Government have done over the past five years and what we see going forward? The Bank of England, with its £375 billion of quantitative easing, has had to bail them out with monetary policy because, quite simply, they have not delivered on fiscal policy.
Neil Gray
I welcome my hon. Friend’s contribution. As we are talking about affordability and sustainability, let me say that the Government think it feasible to press ahead with apparently £167 billion of Trident nuclear weapons, which is shocking and deplorable, while seeing fit to find £4.4 billion of cuts in tax credits. They are taking an ideological wrecking ball to our social security system in the name of a budget surplus by scandalously waging a war on low-income households.
Paul Scully
Does the hon. Gentleman agree that the cost of Trident is over the lifetime of the project, whereas he is talking about an annual savings figure?
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. At last, Members have risen to show that they want to speak. It is very confusing for the Chair if you do not stand up at the beginning of the debate, because I cannot tell how many people wish to speak. At the moment, I can see approximately eight people—
Madam Deputy Speaker
You see! Why can’t people just stand up? It is not difficult. Schoolchildren do it. Just stand up when you want to speak! I can now see a significant number of people wishing to speak. I cannot impose a time limit at this stage in the proceedings, but we have less than half an hour left in this debate, so I appeal for brevity: perhaps three or four minutes.
Oliver Dowden
I shall speak briefly against new clause 1. We as a nation need to be clear about the scale of the challenge that we face. The budget deficit has been halved, but it is still enormous and we are spending far more than we earn. Against that backdrop, the increase in welfare spending is an important element that must be addressed. The amount of spending on tax credits has risen from £6 billion when Gordon Brown first introduced them to £30 billion now. That money is being borrowed in order to pay for welfare. I do not think that borrowing money to pay for welfare expenditure is a sensible idea.
Catherine West (Hornsey and Wood Green) (Lab)
Let us look at the totality of welfare spending as though it were a cake. Is it not the case that the failure of the Government over the past five years to address the high cost of housing or to bring down the housing benefit bill is the key to solving your problem?
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. It is not my problem. It is somebody else’s problem.
Oliver Dowden
We need to be clear about the problems with tax credits. Let me offer the House three facts. The first is that, under the last Labour Government, 1.4 million people remained on out-of-work benefits for almost the entire period. Secondly, the number of workless households doubled, and thirdly, the level of in-work poverty rose by 20%. So there has been a massive increase in expenditure on welfare and on tax credits, but it is not delivering the reduction in poverty that we all desire.
Neil Coyle
Does the hon. Gentleman not agree that tax credits have played a role in tackling in-work poverty?
Oliver Dowden
This is precisely the point that I would like to get on to. Despite the increased expenditure on tax credits, we continue to see these dreadful statistics on poverty, and that is because this is a flawed model that is based on taxing people on the minimum wage who can barely afford to pay tax, recycling that revenue through the welfare system and using it to top up low pay. That is not a sensible way to proceed.
Oliver Dowden
I will give way once more, but I am aware of Madam Deputy Speaker’s injunction.
Ian Blackford
We understand, from survey after survey, that millions of people in this country are going to be worse off as a result of these measures. What is the hon. Gentleman going to say to his constituents who come to him after next April having lost on average £1,300 of their income?
Oliver Dowden
I would say to those people that this Government have a clear and coherent plan for helping people on the lowest incomes that consists of three elements. The first is to increase the amount of money people can earn without paying any tax; by the end of this Parliament that will be increased to £12,500. That is lifting people working 35 hours a week on the minimum wage out of tax entirely. Secondly, we are introducing a national living wage which by the end of this Parliament will increase wages to £9 an hour. Thirdly, we are introducing a number of other measures such as free childcare which will help those in most need of it. That is a far better model—to move from a low-wage economy with high tax and high welfare to a higher wage, lower welfare and lower tax model.
Sammy Wilson
We will be supporting the new clause—not because we are opposed to all welfare reform. Our voting record in this House and the fact that against the odds we have tried to drive through sensible welfare reform changes in Northern Ireland indicates that we do not take the blanket view that welfare reform is bad, full stop. Some of it is necessary, but some of it is wrong-headed, and this change is wrong-headed for a number of reasons.
First, I do not believe that the proposals will achieve what the Government want. We hear time and again—we have heard it today—that the Government want to make work pay and that those who go out every day to employment must have a reward for that and there must be an incentive. All the indications and assessments are that these proposals, because of their timing and their scale, will not make work pay. In fact, the OBR has said they will be a disincentive to work, because the rewards are being taken away from people but the mitigation will not be added quickly enough. Therefore, the objectives that the Government are setting out to achieve will not be achieved.
The second point is that in most cases we are not dealing with people who have a large buffer either of savings or additional income which can help them overcome the timing difficulty. We are talking about people on low wages and probably every penny that they earn goes on their living expenses. We have heard again today that as the tax credits come off, there will be tax cuts, additional childcare support and reductions in rent, and that all those things will mitigate the changes—and that on top of that there will be an increase in the national living wage. However, the tax credit cuts are coming in immediately, whereas the other things will be brought in over a period of time.
Catherine West
Does the hon. Gentleman agree that one way of bringing down the entirety of the welfare bill is to build more homes, so that we do not spend £60 billion in a Parliament on housing benefit?
Sammy Wilson
I agree, although that is not a short-term answer either. That is a long-term answer and it is certainly not going to deal with the issue facing us today.
The tax reductions will not affect all the people who are on low wages because they will not all hit the threshold. The childcare changes will affect only a fifth of the people whose tax credits will be cut. The national living wage increases will not apply, for example, to people under 25. So there is a whole swathe of the population who will not benefit from the other changes. Many of them will have families as well, of course. The Chancellor has said that the principal way in which the issue will be addressed is an increase in the national living wage, yet a whole swathe of the population will not be affected by that. For that reason, many people will be worse off. Even when all the changes are added together—the tax credits being removed, the tax thresholds being increased, the childcare element, the housing element, which does not apply to people in the private rented sector of course, and the national living wage—it is estimated that people will still find themselves on average a third worse off. This will affect many of our constituents.
Conservative Members should be very thankful that those in the House of Lords swapped their red Benches for red flags last night. That has probably done the Conservative party a favour. Many of the people who will be affected by these changes are the natural supporters of the Conservative party; they are the strivers of society, the people who want to do better, who want to improve themselves, and who probably look to some of the Government’s other policies. They will be hit hardest. I suspect that the Government have got off the hook, therefore.
The Government’s measures should be overturned by the House tonight and the Government should have a complete rethink. If they are serious about having a rethink, they should be supporting the amendments, to enable a radical rethink rather than a tinkering with the policy, which will be detrimental.
This question is rightly asked: what is the alternative? There are many alternatives. The changes represent less than 1% of total Government spending. Surely to goodness across Departments two thirds of 1% in savings can be found to finance dropping the changes. Over the life of this Parliament we can then work towards a sensible rebalancing, where employers pay proper wages and the state has to pay less in subsidies.
Suella Fernandes (Fareham) (Con)
We all share a belief in the welfare state, and in a civilised country like ours it is right that we offer help to the most needy, but the amendments are myopic and ill thought out because they forget about sustainability and fairness. Our welfare system is immensely unfair in its discrepancies. The clauses that would be amended—clauses 9 and 10—together freeze the main rates of most working age benefits, child benefit and certain elements of working tax credit and child tax credit for four years, starting from 2016-17, with important exemptions to protect the vulnerable, such as pensioners and those who are disabled, reflecting compassion and proportion.
Why are we doing that? Because since 2008 wages have risen by 12%, but for most working age out-of-work benefits the rise has been 21%. How can it possibly be fair or justifiable that the amount that people receive on benefits is increasing at a faster rate, and is more, than people receive in work? The freezes contained in clauses 9 and 10 go to the heart of reversing that damaging trend.
I want to make three key points about clauses 9 and 10. They support the original concept of welfare, as designed and intended by its father, Beveridge. In 1942, when the Beveridge report was published, he enshrined the key principles of what welfare should stand for—to help those who found themselves in occasional exceptional need. It was to help people cope with unexpected and temporary afflictions of sickness and unemployment.
Catherine West
Is the hon. Lady aware that the Government’s proposals would affect 740,000 families in which there are children with disabilities?
Suella Fernandes
What I am aware of is that the reforms are part of a package that includes an increase of free childcare to 30 hours, which is worth about £5,000 and will help working families combine work and childcare. That is how we are going to help children. Work, not benefits, is the route out.
Beveridge’s guiding principles were clear—the individual has to take greater responsibility, alongside the state establishing a national minimum standard to ensure that the most vulnerable are looked after and that the system is sustainable. The main problem with the existing welfare system is that it has allowed businesses to act in a way that is both unpalatable and bad for the economy. It has facilitated the underpayment of workers, which has allowed chronic under-training and under-investment in staff. The problem is simple. If a business or an employer knows that low wages will be topped up by the state, what is the point of investing in its workforce? What is the point of investing in training or promotion?
Alan Brown (Kilmarnock and Loudoun) (SNP)
Does the hon. Lady think it is fair that businesses will get a taper on the increase in wages? She complains that tax credits subsidise businesses, yet the poorest in society will not get a taper—their income will be cut right away in April. How is that fair?
Suella Fernandes
The Government are pragmatic and sensible, and they will be responsive. They will make announcements in the autumn statement that will deal adequately with that issue. [Interruption.] I have limited time and I want to make progress. It is important that we make work pay by stopping businesses underpaying their staff.
My next point is that we need to ensure that everybody keeps in mind the fact that the reforms are part of a package. The new measures on free childcare, the rise in the personal allowance, the tax lock on income tax, VAT and national insurance, and the welcome introduction of the national living wage will all ensure that household incomes rise over the course of this Parliament. People will be able to keep more of the money that they earn, rather than pay it in tax, which would just go to more Government expenditure.
Finally, the manner in which the Opposition have behaved is shameful. Prior to the election, there were suggestions that they would back our welfare reforms, acknowledging that welfare had become unsustainable and costly. They equivocated and suggested support. Even in July the right hon. and learned Member for Camberwell and Peckham (Ms Harman) was clear in her support for the reforms. What we have seen now is opportunism and the politicisation of an issue on which consensus is required. That is shameful and underlines the Opposition’s lack of integrity and decency, when we need cross-party support on this difficult issue. I support the clauses as drafted and expect the Opposition to do so too.
Hannah Bardell (Livingston) (SNP)
I welcome my hon. Friend the Member for Airdrie and Shotts (Neil Gray) to his position as I move across to the business brief. From his speech earlier, I am sure the social justice team has a very talented member.
I shall speak to amendments in this group tabled by my colleagues, particularly amendments 53, 54 and 55, which clearly state the SNP’s opposition to the Government’s two-child policy. The SNP wholeheartedly condemns the Tory Government’s intention to restrict tax credits to two children, which by definition excludes many of the poorest children in society from our social security system, going against the very principles for which it was set up. The Government’s proposals also stray into an area of policy making that I never thought I would see suggested by any Government who had a shred of compassion for their people. Hidden away in the Red Book were the words:
“The Department for Work and Pensions and HMRC will develop protections for women who have a third child as the result of rape, or other exceptional circumstances.”
No detail was provided. How much disrespect can this country take?
Alison Thewliss (Glasgow Central) (SNP)
Does my hon. Friend agree that it is appalling not only that that appeared in the Budget statement, but that during the consideration of the Bill there has been no explanation of how that will work in practice?
Hannah Bardell
I could not agree more. The two- child policy will hit more than 872,000 families who receive support for third and subsequent children. The Government’s own national child poverty strategy recognises that the risk of poverty is much more significant in larger families than in smaller ones. Currently a third of children living in poverty live in families with three or more children. Perhaps that is why the Tory Government seek to airbrush child poverty from the statute books.
It is easy for this Tory Government to espouse theories and claim that reducing financial support to just two children will make poorer families rethink their “financial choices”. That is based on the falsehood that all children are planned and that it is possible to financially plan for children. I am sure we are aware that that is not the case. What if a second pregnancy turns out to be twins or even triplets? What about the many families who are supported or led by kinship carers? Perhaps the Tories need a biology lesson, or a simple lesson in humanity.
Such eventualities cannot be planned for, so are we telling families across these nations to stop having children, just in case? I have raised many times in Committee, and many of my colleagues have raised on the Floor of the House, the sensitive issue of children resulting from rape and the insensitive Government plan to make women justify their children in front of DWP caseworkers. Many domestic abuse charities have expressed grave concerns, and Rape Crisis Scotland has warned that the plan is “inherently unworkable”. It has asked how DWP workers will prove whether someone has or has not been raped, and said that many women would find explaining that situation extremely uncomfortable. Many women do not report to the police that they have been raped, or go years without reporting it or speaking about it, so they cannot be expected to explain it to a DWP worker.
What training will a DWP worker have to deal with rape victims? It is clear that this is an unrealistic, ill thought out and unhelpful proposal. In evidence before the Select Committee on Work and Pensions, stakeholders described it as “unpalatable”, and the hon. and learned Member for Holborn and St Pancras (Keir Starmer) wrote in The Guardian recently:
“A rape test for welfare is a chilling way to save money”.
I could not agree more. It just goes to show that at the height of the Tories’ insensitivity, they will quite literally leave no vulnerable group untouched in their scramble to, as they put it, balance the books. The policy will ultimately result in a complete abuse of rape victims’ privacy, leading to potentially serious emotional damage for children should they become aware that they are a child resulting from a rape. The SNP amendments would see the policy abolished, and we urge the Government to remove the two-child policy from tax credit and universal credit to ensure that no victim or child goes through the torment associated with having to justify a third child due to such an horrific crime being inflicted—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I am sure that the hon. Lady is about to conclude.
Hannah Bardell
If we as parliamentarians are in this place to legislate for those we represent, let us legislate well and with compassion and good conscience. The proposals do not make good legislation. They are wrong for our society and wrong for this generation, so I ask Members to think again and vote with us.
Marcus Fysh (Yeovil) (Con)
I spoke the other day about how tax credit reform is part of moving to the higher wage, higher productivity, higher opportunity economy that the Government are building. I have been talking to the Chancellor behind the scenes about welfare reform for many months, and he is listening. Welfare reform is, however, an essential part of the broad package of reform that is helping to return our nation and its people to a sound financial future. The Opposition offer no alternative.
In my professional life before becoming a Member of this House, I was involved in the pensions and savings industry. I know how important saving is in building people’s future and their economic resilience. I believe that reforming national insurance contributions and entitlements is a good way to further incentivise work, deal with the hurdles to advancing at work caused by high marginal tax and benefit withdrawal, and provide scope in the budget for transitional arrangements. That could address the impact of tax credit reform on those with the lowest regular income.
Insurance businesses work by taking premiums from people and investing them over long periods, usually in dividend-paying and other shares that grow substantially in value over time to generate returns that are then available to those who need to claim on the scheme. Unfortunately, our national insurance contributions are not invested in the same way but are spent year in, year out on the claims of those using the NHS or the state pension, or are lent out to other Departments for their spending. We should add major savings reform to what we are doing, by reforming national insurance to create a genuine low-cost defined-contribution investment scheme that people can use to supplement their entitlements under the state pension system and that can be made available, under certain circumstances, ahead of retirement age. Credits could be offered to the lowest paid even if they did not meet the threshold for payment of traditional national insurance, to kick off their contributions and get them used to saving. They could also be used to supplement some payments by employers or to provide transitional funds, which could be substantial.
The investment scheme could also be available to others who wanted to make a contribution. I believe that it should be accompanied by tapering the threshold for the payment of traditional national insurance contributions, and the rate, to make the marginal incentives to work more efficient while letting people keep more of their earnings. That could be paid for by tapers on the higher limit and rate of national insurance obligations and entitlements for those on the highest incomes, particularly the entitlement eligibility of very high income retirees. I note that the principle is already established that state pension entitlement cannot pass in its entirety from spouse to spouse, and that entitlement to state pension is not an asset. I believe that that measure could make available several billion pounds.
Tax credit reform is not an option, but is essential in moving to a higher wage economy that will better provide for the future of all of us. Reform of national insurance is a neat solution that is not inconsistent with our manifesto. Nor is reform of the working tax credit system, as part of our overall package of reform.
Tom Brake
I support new clause 1, although it is still not entirely clear to me what the Labour party’s position is on this question. In this place Labour has tabled new clause 1, which is in effect a fatal motion, whereas in the other place Labour would only support transitional protection. I assume that the Labour party is now fully opposed to the tax credit cut.
Tom Brake
I will not give way, as I have to finish at 2.57 pm.
Tax credit cuts will hit 4,000 families in my constituency and 7,000 children. Collectively, some £4 million will be lost. The cuts will hit hard-working families who are struggling to make ends meet and, perhaps most importantly from the Government’s point of view, the changes will reduce the incentive to work, which I thought the Government favoured. Contrary to what the hon. Member for Sutton and Cheam (Paul Scully) said, I do not think that tax credits are a pat on the head. They are essential in supporting families.
Paul Scully
The right hon. Gentleman said that he was going to talk about this, but does he not agree that when I spoke about a pat on the head I was talking about the original tax credits, which were received by nine out of 10 families, including those with salaries up to £60,000 and not just low income families?
Tom Brake
Indeed, and changes were made to tax credits to take that into account. However, tax credits are now needed to support people who are in low-paid work and will not suddenly see their salaries rise dramatically to compensate them for the loss of those tax credits. The cuts are regressive and should be opposed by the House. I hope that that will happen in the vote that is about to take place on new clause 1.
Damian Hinds
I start by welcoming the hon. Member for Airdrie and Shotts (Neil Gray) to his new position and I wish the hon. Member for Livingston (Hannah Bardell) well in her new role.
These amendments intend to prevent the Government from making future changes to control welfare spending and we cannot support them. The Government’s approach is clear: our mission is to get wages up, taxes down and welfare under control. New clause 1 seeks to revoke the 2015 tax credits regulations and new clause 8 seeks to delay the introduction of the regulations unless and until the Government put in place a scheme of transitional protection for existing tax credit claimants for a minimum of three years. The House will recall that the Government tabled the regulations for a vote on the Floor of the House on 15 September, rather than their being scrutinised upstairs in Committee, to allow wider discussion on the regulations and to allow all hon. Members the opportunity to debate and vote on the issue. This House voted in favour of the regulations.
The House further discussed the regulations in the Opposition day debate on Tuesday 20 October and again voted in favour of them. However, as the House will also be aware, last night unelected Labour and Liberal Democrat Lords voted against tax credit regulations, raising constitutional issues that the Prime Minister will address.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
Is the constitutional issue that politicians should not lie to people in their manifestos?
Damian Hinds
I can only guess that the hon. Lady is making a strange reference to the Conservative manifesto. We were very clear in our manifesto that we are still only halfway through the job of getting the deficit down to zero. It stands at £3,300 for every household in the United Kingdom and we said very clearly during the election campaign that, as part of that, we needed to make £12 billion of welfare savings. What was not in our manifesto was the national living wage.
The Chancellor has said that he has listened to concerns from colleagues in this House and will come forward with proposals in the autumn statement to achieve the goal of reforming tax credits, saving the money needed to secure our economy while helping with the transition through the changes. I do not believe that the new clauses are therefore appropriate for inclusion in the Bill.
I now turn to amendments 49 to 52, which intend to prevent the freeze for four years of working age benefits, child benefit and tax credits. The freeze of the main rates of the majority of working age benefits, child benefit and tax credits will, in total, contribute some £3.5 billion of savings by 2019-20, and will help us to achieve our objective of deficit elimination. It will put welfare on a fairer and more sustainable footing so that we can continue our investment in our national health service and our schools, even as we get the national finances back into balance.
As my hon. Friend the Member for Fareham (Suella Fernandes) pointed out, there is an imbalance in a system that has seen a rise in average earnings of 12% since 2008, and in working age benefits, such as jobseekers’ allowance, of 21%. The individual element of child tax credit has risen by 33%. The freeze will help reverse that trend, helping earnings to grow faster than benefits, which will strengthen the incentives to work, and deliver the savings necessary to bring down the overall welfare bill. None the less, the Government will continue to offer protections to the most vulnerable. We know the best way to support people is to help them move closer to the labour market, but of course we realise that that is not possible for everyone. That is why we have made many important exemptions to the four-year freeze. We have exempted pensioner-related benefits, personal independence payment, disability allowance and attendance allowance relating to the additional cost of disability as well as statutory payments, carers’ allowance, the support group component of the employment and support allowance and disability elements in tax credits.
Simon Hoare (North Dorset) (Con)
The list that the Minister has just given to the House underscores entirely the compassionate, one nation Conservative approach that we are taking to these issues in sharp contradistinction to the Opposition parties, which seek to lecture but which have no remedy.
Damian Hinds
My hon. Friend is right, and it is right that those exemptions are made.
Neil Coyle
Will the Minister be absolutely clear that the half a million disabled people receiving ESA in the work-related activity group will not be protected under the measures that he has just outlined?
Damian Hinds
People who are in the work-related activity group are, by definition, people who are to be helped to move closer to the labour market. What I have said in the list of exemptions that I have read out is that the amounts that are specific to the additional costs of disability are protected, which is something that we discussed in Committee.
Damian Hinds
If the hon. Gentleman will forgive me, I will not give way, because it is 3.2 pm and I need to stop by 3.5 pm.
Amendments 53 and 55 seek to remove clauses 11 and 12 from the Bill, and amendment 54 seeks to retain the payment of the family element of child tax credit for all persons who are responsible for a child or a qualifying young person born before 6 April 2022.
The Government want to ensure that the system is fair both to those who pay for it and to those who benefit from it. Currently, the benefit system adjusts automatically to family size, but many families who are only in receipt of income from work would not see their budgets flex in the same way when they have more children. The Government want to encourage those families who are in receipt of benefits to make the same financial choice about the number of children they have as those families who are supporting themselves solely through income from work.
Damian Hinds
If the hon. Gentleman will forgive me, I will not give way.
That is why the Government have proposed changes to child tax credit and to the child element of universal credit, as set out in clauses 11 and 12 respectively. The Government will look at the important issues around exemptions through secondary legislation, which is a better way of dealing with these matters. Indeed, we discussed when that could be done in Committee with proper reflection and working together with stakeholders and experts.
I also wish to make it clear that the changes will not affect families already receiving the child and family elements before 6 April 2017 and who remain on benefit after that date, including such families who subsequently leave universal credit for a period of less than six months, and families who make a new claim to universal credit and who have been in receipt of tax credits for more than two children or qualifying young persons in the past six months. In addition, the Government will continue to support larger families through child benefit, which is paid for all qualifying children in a household, and paid at a higher rate for the first child.
In conclusion, the amendments oppose our clear mandate to find £12 billion of welfare savings and to restore fairness to the system by ensuring that work always pays. In making these changes, we have balanced the vital task of bringing spending under control while ensuring that the support is there for those who need it most. I therefore urge hon. Members to withdraw their new clause.
Question put, That the clause be read a Second time.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Natascha Engel)
With this it will be convenient to discuss the following:
New clause 3—Personal independence payment: timing of payment—
‘(1) Schedule 10 of the Welfare Reform Act 2012 is amended as follows.
(2) In paragraph 1(1), at start insert “Subject to paragraph ( ),”
(3) At end of paragraph 1(1), insert the following new paragraph—
“( ) Where a person in receipt of disability living allowance meets the requirements of section 82 of the 2012 Act his or her entitlement to disability living allowance shall terminate immediately and entitlement to personal independence payment shall commence on the same day.”’.
This New Clause aims to enable claimants of DLA who are transferred to PIP due to terminal illness to receive their first PIP payment immediately after being transferred. Currently claimants must wait four weeks from their final DLA payment to be made and then another four weeks to receive their first PIP payment.
New clause 4—Review of application of sanctions—
‘(1) The Secretary of State must before the financial year ending 31 March 2016 provide for a full and independent review of the sanctions regimes attached to working-age benefits, including but not limited to Jobseekers Allowance, Employment Support Allowance and Income Support, to determine whether they are effective and proportionate for meeting the Government’s objectives.
(2) The terms of reference for the review must include consideration of—
(a) the application of sanctions to lone parents with dependent children;
(b) the application of sanctions to claimants who are disabled;
(c) the effectiveness of sanctions in moving claimants into sustained work; and
(d) any other matters which the Secretary of State considers relevant.”
To provide for a full, independent review of the operation of the sanctions regimes attached to out of-work benefits, to determine the effectiveness of sanctions in moving claimants into sustained work as well as any adverse impacts on particular groups.
New clause 5—Report on impact of benefit cap reductions—
‘(1) The Secretary of State must publish and lay before Parliament before the end of the financial year ending with 31 March 2017 a report on the impact of the benefit cap reductions introduced by this Bill.
(2) The report must include an assessment of the impact on each of the measures of child poverty defined in the Child Poverty Act 2010.”
This new clause requires the Secretary of State to review impact of lower benefit cap after 12months.
New clause 7—Changes to the benefit cap—
Changes to the Benefit Cap shall not be made until the Secretary of State has carried out an assessment of the impact on its effect on poverty and laid a report before the House of Commons, The Scottish Parliament, The Northern Ireland Assembly and the National Assembly for Wales.”
New clause 9—Universal credit and carers—
Claimants in receipt of universal credit who are responsible carers for children are not subject to work focused interviews or work preparation requirements until their youngest child starts school.”
New clause 10—Changes to age of eligible claimants of housing benefit—
The Social Security Contributions and Benefits Act 1992 is amended as follows. 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.”.”
New clause 11—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; care leavers and
(l) 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 person who lives independently”;
“risk of homelessness” and
“a person without family”.”
New clause 12—Review of application of sanctions—
‘(1) The Secretary of State must on commencement of this bill, commence a full and independent review of the sanctions regimes attached to working-age benefits, including but not limited to Jobseekers Allowance, Employment Support Allowance and Income Support , to measure the impact on—
(a) to lone parents with dependent children;
(b) claimants who are disabled;
(c) moving claimants into continuous work;
(d) homeless;
(e) protected characteristics;
(f) long term health conditions;
(g) claimants with mental health disorders and
(h) any other matters which the Secretary of State considers relevant.”
Amendment 35, in clause 6, page 8, line 39, leave out subsection (2)
Amendment 36, in clause 7, page 9, line 2, leave out “£23,000 or £15,410” and insert “£26,000 or £18,200”
Amendment 37, page 9, line 3, leave out “£20,000 or £13,400” and insert “£26,000 or £18,200”
Amendment 38, page 9, line 15, leave out paragraph (a)
Amendment 39, page 9, line 17, leave out paragraph (b)
Amendment 40, page 9, line 19, leave out paragraph (c)
Amendment 41, page 9, line 21, leave out paragraph (d)
Amendment 42, page 9, line 27, leave out paragraph (f)
Amendment 43, page 9, line 39, leave out paragraph (k)
Amendment 44, page 9, line 41, leave out paragraph (l)
Amendment 45, page 9, line 44, leave out paragraph (n)
Amendment 46, page 9, line 46, leave out paragraph (o)
Amendment 47, page 9, line 48, leave out paragraph (p)
Amendment 48, page 10, line 1, leave out subsection (6)
Amendment 56, page 14, line 15, leave out Clause 13
Amendment 29, in clause 13, page 14, line 26, at end insert—
‘(3A) The Secretary of State may not lay an order under section 31 to bring the provisions of subsections (2) and (3) into force until he has laid before both Houses of Parliament a report giving his estimate of the impact of those provisions on persons who would otherwise be entitled to start claiming the work-related activity component of employment and support allowance.
(3B) No order bringing subsections (2) and (3) into force shall be made unless a draft of the order has been laid before and approved by a resolution of both Houses of Parliament”.
Amendment 31, page 14, line 29, at end insert—
‘(5A) The Secretary of State must make provision for additional personalised and specialist employment support in connection with the changes made by subsections (1) to (3).
(5B) The Secretary of State must issue guidance on the following—
(a) the forms of personalised and specialist employment support;
(b) the means by which a diverse market of suppliers for personalised and specialist employment support can be developed in local areas; and
(c) information for local authorities seeking to improve local disability employment rates.”
Amendment 20, page 14, line 39, leave out Clause 14
Amendment 57, page 14, line 39, leave out Clause 14
Amendment 58, page 15, line 1, leave out Clause 15
Amendment 59, in clause 15, page 15, line 4, leave out paragraph (a)
Amendment 60, page 15, line 4, leave out paragraphs (a) to (c) and insert—
“(a) in section 19(2)(c) for the words “under the age of 1” substitute “who has not yet started primary school””
Amendment 61, page 15, line 9, after “2,”, insert “3 or 4”
Amendment 62, page 15, line 10, leave out paragraph (c)
Amendment 63, page 15, line 13, leave out paragraph (a)
Amendment 64, page 15, line 13, leave out paragraphs (a) and (b) and insert—
“(a) in regulation 91 (claimants subject to work-focused interview requirement only), for the word “3” substitute “5 or when the child starts primary school”;
(b) in regulation 91A (claimants subject to work preparation requirement) for the words “3 or 4” substitute “who has not yet started primary school”;”
Amendment 65, page 15, line 15, leave out paragraph (b)
Debbie Abrahams
It is a pleasure to be here on my first occasion at the Dispatch Box. On Second Reading I conveyed my concerns about the Bill, and after a few weeks in Committee I have not changed my opinion. I said then that I thought this is a wicked Bill, and I still feel that.
Amendments 56 and 20 seek to leave out clauses 13 and 14 so as to prevent cuts to the work-related activity component of employment and support allowance, and to the limited capability for work element of universal credit. We believe it is unjust and unfair that disabled people and those with serious health conditions who have been assessed during the work capability assessment as not fit for work and placed in the work-related activity group should have their social security support cut by nearly £30, from £102.15 to £73.10.
Compelling evidence from the independent Extra Costs Commission, which analysed the additional costs facing disabled people, shows that on average they spend an extra £550 per month on things associated with their disability. The Government’s proposed cuts to people in the ESA WRAG come on top of a host of other cuts to social security and support for disabled people since 2010. Demos has estimated that by 2018, £23.8 billion will have been taken from 3.7 million disabled people, with 13 policy changes in the Welfare Reform Act 2012.
The cut in the ESA WRAG comes on top of the freeze in other social security support and the £3.6 billion of cuts to social care. My hon. Friend the Member for Pontypridd (Owen Smith) has argued for a cumulative impact assessment of cuts to tax credits and other benefit reforms for working families on low incomes, as defined in new clause 2, but why has that not happened already? Why have the Government not undertaken a cumulative impact assessment of the latest proposed cuts for disabled people, given that it is a requirement under the Equality Act 2010? I raised that point in Committee, and although I am grateful to the Minister for her response, she implied that only one model can be used to analyse the distributional effects of a policy. That is a flawed judgment. The Equality and Human Rights Commission is somewhat surprised by the suggestion that such cumulative modelling is not possible, given that it is undertaking its own cumulative impact assessment. I understand that the commission has written to the Government and highlighted the resources that are available to help them do that work, and perhaps when she responds the Minister will enlighten the House as to whether the Government have changed their mind.
The Government have also failed to provide evidence to substantiate their claim that working families on low incomes will be better off in spite of having tax credits taken from them—for example, through the introduction of the new national minimum wage, changes to personal allowances, and extended childcare provision. The Government’s meagre offering of an impact assessment for clauses 13 and 14 has failed to provide reassurance that disabled people will not be subjected to serious financial hardship. Although the assessment estimates that approximately 500,000 disabled people and their families will be affected by the cut to the ESA WRAG, there is no analysis of the impact this will have on the disabled people who will be pushed into poverty.
Ian Lavery
I am not sure whether my hon. Friend was present about an hour ago, when the Minister suggested that it was a good idea for people in the work-related activity group to lose 30% of their benefits so as to move them nearer to employment. How ridiculous is that?
Debbie Abrahams
I entirely agree with my hon. Friend. In fact, I am going to move on to a section specifically concerned with incentivising work and how on earth people with, for example, progressive conditions can be incentivised.
Richard Graham (Gloucester) (Con)
I welcome the hon. Lady to her place. On the specific issue of trying to help people in the work-related activity group to get into work, does she agree that the current system is not working as well as it should and that we need to spend more money on helping them find jobs? It is harder for them to find jobs than it is for other people on jobseeker’s allowance. In answer to the point made by the hon. Member for Wansbeck (Ian Lavery), that is precisely why we should be transferring money into helping them to get jobs.
Debbie Abrahams
I thank the hon. Gentleman for his intervention, but his question belies the facts. Some £640 million is being withdrawn from people in the ESA WRAG, while £100 million is meant, in some undisclosed manner, to provide support. There is no information from the Government on how that will support disabled people back into work.
As I was saying, there is no analysis of the impact that this will have on the disabled people who will be pushed into poverty. Disabled people are twice as likely as non-disabled people to live in persistent poverty, and 80% of disability-related poverty is caused by their extra costs. Last year, there was a 2% increase in the number of disabled people who were pushed into poverty. That is equivalent to 300,000 people. The Minister’s recent reply to me did not address this particular point, so I would be very grateful if that could be explained. Half a million disabled people will be affected and lose £30 a week—nearly a third of their weekly income. What is the Government’s estimate of the increase in the number of disabled people who will be living in poverty?
Neil Coyle
I welcome my hon. Friend to her rightful place on the Labour Front Bench. Is she aware that in the other place Lord Low is going to carry out an independent review of poverty, in the absence of a Government study? Will she encourage the Government to interact with that independent review, in particular on poverty and the impact on higher health and local authority costs as a result of the reduction in ESA?
Debbie Abrahams
My hon. Friend makes some excellent points. The Equality and Human Rights Commission is able to undertake that analysis. Other bodies and organisations are doing it, so why are the Government not able to do it? Surely this is what we should expect from the Government in their implementation of policy. There are real concerns from disabled charities, disabled groups and Lord Holmes, the chair of the EHRC’s disability committee, about the extent to which the assessment of the impact on disabled people is understood.
On incentivising work, on Second Reading the Secretary of State for Work and Pensions stated:
“the current system discourages claimants from making the transition into work.”—[Official Report, 20 July 2015; Vol. 598, c. 1259.]
What about people with progressive conditions, such as Parkinson’s, multiple sclerosis and motor neurone disease, who have no prospect of recovery but have undergone a work capability assessment? They have been found not fit for work and placed in the WRAG group. Are the Government seriously saying that the measure will incentivise this group of disabled people into work? They have already been found not able to work through the Government’s own assessment process. Their progressive conditions are not going to change. This is a real concern.
Mr Anderson
I welcome my hon. Friend to her position on the Front Bench. As chairman of the all-party group on muscular dystrophy, I would like to tell her that information shared with me suggests that people across the whole field of disability believe that this measure will actually have the opposite effect from the one intended. Rather than providing an incentive for people to go to work, it will mean that they will struggle to continue to have the independence they need. This £30 deduction will make a big difference: people will wonder whether they can afford to maintain their mobility, which will have a detrimental effect, making it less likely that they will find work than if they are left where they are now.
Debbie Abrahams
My hon. Friend makes an entirely valid point. Disabled people will find it more and more difficult to live fulfilling lives that enable them to make contact and fulfil their potential, which everyone should have the right to do, so it will be a disincentive.
Simon Hoare
I am chairman of the all-party group on multiple sclerosis. I entirely understand the hon. Lady’s concern and, indeed, the sort of representations made by the hon. Member for Blaydon (Mr Anderson). However, does she take heart, as I do, from the fact that Ministers are part of a party that brought forward pioneering legislation on disability rights, which should provide comfort that Ministers on the Treasury Bench will make sure that no policy will leave people behind?
Debbie Abrahams
Yes, it is right to acknowledge the Government’s role in bringing in the Disability Discrimination Act 1995, but this Bill flies in the face of that legacy. I really hope that by the end of today, the Government will be able to provide some reassurance, because to date there has simply been none for disabled people.
In Committee, the Minister said that these cuts would not affect people currently on the ESA WRAG, but does that mean that people diagnosed with progressive conditions, but assessed after the Bill is enacted, will be deemed to have a different form of the progressive condition? Will they require less support, or do the Government finally accept that, apart from being dehumanising and exacerbating people’s health conditions, the work capability assessment is not fit for purpose and needs a complete overhaul so that people with progressive conditions are not placed in the ESA WRAG? I would really appreciate some clarity on that point.
Surely if the Government were serious about supporting disabled people into work, there would be measures in place to support into work those disabled people who are able to work. How many employers will be engaged? Although the Disability Confident scheme is a good first step, only 68 employers are currently active in it, and they will certainly not be able to support the 1.3 million disabled people who are able to and want to work. Do the Government intend to extend Access to Work beyond the 35,000 disabled people it helped stay in work or into a new job last year? What is going to happen about the appalling ratio of one disability employment adviser for 600 disabled people? [Interruption.] What estimates are there of the impact on the employment of disabled people of this measure and the reduction of the 30% disability employment gap?
Helen Goodman (Bishop Auckland) (Lab)
My hon. Friend has just said the most astounding thing I have heard in this Chamber for a very long time. There is one work adviser for 600 people. In the course of a year, I wonder whether each person would get some attention just once. Has there been any assessment of the absurdity and ineffectiveness of this situation, as contrasted, of course, with the marvellous suggestions we heard a short while ago from the hon. Member for Gloucester (Richard Graham)?
Debbie Abrahams
That figure was revealed through the work done when I sat on the Select Committee. Yes, it is shocking. Some are trying to say that this Bill is about encouraging people into work, but there are no measures in place to support it. Indeed, my next point is—where exactly is the “work” bit in this Welfare Reform and Work Bill? Here we are on Report, and these basic questions have still not been answered. All we know from the Government’s impact assessment is that by 2020-21, approximately £640 a year will have been cut from social security support for disabled people—on top of the £23.8 billion of support that has already been taken from them—and that £100 million a year will be provided in unspecified support to help them into work. That is a disgrace; disabled people deserve much better.
Simon Hoare
Hitherto, the hon. Lady has been making a very thoughtful and considered speech. It may not be up to me, as a new Member, to say this, but the sentence that she has just uttered has fundamentally undermined the cause of her argument, and I invite her to reconsider it.
Debbie Abrahams
I appreciate that it is strong language, but I can only provide the hon. Gentleman with the evidence. In 2010, the use of the term “scrounger” by the mainstream press had increased by more than 330%, and it has remained at that level. We should always be mindful of the language that we use as leaders, and of how it is perpetuated.
Ian Lavery
May I advise my hon. Friend not to take any lectures from the team opposite when they are asking her to calm down in respect of her language against the disabled? Constantly, for the last five years, they have attacked disabled people, poor people and lower-paid people. No apologies are required.
Debbie Abrahams
I used that language to draw attention to the issue in the House, and more widely. I did so partly because I am sure I am not the only one to remember the autumn statement two or three years ago in which the Chancellor, at the Dispatch Box, referred to “closed curtains” when people were going out to work. It was quite clear what that implied. I use such language very carefully, and I repeat that its use in the media has increased by 330%. We all have a responsibility in this regard, including the country’s leaders.
The innuendo is that people with a disability or illness might be faking it or feckless. That is grotesque. As a former public health consultant, I speak with some knowledge. It is recognised that incapacity benefit and ESA are good population health indicators, and the release of the Government’s own data has proved the point. Disabled people in the ESA WRAG are a vulnerable group who need our care and support, and not our humiliation.
Richard Graham
I invite the hon. Lady to come to the opportunities fair in my constituency on 6 November, which is specifically focused on helping people in the ESA WRAG category to find opportunities for getting back into work. It will be very similar in tone to the first Disability Confident fair we held a year ago, and I am sure she would want to encourage Members from all parts of this House to hold these events and champion people like that who are trying to find jobs.
Debbie Abrahams
In return, I ask the hon. Gentleman to ask his constituents who are on ESA WRAG how they will be affected by these proposals and whether they will have to cut back on such journeys and work fairs because of the cuts the Government are likely to impose. Up and down the country good work is being done to support people back into work, but this measure is not part of that.
Several hon. Members rose—
Debbie Abrahams
I am not going to give way anymore, as I am conscious of the time.
These cuts are punitive and wrong. They fly in the face of the Conservative party’s pledge to protect disabled people’s benefits. With this cut to ESA WRAG support, without putting in place anything to replace it, the Government are condemning more disabled people and their families to live in poverty. I predict that more tragedies will happen. I will be pushing our proposals to a vote and urge all Members to do the right thing by supporting the removal of clauses 13 and 14 from the Bill.
New clause 4 requires that the Government undertake a full independent review of their sanctions regime by 31 March 2016. It is with considerable regret that, after the Work and Pensions Committee’s report earlier this year, which also recommended an independent review of benefit conditionality and sanctions, the Government have failed to recognise the real concerns about their new sanctions regime, either in response to what was said in the Bill Committee or to that report.
I have been campaigning for an independent review of sanctions for nearly two years, and in that time constituents have come to me with their stories about how they have been sanctioned. One constituent was told while he was undergoing the work capability assessment that he was having a heart attack and should go to hospital, yet two weeks later he received a letter to say that he had been sanctioned. People up and down the country have also got in touch with their stories of how they have been sanctioned, for example, for being a few minutes late for an appointment with an adviser or work coach. Increasingly, people are being sanctioned unreasonably, for example, because they had attended their mother’s funeral, been hospitalised or gone to a job interview—this is absurd.
There was another category of reasons for being sanctioned. I still have the email from a constituent who had received a letter saying he had been sanctioned for non-attendance at a meeting with his adviser at the jobcentre, even though he had evidence that he had been there. The penny dropped when another constituent, who had worked in jobcentres across Greater Manchester for 20 years, came to me to tell me that as part of the new sanctions regime introduced at the end of 2012, the DWP had targets for sanctions. As he described it, claimants were being deliberately set up to fail, whether they had done anything wrong or not.
The Work and Pensions Committee also became concerned while conducting an inquiry in 2013 on “The role of Jobcentre Plus in the reformed welfare system”. At that stage, it recommended the following:
“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.”
Graham Stuart (Beverley and Holderness) (Con)
I am concerned about the issue the hon. Lady raised about targets for sanctions, as this is a serious allegation to make and it is a serious issue. It is possible to meet people from all sorts of walks of life who through their profession may have some professional insight, but their word alone is not enough to suggest that something is true—one does need verification from elsewhere. Can she substantiate her point? What did she find out that would make us believe it is true?
Debbie Abrahams
The hon. Gentleman makes my point for me: that is why we need the independent review. There was enough evidence to leave real concerns about this matter. The Select Committee thought that the Minister had agreed to a review, but as paragraph 100 of the report states, unfortunately he reneged on that promise. In addition to these serious ethical issues, there were, and still are, concerns about a number of people affected, particularly in the case of ESA claimants, and about the meteoric rise in the use of sanctions.
Peter Dowd (Bootle) (Lab)
Does my hon. Friend recall that in the summer the Department for Work and Pensions was forced to admit to having invented quotes from fake benefit claimants, which meant that its sanctions leaflets had to be withdrawn pretty quickly?
Debbie Abrahams
My hon. Friend makes a valid point. That is one of the reasons why we need an independent review to investigate such matters.
Graham Evans (Weaver Vale) (Con)
I congratulate the hon. Lady on her new role on the Front Bench—she has done far better than me. When she and I served on the Work and Pensions Committee, we investigated this matter and found no evidence of benefit sanctions targets in the jobcentres we visited. I have two outstanding Jobcentre Plus offices in my constituency, and I have seen no evidence whatsoever of any targets there. How can she stand at the Dispatch Box and say that there are targets for sanctions when, to the best of my knowledge, there is no evidence that they exist?
Debbie Abrahams
I thank the hon. Gentleman for his kind remarks. I understand that his wife has previously worked in a Jobcentre Plus office. To reiterate my response to the hon. Member for Beverley and Holderness (Graham Stuart), the whole point is that there is some evidence and that we need a better understanding, which is why we need an independent review.
Helen Goodman
If there is to be an independent review, does my hon. Friend agree that it should take evidence from the National Audit Office, which has stated that although the targets might not come from the Minister’s office, the performance management of the jobcentres amounts to targets, because what it measures does not take into account the numbers of people who are supposed to go back into work or the quality of advice they receive?
Debbie Abrahams
My hon. Friend makes a valid point. The Select Committee reported on the fact that there are targets for off-flow, which means getting people off the books. Those in themselves are targets. [Interruption.]
Debbie Abrahams
Well, I will move on to that shortly and show exactly why we believe that is happening.
In addition to those serious ethical issues, we have also seen a meteoric rise in the use of sanctions. ESA sanctions increased from 60,363 between June 2010 and October 2012 to 245,679 between November 2012 and March 2015, which corresponds with the introduction of the new sanctions regime. As I have said, people on ESA are disabled or have serious health conditions.
The new sanctions regime is also particularly punitive. People are without financial support not just for a week or two, because the minimum sanction is now four weeks. Subsequent misdemeanours can mean up to three years of sanctions, whereas previously the maximum was six months. That has particularly affected young people, disabled people and lone parents. In addition, during 2013-14 it became clear that although no other benefits, such as housing benefit, were meant to be affected, in some cases housing benefit was automatically being stopped. The obvious implication is that families will be getting into debt as a result.
The fact that since January 2014, on average, nearly half of ESA sanctions have been overturned on appeal surely confirms that there are issues with sanctions policy and practice. The Work and Pensions Committee published its report in March this year, revealing even greater concerns about the inappropriate use of sanctions, their ineffectiveness in getting people into work and the impact on the health and wellbeing of claimants.
The Select Committee received evidence that sanctions were being driven by targets to get claimants off-flow in a way that distorted the JSA claimant count. A team from Oxford analysed data from 376 local authority areas and found that 43% of JSA sanctioned claimants left JSA and that 80% did so for reasons other than employment. In July, the Social Security Advisory Committee also raised concerns about the effectiveness of the sanctions regime in getting people into good quality jobs, and called for better evidence to underpin sanctions policy.
Debbie Abrahams
Absolutely.
Similarly, there are concerns about the impact of the benefit cap on disabled people, who already face extra costs associated with their disability, as I mentioned earlier. It is estimated that 150,000 adults and 395,000 children will be affected by the reduction in the cap. We believe that, in conjunction with the freeze in local housing allowance, cuts in social housing rents and a lack of affordable homes, the lower cap also risks exacerbating the housing crisis. The Government’s own impact assessment concedes that rent arrears, evictions and homelessness will increase as a result of the lower cap. We believe that further reductions in the benefit cap in London and elsewhere risk pushing tens of thousands of children, families and disabled people into poverty. We are the sixth wealthiest country in the world. It is not right that the Government are seeking to secure the recovery on the backs of the working poor, their children and disabled people. I hope they will think again.
Graham Stuart
I, too, would like to congratulate the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) on her new position.
I want to speak narrowly to new clause 3, tabled by the hon. Member for Sheffield Central (Paul Blomfield). The new clause would amend the regulations that currently mean that a claimant who is moved from the old disability living allowance system to the new personal independence payment award must wait 28 days after a decision before receiving the new benefit. Those regulations allow a claimant who is moving to a lower award to adjust to their new financial circumstances by receiving the old award for a period of time, which is extremely welcome.
The unintended consequence of the regulations, however, has been that some of the most disabled and vulnerable people in our society, including those who are terminally ill, are being forced to wait almost a month, and sometimes longer, to receive the extra money they need to meet the costs resulting from their illness. That situation most commonly affects individuals who have become entitled to additional money through PIP because their diagnosis has become terminal.
I am grateful to Macmillan Cancer Care for the work that it has done in this area. Let us imagine a cancer patient, who is already receiving some support under the old DLA system because of their illness, and who receives a terminal diagnosis. They inform the Department for Work and Pensions about this, and the Department makes a decision about their eligibility for additional financial support as a result of their terminal diagnosis. I am pleased to say that that decision should be made within six days—a target timescale that was introduced precisely in recognition of the fact that those who are terminally ill are in particular need of timely assistance.
Jo Churchill (Bury St Edmunds) (Con)
I, too, have seen the Minister to push this point, to ensure that the vulnerable—particularly the terminally ill—do not fall through the cracks as they transition from the DLA to PIP. I thank the Minister for listening, and I look forward to receiving confirmation of how we are going to ensure speedy payments and minimum waits for that group, as I have been assured will happen, so that those people can get their funds in advance. All these things help, and it is not right that they should have to wait. I am grateful for being listened to.
Graham Stuart
I am grateful to my hon. Friend for her intervention, in which she has succinctly made my entire speech for me. She sets an example to all of us in how to convey an argument as briefly as possible.
If a decision is made within six days—which is a good thing—why must an individual then wait 28 days to receive the additional financial support that it has already been decided they should get? That financial support could help them meet the costs of the sudden onset of daily living needs or mobility needs that can accompany a terminal diagnosis. There are examples of people missing out on, in some cases, hundreds of pounds. People miss out not only on the additional money through PIP, but on other financial support such as free car tax, premiums in means-tested benefits and other passported benefits, because eligibility for those benefits kicks in only when the additional PIP starts to be paid. It cannot be right that an individual who has a life expectancy of less than six months is being forced to wait a minimum of 28 days—perhaps one sixth of their life expectancy—for vital financial support on which they depend.
At the heart of this Government’s welfare reform programme is a commitment to protecting the most vulnerable people in our society. The context of today’s debate, given the tough financial decisions that are having to be made, is one of a transformation in the work opportunities, employment chances and life chances of so many people across our society, so that they can try to escape the labyrinthine mess that was left behind by the former Labour Prime Minister and Chancellor. That is what we are trying to do—create a society in which everyone, including the disabled, can be looked after properly. That is why I believe it is entirely in the spirit of these reforms to amend the current regulations so that anyone who transfers from DLA to PIP due to a terminal diagnosis is paid the additional support promptly and does not have to wait 28 days. It is not a large group, but it is a group of some of the most disabled and vulnerable individuals in our society.
Graham Stuart
My hon. Friend wants to give whatever remains of the argument in my speech, and I give way to her again.
Jo Churchill
I thank my hon. Friend. During the conversations to which I referred, I received confirmation that no one would lose those four weeks’ money, and that following the decision to award PIP new claimants would have their claim backdated, so I look forward to confirmation of such positive news.
Graham Stuart
My hon. Friend really does keep stealing my punches, because I too have met the Under-Secretary of State for Disabled People, and he was most sympathetic in listening to these arguments. There are technical issues that are going to be dealt with, but I will return to that.
The positive impact of such a change on the individuals who are currently affected by the rule would be immense. It would that ensure people could afford the support they need in the final few months of their lives. In Committee, the Government suggested that changing the regulation could mean that a case manager would not have sufficient time to consider the case. I do not follow that argument, because the 28-day rule applies once a decision has already been made, so it should not have an impact on the time taken to decide on a case.
Having spoken to the Minister, I know that he is listening to the concerns raised by my hon. Friend the Member for Bury St Edmunds (Jo Churchill), myself and others across the House, and I hope we will get a positive response so that terminally ill people who are to see an increase in their financial support can receive it as soon as possible.
Richard Graham
Surely the point my hon. Friend raises and the Government’s response on some of these issues—which are sensitive, as other hon. Members have rightly said—indicate that the Government do care about this category of our constituents and are reacting and making changes that will help them, and totally give the lie to some of the irresponsible comments from the Opposition Front Benchers.
Graham Stuart
I would hesitate to give advice to any Member as to how they should conduct themselves, but this is an emotive area and these decisions affect vulnerable people. A balance has to be struck between fiscal responsibility, looking after the most vulnerable and changing the incentives so that we get people aligned with the best opportunity in the long term as well as the short term. These are sensitive issues, and I agree with my hon. Friend about the hon. Member for Oldham East and Saddleworth referring to the Government demonising the disabled and the poor in a way that she did not substantiate at all. One mention in an autumn statement two or three years ago of the fact that some people abused the system is not an effort to demonise the poor and disabled, and suggesting that undermines the other arguments—and there are strong arguments to be made in this area and questions that need to be asked about the Government’s programme.
The decisions being made are not easy, and they will not all be right, but trying to smear the whole Government Front-Bench team loses people rather than wins them over. I do not think the hon. Lady needs to do that in order to make a powerful case and have a strong hearing outside this place; if what she says looks like partisan point scoring and personal vilification, it will undermine the arguments she is trying to pursue and champion.
I am delighted that the Minister is listening. I hope and expect—as I know all my hon. Friends and Opposition Members do—that we will find a solution to this technical challenge and make sure it is delivered as quickly as possible, so that the terminally ill get the money they are due as quickly as possible.
Dr Eilidh Whiteford
I shall speak to the amendments in this group in my name and the names of my party colleagues, namely new clauses 9, 10, 11 and 12, amendments 35 to 48, 56, 20 and 57 to 65, and new clause 7, on which I will open my remarks.
New clause 7, along with amendments 35 to 48, is intended to amend the parts of the Bill relating to the benefit cap. Amendments 35, 36 and 37 would maintain the cap at its current rate, while amendments 38 to 48 would mitigate the differential impact of the Government’s proposals on specific groups of claimants by exempting from the benefit cap bereavement allowance, carer’s allowance, child benefit, child tax credit, guardian’s allowance, maternity allowance, severe disablement allowance and widowed parent’s allowance.
The bottom line, and the key point to be made today, is that many of the provisions in this part of the Bill are entirely arbitrary and have no robust evidence to support them. By proposing an arbitrary benefits cap, the Government fail to acknowledge the underlying drivers of benefits increases. They fail to acknowledge, for example, how soaring private sector rents in parts of the UK with astronomical house prices and chronic under-supply of affordable housing push up the cost of housing benefit—money that usually goes straight into the pockets of private landlords, often without even passing through the hands of tenants. But I recognise that that is not the only driver, and in the absence of proper analysis, setting the benefits cap at an arbitrary level is possibly the worst example of policy making on the back of a fag packet that I have seen in this place for quite some time. Although I support the Labour amendment that would force the Secretary of State to review the impact of the lower cap more regularly, I would prefer to see this very weak piece of policy making removed completely from the Bill.
Dawn Butler (Brent Central) (Lab)
On the effect of the cuts, Brent council has produced its own report, which highlights the fact that in Brent 13,600 households and 26,200 children will be affected.
Dr Whiteford
The hon. Lady makes a useful point. I am aware that Brent is one of the areas where the benefits cap will be particularly keenly felt, but all our big conurbations are affected, especially those where there is a large gap between the incomes of the wealthiest and people who are earning what in any other part of the country would be a decent wage, but in certain parts of the UK is not enough to live on.
I am glad to see that Labour Members have supported amendment 56, which I intend to press to a vote this evening. I shall also address some of the related amendments, 57 to 65, all of which would affect support for those distanced from the labour market, whether under employment and support allowance or universal credit. They would remove the provisions in the Bill that seek to reduce ESA for those in receipt of the work-related activity component.
I want to be absolutely clear that SNP MPs will oppose the proposals in clauses 13 and 14, which are an outright attack on people who are seriously sick, disabled, or living with debilitating long-term health problems. We are talking about people who are so seriously incapacitated that even the Government’s own stringent assessment process has deemed them unfit for work at present. Slashing support for sick people will not help them recover more quickly. In fact, money worries are one of the things that often slow down people’s recovery from serious illness. We have just heard a powerful speech delivered from the Government Benches about support for people who are terminally ill, but sometimes people recovering from illnesses that could go either way need a long time to recover, and they do not always get the support and the sympathy they need.
I am deeply concerned by the Government’s rhetoric on this matter. The hon. Member for Oldham East and Saddleworth (Debbie Abrahams) hit a raw nerve earlier when she suggested that some of the Government’s language has been deeply inappropriate, but as recently as the summer Budget the Chancellor said it was a “perverse incentive” for ESA claimants to receive more than jobseeker’s allowance. When a person has been assessed as not currently fit for work, I fail to see how reducing their income by 30 quid a week will get them into work faster.
Today, the Disability Benefits Consortium has released figures suggesting that 70% of disabled people surveyed say that the cut will make their health worse, not better. There are other important considerations to take into account, however, particularly for those with long-term disabilities or health conditions that compromise their ability to work over long periods. A lifetime of disability or the development of a long-term condition already erodes the financial assets and resilience of too many people, including carers. About one third of disabled people already live in poverty, and sick and disabled people who are unable to work—many disabled people do work, of course, and hold down steady jobs—face many costs that might not be immediately evident. For example, they might need to heat their home throughout the day at a higher temperature than would be necessary for a more active and fit person. They also incur those costs over a long period. In contrast, the vast majority of people on jobseeker’s allowance are on it for fairly short periods. About 60% of people on JSA move off the benefit within six months, whereas almost 60% of people in the work-related activity group need that support for at least two years.
Let us face it, most of us could, with a wee bit of effort, cope with a very low income for a week or two, but for those who face an extended period out of the labour market because of their health, £73 a week is just not sustainable. People will be eating poorly and will be unable to heat their home and clothe themselves adequately on such sums. Any one of us in this Chamber could find our lives, or the lives of the people we love, transformed at any moment by serious illness or disability. Earlier this afternoon someone described this as a civilised society, but in my view to be a civilised society we need an adequate safety net. We need to remember that returning to employment immediately is just not an option for people who have been deemed not currently fit for work.
I agree entirely with the Labour Front Benchers that the language the Government have been using has vilified and stigmatised sick and disabled people. Talking about “perverse incentives” implies that they are malingering. That is not the case. I do not think that a perverse incentive involves being so ill that one cannot work. When this part of the Bill was discussed in Committee, the Government seemed to suggest that they planned to use the savings from the cuts to ESA to provide additional funding for tailored employment support for disabled people. God knows, that is badly needed, given the fairly woeful performance of parts of the Work programme, but the only figure I have seen mooted by the Government is an increase of £90 million in employment support, whereas the measures are expected to save in the region of £640 million. Based even on the most rudimentary arithmetic, that seems a fairly paltry portion of the savings. I am also not convinced that it is the best use of resources given the direct adverse impacts on low-income, disabled and sick people. I would welcome detail from the Government on that, because from where we are standing now it looks extremely thin.
New clause 9 and amendments 57 to 65 all seek to reverse the proposals to introduce further conditionality on parents and responsible carers of very young children. I am particularly concerned about the potential impact on one-parent families. There is quite a lot of evidence that many lone parents are already struggling to comply with the new conditionality regime. We have seen disproportionate numbers of lone parents sanctioned, for example, and in recent days we have seen a massive U-turn by the Government in acknowledging that the sanctions regime is not working. I met representatives of One Parent Families Scotland just over a week ago and was gobsmacked by some of the examples they highlighted of struggling parents being sanctioned in extenuating and extremely difficult circumstances.
Currently, lone parents of children under five do not actively have to seek work, but they do need to attend work-focused interviews or work-related activity. Under this group of amendments, parents will be expected to be available and ready actively to seek work from the time their youngest child starts school, but not before. These proposals, which were pushed in Committee by my hon. Friend the Member for Livingston (Hannah Bardell) and supported by the lone parent charity Gingerbread, take account of the very real logistical hurdles faced by those who are parenting single handed, and do not unnecessarily penalise those children who are already more likely to be poor as a consequence of their family circumstances. The Government’s proposals increase the risk of sanctions for parents of very young children, which can only be detrimental not just for them but for our society as a whole.
That leads me on rather neatly to new clause 12, which is in my name and which I also hope to push to a vote tonight. It would compel the Secretary of State to conduct a review of the sanctions regime. I have called for an independent review previously in the House. In the last Parliament, as we have already heard, the cross-party Work and Pensions Committee called for a full independent review. Earlier today, my hon. Friend the Member for Ochil and South Perthshire (Ms Ahmed-Sheikh) eloquently called for that review, because it is manifestly clear that the new sanctions regime is just not working, as it is failing lots of very vulnerable and disadvantaged people. It is failing not just lone parents, but sick and disabled people, particularly those with invisible or fluctuating conditions such as mental health problems. We can see the fall-out from that in the explosion in the number of food banks in our constituencies and in almost all the communities that we serve.
Last week, we had tacit acknowledgement from the Government that the system is not working when they made their U-turn, announcing their so-called “yellow card” warning scheme pilot. They also showed a new willingness to consider reviewing those classed as at risk to include homeless people and those with mental health problems. I welcome those steps; they are an important change of tone in the Government’s approach, but we need action now and not in the new year—that part of winter when these problems will already have become a lot worse. We must recognise that these steps also fall far short of the independent root-and-branch review that is really needed.
If we are to move towards a more workable system, we need a solid evidence base and to understand better how sanctions have differential impacts on claimants who are disabled, those with protected characteristics such as gender and ethnicity, those with long-term health problems, including mental health problems, and those who are bringing up bairns single handed.
Finally, new clause 10 aims to ensure that any changes to the age of eligible claimants for housing benefit must be made by primary legislation rather than by regulation through the back door. New clause 11 offers protections for young people who cannot, for whatever reason, live with their parents. The Government said that they plan to cut housing benefit for 16 to 21-year-olds, but we on the SNP Benches do not think that that should be done through regulation. It is another example of a policy for which there is a very poor evidential base and which needs proper scrutiny. Some 60% of the young people set to be affected by this measure live in social housing. In other words, they are already likely to be deemed vulnerable by their local authority. Their age should not matter, but their need for support most certainly should. Again, this seems entirely arbitrary, and, again, we have seen none of the promised detail of support for those who are particularly vulnerable. I am forced to conclude that the Government have not thought through the implications of their slash-and-burn approach to our social security system.
Our amendments in this group seek to protect low income households, sick and disabled people and children. They offer the Government a way to mitigate the worst impacts of the legislation and help us all better to understand how we can genuinely improve our social security system. I hope that the Government will take some of that on board this evening.
Helen Whately
Over the past few weeks, the Welfare Reform and Work Bill Committee, of which I am a member, has had to make some difficult decisions, but they were decisions that the electorate showed in May that they wanted us to make. The decisions that we have had to make can be seen both in this Bill and in the summer Budget.
I do not support the Opposition’s proposed new clause 2, but its wording shows that they do recognise that these reforms are part of a broader and coherent plan. They are part of a package of measures to create the kind of economy and society that people want. I am not talking about a society in which people spend years on benefits and low pay but one in which work pays, people keep more of what they earn and everyone has a chance to be better off.
Dawn Butler
In the context of people earning more, does the hon. Lady believe that we should take into the consideration the Living Wage Foundation’s report on how much the living wage should be?
Helen Whately
When the announcement on the national living wage was made, the Living Wage Foundation supported it, and I hope that Labour Members can do the same.
Jo Churchill
This is only a minor point, but the hon. Member for Pontypridd (Owen Smith) said earlier that the minimum wage is £6.50, yet it actually went up to £6.70 on 1 October. Knowing how much we are paying people is the first step. A living wage is what we are driving towards so that people have more in their pocket—[Interruption.] At the moment the national minimum wage is £6.70, and we are driving it up to £7.20.
Dawn Butler
On a point of order, Madam Deputy Speaker. I think that the hon. Member for Bury St Edmunds (Jo Churchill) might be inadvertently trying to mislead the House in that the living wage is actually £9.15 an hour, according to the Living Wage Foundation.
Madam Deputy Speaker (Natascha Engel)
I am afraid that I did not catch the intervention by the hon. Member for Bury St Edmunds (Jo Churchill), but I am sure that she was not trying to mislead the House.
Jo Churchill
Indeed I was not, and I apologise if I did. I was merely trying to make the point that the current minimum wage is £6.70 and not £6.50 as was stated earlier. We are moving towards a higher-wage economy. [Interruption.]
Madam Deputy Speaker
Order. The hon. Member for Faversham and Mid Kent (Helen Whately) is in the middle of her speech, and this is a debating point rather than a point of order, so can we please continue?
Helen Whately
Thank you very much, Madam Deputy Speaker.
Labour’s new clause calls for an impact assessment. There have already been several impact assessments, but the strongest one of all was that made by the thousands of people in May who voted for a Conservative Government on a manifesto that pledged to build a stronger economy with more jobs and lower taxes, to move from deficit into surplus, to protect public services such as the NHS, and to bring down the welfare bill. Labour Members oppose these reforms. They want to keep on taxing people and using that tax to subsidise below-the-breadline wages.
It is time to break that cycle, and these reforms will do that. They include the national living wage, from which 2.7 million people will receive a direct increase in income and at least 3 million more will get a knock-on benefit. Would Labour Members seek to delay that? If so, they would already be too late, because the benefits are already being felt. Wages are going up, and 200 companies have committed to increasing their lowest rates of pay in advance, including Sainsbury’s, Morrisons, Lidl, IKEA, Asda, and British Gas.
Mr Anderson
Does the hon. Lady have any idea what her Government plan to do about the people who have been left behind with pay increases—the 5 million or so public sector workers who have had their pay frozen or cut over the past seven or eight years? What do the Government intend to do to bring them up to the living wage, because they have not had a pay rise for more than seven years?
Helen Whately
Public sector workers are getting a 1% pay rise. Over the past few years, private sector pay has, in the main, been frozen while public sector pay has continued to go up.
I will move on to the Opposition amendments on the benefits cap. The Government intend to reduce the cap to £20,000, or £23,000 in London. We should be clear that that is the net figure, so it would amount to a salary of about £25,000 before tax. We have heard some rather mixed messages from Labour Members. Their leader has said that he wants to cap benefits overall but not for individuals. I am sure that it will become clear today exactly where they stand on the amendments tabled by SNP Members, who I understand do not want any reductions in the benefits cap. Benefits should be a safety net. We need a benefits system that is sustainable and therefore affordable and fair. It cannot allow people to do better on benefits than in work. That creates the wrong incentives. It is also deeply unpopular and therefore unsustainable in its own right. Surely Opposition Members have had conversations with people who are just above the threshold that would allow them to receive most benefits. They must understand their legitimate anger when they see their taxes funding a lifestyle they cannot afford.
Peter Dowd
Is the hon. Lady aware that 70% of the money that the Treasury will save as a result of cuts to tax credits will come from working mums?
Helen Whately
It was pointed out in Committee that people who receive benefits also pay tax. I do not think we should try to parcel people up in different tribes or groups. This is about getting the right thing for the country, trying to help everybody make the most of their opportunities and making work pay.
I have certainly had difficult conversations on the doorsteps in my constituency, because the majority of employees in Faversham and Mid Kent are paid less than £20,000 per annum. At its current level the benefits cap has been working. More than 16,000 capped households have moved into work, and households subject to the cap are 41% more likely to get into work. We know that work is the best way out of poverty and I believe that everyone in this House wants to see people move out of poverty. We should make the benefits cap work harder. That is what this is about.
Graham Stuart
It is shocking that Opposition Members find themselves unable to talk about the jobs miracle of the past five years. We have created more jobs in this country than the rest of Europe combined. That is the dignity that people want. What we did not need was people who were on 16 hours a week and disincentivised from taking on any extra work because they would lose out if they did so. That is the mess that Labour left behind and we are disentangling it so that we can create a fairer society for everybody.
Helen Whately
I thank my hon. Friend for making his point so forcefully.
I will move on to the proposed amendments to clause 13. The Bill Committee heard evidence of the damage that a long period or a life on welfare can do to people. Our witnesses talked about people who had been out of work for a long time having their confidence destroyed, and about how they begin to feel that they are not capable of changing their lives. We were also told that 61% of people in the work-related activity group want to work, yet only 1% come off that benefit each month. I am sure that many of us know of people who find it difficult to get into work for all sorts of reasons, such as mental health problems, and need extra help to do so. The current system is not working well enough. Not only does clause 13 remove financial disincentives, but, critically, and hand in hand with that, the Government have committed new funding to help that group of people into work, which is a response to what they really want.
Neil Coyle
What message does the hon. Lady think she is sending to the 8,000 people with progressive and incurable conditions in the employment and support allowance work-related activity group when she says they should be working rather than receiving support?
Helen Whately
I had a conversation recently with the company that does the work assessments. We talked about the importance of people with progressive conditions not being put in groups that would lead to them being made to work if it is not possible for them to do so. We should not assume, however, that just because someone has a progressive condition they do not necessarily want to work and be helped to do so.
Although many people knock jobcentres and are critical of them, the Committee also heard about the effective work they do across the country in supporting people, particularly those faced with barriers, to get into work. I have heard of some great examples in my own constituency in Kent.
In summary, many important and valid points have been raised in Committee and in this Chamber. The amendments, however, propose to pull apart a package of considered changes to welfare, including tax changes such as increases to the personal allowance and access to free childcare, as announced in the summer Budget. That package of measures is about making work pay and helping people into work.
Helen Whately
I am just summing up, so the hon. Lady will forgive me if I do not give way.
Opposition Members are not offering a credible alternative or, in fact, any alternative. Throughout the Committee stage and today’s debate we have heard many criticisms, but a complete absence of positive proposals to make the welfare system more effective at getting people off welfare and into work—this is an opportunity for Opposition Members to make such proposals—and to make the welfare system more sustainable and affordable.
Hand in hand with criticising the Bill, Opposition Members should say what they would do to make work pay and help people into work; what savings they would make to ensure the welfare bill is more sustainable; what cuts they might make to public services—for instance, whether they would cut the NHS or reduce its funding—and what taxes they would put up, other than raising the top rate, which they know does not raise extra revenue; or would they just keep on borrowing, which is increasing the debt for future generations?
Emily Thornberry (Islington South and Finsbury) (Lab)
Will the hon. Lady give way?
Helen Whately
I am just summing up, so I will not give way, if the hon. Lady will forgive me.
Coupled with that is the desire of Opposition Members to keep a welfare system that does not work and does not help enough people into work, when we now—with the economy growing, plenty of jobs and wages going up—have an opportunity to do something about it. We have a plan, and in the absence of a plan of their own, I encourage them to back ours.
Mr Anderson
This debate should be about people, not constitutional niceties or the economy. It is not about some faceless, inanimate objects, but real people at the sharp end. I have been asked by the Muscular Dystrophy Campaign, with which I work as the chair of the all-party group on muscular dystrophy, to raise the impact of these changes to support, which build on the cuts and challenges brought in by the coalition Government during the past five years. It has real concerns about the changes to ESA, JSA, housing benefit, tax credits and the new universal credit. It has asked me to raise the cases of real people, and that is what I will do.
I want to talk about Bill. After 25 years as a coalminer, he had to retire in his early 40s. He had long-term health problems and died at the age of 48. Joy, who as a young girl swam with Durham County, went into the world of work and then, in her early 20s, was struck down by a disease. She died at the age of 53, from heart failure. Joanne, a girl who was born with defects, spent a lifetime struggling to get on in her life. A lovely young woman, she died at the age of 42, cruelly, after suffering for a long time. Jacqueline died from a massive heart attack at the age of 40. Unfortunately, the hon. Member for Beverley and Holderness (Graham Stuart) has left the Chamber, but she was one of his constituents. Ian, a young boy who struggled through his early years, was just starting to develop, but died at the early age of 19 from a heart attack, beside a swimming pool while doing what he did best.
These five people had three things in common: they were all part of my family; they all suffered from myotonic muscular dystrophy; and, to a greater or lesser extent, they all looked for support from the welfare state. These people’s lives were happy if tough, but ultimately they were short-lived. Thank God that the people who went before them had the guts, nous and determination to build a welfare state that meant they could live a reasonably secure and stable life.
No doubt Conservative Members would say that my family were part of the dependency culture. Do you know what? They would be absolutely right. These members of my family were dependent on the state for help with the costs of medication and of care, and they were dependent on the state for day-to-day living costs, as well as for help with transport, mobility, housing and hospitalisation. If they were alive today, they would no doubt be in the direct sights of Conservative Members, so I will now use the language that has been used today.
This Government have demonised people who depend on the welfare state, and through a clear strategy of dog-whistle tactics, they have worked to convince many in this country that anyone on benefits is a scrounger. They have led people to believe that if anyone passes a house with closed curtains while on the way to work in the morning, they can safely assume that anyone inside is a bone-idle waster who needs to be ridiculed and demonised.
Graham Evans
This is a very important debate. In the last Parliament I had the privilege of sitting on the Work and Pensions Committee, and it is a pleasure to follow the hon. Member for Blaydon (Mr Anderson). I am sorry to hear about how his family have been affected by Duchenne muscular dystrophy. A member of my family suffered with that condition and died aged 21 after many years of suffering. It is a dreadful disease, but this Government’s reforms are not about inflicting anything on people with diseases such as Duchenne muscular dystrophy.
Reforming welfare is crucial to achieving a sustainable welfare system that is fair to the most vulnerable in society and also to the hard-working taxpayers who pay for it. Without sound public finances, there can be no economic security for working families, and the country cannot pay for the hospitals and schools that we rely on. Those who suffer most when Governments run unsustainable deficits are not the richest, but the very poorest.
Ian Blackford
We have heard much from Government Members about sustainable welfare spending, but how would they define it? Is not the heart of the problem the fact that through the things they are doing, the Government are pushing many children into poverty and redefining poverty? Is it not the case that when we change the definition, we change the truth?
Graham Evans
I think I am grateful for the hon. Gentleman’s intervention. This is about choices and what we spend our money on. There is no such thing as a magic money tree, and if Scottish nationalists are not happy with these measures, perhaps they will inform the Scottish people how much they will pay in tax—we never hear that from the SNP. If they do not agree with welfare reform, they should tell the House and the people of Scotland how much they will put up taxes.
The Bill continues on from the Welfare Reform Act 2012, restoring the ethos that it always pays to work to the heart of the British welfare system. The 2012 Act set in place a benefit cap.
Geraint Davies (Swansea West) (Lab/Co-op)
Does the hon. Gentleman accept that this debate is between growth or cuts to get down the deficit? We are taking a lot of money from the poorest people—those on tax credits and welfare—but those people spend all their money consuming things while richer people save some of it. The macroeconomic impact of the cuts—especially across the country outside London—will be deflationary, undermine growth and increase debt. Is that not economically illiterate?
Graham Evans
The hon. Gentleman has a fine record of representing his constituents. That argument is often made by Opposition Members, but I do not necessarily agree with it. The most important thing is for people to get into work and to get into higher paid work.
The Welfare Reform Act 2012 wanted to reduce the benefit cap to £26,000, or £500 a week. That is a net figure. If tax and national insurance are taken into consideration, the cap is actually £36,000. The Bill expands on the 2012 Act, lowering the cap, rightly, to £20,000 per household, or £23,000 in the London area. The changes restore fairness to the welfare system: they are fair for the hardworking taxpayers, who have to pay for the welfare, and ensure that work always pays. The savings from the benefit cap will be used in conjunction with other measures to fund 3 million apprenticeship places to secure the future of our young people.
This is about choices. This House takes very seriously the security and defence of our country—we are committed to spending 2% of GDP on it. I am absolutely delighted that Labour Members are also committed to that 2% target, but if they are committed to 2% of GDP for defence, and to spending on welfare and overseas aid, where will the savings be made? If they want savings to be achieved through an increase in taxes, they should please tell the British people how much more tax they will have to pay.
I sat on the Work and Pensions Committee investigation into benefit sanctions. We hear a lot of noise from Opposition Members about benefit sanctions, but the truth is that the condition has always been applied to the payment of unemployment benefits. The concept of conditionality enforced by financial sanctions dates back to the 1980s. It is nothing new, even under 13 years of a Labour Government. Conditionality remains a necessary part of the benefits system and is still one of the most effective tools for encouraging engagement with employment support programmes at the jobcentre. Some 70% of claimants say they are more likely to follow the rules if they know they risk having their benefits stopped. Sanctions are used only as a last resort and in a very small percentage of cases. Only 6% of JSA claimants and 1% of ESA claimants have faced sanctions in the past year, and the number of sanctions issued has fallen by a third.
Geraint Davies
In Swansea, the area that I represent, 65% of JSA claimants have been sanctioned at some point in the past two years, according to the citizens advice bureau. That is intolerable.
Graham Evans
Swansea is a fine city and the hon. Gentleman represents it very well. That may be the case in Swansea, but I can only speak about the Jobcentre Pluses that the Work and Pensions Committee investigated. We did not see any evidence of targets. In my constituency, I have two Jobcentre Pluses. They are outstanding and do a fantastic job. We have almost full employment in Weaver Vale and the surrounding area. The centres do a great job of trying to get the people who are unemployed into jobs. If hard-working taxpayers who pay for benefits and welfare did not turn up to work on time and do a good job, they would be sanctioned—they would be sacked. There has to be fairness. Finding a full-time job is a full-time job. There is the claimant commitment. All I am saying to the House is that in my experience I have not seen any target culture in the Jobcentre Pluses I have visited.
Emily Thornberry
Is the hon. Gentleman aware that the Islington Law Centre in my constituency has a 100% success rate in overturning sanction decisions?
Graham Evans
I am grateful to the hon. Lady for that intervention. She makes a powerful point. She represents north London and I represent a seat in the north-west. When the Committee investigated Jobcentre Plus, one of the things I used to argue for was best practice. There are some outstanding examples of Jobcentre Plus practice. Perhaps the north London jobcentres need to look at best practice elsewhere in the Department for Work and Pensions.
Emily Thornberry
The point is simply this: the hon. Gentleman may be right, so will he support our call for an independent review of sanctions across the country, so we can see where there is good practice and where there is bad practice?
Graham Evans
The hon. Lady raises a good point, which others have raised, too. I would encourage the Select Committee to do a further investigation into Jobcentre Plus. My personal experience is that it does an outstanding job. I carry out job fairs in my constituency and I am organising my fifth one since I became an MP, during which time I have seen unemployment halved in Weaver Vale. One thing I learned from working with the jobcentres in Runcorn and Northwich was the number of high-quality and well-paid jobs available.
Let me provide an example. Waitrose came to town—to Northwich. It is under no obligation to give interviews, but when it came to Northwich, it said it would interview 25% of local people on the books of the local jobcentre. In the end, it interviewed 70%, and I am pleased to say that more than 50% of those it took on for the new Waitrose in Northwich were local people. I spoke to many of the people employed there. There were lots of young ladies, and ladies not quite so young, who had been unemployed for many years. They now have themselves a fantastic career with a John Lewis partnership. I asked them why they were unemployed for so long, and they said that the training given by Jobcentre Plus and the local Cheshire West and Chester work zone was what made them job-ready, able to do well in interviews and capable of producing a good CV.
The last time I checked, Waitrose was delighted with the quality of the workforce—one that, as I say, had been unemployed for a very long time. Some of the jobs are part time, but some people want that, and they are good-quality jobs and very well paid. This is exactly the sort of Jobcentre Plus activity that I hope goes on in everyone’s constituency. I was going to say more about Jobcentre Plus, but I shall give that a miss as I have already made the points.
Everyone with the ability to work should be given the support and opportunity to work. The previous system wrote too many people off and left too many trapped in a cycle of welfare dependency. Over the last five years, the number of people in Weaver Vale claiming jobseeker’s allowance and universal credit while not in employment fell by more than 1,000—a 51% drop. I am not saying that my jobs fairs had anything to do with that, but they probably helped in some way.
This Government’s long-term economic plan is working for Weaver Vale, getting people off a life on benefits and back into work. I have not heard of an alternative to our long-term economic plan recently—or at all, in fact. Employment has been this Government’s real success, with 2 million more jobs—and 1,000 created each and every day during the last Parliament.
Graham Jones (Hyndburn) (Lab)
I question this “long-term economic plan”. Is it the one intended to cut the deficit entirely by 2015 or the one to cut it by 2020? Which one of those long-term economic plans is it?
Graham Evans
The hon. Gentleman raises a good point. The long-term economic plan I am talking about is taking this country from the depths of despair we experienced in 2010. If we carry on the way we are going, we will be the biggest economy in Europe. I have to confess that I have a vested interest as I have young children and I am interested in their future. Do we all want to leave a credit card debt of £1.4 trillion? As long as we carry on with the deficit, we are adding to that debt. It is all about choices and paying down the deficit, which we will do by 2019-20. It is about paying down the debts of my children and the hon. Gentleman’s children so that they will not be saddled with our credit card debt.
We understand that the route out of poverty is not through welfare; poverty can be left behind through work. International development is a recognition of that. When we as a country give 0.7% of our GDP to overseas development, we look for ways to help countries to stand on their own two feet. Helping communities and individuals all comes through work.
The OBR has predicted that a further million jobs will be created over the next five years, but this is the party of ambition, and we want to go further. This Bill is working to a target of full employment and puts an obligation on the Secretary of State to report on progress towards that target. I wholeheartedly agree with that.
This Bill is a major stepping-stone, moving Britain from a high welfare, high tax, low wage economy to a lower welfare, lower tax and higher wage economy. It continues the work of my right hon. Friend the Secretary of State for Work and Pensions in the last Parliament, making work central to Britain’s welfare system. These reforms are transforming the lives of some of the poorest and most vulnerable people in our communities and giving people the skills and opportunities to get on in life and stand on their own two feet.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. Before I call the hon. Member for Bermondsey and Old Southwark (Neil Coyle), let me remind the House that, while this is a very interesting and lively debate, 12 Back Benchers and the Minister are still to speak before the knife comes down at 6 pm. If interventions could be short and kept to a minimum, that would be great, because there are still quite a few Members whom we wish to call.
Neil Coyle
I want to speak about new clause 3, to which my name is attached. It was a privilege to be a member of the Bill Committee, which studied this issue in some detail. I thank the hon. Member for Beverley and Holderness (Graham Stuart)—who is no longer present—and the hon. Member for Bury St Edmunds (Jo Churchill) for speaking positively about the new clause. I hope that that is an indication of consensus that it is a necessary amendment to the coalition Government’s changes in relation to personal independence payments. I also pay tribute to my hon. Friend the Member for Sheffield Central (Paul Blomfield) and his local citizens advice bureau. They helped with the drafting of the new clause, and also provided genuine case studies of terminally ill people who are missing out on the swifter support that the new clause would deliver.
New clause 3 is designed to address a bureaucratic anomaly that has arisen since the Government began ending disability living allowance and introducing personal independence payments. New claimants of PIP who become terminally ill can access additional support swiftly, and under the DLA system, people could, on receipt of a terminal prognosis, access help swiftly. However, since PIP has begun to replace DLA under the coalition’s regulations, an issue has arisen that affects people who are already on DLA, become terminally ill, and are required to move on to PIP before they can access the additional help that the whole House seems to agree should be provided. The aim of the new clause is to enable people receiving DLA who are transferred to PIP owing to terminal illness to receive their first new payment immediately after being transferred. Currently, claimants must wait four weeks for their final DLA payment to be made, and then another four weeks to receive their first personal independence payment.
The Government have suggested that they are protecting disabled people from the worst cuts. The new clause is concerned solely with terminally ill and disabled people: people with an existing impairment or health condition, and a terminal prognosis. That is a very small group. To meet the Department’s definition of “terminally ill”, the claimant would need to provide independent medical evidence of a prognosis of six months or less to live. While it is great to have the support of the hon. Member for Beverley and Holderness for the new clause, it is slightly more disturbing that Members should suggest that only those with six months or less to live should benefit from our welfare system.
On 9 September, I asked the Department to specify the number of people on DLA who could benefit from the new clause. The response was that the information on the number of disabled people affected was “not collated” by the Department, and
“could only be provided at disproportionate cost.”
That was an incredibly disappointing response, given the nature of the people whom we are discussing.
In May this year, the DWP did publish a statistical report on registrations, clearances and awards of PIP, which indicates how many people might qualify under the new clause. As at 31 March 2015, the number of reassessments under
“special rules for the terminally ill”
was just 1,600 in two years. So that the Government can cost the new clause, let me explain that we are talking about roughly 800 people a year who are disadvantaged by current processes and who would benefit slightly from a more empathetic system: that is, disabled people who are on DLA and are moving to PIP owing to terminal illness.
Let me give the House a couple of genuine case studies. Carol is 59, lives in Sheffield, and was receiving the DLA care component at the lowest rate of £21.80 per week. On 27 May this year, following a diagnosis of terminal, metastatic breast cancer, she notified the DWP that she wanted her claim to be reconsidered under the special rules. The Department awarded her the highest rate of daily living and mobility components of PIP, worth more than £100 a week extra to reflect her new needs and her terminal prognosis. However, owing to the application of the transitional PIP rules, payment was from 8 July, four weeks after her next DLA payment. Had she been a new claimant for PIP and not already receiving DLA, the benefit would have been paid immediately. Carol lost about £240 as a result of a bureaucratic anomaly.
John was diagnosed with terminal lung cancer. He also has chronic obstructive pulmonary disease, and has had his right leg amputated below the knee. He lives in Sheffield and receives disability living allowance, with a high-rate mobility component and a low-rate care component. Under PIP, he is entitled to an enhanced rate of the care component and a high-rate mobility component. Although he discovered on 10 August that the additional help would be available, his next DLA payment was due on 2 September, and under the anomaly he did not qualify for the extra help until 30 September. We are talking about almost an eight-week delay for someone living in those circumstances.
Given the circumstances of those involved, some people affected by the change will simply not live long enough to receive the extra help to which they are entitled under existing rules. That additional waiting time was not required under DLA rules and has arisen purely as result of the introduction of PIP by the coalition Government. PIP is now being rolled out nationally and this issue will begin to affect more people in more constituencies. If Carol or John were new claimants, they would have got help quicker. When people are terminally ill, time is more pressing and more precious. John and Carol are genuine people who would, if the new clause is accepted, have a little more help for a little more time.
We discussed this issue in Committee at some length, and the Minister for Employment suggested that
“PIP recognises the unique challenges of claimants who are terminally ill.”––[Official Report, Welfare Reform and Work Public Bill Committee, 15 October 2015; c. 435.]
John and Carol, however, demonstrate how PIP has introduced an obstacle to swift support and left some people with less help. It is my understanding that that bureaucratic anomaly was an accident, as we discussed in Committee, rather than deliberate policy design, but the result is that it has delayed support for terminally ill and disabled people. The new clause would change that situation.
In Committee, the Minister also emphasised that PIP handles new cases under a fast-track system, with claims, on average, being cleared within six working days and with 99% of people going on to receive an award at a higher rate. That is welcome, but it serves to highlight the disadvantage for former DLA claimants moving to PIP, as opposed to the system for new claims, statistics for which the Minister cited. The fast-track system reflects the fact that these people have only six months to live and was meant to mirror the DLA system. The new clause would replicate the system in a way that addresses the anomaly arising from regulations and would provide equivalent support for those on DLA transitioning to PIP and new claimants.
In Committee, the Minister undertook to meet me and interested parties to address our concerns, and that meeting will be tomorrow. I am grateful for the Minister’s time but I thought there would be more of a window of opportunity for the Government to explore this issue in detail before Report and Third Reading. I understand that they may be willing to address this issue in the other place and, as I say, I am pleased to have heard positive comments from some Government Members, but a strong indication today that the Government do intend to address the issue would be very helpful. I hope they will accept the new clause or indicate how they will introduce their own mechanism to fix the anomaly caused by the PIP regulations, which leaves the most disadvantaged terminally ill people waiting while their time with family, friends and loved ones runs out.
Amanda Milling (Cannock Chase) (Con)
Having served on the Bill Committee, I am grateful for the opportunity to speak in this debate. I would like to focus my attention on amendments 35 to 48 relating to the benefit cap, and speak first to amendments 35, 36 and 37. In my view, it was absolutely right in the last Parliament to introduce the benefits cap, and it is right that we review its level now, as set out in clause 7. For those reasons, I do not support the amendments, which seek to keep the cap at the current level.
Many of the things I will touch on this afternoon have been covered by my colleagues, but I wish to make a few points. The benefits cap was introduced in the last Parliament to make work pay or, to put it another way, to incentivise people into work, ensuring that those people who can work are always better off doing so, rather than living a life on benefits. This was about creating fairness in the system.
Amanda Milling
I am going to make some progress.
It is morally right that people who can work are better off in work; why should someone who is able to go to work get more money on benefits than in work? There has been strong support for that argument, both nationally and in my constituency. As I have mentioned in this Chamber before, Cannock Chase is a former mining area, where there is an incredibly strong work ethic. That might go some way to explaining why people would spontaneously say to me on the doorstep that they really supported the cap. That is notwithstanding the general public’s support. A YouGov survey conducted in the previous Parliament demonstrated the strength of public feeling, with around three quarters of respondents supporting the cap.
Amanda Milling
If the hon. Lady does not mind, I am going to make progress.
Not only do people support the cap, but there is evidence that it is working. It is reforms such as these that have helped encourage people back into work. In my constituency of Cannock Chase, unemployment has fallen dramatically. Since May 2010, the number of people claiming jobseeker’s allowance has fallen by a staggering 70%. It is measures such as the benefits cap that have contributed to that fall. That is also evidenced by the figures mentioned by my hon. Friend the Member for Faversham and Mid Kent (Helen Whately). Since the cap was introduced, 16,000 capped households have moved into work. Further analysis shows that households subject to the cap are 41% more likely to go into work, compared with similar uncapped households. There is also evidence to show that those who are subject to the cap are doing more to find work, whether by submitting more applications or attending more interviews.
However, one of my key concerns—this can be seen nationally and in my constituency—is whether the benefits cap goes far enough. Having talked with members of the public, I had a strong sense that the cap was set too high. After all, a family going out to work would have to earn £35,000 in order to net the equivalent £26,000, as my hon. Friend the Member for Weaver Vale (Graham Evans) mentioned.
Amanda Milling
I am going to make progress, because I am conscious of time and the number of Members who wish to speak.
I therefore welcome the proposed reduction in the cap to £20,000 outside London and £23,000 in London, as set out in our manifesto and as included in the Bill. That is something the public support, as the general election result demonstrated. The Government received a clear mandate from the public on 7 May to introduce the benefits cap and the proposed reductions.
In my view, the benefits cap is a key measure at three levels. First, it ensures that our welfare system is fair, by making work pay and ensuring that those who can work are always better off in work than on benefits. Secondly, it ensures that our welfare system is targeted, by making sure that there is safety net for those people who most need support—the most vulnerable. Thirdly, it creates a welfare system that is sustainable, helping to get our economy and public finances on to a firmer footing and helping to reduce the deficit.
To date, the benefits cap has worked to meet those three objectives, helping to create a fair, targeted and sustainable welfare system. I believe that the measures set out in the Bill will help to deliver those further. The amendments that have been tabled would undermine that progress, so I will not be supporting them this evening.
Helen Goodman
I am pleased to follow the hon. Member for Cannock Chase (Amanda Milling) and will begin where she left off: on the benefit cap. It is quite clear that, as she has described, the public take the view that there needs to be a certain reciprocity and that there is a certain fairness in limiting the amount that individual households can receive. The question is whether the amounts are set at the right level and whether the right benefits are included.
The impact assessment that the DWP initially produced when it introduced the benefit cap stated that the object of the policy was to get more people into work. That raises a question about how sensible it is to include carer’s allowance, since carers are already busy caring, and maternity benefits, since people claiming those will obviously have little babies to look after. The Government should think more carefully about those proposals.
Michelle Donelan (Chippenham) (Con)
The hon. Lady mentioned six applications a week. Just to clarify: is that less than one application a day?
Helen Goodman
It depends what kind of job is being applied for and how long it takes. I do not know how many applications the hon. Lady made when she was unemployed. Obviously, if they are simple job applications, one can make more. My point was: the young man had made 27 and he was sanctioned. Does she think that a sign of somebody malingering or a sign that people in the jobcentre were playing games? I put it to her that it was not a straightforward way to treat this young man. It was not encouraging or supportive; it was demeaning and demoralising, and it should stop. Ministers should ensure that the sanctions rules are properly applied.
The big study on sanctions carried out by Glasgow University found that one person in four on JSA had been sanctioned. I am sorry, but I think there is the intention on the part of Ministers to massage down the JSA numbers. Of course, the number of people unemployed has fallen and employment has risen—everybody is pleased about that, and nobody wishes to deny it—but I think there is an attempt, through sanctions, to massage the JSA numbers and pretend that there is not an unemployment problem. When I went to the Bishop Auckland jobcentre, I was told that half the people claiming JSA there had been unemployed not for more than 12 months but for more than three years. This is a serious problem, but the Government are not addressing it in a serious way.
Paul Scully
The hon. Lady might make a stronger case if she were looking at the unemployment figures alone. The fact is, however, that we now have record levels of employment in this country. They are at their highest since the statistics first started to be recorded. Does she not agree that that shows a move from unemployment to employment?
Helen Goodman
The statistics are quite dubious, in a number of ways. Let us consider, for example, the number of people who have gone into self-employment because they have not been able to find proper jobs, and the extent of under-employment.
Paul Scully
As someone who has been self-employed for the best part of 20 years, I find that quite offensive. Is the hon. Lady seriously telling her constituents that self-employment is not a proper job?
Helen Goodman
Is the hon. Gentleman aware that self-employment has increased by 42%? How many of those newly self-employed people does he think are in sustainable small businesses? People come to my constituency surgeries who have become self-employed and are working as window cleaners. That is fine—of course everyone needs to get their windows cleaned—but there is a limit to how many window cleaners we need in society. If people are coming out of highly skilled jobs and going into very low-skilled ones—[Interruption.] Conservative Members can protest as much as they like, but when the Treasury Committee took evidence from representatives of the Bank of England, they told us that a lot of the increase in self-employment was not real employment and that it was a sign that people could not get the kind of employed jobs that they wanted. Professor Kristin Forbes said precisely that to the Committee. Conservative Members do not need to pretend that this is some kind of prejudice on my part. It certainly is not.
Neil Coyle
Much has been said about the current employment levels. Indeed, we heard earlier that there had been a miracle, no less. Is my hon. Friend aware that the percentage of working age disabled people in work has fallen over the past five years, in direct correlation to the reduction in the number of disability employment advisers and in the number of disabled people being supported by the Access to Work scheme?
Helen Goodman
I was not aware of that fact, and I am grateful to my hon. Friend for pointing it out.
On the employment numbers, I also want to point out that there are a lot of people on short-hours contracts. I am not talking about zero-hours contracts, which have now reached 750,000, as Conservative Members must know; I am talking about eight-hour and 12-hour contracts. They provide insecure employment and insufficient money for people to live on, and they make it very difficult to get other jobs. They are, however, recorded as employment. There is all the difference in the world between working 35 hours a week and working eight hours a week, and Conservative Members need to think about that before they start talking about miraculous employment figures.
Emily Thornberry
A snapshot of today’s jobs market would also reveal that 3 million people in this country identify as being underemployed. They are not working enough hours to be able to support their family.
Helen Goodman
My hon. Friend has expressed that beautifully.
I shall move on to the question of employment and support allowance. Again, hon. Members need to think about the overhang from the heavy industries and the impact that reductions in people’s income has on those individuals and on whole communities. I suppose this seems quite unusual to those representing a constituency whose casework consists of a lot of neighbour disputes and planning issues, and where only one person a week turns up with a benefits problem, but in a constituency like mine—a former mining constituency in an industrial area—the bulk of the casework is this sort of thing. The cuts Conservative Members are proposing to vote for tonight will have a devastating impact on the amount of money in the local economy, as well as being very unfair to people who are not going to be able to go back to work.
Finally, I want to make one observation on universal credit and lone parents. It is not reasonable to have the same conditionality for a lone parent with children under school age as for people in couples. The practicalities of looking after children are different for lone parents and for married couples. Ministers in the Parliament before last changed the rules so that the conditionality for lone parents was aligned to the tax credit system, and the period was 16 hours instead of 30 hours for people in couples. Ministers must help people balance their parenting responsibilities and their working responsibilities better.
Jo Churchill
I was fortunate enough to sit on the Public Bill Committee, and I also sit on the Women and Equalities Committee. That has shown me two things. I recently spoke to women in Oldham running a voluntary group, and the leader said to me she did not feel what we were doing was wrong, because she felt these measures helped marginalised minority women break out of the cycle of being kept in their homes, improved their English and helped them understand how their families interact with the wider world, asking women to find work and not rely on—
Madam Deputy Speaker (Natascha Engel)
Order. The hon. Lady is making a speech, not an intervention, so I ask her to resume her seat.
Helen Goodman
People can take different views on this matter, and I have just been describing the view I take with respect to lone parents.
I want to make one final point. Conservative Members have repeatedly said that the Opposition have no proposals for savings and they are the only ones who are concerned about the deficit. The Opposition voted against the inheritance tax cuts, which will benefit the richest 60,000 households, and we went into the last general election with a proposal to cut the winter fuel allowance for wealthy pensioners. Personally, I think that would be a better thing to do than hit disabled people once again.
Jeremy Lefroy (Stafford) (Con)
I am going to speak extremely briefly to amendment 29 in my name and that of my hon. Friend the Member for Stevenage (Stephen McPartland), which asks the Government to look again at withdrawing the full amount of the WRAG component, which affects approximately 492,000 people. Let me briefly explain the reasons.
First, as the hon. Member for Banff and Buchan (Dr Whiteford) mentioned earlier, many in the WRAG are in that group for a long period—two years or more, compared with six months on average for jobseeker’s allowance, for instance. As she said, it is extremely difficult to exist on these levels of income for long periods, whereas it might be possible for a few weeks or even a few months for those with other kinds of support. It is therefore important that we look at the length of time.
Secondly, the costs for people in this group are often higher. It has been said to me that the personal independence payment will compensate. It will not compensate for all those costs; for instance, heating is not part of PIP, nor are the special diets people may have, although caring and mobility are part of PIP, of course.
Thirdly, there is the question of the incentive. Because the support group has a component of £36.20 a week at present as opposed to the WRAG of £29.05 a week, which it is proposed to take away, there will be the incentive and a tendency for people to be put into the support group rather than the WRAG. Surely the whole point is to bring people into the WRAG so that they can be given support to come back into work. For instance, 30% of people with Parkinson’s are wrongly placed in the WRAG. This means that instead of receiving the £29.05 component a week, they will receive nothing in future. I have seen instances of people placed in the wrong group in my constituency.
We are talking about a benefit where sanctions are wrongly applied in a number of cases, as has been mentioned in the debate. I need to be very brief and I apologise for not making my points in more detail, but I want others to come in. I ask the Minister to come back on this—
Mr David Burrowes (Enfield, Southgate) (Con)
This may be an opportunity to mention amendment 31. I recognise my hon. Friend’s concerns. What we need is specialised tailored employment support. I understand that in Committee the Minister agreed to come back in the autumn with details of what support the Government will give when the package rises from £30 million to £100 million. The sooner we get those details, the better.
Jeremy Lefroy
I entirely agree that we need specialised tailored employment support, but people also need cash to pay their heating bills. That is extremely important and needs to be borne in mind.
Finally, I was not quite clear from my hon. Friend the Minister’s remarks earlier whether the freezing of benefits applies to those in the WRAG who will be on the present JSA rate of £73.10.
Natalie McGarry (Glasgow East) (SNP)
I am grateful for the opportunity to speak in this crucial debate. I congratulate and welcome to her place the shadow Minister for disabled people. She made a fantastic contribution.
I support amendment 56, which was introduced by my hon. Friend the Member for Banff and Buchan (Dr Whiteford). The proposed changes to the employment and support allowance and the potentially devastating cuts to the work-related activity group are of particular interest to me as the disability spokesperson for the SNP.
This Government say that the Bill will support our economy and improve support for those who need it, but it is clear that it is a deeply damaging and divisive piece of legislation which will harm workers, families and communities and will exceed even the worst excesses of the Thatcher Government. The Tories’ approach to social security has been deeply destructive, and has damaged the vital social fabric that binds our society together. Liz Sayle of Disability Rights UK says that the language used in this context conveys a sense of suspicion of disabled people, as though they were trying it on to get free transport and handouts. That suspicion is completely misplaced, but is reinforced by the policy and rhetoric of this Government.
This Government’s cuts are systematically undermining the life chances of working people, especially children and young people across the UK. It is an ideological attack on the most disadvantaged—a war not on poverty, but on the poor. But despite my fervent opposition to the Bill, and my vocal opposition to this Government’s policies, I want to take the opportunity to reach out to Members right across the House. I understand the desire to support people into work, and to create a system where social security supports those in need and encourages those who can work to do so. That ambition, I believe, is shared by all of us across the House. However, I cannot see how Members on the Government Benches can say with any integrity that this Bill furthers our common aim.
We already know that many people who are currently unfit for work are dubiously placed in the ESA work-related activity group, and that DWP policies already force WRAG claimants to meet arduous bureaucratic requirements simply to receive the financial support they rely on. We already know that the UK Government’s austerity programme is impacting disproportionately on those living with disabilities and sicknesses and that it impairs their ability to work. We also know that there is absolutely no evidence that these policies of cuts will have a positive impact on moving those in the WRAG group into work. There is no evidence from the Government, despite repeated requests for it to be produced. It is therefore absolutely shameful that, without any evidence, the Conservatives should have disabled people in their sights yet again, promising to cut nearly a third of ESA support for new claimants in the work-related activity group.
It is also deeply distressing for many claimants that the Government intend to freeze ESA WRAG support for the next four years, failing to protect this important social security payment against the rising cost of living. When it comes to people with long-term sicknesses and disabilities, however severe, and the support they need, the Government simply do not get it, and for too many it seems that the Government simply do not care. We talk about language, and we have a Secretary of State who has shockingly made a distinction between disabled people and “normal” people. We have a Government that have continually introduced policies that isolate disabled people and distance them from their communities and support, risking institutionalising people in their own homes.
It is quite unfathomable why the Conservatives think that those with illnesses and disabilities should not have their special requirements and challenges recognised in the level of support and care that they receive. By reducing ESA for WRAG claimants to the level of the general jobseeker’s allowance, the UK Government are undermining the entire purpose and principle of ESA, which was always intended to support those with particular challenges in entering employment more gradually than those on jobseeker’s allowance.
By targeting disabled people for the latest cuts, Government Members do nothing more than demonstrate an utter unwillingness to listen to the needs of disabled people and disability organisations. As a disability spokesperson for the SNP, I spent the past few months speaking with and listening to people across the UK. I heard from organisation after organisation, I heard statistic after statistic, and it is clear the harm this Bill will cause. I cannot see him in the Chamber this afternoon, but who has my counterpart on the Government Benches, the Under-Secretary of State for Disabled People, been talking to? An echo chamber?
According to a new survey conducted and released today by the Disability Benefits Consortium, almost one third of people on ESA who were surveyed say that they cannot afford to eat on the levels of ESA that they receive now. Do the Tories intend to starve those people into work? To me, that is not just morally repugnant but economically incoherent and illiterate. Inclusion Scotland has said that the proposals are
“a direct attack on the living standards of disabled people, their families, carers and children and will result in hundreds of thousands more being plunged into poverty and destitution”.
To talk about levels of destitution in 2015 is an outrage and we cannot simply stand by and let these people’s lives be sacrificed on the altar of fiscal responsibility. Surely no civilised society would penalise the disabled and disadvantaged in the pursuit of an ideological austerity obsession.
I know that my constituents will find it difficult to fathom how the Government can introduce such harmful proposals and I sincerely hope that Government Members at least have significant concerns about them, too.
Graham Evans
I am most grateful to the hon. Lady for giving way. I welcome her to this place; she makes a powerful point and a huge contribution. Disability and carer benefits for working age people in 2014-15 were £11.4 billion and in this new financial year of 2015-16 they are £11.5 billion. The hon. Lady is talking about cuts, but the spending has gone up, not down.
Natalie McGarry
I thank the hon. Gentleman for that point. These are real-term cuts and many people have disappeared from the system because of its complexity and because of their fear of it.
With every Bill in this Session, we have a chance to act in concert, to set out the direction of our country and to make it clear what and who is important. I look to all Members, on both sides of the Chamber, to look to themselves and to their consciences and not just to their Whips. I implore Members from all parts of the House to put themselves in the position of the half million people who will be affected by these cuts—I am talking about those with mental ill health, learning disabilities, autism, Asperger’s and all the families involved—and vote in solidarity with them. They are real people, so Members should vote for amendment 56.
Victoria Atkins (Louth and Horncastle) (Con)
I wish to speak to new clause 7, amendments 35 to 48 and new clause 6.
I had the very great privilege of sitting on the Committee for this Bill and I have heard arguments from all parts of the House. There is one point in relation to new clause 7 that we looked at in Committee and that I wish to develop further today, and that is the principle of making work pay. The benefit cap has been criticised by some Opposition Members, but the reality is that, in my constituency, it is a very popular policy. The median salary in my constituency is £480 per week, which is less than the cap currently in place for benefits of £26,000. The point has already been made, and indeed we looked at it in the Bill Committee, that that £26,000 figure is equivalent to a gross figure of £35,000.
Victoria Atkins
In a moment if I may. Let me just finish this point. This effort to make work pay is to be welcomed and not criticised.
Emily Thornberry
I pointed this out to the hon. Lady in Committee, but I am grateful to have the opportunity to point it out to her again. If someone had a median income in central London, they would be on benefits, because it is accepted that people cannot live on £26,000 in central London and pay their rent.
Victoria Atkins
As I responded in Committee, I understand that the hon. Lady represents a London constituency, but I do not. I can only speak for what I think is right for my constituency and the area outside London.
We are talking here about a package of measures. I know that Opposition Members do not like to draw together all of its different threads, but this is a package. The ripple effect of the national living wage includes commitments—
Victoria Atkins
No, I will not give way, because I wish to develop this point. The ripple effect of the national living wage includes commitments by at least two employers in Louth and Horncastle—I am talking here about Morrisons and Sainsbury’s, but there may be many more that have not yet declared their intentions—to raise their lowest wages to more than the first stage of the national living wage, which will take effect in April.
Victoria Atkins
I will not give way, thank you.
The point is that the policy is part of a package, and the principle behind it is to make work pay. The criticisms that we are hearing from Opposition Members highlight how different our approaches are. We want to create a culture of employment. We believe in work and in all of the benefits that work brings to people.
Our responsibility as a Government is to make work pay, but we cannot do that if the system means that some people are better off out of work than in work. That does not make economic sense. We know that, since the cap was introduced, at least 16,000 capped households have moved into work. That is a good thing for those households. We know that those people who are now working are spending their money in the local economy. A strong local economy pays for the things that we care about—hospitals, teachers, the armed services and so on.
As we saw on the Bill Committee, what counts is not just the pay packet, but what it brings to people’s lives in terms of life chances, the positive benefits that it has for children in a working household and the examples it sets for those children. Those are all factors that are part of this package that some Members seem keen to avoid.
We know that households subject to the current cap are 41% more likely to get into work than uncapped households. I join my hon. Friend the Member for Weaver Vale (Graham Evans) in congratulating the Government on making the commitment that the money saved through this measure will be used to help fund more apprenticeships. It is about getting people into work and into training. We should celebrate, not criticise, the fact that unemployment and the number of out-of-work claimants is at its lowest level since 2010. The fact that we have these very low claimant rates, these measures and this determination to make work pay is something to be supported and not chipped away at.
Mr Speaker
Order. Before the hon. Lady continues with her speech, I want to notify the House that I would like to secure a contribution from the hon. Member for Bootle (Peter Dowd), which will be brief, as I must leave time for the Minister. I therefore feel confident in expressing the hope that the hon. Lady is approaching her impressive peroration.
Victoria Atkins
I am grateful, Mr Speaker. This is a very quick point.
The concept of job quality is beguiling, but how on earth do we define it? I am conscious that I may be about to upset the hon. Member for Bishop Auckland (Helen Goodman). I am going to describe a real-life job. Someone in their early 20s worked six days a week, or seven on occasion, without a break and far beyond nine-to-five, earning so little that she did not pay income tax in her first year, with no pension, no sickness pay and no holiday pay. Some Members might think that the quality of that job was very poor, but the opinion of the person who had it was that it was a great stepping stone into a very fulfilling career. I can say that because it was my first job. The hon. Member for Bishop Auckland laughs. I do not for a moment recommend it as a first job; we must all find our own courses in life. Nevertheless, how on earth do we define the quality of a job? I fear that this new clause would be a lawyers’ paradise—and I know whereof I speak.
Peter Dowd
It is often my lot to be well down the batting order, although I prefer bowling.
Until last night, when they were fortunately brought down to earth by the other House, the Government were pushing on with their tax credit proposals. They are still pushing on with them, despite the fact that the Chancellor is, he tells us, in listening mode, and the fact that there is no palpable or sustainable action to move to a higher-wage economy. They are tinkering at the edges. This proposal affects working mums; as I said earlier, 70% of the burden is falling on them. It affects low-income families. It damages work incentives, despite what the hon. Member for Louth and Horncastle (Victoria Atkins) said. It affects the working poor. It will have a dire effect on those with chronic illnesses, particularly with mental health problems.
The question we have to ask is whether this proposal will make work pay and help people back into work. Many say no. Some have suggested alternatives for where the extra funding can be found. I am not saying whether I agree or disagree with them, but it gives the lie to the claim that there are no alternatives. Despite issues of phased implementation, inheritance tax, relocation of planned spending on the personal allowance, marriage allowance changes, help with childcare costs, working tax credit and universal credit, there is still no guarantee of higher wages.
The provisions on ESA and the WRAG were introduced specifically to assist with support for disabled people who were assessed as not being fit for work according to the Government’s own assessment regime. Some people, such as those with chronic mental health problems, find it difficult to work. The Work programme has supported only 9% of participants on ESA with mental and behavioural disorders into sustained employment. We have parity of esteem, but not for those on welfare. Support for those people has to be tailored to their needs. There can be a slow journey back to health. People need advisers with particular skills and they are not getting them, so how do they possibly get back into work?
As for the sanctions regime, a Church group in Scotland identified that 100,000 young people were affected by sanctions, that they were being debilitated by them and that the sanctions undermined their humanity. Yes, sanctions have existed since 1913, but they have to be humane and those under discussion are not.
The Minister for Employment (Priti Patel)
We have had a long and interesting debate on a range of amendments. I thank every colleague who has contributed to it, particularly my hon. Friends the Members for Faversham and Mid Kent (Helen Whately), for Beverley and Holderness (Graham Stuart), for Weaver Vale (Graham Evans), for Stafford (Jeremy Lefroy), for Bury St Edmunds (Jo Churchill), for Chippenham (Michelle Donelan) and for Louth and Horncastle (Victoria Atkins).
Given that time is short, I will speak very briefly to some of the amendments. On amendments 35 to 48, we introduced the benefits cap in order to increase work incentives, to promote fairness between those in work and those on benefits, and to not only help to address the deficit but to support people back to work. The benefits cap has been a key part of our reforms to the structure of the welfare system and to attitudes towards getting back into work.
It is clear from the evidence that the cap is working. Since the cap was introduced in 2013, more than 6,000 previously capped households have moved into work and more than 41% of capped households are likely to go into work. That trend did not exist before the cap, and those with higher weekly benefit payments used to be less likely to move into work. We have had some great results and we intend to build on them and to align the cap with the circumstances of many hard-working people throughout the country. We firmly believe that the new, tiered benefit cap will continue to build on those successes and that it will do more to improve work incentives throughout the country while promoting greater fairness when it comes to work and employment.
There was an extensive debate on amendments 56, 20, 57 and 31 on universal credit and the employment support allowance. The removal of the work-related activity and limited capability for work component will apply only to new claims. There will be no cash losers among claimants already receiving the rate, and clauses 13 and 14 do not affect the support group component.
In 2008, when the then Labour Government introduced ESA as a “radical reform package”, the work-related activity component was originally intended to act as an incentive to help people into work and to return quickly to work. However, the original estimates were incorrect and only 1% of people in the work-related activity group left the benefit each month. It is clear, therefore, that the existing policy is not working and that it is failing claimants.
As discussed in Committee and this afternoon, we believe that it is the duty of Government to support those who want to work to do so, particularly those with disabilities and health conditions who want to work, including the majority of ESA claimants. We know that 61% of those in the WRAG want to work. We will do everything we can to support them in that ambition, and it is right that we do so.
Universal credit supports people with small or fluctuating amounts of work. That is why it is particularly helpful that we look at the ESA component and universal credit together. It is that alignment that will help to bring people closer to work while tailoring the support they need to move into work. As part of the package of savings in the summer Budget, the Government were able to allocate new spending to ESA that would not otherwise have been available. That support is now funding up to £100 million per year to help claimants with limited work capability but who have potential, because they want to move into work, to get closer to the labour market. We will provide all the support necessary to make sure that they can get back into work.
Comments have been made about work coaches and jobcentres. May I reassure the House that all work coaches are trained to help claimants and that that is not based on the benefit they are on, but, importantly, on the actual support they require? That is particularly true for universal credit. The training for staff working with ESA claimants focuses on raising awareness of their individual circumstances and recognises that disability and health conditions affect individuals in different ways. Such factors change over time but, importantly, we will support claimants in their journey to get back into work.
We have had a debate about sanctions. Of course sanctions exist for a reason. Importantly, however, they also exist to support people into work. I recognise that many Members from both sides of the House have specific cases to which they have referred. I again extend my offer to look into such cases. The Government keep the operation of sanctions under constant review. We have clearly made a number of improvements to sanctions, including in relation to the Oakley review. Last week, we gave a very clear response to the Work and Pensions Committee report. Our response outlined the work that the Department has already undertaken to review the sanctions system and the changes we intend to make. The response was welcomed by the right hon. Member for Birkenhead (Frank Field), the Chair of the Select Committee.
Our response to the Committee includes the announcement that we will trial a sanctions warning system, which will give claimants a further opportunity to work with jobcentre work coaches to provide evidence before a sanction is applied. We will consider extending the definition of at-risk groups for hardship purposes, including those with health conditions—particularly those with mental health conditions—and those who are homeless, which means that they can seek access to hardship payments from day one of the sanction.
We want the sanctions system to be clear, fair and effective in promoting positive behaviours. Importantly, however, it should also support individual claimants, which is why we will continue to keep the system under review. I will make it very clear: there are no targets for sanctions, a point made on the Floor of the House this afternoon. I say to the hon. Member for Bishop Auckland (Helen Goodman) that she was wrong in her remarks not just about sanctions but about employment levels in this country and clearly about the economy.
On new clause 3, I thank my hon. Friend the Member for Beverley and Holderness, the hon. Member for Bermondsey and Old Southwark (Neil Coyle)—he was consistent in making points in Committee—and my hon. Friends the Members for Bury St Edmunds, for Gloucester (Richard Graham) and for Weaver Vale for their contributions. The PIP assessment is designed to treat all health conditions and impairments fairly. I assure all hon. Members that we consider the needs of those who are terminally ill in developing the assessment, and that we absolutely remain committed to providing support to disabled people and those with illnesses in all their circumstances. We know that such claimants, especially those who are terminally ill, have particular challenges.
I listened to all the contributions in Committee. As the hon. Member for Bermondsey and Old Southwark knows, I am meeting him tomorrow, with the hon. Member for Sheffield Central (Paul Blomfield), to discuss this matter further. I look forward to working with him on the points he has made, as well as on those expressed by my colleagues. The hon. Member for Bermondsey and Old Southwark was right to refer to the fact that rules have been introduced to ensure that the PIP system handles terminally ill claimants efficiently and sensitively, reducing the need for face-to-face assessments—we discussed that at length in Committee—and the degree of intrusion on claimants and their families, while, importantly, focusing on delivering vital support to claimants as quickly as possible.
It is very clear, as we discussed in Committee, that the Government are focused on rolling out PIP in a very safe and steady manner, ensuring that the claimant experience is protected and that the PIP system is as straightforward as possible for the user, particularly those who are terminally ill. PIP has been and will continue to be subject to independent reviews—we have committed to that in legislation—which, as ever, will help us to make continued improvements to what is a dynamic benefit. We are fully committed to ensuring that there is a positive evidence base for all changes that we make and that users understand their impact so that we can deliver the best possible service for claimants.
We will continue to work with all hon. Members, as I have said in Committee and this afternoon, as PIP is rolled out. I will continue to work with colleagues and to take on board their points. I thank them for their valuable contributions. The hon. Member for Bermondsey and Old Southwark has expressed some concerns, but I will take away his points for our meeting. I look forward to taking forward such considerations.
In summary, the Bill brings forward important changes that are designed to create the right incentives within the welfare system, and I urge hon. Members to withdraw their amendments.
Priti Patel
I beg to move, That the Bill be now read the Third time.
The Bill, alongside other measures, including the national living wage and the increase in the personal allowance for income tax, will ensure that the welfare system is fair to taxpayers while supporting the most vulnerable. It will help ensure that work always pays more than life on benefits. It will continue to build an economy based on higher pay, lower taxes and lower welfare.
Ian Lavery
As a result of these measures, people receiving family tax credits will lose up to £1,300 per annum and 200,000 more children will be pushed into poverty. Can the Minister explain how that is fair?
Priti Patel
I thank the hon. Gentleman for giving me the opportunity to respond once again on that issue and to make the case that, first, it pays to be in work, and secondly, through our package of measures, including the national living wage, the increase in the personal allowance and the extra support for tax-free childcare, families will be supported through the changes we are making. That contrasts with the system we inherited from Labour in 2010, which was not fair to the hard-working taxpayers who paid for it, and certainly did not support people trapped in a system of welfare, with no hope for a brighter future. That is why we are continuing to reform welfare so that work pays in the United Kingdom.
After 13 years in government, Labour left a welfare system that failed to reward work. Between 1997 and 2010, spending on tax credits increased by 335%, compared with an increase in average earnings of just 30% over the same period. Despite all the spending, 1.4 million people spent most of the last decade under Labour trapped in out-of-work benefits. [Interruption.] That is not a ridiculous point to make. Over the same period, the number of households in which no member had ever worked nearly doubled and in-work poverty rose, yet Labour has opposed every decision we have taken to fix the welfare system and support people off welfare and into work.
Our welfare reforms are focused on transforming lives by helping people to find and keep work. We are focused on boosting employment and ensuring fairness and affordability, while supporting the most vulnerable, and on making sure that people on benefits face the same choices as those not on benefits and in work. Over the past five years, 2 million more people have entered employment, while 2.3 million people are now in apprenticeships and the number of workless households is at a record low—down by more than 680,000 since 2010. This was achieved in the last Parliament, when welfare spending increased at the lowest rate since the creation of the modern welfare system.
Mr Burrowes
The Bill delivers on our ambitious manifesto commitment to halve the disability employment gap, but we need to be held to account for the progress we make, so will the Minister outline how, through the reporting mechanisms in the Bill, we can show we are delivering on that commitment and build on the good progress we have already made in helping over 200,000 more disabled people into work?
Priti Patel
My hon. Friend is right about the Government’s clear desire to support more disabled people into employment, and as we discussed in Committee, we will strive continuously to fulfil that commitment. I can assure him that in everything we do, including through the £100 million of investment to help people with disabilities and health conditions—something that Labour did not do in government—we will share information with the public and report back to the country on our progress. The Government stand by the principle of encouraging and rewarding work, and the Bill builds on that success.
Naturally, we want more people to have the dignity of a job, the pride that comes with earning a pay packet and, importantly, all the wider advantages that come with employment. All those who want to enter employment and contribute to the growth of our economy should be supported to do so, which is why we are committed to full employment. The Bill will support that commitment with a statutory duty to report on our progress towards full employment and our ambition to deliver 3 million new apprenticeships. In addition, it will put in place a statutory duty to report on our progress in supporting troubled families with multiple, highly complex problems, including in helping them to move closer to work. It will encourage parents into work and support those trapped on benefits without the opportunity to move into work, such as those with health conditions or disabilities in particular. As my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) rightly highlighted, we will support them into work.
As a one nation Government, we believe that everyone in the country should have the chance to benefit from the security and sense of purpose that comes from being in work. Work provides purpose, responsibility and, in particular, role models for children, yet getting people into work is about more than earning a salary. Growing evidence shows that work can help people to remain healthy and help to promote recovery where somebody falls ill. It is right, therefore, that we look at how the system supports people with health conditions into work. We know that 61% of those in the work-related activity group want to work, but only 1% come off benefits each month. The system has failed them, and financial disincentives have left them trapped on benefits.
As we discussed in Committee and on Report, the changes in the Bill will apply to new ESA claims and universal credit from April 2017. This will enable us to provide significant new funding for additional support to help claimants with health conditions and disabilities into work and to transform people’s lives. Furthermore, we are providing £60 million of funding in 2017, which will increase to £100 million a year by 2020. That will be direct support to get people into work and provide new employment opportunities for those who want to work but have been unable to do so. We recognise the long-term conditions that some people face and will support them back into work.
Jeremy Lefroy
That help into work is absolutely vital, but what would the Minister say about those who have been in the work-related activity group for one or two years, or perhaps even longer, and who are unable to get back into work, however hard they try? New claimants will not have that work-related activity group component.
Priti Patel
We recognise that there are people who cannot work, as a result of illness, and they will be in the support group. They will absolutely be supported in that group, as is right and proper.
It is our responsibility to ensure that the welfare system is affordable and sustainable. Those on the Opposition Benches who oppose our making difficult decisions on welfare must say what they would cut or which taxes they would put up to pay for their proposals. The Bill will correct many of the unaffordable and disproportionate increases in benefits compared with earnings by freezing most working-age benefits. As we have said throughout the passage of the Bill, this will protect taxpayers from the cost of subsidising increasing social housing rents through housing benefit. Those rents have climbed by 20% since 2010, but we will now act to reduce them by 1% a year for the next four years.
The Bill will continue to restore fairness to the system. We do not think it is fair that someone on benefits should receive more than working households earn, and 77% of the public agree. The benefit cap reintroduced fairness. Reducing the benefit cap to £20,000—and to £23,000 in Greater London—reinforces and strengthens that message. The new cap better aligns the level with the circumstances of hard-working families across the country.
Paul Scully
Does the Minister agree that, as well as providing a fairer deal for the taxpayer and introducing a fairer, more sustainable system in order to help to pay off the deficit, this programme will help to encourage, nudge and support people back into work? Is that not better than just wringing our hands?
Priti Patel
My hon. Friend is absolutely correct. That is the whole purpose of what we have been doing through our welfare reforms. We are putting people first and providing the support they need to get back into work, in contrast to what we saw during the 13 years of the Labour Government, when people were trapped on benefits in a cycle of dependency, and trapped in poverty while having opportunities denied to them.
This Government are committed to working to eliminate child poverty and to improving life chances. Our new approach focuses on transforming lives, which is what the Labour Government failed to do through their arbitrary measures on poverty. We will tackle the root causes of poverty rather than focusing on the symptoms, as existing measures do. We saw the previous Labour Government’s pursuit of short-term, narrow and expensive policy solutions that attempted to lift incomes above an arbitrary line. They increased welfare spending by 60% in real terms—[Interruption.] That is a fact. They increased spending in an attempt to chase that moving poverty line, without driving any sustainable improvements in children’s lives.
In contrast, the Bill will place a duty on the Government to report annually on the key measures of worklessness and educational attainment. In these new life chances measures, we will focus on the root causes of poverty, rather than on the symptoms. That approach has been seen to fail—[Interruption.] The hon. Member for Islington South and Finsbury (Emily Thornberry) can shout all she wants, but these new measures will drive real actions and make the biggest difference to disadvantaged children now and in the future. We have also committed to publishing a life chances strategy—[Interruption.] What is embarrassing is that during 13 years, the Labour Government systematically failed to deal with the root causes of poverty or to change people’s lives by getting them back into work.
Priti Patel
I will not give way.
We are committed to publishing a life chances strategy, which will set out a wider set of measures on the root causes of poverty such as family breakdown and the problems of debt, drug addiction and alcohol dependency. We will report to the House on those measures annually. We are absolutely committed to protecting the most vulnerable in society, and the Bill will continue to ensure that the welfare system will support the elderly, the vulnerable and disabled people. We are exempting pensioner benefits, and benefits relating to the additional costs of disability, from the freeze on working-age benefits. We are also exempting the most disabled people from the benefit cap.
I would like to thank all Members on both sides of the House for their contributions on the Bill and on the other important issues that have been raised in our debates in Committee and on the Floor of the House. A number of amendments have been passed so that support for mortgage interest and social rented sector policies are delivered as intended. In the case of the social rents measure, we have been able to reflect comments made to the Government by the social housing sector. We have also added a clause that will enable the Government to recover the expenses they incur from administrating benefit diversions for the Motability scheme. As we agreed on Report, the wishes of the Welsh and Scottish Governments are now also reflected in the life chances measure.
This Bill will establish the principle of economic security, and will ensure that the welfare system is fair to taxpayers while continuing to build an economy based on higher pay, lower taxes and lower welfare. I commend the Bill to the House.
Owen Smith
May I start by thanking everybody on the Opposition Benches for all the contributions they have made not just today, but during the passage of this enormously important Bill? May I also thank the Secretary of State for gracing us with his presence today? I would like to be able to thank the Minister for offering some detailed answers to the questions put to her throughout the Committee stage and today, but there were not many answers, so I will not be able to do that, I am afraid.
Labour will be opposing the Third Reading of the Welfare Reform and Work Bill. Combined with the other measures in the summer Budget, this package of tax credit and benefit reforms penalises millions of working families and will risk pushing hundreds of thousands of children into poverty. It is a cruel, pernicious Bill that breaks Tory promises in almost every clause and will hit more than 10 million families in Britain. It is also indiscriminate: it hits the young, the old, those unable to work and those working every hour they can.
Andrew Gwynne (Denton and Reddish) (Lab)
I am pleased we will be opposing the Welfare Reform and Work Bill on Third Reading. Is not the real problem for the Government that their record so far on welfare reform has been entirely counterproductive? The facts speak for themselves: on this Government’s watch welfare bills have shot through the roof. They have cut welfare, but the bills have gone up.
Owen Smith
This is the first Government who have ever spent more than £1 trillion in a Parliament on social security. That is an extraordinary rise, and it has happened on the watch of the Secretary of State for Work and Pensions.
In this Bill we are seeing the Government break their promises repeatedly. They are breaking their promises to older people, for example. Before the election, the Conservatives’ manifesto said they would “maintain all pensioner benefits”, but after the election it appears that there is a different story. Some senior Conservatives have talked about this being a “great opportunity” for deep cuts to pensioner benefits. The Minister for Community and Social Care said that pensioner benefits should not be cut immediately, but that raises the question: when are they going to cut them?
The answer appears to be that the Government are cutting pensioner benefits now, in this Bill, because 70,000 pensioners are being hit by more than £1,000 a year through the changes to support for mortgage interest. That support is a vital lifeline for many, but through this Bill the Government are chipping away at pensioner benefits and charging a 2.9% interest rate—profiteering from pensioners. By refusing our amendment 24, the Conservative party is breaking its promise to our pensioners. We will act as the watchdog for our older people on that, as we will on pensioner freedoms. A scathing report from the Work and Pensions Committee has warned that the next great mis-selling scandal will be coming soon, after the Tories introduced pension freedoms. We will be watching that, as we are watching tonight.
Just as with older people, the Conservative Government are tonight letting down young people and our children. Before the election the Conservative manifesto spoke of
“boosting the self-esteem of young people”,
but after the election the Government are failing our children, failing young people and failing the next generation.
This Bill will push 600,000 children into poverty over the course of the Parliament while fiddling the figures and hiding the Government’s shame by abolishing the child poverty target. It is a scandal that any Government can seek to withdraw income—the money people have—from a measure of poverty. If it were not so disgraceful, it would be laughable. They are stripping housing benefit away from 18 to 21-year-olds, patronising our young people with “earn or learn” boot camps and introducing a so-called living wage that kicks in only when people are 25, and the Business Minister is running down young people, saying that they do not deserve a living wage because they are not as productive.
What about the Tory promises to the sick and disabled people of Britain? Before the election the Tory manifesto said that the Conservatives would
“aim to halve the disability employment gap: we will transform policy…so that hundreds of thousands more disabled people who can and want to be in work find employment.”
But what is the truth? After the election, they are cutting support for sick and disabled people. Half a million people in the ESA WRAG are set to lose £1,500 a year. That will reduce the likelihood of a return to work, increase the number of long-term unemployed and act as a work penalty for sick or disabled people seeking to get back into work.
Alex Cunningham (Stockton North) (Lab)
I was told today by Homeless Link that 50% of the charities providing specialist housing services say they will be forced to close services within one to five years because of the changes in the rent arrangements for housing associations and housing benefits. Does my hon. Friend know what will happen to the vulnerable who depend on those services?
Owen Smith
I suspect that their lot will be far worse, as with so many of the groups that I am talking about tonight. We know that young people, older people, disabled people and vulnerable people in our communities are going to be worse off under the Tories, because they always are.
Owen Smith
What about working families, the very group that this Tory party chooses to try to speak for? Before the election, the Tories said they would not cut tax credits. The Justice Secretary said:
“We’re going to freeze them for two years, we are not going to cut them.”
That was the promise. We know the truth. After the election, the Government are stripping £1,300 out of the pockets of 3.5 million working families—a 10% cut in the incomes of working families, putting an effective 93% tax rate on low and middle-income workers and imposing a work penalty on those families.
Owen Smith
I had not heard the hon. Gentleman. He needs to speak up. I give way to him.
Mr Burrowes
The hon. Gentleman is very kind. Will he speak up, loud and clear? He says that he and his party will oppose the Bill, so what are their alternatives? How would they meet the £12 billion savings package? What parts of it will they accept, and what are their alternatives? We want to know the basis of their opposition.
Owen Smith
I could, of course, refer, as I have done repeatedly, to not cutting inheritance tax for people passing on million-pound houses; I could talk about not introducing the millionaires’ tax cut; I could talk about clamping down on tax avoidance and evasion. But the real question is for the working families in the hon. Gentleman’s constituency, thousands of whom are going to see 10% of their income carved away at the stroke of a pen, in a letter arriving just before Christmas. It is a disgrace what this Government are doing. We are clear that we are opposing it tonight and will continue to oppose it. Asking working mothers to shoulder 70% of the cuts is no way for any Government to continue.
This Bill is a litany of broken promises. The risk of job loss, sickness, bereavement or retirement faces all of us at some point, yet this is a Tory bid to undermine the basic case for support and security for individuals through the collective pooling of risk. The Bill is a naked attempt to turn people against one another, in order to undermine any concept of a safety net—young against old, disabled people against non-disabled people, those in work against those looking for work.
The Opposition will not play that game. We are not interested in those divisive Tory tactics. We all want to bring down the welfare bill by making work pay, getting the homes we need built, bringing down unemployment and growing our economy, helping our foundation industries, such as the steel industry, which is being abandoned by the Government—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Mr Bacon, you are getting carried away. That is not like you. You are usually a man who wants to hear both sides of the argument. Don’t spoil it tonight.
Owen Smith
I am very grateful to you, Mr Deputy Speaker.
The Tories faced a humiliating and deserved defeat last night in the House of Lords, in part due to their failure to outline where cuts will fall and being less than open about their intentions. Just like their cuts to tax credits, this Bill breaks the Conservatives’ manifesto promises—pledges to protect pensioners, to support the young, to help the disabled into work and to back working families. This is a cruel Bill that shows that the Tory manifesto was not worth the paper it was printed on. It penalises children, takes money from low and middle-income workers, drives families from their homes, punishes disabled people and will push hundreds of thousands of children into poverty. We will oppose it tonight.
Peter Heaton-Jones (North Devon) (Con)
It was a pleasure to serve on the Public Bill Committee along with hon. Members from both sides of the House who I can see in the Chamber. I sat through many sittings of the Committee, listening intently to all that was said, and I simply fail to recognise a lot of what the hon. Member for Pontypridd (Owen Smith) said about what the Bill will do. I do not know how much of the Committee he sat through.
We have made great progress on the economy since 2010, and it is worth recording some facts. I stress that they are facts. Employment is now at a record high of more than 31 million, up more than 2 million since 2010. That represents a record employment rate of 73%. I am always proud to talk about my constituency of North Devon, and the JSA claimant rate there is just 0.9%, a record low. Unemployment is almost back to its pre-recession levels—a recession, let us remember, caused by the Labour party—[Interruption.] The number of workless households is at a record low as well, down nearly 700,000—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I expect the same courtesy from Opposition Members as I expected from Government Members.
Peter Heaton-Jones
Thank you, Mr Deputy Speaker. They do not want to hear the truth, that is the problem.
Our welfare reforms over the last Parliament, every one of which was designed with the aim of supporting those who are able to work in getting closer to employment, were undoubtedly part of achieving the success story I have cited.
Mr Nigel Evans (Ribble Valley) (Con)
Is not the difficulty that the Labour party, in its last year in government, borrowed £150 billion, introduced a tax credit system that started at £4.5 billion and ended at £30 billion, maxed out not only the taxpayers’ credit cards but their children’s and grandchildren’s credit cards, and chained workers to a lower minimum wage instead of a much higher national living wage?
Peter Heaton-Jones
I agree with the powerful point that my hon. Friend makes. In fact, I am about to talk about the benefits cap that the Bill quite rightly introduces. The New Statesman, by any measure the house journal of the Labour party, states:
“Most voters regard a cap of £26,000 as unacceptably high and the move draws a sharp new dividing line with Labour. By pledging to use the money saved to fund apprenticeships, Cameron sends out the message that the Tories support work, not welfare.”
Peter Heaton-Jones
I will not give way, as we are short of time.
Let us look at what happened when the £26,000 cap was introduced: 16,000 households moved back into work, and capped households are 41% more likely to move into work. When asked, 38% of those who had been capped said that they were doing all they could to find more work and being supported by the Government in doing so. Those are important statistics that we must not forget.
I want to talk briefly, if I may, about some of the measures in the Bill on the help that will be given to people with disabilities. I am pleased to see on the Front Bench my hon. Friend the Under-Secretary of State for Disabled People. An SNP Member asked earlier where he was, and at that very moment he was in Westminster Hall speaking up for the people he represents, so we will take no lessons about that. I am working with the Minister to hold a Disability Confident event in my own seat of North Devon, because I want to ensure that people with disabilities can get closer to employment.
I am aware of the time, so I will conclude my comments. [Hon. Members: “More!”] I am very happy to provide more. We are moving from a high welfare, high tax, low wage economy to a society where work pays, where people earn more, and where the Government will help them to keep more of the money that they earn. That is the purpose of the Bill. That is why it is important that the House passes it; why it is right for the country; and why we should all support it in the Lobby tonight.
Dr Eilidh Whiteford
I will keep my remarks brief. This Bill has been the centrepiece of the Government’s austerity agenda, but the Government’s package of proposals was holed below the waterline by the vote in the House of Lords yesterday. The Bill’s measures are characterised by their arbitrary nature, by a total lack of evidence that they will achieve their intended aims and, above all, by the fact that low-income working households and the sick and disabled have been put on the frontline and are shouldering a wholly disproportionate share of the cuts.
Cuts to tax credits are at the heart of that agenda, with 7 million families set to lose an average of £1,300 each.
Dr Whiteford
I will not give way, because time is very short.
Those measures will drive disincentives to work and will compromise economic recovery. Above all, they will push hundreds of thousands of bairns into poverty. The benefit cap fails to tackle the underlying issue of an out-of-control housing market and a lack of affordable housing, and it hits those living in our most expensive urban areas. Cuts to employment and support allowance penalise people with serious and long-term illnesses and disabilities, and, to add insult to injury, stigmatise people for their own poor health. On sanctions, we have heard that the Government’s U-turn fails to address the need for a proper review of the sanctions regime. Those are the wrong choices to make. There is a responsible path to deficit reduction. There is a responsible alternative to austerity, and this Bill is not it.
However, we did not get a chance to debate the amendments in the third group this afternoon, so I wish to put it on the record that I welcome Government amendments 2 to 16, which take into account the concerns raised by the Scottish Government and other devolved Administrations.
This is a deeply regressive Bill. It harms low-income households and makes disadvantaged people carry the can of the Government’s economic failure. The SNP will oppose the Bill tonight.
Paul Scully
I regret the fact that, on Report, we have spent a lot of time—about a third of it—on yesterday’s debate. As important as that issue is, it has meant that we did not get to speak about our measures for full employment and for improving people’s life chances, especially with our troubled families programme. What I do not regret—in fact, I positively welcome it—is the clear and direct action taken by the Secretary of State for Work and Pensions and the range of Ministers who have worked incredibly hard so that Britain can deliver this Bill tonight.
The Bill means that, when we are looking at delivering a welfare programme, people who are in work and paying their tax will have the same expectations on housing and other choices when they have children as those who are not in work. The Bill is also for our children. We must pay off the deficit and, ultimately, our debt. By saving £12 billion through our overall package, we will be able to reduce the deficit significantly. Most of all, the Bill is about helping those who are most in need of our support. We have heard a lot of empty rhetoric from the Opposition parties, but what the Secretary of State and his Ministers have done in this Bill is to look at the underlying problems and at the underlying situation so that we can push people towards work. We will nudge, support and help them back into full employment. I very much welcome this transformational Bill.
Mark Durkan (Foyle) (SDLP)
Like other Opposition Members, I will oppose the Bill, because it does not meet the claims that the Government are making for it about making work pay. It will penalise people in work. Most of all, it will penalise families. It will penalise not just work but parenthood. The Minister told us that it is about making sure that families have to make the same choices as others. However, the two-child rule will not apply to childcare payments, and that means that up to £2,000 per child will be paid to relatively well-off people in employment, who will continue to get those payments for as many as children as they want. Only poorer families will be penalised by the two-child rule. That is just one of the injustices and inequities for which—
Business without Debate
(8 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
electoral Commission
(8 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Cardiac Screening: Young People
(8 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mims Davies (Eastleigh) (Con)
I am grateful to you, Mr Deputy Speaker, for the opportunity to discuss the crucial matter of cardiac screening for our young people. I am delighted to be able to speak tonight because I did the 10-mile Great South Run on Sunday for CRY—Cardiac Risk in the Young—which raises awareness, supports screening and research, and assists bereaved families affected by cardiac risk in the young. You can look at its website to see its impact on cardiac arrest in our young people.
Cardiac arrest is a preventable and silent killer. There are often no symptoms and there is regularly no warning. At least 12 young people under the age of 35 die unexpectedly every week of the year from a heart condition that they did not know they had. I and various campaign organisations involved in tackling this issue believe that the number may be even higher. Perhaps even as many as 20 young people a week are lost by their families. Some 80% of those deaths occur with absolutely no prior symptoms.
Sudden cardiac death is thought to be caused by a heart condition, and young sudden adult death syndrome occurs when a cardiac pathologist is unable to find a definite cause of death. Thankfully, coroners are becoming more willing to name sudden arrhythmic death syndrome as the cause of death, which is a positive step forward, but we must continue to push for greater awareness.
My constituents, Graham and Anne Hunter, lost their beautiful daughter, Claire, two years ago from sudden cardiac arrest. Claire was only 22 and was newly married to Andy. She was a trained accountant and a mature, beautiful girl with an exciting life ahead of her. She had no prior symptoms. She was in a spa on a hen weekend, relaxing with friends in a jacuzzi after a swim. She said that she felt hot and sick, and she sadly died from sudden cardiac arrest. It took a significant time for the ambulance to arrive. We and her family do not know whether, had the spa had a defibrillator, that would have saved her life.
Claire’s family have since been screened. Heart conditions have been found and preventive measures put in place by the excellent Southampton general hospital. Graham and Anne’s lovely daughter Claire was cruelly and tragically taken from them, and that terrible loss exemplifies what is happening to other families in every community and constituency each week. Graham and Anne are sitting in the Public Gallery listening to and watching this vital debate, and I pay tribute to them and to many other families across the country who have lost their precious children to such a cruel and sudden tragedy. Such losses are often preventable, which only makes them even more heart-breaking.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I congratulate the hon. Lady on securing this important debate. Does she agree that this tragic condition seems to hit fit young people, such as my constituent Mr Philip Evans who was a family friend? He was a keen bodybuilder and he tragically died from this condition.
Mims Davies
I agree with the hon. Gentleman. We are losing fit, young, capable, able and good people, and we must do something about it. We bring our children into the world. We school and train them, and above all we love them and get them ready for a future—our future. Economically, there is a case to do something, but the emotional case is priceless.
Screening has been proven to work. In Italy, screening is mandatory for all young people who are engaged in sport, and cases of young sudden cardiac death have fallen by 90%. In this country, free screening is provided only when a young death has occurred in the family, or through the work of Cardiac Risk in the Young and the help of affected families who fundraise for that cause.
Pauline Latham (Mid Derbyshire) (Con)
I congratulate my hon. Friend on securing this important debate. My constituent, Sam Wright, who was a very fit young man, died suddenly. His friend, Danielle West, has fundraised on behalf of CRY and secured enough money to screen all the sixth-formers at the school that Sam used to go to. Three of those sixth-formers have had further tests. I do not know the results of those tests, but three people who knew nothing may have a condition that can now be treated. My hon. Friend’s campaign is valuable and we should continue with it.
Mims Davies
I absolutely agree. The UK National Screening Committee has refused to make a comprehensive offer of heart screening for young people in the UK, which I think is a scandal.
Mike Gapes (Ilford South) (Lab/Co-op)
I lost my own daughter three and a half years ago from sudden unexplained heart failure. I am a supporter of CRY, and I appeal to the Government to listen to what is being said in this debate. Many young people between 14 and 35 die suddenly from an unexplained cause, and that is a personal tragedy for the families and friends of those young people. I came to this debate unsure of whether I would be able to intervene, and it is a great grief and something that is with me all the time. I wish that people would take this issue more seriously.
Mims Davies
I thank the hon. Gentleman for such an eloquent and kind intervention. I am sorry for his loss. We think of all the children in this debate.
How can it be right to wait for tragedy to strike before taking action? That is truly unacceptable. I urge the Minister tonight to review the policy and to reverse it. As with many other preventable illnesses, screening needs to be part of the standard healthcare provided to our young people. Screening has more than just general benefits: it helps to prevent future diseases. Heart UK estimates that if 50% of people with the potential genetic condition known as familial hypercholesterolaemia or FH—a naturally occurring high cholesterol condition—were diagnosed and then treated, the NHS could save £1.7 million per year on treatment. Truly comprehensive heart screening is a good measure for now and a perfect insurance policy for the future.
Tom Tugendhat (Tonbridge and Malling) (Con)
I pay tribute to my hon. Friend for this fantastic opportunity to highlight a major national issue. I also pay tribute to the hon. Member for Ilford South (Mike Gapes) for his courage in intervening to talk about a clearly incredibly fraught moment, not only for him but for his whole family and all who share his grief.
In my constituency recently, a young man was playing football when he dropped dead. Junior Dian, who played for Tonbridge Angels, could have been saved by screening. We are pleased to say that the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) is working with the Premier League and other organisations to introduce screening for individuals across our country. I hope very much that we will all join her in urging sporting institutions, whether relating to football, rugby or cricket, to push for this opportunity to save young people. Sudden cardiac death hits every part of society. My very dear friend’s brother, the late Earl of Shaftsbury, died in his sleep, aged 30, in New York. This hits everyone: old, young, rich or poor. We can do better. We must do better.
Jim Shannon (Strangford) (DUP)
In Northern Ireland, we have done three things. First, schools have responded. I visited Regent House school just last week and there were 60 young people doing CPR testing—that was very positive. Secondly, we have first responders in Strangford, volunteers with a defibrillator. So far, they have had 64 call-outs in less than a year. Thirdly, the Henderson Group has purchased defibrillators for each of their shops in Northern Ireland. Those are three initiatives that can make a difference. I commend the hon. Lady for bringing this issue to the House.
Mims Davies
I thank the hon. Gentleman. I think that is something we can absolutely pick up on. There are other ways we can reduce mortality at any age, young or old. We need to have more ready access to defibrillators and further CPR training.
Dr Tania Mathias (Twickenham) (Con)
Does my hon. Friend agree that a teenager should not get a driving licence unless they have CPR training?
Mims Davies
I absolutely agree. That is a wonderful idea to make people aware, early on, about health intervention and what can be done through training.
Mrs Maria Miller (Basingstoke) (Con)
I thank my hon. Friend and Hampshire neighbour for giving way and I pay tribute to her for securing the debate. Will she join me in paying tribute to organisations such as my local parish council, which has gone out of its way to put its funds towards making defibrillators available not only in the local village hall but in the local village pub, too?
Mims Davies
Absolutely, and I thank my right hon. Friend. There is always a good reason to go the pub and that sounds like an excellent one.
Julian Knight (Solihull) (Con)
My hon. Friend is being very generous in giving way as I know this is a short debate. I pay tribute to her for securing the debate and for the passion she is showing in putting her case across.
On defibrillators, will my hon. Friend join me in congratulating Solihull Lions in my constituency, which has just paid for 10 defibrillators in public places, and the cardiac nurses at Solihull hospital who, touched by the tragic case of young Miles Reid, 21, who dropped dead of a heart attack while playing football, paid for a defibrillator in Shirley Park? Will she join me in congratulating those groups and in understanding the importance of public defibrillators?
Mims Davies
I absolutely do. My hon. Friend makes a great point about communities coming together—sadly, always off the back of a tragedy. We could be on the front foot on this issue instead.
Rebecca Pow (Taunton Deane) (Con)
I, too, absolutely commend this debate. Every single one of us probably knows somebody who has dropped dead. My brother-in-law’s brother, a great college friend of mine, did so, and we all know such people. We are, in particular, encouraging our young children to get into sport big time, and it gets more and more intense. Every time they get selected, they have more sessions, more training and it becomes more high profile; I would urge that we get testing going for these young people. It is often the fit and sporty ones that seem to be affected. Does my hon. Friend agree we should do something for these particular type of students?
Mims Davies
Absolutely. Italy saw a 90% reduction when sporting people were properly targeted.
Portable defibrillators will help people with no medical training; they can provide immediate, first-instance help to all patients following a cardiac arrest. Survival decreases by 23% per minute. The UK Resuscitation Council asks for an AED—automated external defibrillator—to be present in any location where medical treatment is further than five minutes away. Clearly, that means pushing on with installing these crucial bits of equipment in every public building, and encouraging more businesses to have them.
I thank the Chancellor for listening to Graham and Anne Hunter from my constituency and to the British Heart Foundation. Some £1 million has been pledged for defibrillators for community centres and to ensure that schools are delivering CPR training awareness. This is a welcome step, but more can be done.
Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
In my family’s case, my father died very young when I was two years old. I have had to go to my GP to ask to be monitored, and no suggestion has been made that my children should also be monitored, even though my grandfather also died young of what is clearly a potential genetic disorder. Does my hon. Friend agree that the Minister should consider how we can develop this across the national health service, thus ensuring that families are protected?
Mims Davies
If I did not know better, I would think that my hon. Friend was reading my speech. Action is needed on GP awareness. When there is an incident of sudden adult death syndrome, the family can be screened for free to look for potential causes. This is often because the conditions require a live and still beating heart for diagnosis, although problems are also often discovered through a process of screening for genetic hereditary conditions in families. It is up to GPs to ensure that they advise family members to get screened in these instances. I want to see far greater awareness among our practitioners of the huge benefits from screening. It is absolutely critical to fight to prevent these young mortalities.
So what do we want? First, MPs, campaigners and families want free screening for every 14-year-old to be checked for the key risk factors. Whether via schools, sports clubs or the NHS, we can find a way. Last week, at Fleming Park in Eastleigh, two youngsters were screened by CRY and found to be in urgent need of follow-up. Another screening was organised in Claire’s memory and was funded by local donations.
Secondly, we want more public access to defibrillators, and new local community buildings should, through planning, have one placed in sight. That is easily done. Thirdly, we want higher awareness among our among our general practitioners that hearts need checking at any age.
In conclusion, up and down the country every week, at least 12 young people are dying from sudden cardiac arrest—over 600 young people a year, and we have heard tonight that many MPs have experienced at least one incident in their family or their community. On 14 October, the Daily Mail reported that a family from Stoke-on-Trent lost a daughter in 2006 and now a son aged 17, after swimming on a recent holiday in Turkey. Each and every incident is a tragedy. These causes of death are conditions that can be picked up by screening. I do not believe that a health Minister is often told that we can relatively cheaply and surely prevent the deaths of thousands of our young people by taking some very easy steps. This evening, on behalf of many families, I ask the Minister to do just that.
The Parliamentary Under-Secretary of State for Health (Jane Ellison)
I thank my hon. Friend the Member for Eastleigh (Mims Davies) and all the other Members who have contributed to the debate for raising what is—as has been more than amply demonstrated—a serious and important issue. We have heard from Members who have suffered tragic losses, and I myself have lost a friend in similar circumstances. I thank all Members for bringing their experiences to the Chamber to inform our debate. Obviously, our sympathies are with the families who have been affected.
I suspect that some elements of my speech will not satisfy my hon. Friend, but I want to try to identify the areas in which I think we are making some progress, and also those in which some of the real difficulties lie. Many of them involve clinical challenges rather than political decisions.
I join my hon. Friend in paying tribute to her constituents Graham and Anne Hunter, who have worked tirelessly to raise awareness of sudden adult death syndrome because of the personal tragedy that they suffered. My right hon. Friend the Secretary of State met them in June 2013, along with the UK National Screening Committee’s secretariat and Public Health England’s director of screening programmes, Dr Anne Mackie.
Sadly, as we know, not everyone survives cardiac arrest, and 100,000 people die of heart disease annually in the United Kingdom. As my hon. Friend said, an estimated 400 to 500 cardiac deaths each year are unexplained, and most have a genetic basis. In some cases there is no definite cause of death, even after the heart has been examined by an expert cardiac pathologist. Most sudden deaths in people under 30 are caused by inherited cardiomyopathies and arrhythmias. The situation is very tragic.
My hon. Friend mentioned three possible solutions. The principal one was population screening, but she also mentioned defibrillators, the provision of testing and advice for the families of those who suffer a sudden cardiac arrest, and GP awareness. I shall try to touch on all those points, although time is slightly against me: I have only about 10 minutes.
I think that if population screening were easy and obvious, we would do it, but it is not easy or obvious, despite the compelling reasons why we would all want to respond to the challenge. Let me try to explain why. As many Members will know, screening programmes in England are set up on the advice of the UK National Screening Committee, so these are not political decisions. They are decisions based on the best currently available evidence and expert advice from those who are most qualified to provide it, and many factors are weighed in the balance. The evidence is drawn from the United Kingdom and from other countries around the world.
Earlier this year, the UK NSC carefully considered the evidence in favour of introducing cardiac screening for people between the ages of 12 and 39. They took account of, for instance, the fact that sudden cardiac death covers a range of extremely complex conditions which are very difficult to detect by means of screening. Although it is such an important health problem, the committee found little peer-reviewed evidence that would have enabled it to make an accurate assessment of the number of people affected.
There is no single test that can detect all the conditions involved, nor is it possible to say which abnormalities will lead to sudden cardiac death. Moreover—this applies to other kinds of screening, but it applies particularly in this context—there is currently a risk that a false positive or a false negative could result. There is a clear risk that a positive result could be given to someone who was not affected by these conditions, and we can all imagine some of the effects that that might have. Someone might worry unnecessarily about having a heart problem, and might refrain from exercise that would be beneficial for their health, or give up a promising career in sport. A false negative would also present significant challenges. It is possible to have a heart problem that a test will not pick up. Fabrice Muamba, for example, had several screening tests throughout his career which did not identify any problems, but we saw his sudden collapse on the pitch at White Hart Lane.
Telling someone they have a condition when they do not could cause unnecessary anxiety to everyone concerned, even though it might not affect them. That causes difficulties, as does telling someone they are in the clear when they are not. These are the difficult elements of decision making and evidence that our expert committees have to sift in coming to a conclusion and making a recommendation. In the review that has just taken place, no studies reporting on test performance, sensitivity or specificity were identified by academic evidence. It was therefore felt that it was not possible to recommend the use of such a test in a national programme.
Another key test for screening is that once a problem has been detected, there must be something we can do about it, either by treating a condition or by helping someone to remain healthy. The conditions that lead to sudden cardiac death are poorly understood, and there is no evidence to guide clinicians as to what the treatment or lifestyle advice would be when a problem is found in a family member. That is not to say that in every circumstance people cannot give advice, but across a population-based screening programme it would not be possible to know what the advice would be for everyone screened. For some of the conditions implicated in sudden death there is no treatment. Delivering the message that someone has a condition is extremely difficult, but it is exacerbated where no known treatment is available. A person who tests positively will face significant dilemmas, and not just the ones I have touched on. Such dilemmas may involve ending a career they have mapped out for themselves or decisions about their family situation. They can also be penalised financially through higher insurance premiums.
On screening, the situation is extremely difficult. The evidence has been carefully weighed up recently, and we should introduce screening only when there is evidence that it can be effective. Overall, at this time, the UK NSC found insufficient evidence to support it. That position was supported by the British Cardiovascular Society, the national clinical director for heart disease in the NHS and the Royal College of Paediatrics and Child Health. They made that position clear in their responses to the public consultation. The difficulties were acknowledged even by Cardiac Risk in the Young, which, as many hon. Members have said, does wonderful work campaigning in this area. It acknowledged some of the concerns identified by the review, although I also accept that it took issue with some of the other matters raised in the conclusions.
This year’s decision by the UK NSC is not the end of the road in the consideration of screening for sudden cardiac death. The evidence is routinely reviewed every three years, but individuals and organisations can alert the committee at any time to any new peer-reviewed evidence published in the interval between regular reviews. It goes without saying that I will draw the committee’s attention to this excellent debate, how well supported it has been and the strength of feeling that has been expressed. Such a notification will be considered by the UK NSC, which can conduct an early update of a review in response.
Let me respond to the point that was made about Italy, because it has been raised before. My hon. Friend the Member for Eastleigh mentioned the example of Italy’s introduction of screening for all children involved in organised sport. Although there is literature on the screening of young people participating in sport, the evidence is again mixed, and some of the outcomes have been questioned. We are keen to understand what is going on in Italy, but it has yet to share its national data on the screening programme. The Secretary of State wrote to his Italian counterpart to request these data in August 2013, following the meeting that I mentioned earlier. This has been chased up on a number of occasions but the data have not been forthcoming, to date. Obviously, I will write again after this debate to say that we would like to see the data, because they might be one example of data that could inform a future NSC evidence review. My hon. Friend and other hon. Members may also be interested to know that the Sports Minister and I spoke today to some of the major sports governing bodies and raised this important issue. They are very much aware of their responsibilities towards young athletes, and we had a very productive discussion about what they have already done and what more they are considering in this area.
Let me touch a little on the research that is going on, because I have mentioned that we do not know much about some of these conditions and do not have treatments for some of them. The National Institute for Health Research is funding research on early detection of asymptomatic cardiomyopathies through its biomedical research centres and units, including the genetic aspects of the condition. It is also supporting a project with partners, including Manchester United football club, to identify the healthy limits and wider benefits of exercise for young elite athletes, normal healthy children and children with congenital heart defects. There is some really interesting and important work going on, and some of the data will be used to improve screening protocols for cardiac abnormalities in young athletes. The evidence from that research will be provided to the UK NSC when it next reviews the evidence, or earlier if new evidence comes to light.
Let me touch on defibrillators in the remaining three minutes. Tonight we have heard some wonderful examples of local campaigns across the country, and I pay tribute to all the people involved in ensuring that we accelerate access to defibrillators. In the March Budget my right hon. Friend the Chancellor of the Exchequer announced a £1 million fund to boost public provision of defibrillators in England and to support training in their use. That funding is now being administered by the British Heart Foundation.
Members of Parliament also have a role to play in that regard, for example if they think there are places where we need to have defibrillators. Many of them are in public buildings and sports grounds—I was discussing this with sports governing bodies only today—but they are of no use to wider communities when those buildings or grounds are closed. We can ask those questions on the back of debates such as this one, and I know that hon. Members are well placed to do that. The Hunter family, of course, have been extremely instrumental in making that change happen, and we pay tribute to them for that.
My hon. Friend also mentioned the importance of providing support to families of people who have suffered a sudden cardiac death and the need to ensure that GPs are aware of that. I make a commitment now to write to the Royal College of General Practitioners and draw its attention to the strength of feeling and the continuing concern that this might not be as well understood as it should be. When there is a sudden cardiac death, we need to take action to ensure that potentially affected family members are identified and offered counselling and testing to see if they, too, are at risk.
The national clinical director for heart disease, Professor Huon Gray, and representatives of NHS England, the Department of Health and the British Heart Foundation met the Chief Coroner in late 2013 to discuss that matter. Guidance has now been issued to the coronial system on how to deal with potentially affected family members. The Department will do all it can to encourage that, and I will write to the Royal College of General Practitioners to draw its attention to Members’ interest in spreading good practice in this regard. NHS England is committed to working with all stakeholders to ensure that we develop and spread good practice, particularly as evidence becomes available.
I will conclude by once again thanking my hon. Friend the Member for Eastleigh and all hon. Members who have attended the debate—I have responded to a great many Adjournment debates, and this is easily one of the best attended. That is clear evidence of the strength of feeling across the House on this important subject. We will continue to give it our utmost attention.
Draft Onshore Hydraulic Fracturing (Protected Areas) Regulations 2015
(8 years, 6 months ago)
General CommitteesRead Full debate Read Hansard Text
The Committee divided: - Ayes: 10 / Noes: 8 - Question accordingly agreed to.
The Chair
Before I call the Minister to move the motion, let me say that there has been a lot of interest from Members in contributing to the debate. I intend to allow non-members of the Committee to speak after members of the Committee who have indicated whether they wish to contribute. This debate is only an hour and a half long, so given the interest, I implore Members following the Front Benchers to be reasonably brief.
Tommy Sheppard (Edinburgh East) (SNP)
On a point of order, Mr Hanson. I seek clarification on the position of Scottish Members on this Committee following the changes made last Thursday by the House as a whole to Standing Orders in relation to English votes for English laws. Our understanding—I would appreciate clarification —is that we will be able to fully participate in this Committee for two reasons; first, we are talking about secondary legislation that relates to primary legislation that preceded the EVEL change; and secondly the Scottish Parliament does not yet have legislative authority over this matter and will not do so until 2018.
The Chair
I am grateful to you for raising this issue, Mr Sheppard. I confirm as the Chair that you can debate and vote in this Committee today.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
I beg to move,
That the Committee has considered the draft Onshore Hydraulic Fracturing (Protected Areas) Regulations 2015.
It is a pleasure to serve under your chairmanship, Mr Hanson. Before outlining what the draft regulations seek to do, I would like to take this opportunity to restate the Government’s commitment to a low-carbon and affordable future for energy. Gas, the cleanest fossil fuel, still meets a third of our energy demand and we will need it for many years to come. It is vital that we seize the opportunity to explore the UK’s shale gas potential, while maintaining the very highest safety and environmental standards.
We have established those standards as world leaders in extracting oil and gas over many decades. Shale can and will be developed safely. The UK has more than 50 years’ experience of safely regulating oil and gas exploration. We have world-class independent regulators, who will not allow operations that are dangerous to local communities or to the environment to go ahead. Safety is and always will be absolutely paramount.
Members of the public are understandably worried about a process which has not been used in the UK before, and my job is to provide reassurance and a clear explanation of why this potential new industry is very much in our interests and will be safely carried out. We have a strong regulatory regime for exploratory activities, and we will continuously review it as the industry develops. We insist on the highest safety standards, and all of that is backed up by independent checks from the regulators.
There is no denying the fact that 80% of us use gas for heating and cooking, and industry uses gas in many everyday products. At the moment, we import about 40% of our gas needs and by 2030 we could be importing three quarters of the gas we use.
Michael Fabricant (Lichfield) (Con)
On a point of order, Mr Hanson. Someone is taking a photograph in the Committee Room. Surely that is out of order?
The Chair
Thank you, Mr Fabricant. Whoever is taking a photograph, would they please desist? That is not allowed in the Committee.
Andrea Leadsom
As I said, at the moment, we import 40% of our gas needs, and by 2030 that could increase to around three quarters of the gas we use, so shale is vital, not just to reduce our reliance on imports but because it can create an energy bridge while we further develop renewable energy, improve energy efficiency and build new nuclear generating capacity.
Christian Matheson (City of Chester) (Lab)
On that point, will the Minister give way?
Andrea Leadsom
I will not give way at the moment. I would like to make some progress in making my case and then I will take some interventions.
Importantly, studies show that the carbon footprint of electricity from UK shale gas is likely to be significantly lower than that of unabated coal and imported liquefied natural gas. Shale offers a valuable decarbonisation route from where we are today to where we want to be with a cleaner energy future.
Exploring for shale will also help create jobs and grow local economies. Investment in shale could reach £33 billion and support as many as 65,000 jobs in the oil, gas, construction, engineering and chemicals sectors. Locally, that could mean not just highly skilled jobs, but cementing contracts, new facilities and work for local businesses such as lorry drivers and income for local restaurants and bed and breakfasts.
The draft regulations serve to strengthen further the protections already in place for protected areas. It is right that we are debating them at the earliest opportunity, as we agreed to do during debate on the Infrastructure Act 2015. The powers to make the regulations are found in section 4B of the Petroleum Act 1998, as inserted by section 50 of the Infrastructure Act, which, following scrutiny in this House and the other place, received Royal Assent in February 2015.
The Infrastructure Act requires the Government to specify protected areas within which hydraulic fracturing cannot take place. As hydraulic fracturing occurs far below the surface, the regulations can relate only to subsurface activities, so they will not contain an answer to all the questions Members may wish to raise about hydraulic fracturing at surface level; however, I will address those questions in a moment.
I remind hon. Members that sections 4A and 4B of the Petroleum Act set out further safeguards for onshore hydraulic fracturing in England and Wales to provide the public with confidence that the shale industry is being developed in a safe, balanced and measured way. The Act lays down a number of conditions that must be satisfied before a hydraulic fracturing consent is issued by the Secretary of State. It includes two conditions specifying that associated hydraulic fracturing cannot take place within “protected groundwater source areas” or “other protected areas”.
Andrea Leadsom
If my hon. Friend will bear with me, I will certainly give way in a moment.
Those two terms are not defined in the Act. Instead, the Act contains a requirement for the Government to produce draft regulations with the proposed definitions and to lay them in both Houses by the end of July this year. To honour that commitment, we laid the instrument in draft form on 16 July.
Let me be clear: despite accusations to the contrary by Opposition Members, there has been no attempt to sneak the regulations past Parliament. The instrument has been in the public domain for three months, during which time the Opposition have not requested a debate on the Floor of the House, so to affect outrage that there will not be a House debate at such a late stage—hours before this Committee met—is pure political point scoring. On that point, I will give way to the hon. Member for City of Chester.
Michael Fabricant
While I have concerns to raise if I catch your eye later, Mr Hanson, I want to ask my hon. Friend a question following on from a visit I paid to the Environment Agency last Friday. Does she agree that, although there were major incidents of pollution in the early stages of fracking in the United States, there have not been such incidents since the US implemented strict regimes; and can she assure me that there will be robust regulations in the United Kingdom?
Andrea Leadsom
I assure my hon. Friend that the Government, in conjunction with the regulators, have taken every step possible to ensure that we can safely exploit shale. Let us be clear: at the moment no hydraulic fracturing is going on in the UK. This industry is at the very early stages and we have used every bit of our more than 50 years of regulatory experience to make the process the safest possible.
Huw Irranca-Davies (Ogmore) (Lab)
The Minister has been at pains to give assurances on environmental protection, but does she accept that one of the assurances that even those who are adamantly opposed to onshore hydraulic fracking as part of unconventional gas set great store by was that it would not take place in protected areas such as sites of special scientific interest or anywhere near any groundwater source zones? There is a fear that, with these regulations, that assurance is being undone.
Andrea Leadsom
The regulations tighten the protections on hydraulic fracturing; that is precisely what they are for. As I have made clear, they deal with the subsurface implications of hydraulic fracturing, a process that occurs far below ground level, and they will tighten the protections. Far from loosening them or turning back on whatever the hon. Gentleman seems to think, they will improve the protections.
Christian Matheson
I accept what the Minister is saying: the regulations deal with what is happening far below ground level. But for that to happen far below ground level, something has to happen at the surface. Frankly, I cannot see why the Minister is making that rather false distinction.
Andrea Leadsom
I am grateful to the hon. Gentleman because he gives me the chance to repeat what I said, which is that the Infrastructure Act required the Government to lay regulations to deal with the hydraulic fracturing process, which happens far below the ground. We will, as soon as possible, make a statement regarding the areas on ground level—the surface drill level—in which activity will be banned. We are looking very carefully at how to define and protect our most valuable areas. We will be making announcements shortly, but that is not for today. These regulations are the consequence of a requirement in the Infrastructure Act to deal with the subsurface implications, so I will move on.
The draft regulations set out definitions for the protected groundwater source areas and other protected areas in which hydraulic fracturing will be prohibited, and will afford greater protection to some of our most precious areas in a manner that still meets the Government’s broader policy objective of supporting the long-term development of the UK’s shale gas industry.
Regulation 2 defines protected groundwater source areas. The definition is equivalent to the existing definition of source protection zones 1, which applies to those areas close to drinking water sources where there is the greatest risk associated with groundwater contamination. The draft regulations ensure that the process of hydraulic fracturing cannot take place in such areas at depths above 1,200 metres. The vast majority of drinking water supplies are located at depths above 400 metres. The limit therefore provides at least 800 metres between the depth of most drinking water sources and the highest possible level at which hydraulic fracturing can take place.
As required by the Infrastructure Act, we consulted the Environment Agency and Natural Resources Wales on the definition of protected groundwater source areas. They confirmed that they are content with the definition being aligned with source protection zones 1, as that reinforces their approach to controlling risks from other groundwater activities. Indeed, it is already the case that neither agency permits onshore drilling for oil or gas, which does currently happen in the UK—to be clear, hydraulic fracturing does not—in source protection zones 1. They have successfully influenced operators not to apply for sites in those zones and have ensured that pipelines do not run through such areas. Furthermore, if either agency assesses that more stringent controls are needed to protect groundwater, those will be applied as conditions in the environmental permits required for all developers. The proposed definition would not affect the environmental regulator’s current powers to refuse permit applications within source protection zones 1, 2, 3 or wider on a case-by-case basis, if it considers that an activity poses an unacceptable risk to the environment.
Regulation 3 defines “other protected areas” as national parks, the broads, areas of outstanding natural beauty and world heritage sites. The draft regulations ensure that the process of hydraulic fracturing cannot take place above 1,200 metres below ground in such areas. In defining protected areas there is a need to strike the right balance, affording them additional protection without stifling the nascent shale industry. The Government firmly believe that the depth limit chosen—1,200 metres—strikes that balance.
In addition, national parks, the broads and areas of outstanding natural beauty are our finest landscapes and are afforded the highest status of landscape and scenic beauty protection within the planning system. Similarly, world heritage site status is the highest international heritage designation. Our world heritage sites are simply irreplaceable, and the Government take their responsibility to conserve and protect them very seriously.
Mr Mark Williams (Ceredigion) (LD)
Will the Minister explain the omission from that list of SSSIs, which the hon. Member for Ogmore mentioned, not least in the light of comments made by her ministerial colleague during debate on the then Infrastructure Bill that SSSIs would be protected and part of the list?
Andrea Leadsom
The regulation deals with activity underground—1,200 metres below ground. The Infrastructure Act 2015 already deals with the level below ground at which hydraulic fracturing may take place normally. The important balance to strike is between those areas that are protected absolutely and those where the depth of drilling underground can be set safely by the Environment Agency. The key point regarding SSSIs in the planning process is that the Environment Agency may determine the depth, so additional protections were not deemed necessary, because they would transcend the balance between enabling the industry to succeed and protecting our most valuable areas.
Andrea Leadsom
I cannot give way again, because many Members wish to speak.
Turning briefly to surface level protections, our existing regulatory and planning regimes already offer strong protections to sensitive areas. In addition, the Government have separately committed to ensure that hydraulic fracturing cannot be conducted from wells that are drilled at the surface of national parks and other protected areas. Members can be reassured that that remains the Government’s position. We are considering how best to implement that surface restriction, but the draft regulations before us today are not a suitable vehicle, because they flows from the Infrastructure Act’s requirement to specify the protected areas within which subsurface hydraulic fracturing cannot take place. Consideration of surface activity therefore is not within the scope of the regulations.
Nick Herbert (Arundel and South Downs) (Con)
The Minister has just said something important that will be reassuring to our constituents. Given that the draft regulations deal with below-the-surface activity and not with surface activity, the assumption has been that drilling at the surface in protected areas would be allowed. Will my hon. Friend make it absolutely clear that it remains the Government’s intention not to allow drilling at the surface in protected areas, including national parks, and that a policy instrument will be put forward to enable that?
Andrea Leadsom
Yes, I can give my right hon. Friend that reassurance. The Government’s intention is to announce soon the areas in which it will not be possible for drilling to take place at the surface, and that will include all of our most valuable areas. At the moment we are defining the scope and precisely how the arrangements will work. I hope that totally reassures him and other hon. Members.
The Government recognise that some concerns have been expressed about fracking being carried out from wells drilled at the surface of some of the UK’s most valuable areas; in particular a number of groups have voiced concern about sites of special scientific interest. The national planning policy framework already makes it clear that a development should not normally be permitted if, either individually or in combination with other developments, it is likely to have an adverse effect on special interest features of an SSSI. That applies even if the development itself is outside the boundary of the SSSI.
In addition, under the Wildlife and Countryside Act 1981, as amended, consenting authorities have a duty to conserve and enhance the features of sites of special scientific interest; that duty must be incorporated in their decision making. We have considered carefully how we can protect SSSIs and are confident that the existing planning and regulatory regime already accords them strong protections.
I stress that even when the draft regulations and the surface restrictions are in place, a company looking to develop shale will always need to obtain all the necessary permissions, including planning and environmental permits, before hydraulic fracturing can be carried out.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I note what the Minister has said about national parks and areas of outstanding natural beauty, but within the planning regime—certainly within Wales, which is what I am familiar with—there is also a requirement to abide by planning rules in areas where there would be a visual impact on national parks. She mentioned that surface works will not be permitted within national parks, but will the visual impact requirement also be in place, or will there be a rule about how near to national parks and other areas of special interest surface works may be carried out?
Andrea Leadsom
As I said to my right hon. Friend the Member for Arundel and South Downs, we will shortly make announcements about the surface level implications. We are considering how to define exactly in which areas surface drilling will be banned and precisely how that can be enforced. I assure the hon. Lady that there will not be any changes to the ability of local planners to take all those facts into account when determining planning applications.
As part of the licence, permission and permit procedures, the environmental impact and any risks associated with operations are assessed by regulators and through the planning system on a case-by-case basis. All oil and gas sites need permits under the Environmental Permitting (England and Wales) Regulations 2010, as well as planning permission from the relevant planning authority. The national planning policy framework and supporting practice guidance state that, in respect of minerals such as shale oil and gas, any new development should be appropriate for its location. Let me be very clear: if the risks of a proposed shale activity are deemed unacceptable, the environmental regulators will not allow that activity to go ahead, irrespective of the geographic area or the depth of the drilling.
Finally, in line with the Small Business, Enterprise and Employment Act 2015, regulation 4 of the draft regulations commits us to carry out a review of the regulations in five years, and every five years thereafter, and to publish a report setting out the conclusions of the review.
I recognise that it is for me and the Government to make the case for shale and to reassure the public that shale can be developed safely. Shale gas may have huge potential to add to the UK’s energy sources, to improve energy security, to create jobs and to help to meet our carbon targets. We need more secure home-grown energy supplies, and shale gas has a vital role to play, as a bridge to a cleaner energy future.
Dr Alan Whitehead (Southampton, Test) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hanson.
This simply is not good enough. It defies belief that arrangements set out in the Infrastructure Act can be separated out in the way that the Minister has described, talking about fracking underground as if it had no relation whatever to the pipe that leads up from the underground fracking, that leads to the drill head at the top of the pipe, that leads to the water coming out of the pipe and being held in containment ponds on the surface, that leads to the vehicles bringing the water to go down the pipe for fracking. It is preposterous to suggest that associated hydraulic fracking is nothing to do with the rest of the process of fracking that inevitably has to take place on the surface and down through the ground to the point at which the drill bit turns left or right and goes into the horizontal seam and then begins the fracking.
We can see why that suggestion is preposterous in the Infrastructure Act. As the Minister has indicated, this SI does indeed arise from section 50 of the Act, which is headed “Onshore hydraulic fracturing: safeguards”. Section 4B(4) of the Petroleum Act 1998, which is inserted by section 50, requires the Secretary of State by regulation to specify descriptions of areas that are protected in the section. That is essentially what the Minister has told us this afternoon: it is something she is thinking about at the moment and she may come back at a later date with a definition. However, the definition is already required by section 4B. The protected areas are numbers 5 and 6 of the table in section 4A, which state that
“The associated hydraulic fracturing will not take place within protected groundwater source areas”,
and
“The associated hydraulic fracturing will not take place within other protected areas.”
One might think that that is clear. The regulation defines the areas—what is in, what is out and what is the extent of the areas.
It is clear also because those two items in the table directly arose from an amendment to the Infrastructure Bill accepted by the Government at the time, which specified that,
“Any hydraulic fracking can not take place...in land which is located within the boundary of a groundwater source protection zone…within or under protected areas”
or
“in deep-level land at depths of less than 1,000 metres”.
The amendment was modified to some extent during the passage of the Bill through another place, but by and large it remained intact as a list of prohibitions on or conditions attached to the fracking process that is a hydraulic fracturing consent issued by the Secretary of State. So clear was it that upon acceptance of the amendments even before the Bill went to another place, the Secretary of State declared:
“we have agreed an outright ban on fracking in national parks, sites of special scientific interest and areas of outstanding natural beauty.”—[Official Report, 26 January 2015; Vol. 591, c. 586.]
So that was that: no fracking pads, no trucks, no water retaining ponds, no drill heads, no drilling rigs in those areas. All that was left to do would be to winnow out the precise designation of what those areas were, and that is what was required in the regulation that is in the legislation. There might have been an issue, for example, about the exact extent of groundwater source protection zones, but the regulation would sort that out.
One might ask: what could possibly go wrong? Well, quite a lot has gone wrong. Yes, the instrument before us defines what is in groundwater source protection zones; it defines other protected areas, including national parks, the broads, areas of outstanding natural beauty and world heritage sites; as has been pointed out, it defines out all but zone 1 groundwater source protection zones; and it defines completely out sites of special scientific interest—but then, as in the fracking process, it veers away at 90 degrees. It uses a very curious definition of what constitutes associated hydraulic fracking within those defined zones. It merely adds an additional protection zone of 200 metres to the 1,000 metres nationally above which the process of fracking can take place. If the Government really intended to undertake as a separate exercise the process of deciding in which areas fracking would be banned completely—and these would be identical to the areas defined in this statutory instrument—why would they introduce a zone below which fracking can take place? Why does regulation 3, at that point, state that associated hydraulic fracking can take place at depths below 1,200 metres, rather than 1,000 metres, as is the case nationally, if indeed there was to be no fracking at all in those particular areas? It simply makes no sense.
Reading the definitions in the statutory instrument, along with the provisions of the Act, we can see that only the associated hydraulic fracking that might otherwise take place within that chunk of defined land—it is all underground, from 0 metres to 1,200 metres—cannot happen. That is the protected lump of rock in this particular statutory instrument.
Michael Fabricant
On a point of order, Mr Hanson. I am sorry to interrupt the hon. Gentleman, but I understand that there will be a vote at 3.5 pm, which will be followed by a second vote. Can you define when Committee members have to come back? There will be a suspension during the vote, but if it is a 20-minute vote followed by another, will we have to come back and then go back down to the Chamber?
The Chair
We will, as ever, cross that bridge when we come to it, but to help the Committee let me say now that there will be a minimum of 15 minutes for the first Division. If there are two Divisions, I would expect 25 minutes. I will indicate that when the Division bell goes.
Michael Fabricant
Further to that point of order, Mr Hanson. If the vote takes 20 minutes before there is a result, are you saying that we need to come back here and wait for the second vote?
The Chair
What I am saying, Mr Fabricant, is that there will normally be a 15-minute suspension for a Division and I would expect people to be back here within 15 minutes. If there is a second vote, we will have to cross that bridge when we come to it. We have already used a minute of time now as a result of your point of order.
Dr Whitehead
As I was saying, there is no clarity in the SI, as I have emphasised, concerning what any reasonable person would regard as the rest of the fracking process: that is, the establishment of the fracking pad, the vehicle movements, the drilling itself and the treatment of waste water on the site.
Richard Benyon (Newbury) (Con)
I have come along to try to get to the bottom of this, so I am listening closely to the debate. The hon. Gentleman seems to suppose that every fracking operation happens vertically. Surely the lateral drilling that he mentioned earlier must be the reason for the fact that activity might take place on the surface outside a protected area, but reach deep underground inside a protected area. I hope that he will clarify that point.
Dr Whitehead
The hon. Gentleman may consider that the reason for the 1,200 metre protection; like me, he does not know. It may be that one could consider a process—the Minister may enlighten us in the fullness of time about how that process might work, when she comes up with a list of protected areas, as she has said she might—in which a drilling rig could be set up on the boundary of a national park, then drill diagonally for a number of miles and then go further around to reach whatever it is thought might be reached at 1,200 metres below the national park. I would consider that fairly unlikely, particularly in large protected areas, because the drilling process would have to be extensive even to get there. However, like the hon. Gentleman, I am in the dark about whether that is the reason, because it is not stated in the SI, and indeed was not stated in the main legislation.
Mr Dennis Skinner (Bolsover) (Lab)
I used to work in very deep pits. My hon. Friend might be coming to the fact that drilling might cause gas to escape. The reason why I say that is that the Government want to be very careful about what they are doing. After Arkwright colliery in the Bolsover constituency closed, it had not been closed very long before there was an escape of gas into about 200 or 300 houses close to the pit. We were lucky that nobody was killed. Had somebody struck a match, the whole village could have gone up in smoke.
That is what can happen, and my hon. Friend has described it almost exactly. The drilling shaft and then, at 90°, the seams of coal and so on—it is almost an exact replica of what it is like in a pit, and I defy anybody to suggest otherwise. We all carried a safety lamp down the pit. Why did we carry them? To find gas. Believe me, when canaries went down the pit, they went for the same reason.
Mr Skinner
I am just finishing. I say to my hon. Friend that I do not know whether he was going to talk about gas, but it would not be a bad idea. [Interruption.]
The Chair
There is a Division in the Chamber. I understand from the Opposition and the Government Whips Offices that there will be two Divisions, so I suggest that we reconvene at 3.35 pm.
The Chair
For the convenience of Members, the new completion time for the Committee is 4.30. I intend to take a five-minute winding-up speech from the Minister, and as for the remainder of the time it is in Members’ hands to enable as many to be called as possible.
Dr Whitehead
I was in the process of saying that there is no clarity in the statutory instrument—although the Minister suggested that at some stage a definition might be brought forward—with respect to the rest of the fracking process, the drilling itself, vehicle movements, the pads, the treatment of waste water and so on, on the site.
From the definition in the statutory instrument—which, I agree, also has to be read in conjunction with the requirements on local authorities to certify that fracking is not taking place within any of the stated protected areas in their planning area—the Secretary of State could lawfully give permission for fracking wells to be established on the surface of all the areas in question, provided only that the 1,200 metre condition was met when it came to the actual fracking proceedings. The statutory instrument therefore completely overthrows the assurances and written definitions in the Infrastructure Act 2015.
Graham Jones (Hyndburn) (Lab)
My hon. Friend makes a powerful case for our serious concerns about today’s proposals. He says that he struggles to find a reason for the manner in which the Government are bringing the measure forward; but on pages 10 and 11 of the impact assessment we see nothing but spreadsheets about the value—presumably to the Treasury as well as to the economy—and about numbers and financial benefits. Is not that one reason for the introduction of the measure?
Dr Whitehead
My hon. Friend may well be right. He has drawn attention to the impact assessment accompanying the statutory instrument, which dwells at length on the relative utility for the public—or private—purse of fracking at 1,000 metres or 1,200 metres. Even assuming—this is what the hon. Member for Newbury and I were puzzling about a little while ago—that there could conceivably be a proposition that one could drill diagonally from outside the areas in question below 1,200 metres, and that that would not give rise to a great deal more danger or problems for the whole process than drilling vertically down, a 200 metre “additional protection zone” seems an odd creation.
Either the 1,000 metre limit below which fracking may take place nationally is deemed not to be safe, but under these particular areas 1,200 metres is safe—in which case why is there a 1,000 metre prohibition for the rest of the country, and additional protection under areas of outstanding natural beauty and national parks—or there is no difference as to protection. In that case, the statutory instrument is a completely vacant measure, which should not have been put before the Committee in its present form, as it makes no difference to the reality of what goes on under the surface.
There is another strange locution in the statutory instrument, about the question of what a national park is. The regulation refers to
“land at a depth of less than 1,200 metres beneath…a National Park”
as if a national park were merely what is on the surface. In planning terms, it is not possible to be granted planning permission in a national park if what is under the national park is not taken into account. The definition of a national park is not just the surface of the national park; in planning terms, it is the surface and what is under the national park. Therefore, we cannot decide to introduce even secondary legislation that treats a national park as if what is under it is nothing to do with it and as if the national park is merely a millimetre deep linear feature on the surface of the earth.
Christian Matheson
My hon. Friend makes an interesting point. I recall going to Edale in the Peak District national park when I was a child. I visited Blue John mines and Speedwell cavern, which are rather deep under the national park. They are considered to be important tourist attractions within that national park, even though they are underneath it.
Dr Whitehead
My hon. Friend makes a strong point, which leads me to draw attention to the word “within”, which is in condition 6 of section 4A of the Petroleum Act 1998. “Within” a national park must mean what is in and under it. It is therefore illogical—and, indeed, a simple misreading of what a national park is—to try to define a national park as if it consisted of two separate things, one for the purpose of what is on the surface and the other for the purpose of what is 1,200 metres beneath it. I contend that this was simply not what was set out when the Act was passed. Indeed, the apparent strength of the bans that were set out at that point may have caused some doubting Members to vote for the legislation in the first place.
One can, at the very least, say that this provision is a serious diversion of the intention of the Act—of what the Act said and, indeed, what those who proposed it said about it at the time. Either this SI has been accidentally very badly drafted, meaning that it allows fracking activity in all of these areas while claiming that it does not, or it has been deliberately drafted to take a very fine definition of what
“specify the descriptions of areas”
means to drive a coach and horses through the protections that Members thought were in the Act when it became law.
Under those circumstances, it would be best if the SI were simply withdrawn to be returned for further consideration. At that point, if and when the Minister decides what should have been done in the first place—which is to specify the extent of the protections that are to be on the surface—a properly drafted SI can be brought forward with that protection so that Members can see whether this provision is an accidental or a deliberate diversion of the intention of the Act. Either way, we demand that the SI is withdrawn. Failing that, we will divide the Committee. This is not just a question of whether the Government vote one way and the Opposition vote another. All hon. Members are engaged in a joint endeavour about whether the protections put forward in the Infrastructure Act, which all hon. Members here voted on, should be maintained or set aside.
Some hon. Members may already have corresponded with constituents about protections for various areas in their constituencies. The hon. Member for St Austell and Newquay has an area of outstanding natural beauty in his constituency, as does the hon. Member for North Cornwall. The hon. Members for Lichfield and for Croydon South, and the right hon. and learned Member for Beaconsfield have water source protection zones in their constituencies. The hon. Member for Skipton and Ripon has a national park in his constituency; he is doing rather well there. Indeed, all but one of the hon. Members on the Committee have sites of special scientific interest in their constituencies. It is a question not simply of possible party animus, but of how Members want to vote in light of how those sites in their constituencies may be dealt with and what they have said about those sites. I merely draw attention to the fact that should hon. Members on either side of the Committee decide to vote for the SI, they will effectively be saying that those areas in their constituencies, contrary to their understanding and that of their constituents, have no protection. That is a weighty decision for hon. Members to take.
Michael Fabricant
I rise because I, too, have concerns, and I certainly share some of those expressed by the shadow Minister. He quite rightly pointed out that I have a water source protection zone in my constituency. The SI was laid before the House, it says quite clearly, albeit in tiny print at the very bottom, in July 2015, so there is no excuse for anyone to say that it is a surprise. As a consequence, I went to visit the Environment Agency, which has an area headquarters in my constituency, last Friday, and today I spoke to people at the agency about the legislation. Yes, I have concerns, but I am also aware, as a chartered engineer and someone who is interested in technical matters, that people should not become alarmed unnecessarily—although there is some element to be alarmed about, and I will come on to that shortly.
As I said in my lengthy intervention, for which I apologise, I think the early stages of fracking in the United States, which were not subject to robust regulation, gave it a very bad name indeed. I have had a few emails—only a few—from constituents and from people outside my constituency who have talked about “this dirty practice”. It need not be a dirty practice if it is controlled. As the EA said to me only today, provided that robust regulations are in place—and it fully expects that to be the case—there is nothing to fear from pollution, or the sort of pollution that has occurred in the United States, because the construction of the wells and the horizontal seam is very different.
I listened to the hon. Member for Bolsover with considerable interest before the vote. The conditions that existed in coal mines 30 or 40 years ago are very different from those that will exist with fracking. Indeed, the EA did not even exist 30 or 40 years ago. We must bear that in mind.
With regard to fracking beneath areas of natural beauty, I want to remind people that coal mines have seams below country parks and SSSIs. I do not think that that is the issue. My concern—it has already been expressed by hon and right hon. Members—is the question of the well heads. The drill heads can cause considerable problems, whether they be in SSSIs, country parks, national parks or other areas of outstanding natural beauty. Before I can guarantee that I will vote for this SI, I want assurance from the Minister in her summing up that regulations will be laid before the House to control where the drill heads are placed.
There has been and continues to be a lot of hysteria about fracking, partly because people quite naturally do not know enough about fracking and are ignorant about the actual processes. I should say that I have nothing to declare in regard to fracking: I have no financial interest in it, only an academic interest.
Provided that I can be assured that robust regulations will be in place—that is certainly what the Environment Agency has said to me today—and that the Minister can say that there will be strict controls on where the drill heads will be, I will support the motion. If I do not receive those assurances, I have to tell my hon. Friend the Whip, who is sitting nervously in front of me, that there is a possibility that I may have to vote with the Opposition.
Callum McCaig (Aberdeen South) (SNP)
I will be brief to allow others to speak. First, I will touch on what the Minister said about the call for this debate to happen in the Chamber, as opposed to in Committee. At business questions on Thursday, I made that request to the Leader of the House, and it was rejected. That was unfortunate. This debate would benefit from all Members being given the opportunity to engage in it, because the implications of getting this issue wrong are so large.
Ostensibly, this is an England and Wales only matter. The point that my hon. Friend the Member for Edinburgh East made on the changes to Standing Orders raises the issue of why the Scottish National party is here and why we will be voting. There are two clear issues. First, there is the cross-border issue with water contamination. Frankly, poisoned water knows no national boundaries, or sub-national boundaries, if that is what people wish to call them. Beyond that, the SNP made it clear in the run-up to the election that we would engage in progressive politics with folks from elsewhere in the United Kingdom. Frankly, it saddens me that defining whether we should have safe drinking water should count as progressive politics in this day and age. It is beyond the pale.
Andrea Leadsom
Does the hon. Gentleman not think it is rather ridiculous, shall we say, that he should stand there as an SNP Energy spokesman suggesting that somehow the Government of the day would deliberately poison people’s drinking water? Does he not think that is a completely outrageous accusation? Did he not listen to my remarks?
Callum McCaig
At no stage did I say that there would be deliberate poisoning of water. If the Minister took some more time to listen and reflect, it might be more helpful. What we are dealing with here is the potential for drilled wells—fracked wells—under protected groundwater source areas.
Caroline Lucas (Brighton, Pavilion) (Green)
Far from talking about scaremongering, the Government would do well to look at the impact assessment by the Department for Environment, Food and Rural Affairs on rural economy impacts. Of course, the Government tried to prevent it being in the public domain, but it states:
“There is a risk that even if contaminated surface water does not directly impact drinking water supplies, it can affect human health indirectly through consumption of contaminated wildlife, livestock or agricultural products.”
That is from the document that the Government tried to hide. We now have it in the public domain, and what the hon. Gentleman is saying is far from scaremongering.
Callum McCaig
I thank the hon. Lady for that. To dwell for a second on the terminology here, we are talking about protected groundwater source areas. Why are we talking about that? The agencies have suggested that the areas are in need of protection. Someone drilling a well is going through the aquifers to pump chemicals down into the ground to cause a chemical reaction that causes mini-fractures. That is the process. If people think that what happens 1,200 metres below the ground has no relevance to what happens at the surface, they are deluding themselves. Even were it not for the large hole that is required to get the chemicals down there in the first place, there is the chance of seepage to the surface and the aquifers, causing damage.
I understand that the Government have a different approach to fracking than my party’s Government in Holyrood, and I am entirely thankful that the matter is devolved to the Scottish Parliament. I have great sympathy for Members whose constituencies may be adversely affected by the regulations. If the Government are to proceed with fracking, would it not be sensible to demonstrate its safety before they consider allowing it in protected groundwater source areas? To me, that seems a logical way of dealing with the race for gas.
Graham Jones
The hon. Gentleman tempts me to ask two quick questions. First, has there not been some form of fracking under the North sea, in and around Scottish shores, for a long period? What experience and knowledge does he have of that?
Callum McCaig
First, the majority of fracking in the North sea uses water, so there is not the use of chemicals that is required for onshore gas fracking. Secondly and frankly, the North sea is considerably further away, so I do not think that the implications for our drinking water are the same: I do not think that it is possible to drink sea water.
Graham Jones
I am grateful for that answer. The hon. Gentleman said that scientific evidence is needed. So I presume that he is in favour of some limited testing of fracking: he is not absolutely opposed to fracking if he wants some scientific base for it.
Callum McCaig
The science can be done in a number of ways and there are many lessons that can be learned from fracking elsewhere in the world: we would benefit from pausing and learning the lessons of elsewhere. I am very pleased that the Government north of the border have proceeded with a moratorium to allow a proper evidence-based approach to this issue.
Graham Jones
So the hon. Gentleman is saying that fracking is okay in other countries, to find out the scientific evidence base, but there is a moratorium in Scotland. Is that not a duplicitous position for the SNP to take?
Callum McCaig
I have no jurisdiction over what happens in the United States of America, for example. [Interruption.] Excuse me?
Callum McCaig
I will cut my comments short—I have taken up longer than I had intended to—and say that it is completely and utterly unfathomable to push ahead with this proposal at this time. It is deeply regrettable that this debate is not happening in the Chamber and I wholeheartedly support the comments of the hon. Member for Southampton, Test about taking these regulations away and coming back with something that protects the environment, and above all protects water sources.
Several hon. Members rose—
The Chair
Order. We have 27 minutes before I call the Minister, and I have nine right hon. and hon. Members seeking to catch my eye. I will first call members of the Committee who wish to speak although there are none on the Government side, so I call Mr Nick Herbert.
Nick Herbert
Thank you, Mr Hanson.
I will just make a couple of points. First, the Opposition’s case rested on the assertion that the regulations betray the promise that was made not to allow fracking in protected areas. However, the Opposition did not say whether there is any evidence that lateral drilling at depths below 1,200 metres is damaging and therefore should not be permitted.
What is clear about the Government’s position now is that fracking in protected areas at depths of up to 1,200 metres will not be permitted by these regulations. Furthermore, the Minister gave an assurance that the Government were also committed to ensuring that fracking at the surface in protected areas would not be permitted. Therefore, the question is whether it is damaging to allow lateral drilling from outside these protected areas that will allow fracking at depths below 1,200 metres. That is 40 times the depth of the deepest underground tunnel, for instance, it is the height of Ben Nevis and it is three times deeper than the level of water sources.
What the Opposition have not said is whether they believe that such activity at such depths—lateral wells only—is damaging and should therefore be opposed. The opposition of the hon. Member for Southampton, Test seemed only to be procedural; he argued that these regulations were not entirely as had been suggested, because there was not an outright ban, and therefore they were not good enough. But he has made no case as to why fracking at these depths is damaging.
That leaves the question of SSSIs and there is a good point to be made that the definition of protected areas in these regulations does not include SSSIs. However, the vast majority of SSSIs fall within the protected areas that are covered by this legislation in any case. Only about 15% of SSSIs would fall outside this definition, and SSSIs have an existing protection under the planning system. Therefore, it behoves those who oppose the regulations and say they are inadequate to show why the existing procedures are inadequate to protect them. It is not enough to say that because the regulations do not cover them, therefore SSSIs are under threat. There is no evidence of that.
Half of my constituency is covered by the South Downs national park and my constituents can be reassured that fracking at the surface in that national park will be banned. Fracking to a depth of 1,200 metres will be banned under the regulations. Only if they are concerned about fracking at depths below 1,200 metres should they feel that I should oppose the regulations. I see no evidence that such activity will be damaging at such enormous depths and, therefore, I see no justification for the claim that national parks will be damaged by the regulations and no justification for opposing the Government on the matter.
Graham Jones
It is a great pleasure to serve under your chairmanship, Mr Hanson. I do not know if this is your first Committee, but it is certainly the first on which I have served under your chairmanship.
I want to make a few brief comments on the regulations, the purpose of which is to clarify and hurry on the industrial-scale fracking in the UK. I question the Government’s reasons for fast-tracking this. The report I alluded to earlier, the “Summary: Intervention and Options” impact assessment, makes interesting reading and talks about being committed to developing oil and gas as soon as possible, a new tax regime—I want to touch on that—and streamlining the regulatory regime. I presume that phrase means trying to do away with some of the genuine objections and issues that might be raised about unconventional gas extraction. I am deeply concerned about that. That report talks about mitigating the risk. I think we should be sure about what we are doing, rather than simply mitigating a risk.
I am not opposed to fracking in principle; I support fair policies based on evidence. As I mentioned to the hon. Member for Aberdeen South, I do not think we should be duplicitous on this. If it can plug a demand gap before a transition to new technologies, which are not reliant on fossil fuels, and in the meantime provide jobs and local revenue, we ought to consider fracking.
It would be wrong to oppose fracking without evidence and without exception. I do not see how someone can be totally opposed to fracking and opposed to the gathering of scientific evidence through tests, unless they say they will end all gas consumption in the UK. That is an illogical position and does not stack up.
That said, fracking is clearly a different form of extraction involving a different process, and it is being carried out onshore, which is one of the critical points that ought to be raised as a concern. There are good reasons why many of our constituents are worried. I believe we should be ultra-cautious and strike a balance when considering the roll-out of fracking if it is to be proved safe. Clearly, if it has not been proven safe, there should be a moratorium, which would be a logical position.
Turning to the report, I am concerned that as early as page 4 the topic is growth and jobs. It is all about finances, not about safety. Sporadically, over the next couple of pages, the economic rather than the environmental case is mentioned. I would have thought that the environmental case should come before the economic one. On page 6 at the bottom, we are straight into Treasury figures about fracking. That causes me deep concern. We should be considering the environmental, not the financial argument. By the time we get to page 8, we are talking about production levels, and page 9 addresses development costs and gas prices, which is a long way from environmental considerations, and I am deeply concerned about that. By the time we get to pages 10 and 11, as my hon. Friend the Member for City of Chester mentioned, we have tables of costings on who will benefit from this measure: private companies and the Treasury. I will return to the benefit to the Treasury, which is mentioned at the beginning of the impact assessment. I am deeply concerned that the emphasis is completely the wrong way round. We should look to protect the environment. If there is a case for unconventional gas, it should address those environmental concerns.
I am regularly contacted by my constituents on this issue. I am a Lancashire MP, and I see quite a few Lancashire MPs here today. Of course, Lancashire is probably the epicentre at the moment, with supposed considerable shale gas reserves in the Bowland basin. We have seen the test wells and the test pads out on the west coast in the constituency of the hon. Member for Blackpool North and Cleveleys.
Graham Jones
You don’t have them? There are test wells and test pads very nearby on the Fylde coast. Licences have just been issued for that area, and Lancashire MPs are deeply concerned.
Finally, on my constituents’ concern and on the policy being the wrong way round, the beginning of the impact assessment mentions a new tax regime. I am delighted to oppose the Government’s plans for fracking in Lancashire so long as they are accompanied by an insulting 1% retention rate for local authorities while the Treasury collects 60% should gas flow from the wells. The Treasury is taking a huge amount of money that my constituents, and constituents across Lancashire, think is just going to be spent on Crossrail 2 or some other London or south-east project. It is outrageous that the Bowland basin should be so used. The Minister talks about a new tax regime, but that new tax regime is an insult to the people of Lancashire.
Kevin Hollinrake (Thirsk and Malton) (Con)
The hon. Gentleman may be confusing two different figures. The 1% figure is based on revenue, but the 60% figure is taxation on profits.
Graham Jones
The hon. Gentleman has a point, but he will find that, when the gas finally flows, it will be nearly all profit because the capital investment will be at the beginning and there will be minimal capital investment as we go along. Year on year, the balance sheet will essentially show profits. He is not wrong, but if he looks at how it will play out, there is huge disparity and there will not be much closing of the gap between the 1% that Lancashire gets and the 60% that will be given to the Chancellor.
Michael Fabricant
I think the hon. Gentleman is genuinely confused. The revenue is the actual total sales. He is comparing capital with revenue. The revenue is the sales, and the profit is the profit. As he will know, profit on the pump at petrol stations is a tiny proportion of total sales. His assumption is therefore wrong.
Graham Jones
That is not what the Treasury has set out. It is following the broad financial framework for the oil and gas industry in Scotland. I know that other Members want to speak, but it is not fair that the constituents of Lancashire will be ripped off again. There are environmental concerns, but I am happy to oppose the regulations because the offer in the impact assessment is simply not good enough.
Several hon. Members rose—
The Chair
Order. We have approximately three minutes per person if all the Members in the room wish to speak, so please bear that in mind.
Richard Benyon
You will be glad to know, Mr Hanson, that my right hon. Friend the Member for Arundel and South Downs made most of my points, so I will be brief. I came into the room thinking that I would be giving my hon. Friend the Minister a rather harder time than I actually am, because she made a very important point in her introductory remarks that I hope she will repeat in her conclusion.
I am here because most of my constituency is an AONB. I live in it. I used to have a job in government that was involved with looking after designated landscapes. I think that it is important to state where one comes from in this argument. I do not come from a position of believing that exploiting new hydrocarbons is wrong. I was in DEFRA during the early stages, when we were talking with the Environment Agency about how we would regulate this activity, and I was impressed by its determination that we should be a world leader through the environmental protections that we imposed. I therefore think that the Government are right to be feeling their way, and the regulations reflect that.
I am concerned about the designated landscapes and the special areas of concern. First, on SSSIs, we are talking really about the 15% of them that are not in national parks or AONBs. Those have layer upon layer of protections about what people are and are not allowed to do. The hon. Member for Southampton, Test talked about collecting ponds, roads and pipework going in, but they would not be allowed in SSSIs, so I am reassured on that point. He also made a point about the depth under national parks and AONBs. Frankly, there has to be some gradation of concern; otherwise it could be said that any activity right down to—I am being absurd here—the Earth’s core underneath an AONB would be permitted under some future technology. That was probably the weakest point that he made.
However, I hope that the Minister, in her closing remarks, will ensure that the designated landscape community, if I can call them that—the national parks, the AONBs and the people who feel passionately about those landscapes—are given further reassurance that we are talking about an activity that will come in from outside those areas, that it will be below a very deep depth indeed and that there will be endless measures, through the Environment Agency and others, to ensure that protection is given. Then I will be satisfied with the points that she has made.
Christian Matheson
I agree with my hon. Friend the Member for Southampton, Test that the regulations simply are not up to scratch. The hon. Member for Newbury raises an interesting point, but the idea that we can somehow separate what happens 1,200 metres below the surface from what happens on the surface is absurd and therefore the idea that we can separate the regulations for one and the regulations for the other is equally absurd. Yes, lateral drilling takes place, but it does not take place as far as perhaps the hon. Gentleman hopes that it might.
In the brief time available to me, I want to talk about some of the problems with the drilling. The industry-accepted figures on well failure stand at 7% of wells failing immediately, and Schlumberger, the world’s biggest fracking company, cites failure rates of 60% over a 30-year span, so there is a very high likelihood that wells will fail. The Minister talked in her opening address about the 400-metre to 1,200-metre depth, but what happens if the well fails within that zone—within the zone that is not being fracked—and then the pollution and gas escapes that my hon. Friend the Member for Bolsover talked about in relation to the coalmining industry happen within that zone? We simply cannot guarantee that well failure will not take place within that zone.
There is a problem, in that there was an agreement and assurance was given before the general election that SSSIs would not face fracking. Labour Members are becoming increasingly used to the Government saying one thing before a general election and doing something entirely opposite after it: whether it is saying, “There will be no top-down reorganisation of the NHS,” and then introducing the Health and Social Care Act 2012; saying, “There will be no changes in tax credits,” and then bringing in the Government’s tax credit cuts, or saying, “We are the greenest Government ever,” and then replacing that with, “Get rid of all the green crap”. However, that brings into question the Government’s motives and, indeed, their credibility in this area.
Additionally, in the Infrastructure Act, engineering standards, environmental protections and seismic monitoring measures were discussed, and the Minister talked in her opening speech about ensuring that we have high safety standards and strong regulatory regimes. Because she is not bringing those forward at the same time as this statutory instrument, there are grounds for us to be cautious about whether the Government will go back on those promises and assurances as well. There is enough doubt about the Government’s credibility to prevent us from approving this statutory instrument without seeing everything that goes on on the surface. I remind you, Mr Hanson, of the 24-hour a day operations, the huge air and light pollution and all the heavy goods vehicle movements that go with it. This is not the right time to introduce a statutory instrument about something that is happening down below, because it is intrinsically linked to what is happening on the surface.
Several hon. Members rose—
Tommy Sheppard
I think we can all agree that there is a fair degree of public concern and anxiety about this process and our deliberations should try to build public trust on this matter. I was not a Member of the House in January, but I was here to observe the debate on the Infrastructure Bill and I saw the Government head off demands for a moratorium by saying that certain areas would be exempt from this technology. I do not think that it builds public trust to say in January that there will not be fracking under any circumstances in national parks or sites of special scientific interest, then to say in October that, actually, there might be regulations which will allow it to happen under certain circumstances.
The way some colleagues have talked about the 1,200 metres being somehow okay, it is as if there is a disconnection between what happens 1,200 metres under the ground and what happens on the surface; as if some mysterious process happens down there to create shale gas and then, Star Trek style, it is teleported into a lovely, shiny, clean canister and there are no problems. However, what happens 1,200 metres down is connected to the surface and what happens at 100, 200, 300 and 400 metres, all the way through the water aquifers, all the way through until you get to 1,200 metres.
Harry Harpham (Sheffield, Brightside and Hillsborough) (Lab)
Will the hon. Gentleman give way?
Tommy Sheppard
Not with three minutes to go—two minutes, I am sorry. The problem with this process, which is essentially more a chemical than a mechanical process, such as coalmining or conventional oil drilling, is that you have to pump stuff down and get stuff up all the way through the 1,200 metres and there is every chance that leakage could take place and the environment be damaged. Why 1,200 metres? Why not 1,500 metres? Why not a mile? The answer is in the explanatory notes, which talk about a balance between environmental protection and the needs of the industry. That is not good enough to reassure the public.
Mr Dominic Grieve (Beaconsfield) (Con)
Will the hon. Gentleman give way, very briefly?
Mr Grieve
The hon. Gentleman says he objects to there being a balance, but what is happening up in Scotland when they put up a wind farm? They are having to balance getting the energy from the wind farm with the destruction of the peat land on which it is situated. We are always striking a balance and to argue that we should not do so is to argue that we should do nothing at all.
Tommy Sheppard
I am not entirely sure what that has to do with the debate on this SI. A balance may be struck with wind farming between the turbines and aesthetic judgments of the landscape and various other things, but here we are talking about striking a balance between public safety and environmental protection on one hand, and the needs of the industry on the other. If we want to reassure the public, we should not seek to compromise on those things. We should say that public safety and environmental protection are paramount, and that we will proceed with this technology within that framework. The problem here—unlike in Scotland, where there is a moratorium and the Government are seeking to develop a policy based on evidence—is that the policy appears to have already been decided and the evidence is being bent to fit the policy.
Mr Skinner
I came here principally because we have an application in the Bolsover area, in a small village called Calow. They oppose this very idea and the net result is that most of the village is on the side of those who oppose fracking. Cuadrilla set up almost immediately so I realised that there was a lot of money involved, a lot of profit, and that is what this is all about. It is about a licence to print money and, until the oil price went down, it was a licence to print a hell of lot more money, and who knows what the price will be in the future? I am here to represent my constituents and I promised them that I would come and do that.
I have to tell the Committee that, contrary to what a lot of people think, Derbyshire had more than 50 pits. There are mine shafts all over the place. Even somebody at the Department for Transport has drawn a line that runs across the M1 four times and over two pit shafts. Be careful about lines that are drawn on a fag packet by this Government, because that is what might happen. I am here to represent my constituents and to say, “Keep up the battle”. I am with them all the way. I do not believe in this nonsense about fracking. No one will find me saying, “On the one hand, this, and the other hand, that.” I am against it in principle.
I am pleased that my hon. Friend the Member for Southampton, Test has decided to vote against this, in the absence of the Tory Government withdrawing the measure and bringing it back in another form. I wish I had a vote, Mr Hanson. Give me one if you like; I will use it.
Caroline Lucas
Thank you, Mr Hanson, for allowing those not on the Committee to make short interventions. To be brief, I simply say that I very much agree with the analysis put forward by the hon. Member for Southampton, Test. The Government have made a spectacular U-turn and are undermining public trust even further by so doing.
Overall, the regulations fall far short of protecting our most precious wildlife sites and also our national parks and water resources. They also run contrary to the recommendations of the Environmental Audit Committee, of which I was a member in the previous Parliament.
The Minister will recall that that Committee carried out an in-depth inquiry into fracking and the unanimous view in that cross-party report was that there should be a moratorium on fracking. If there were not to be a moratorium, at the very least we made recommendations for the regulatory framework, including outright prohibition in protected and nationally important areas such as SSSIs, and in all watersource protection zones. The Minister is now, sadly, running against those recommendations.
I want to pick up on a point the Minister made in her concluding remarks. She said something that frankly beggars belief. She said that going ahead with fracking would help to meet carbon targets. Fracking represents a whole new fossil fuel industry, which will not displace coal because, by the time fracking comes on to our grid, coal will be off the grid. What it will displace are renewables.
There is real lack of understanding that fracking poses a risk to the shift that everybody says they want to a low carbon economy. Even if we had a perfect, generously resourced system of standards, regulation and monitoring—which we do not—fracking is not compatible with securing a safe and habitable climate for current and future generations.
Caroline Lucas
I will not because I have only two minutes. It is clear that globally we already have around five times more fossil fuel reserves than we can safely burn. The bottom line is that building this whole new fossil fuel industry is the very last thing the UK should be doing, especially if we are serious about securing a deal at the Paris climate talks.
The argument that shale gas is lower carbon than coal stacks up only if minimum methane emissions can be guaranteed. Recent studies suggest worrying rates of methane leakage from US shale operations. The inventor of the monitoring device routinely used by the industry warns that a fault in his invention means that historical estimates of leakage are severely underestimated. That means that fracked gas may not be better than coal in greenhouse gas emissions after all.
I can see that you want me to wind up, Mr Hanson, so let me simply repeat what John Ashton, the climate diplomat under the previous Labour Government, said:
“You can be in favour of fixing the climate, or you can be in favour of exploiting shale gas, but you cannot be in favour of both at the same time.”
Mr Gordon Marsden (Blackpool South) (Lab)
My hon. Friend the Member for Lancaster and Fleetwood, other Lancashire MPs and I are here because we are in the eye of the storm. The impact on our tourism and green spaces, and the lack of confidence that our constituents have, due to the duplicity of the Government, have brought us here today. [Hon. Members: “Hang on.”] No hang on. When the Government were under heavy pressure across the Chamber, the Labour amendments were accepted. They were then nibbled at in the Lords and finally we have what we have today.
The Minister failed to answer any questions about the visual impact of drills around areas of natural beauty, such as the Forest of Bowland, that would be affected. She and others took refuge in the fact that they would be outside. What an enticing vista to welcome visitors and residents to national parks—all the apparatus of fracking. The reality is, as my hon. Friend the Member for City of Chester said, that this is a process that goes on above in the sky and not simply below. We need to go back to the spirit and intention that was agreed by all parties in the Commons on 26 January.
The Chair
Order. I apologise to the hon. Member for Lancaster and Fleetwood, but I promised the Minister five minutes to wind up.
Andrea Leadsom
I am grateful to all Members for their comments. The debate has been interesting and it has certainly given us a lot of food for thought. I will address a few points now and I will write to Members about a few other points later because time is running out. The hon. Member for Southampton, Test asked for the definition of a national park. We have used the same definition as the standard one used by the Environment Agency. He cannot have it both ways. He asked whether there was any point to the regulations. We have taken every possible step to enhance and provide extra protection for the environment and for members of the public. The regulations do that. He seemed to say that the Infrastructure Act achieved adequate safeguards and asked why we need the regulations. I do not understand that. He should welcome this tightening of the protections.
The hon. Member for Bolsover talks about shale wells as if they are similar to coalmining pits. I reassure him that onshore gas wells are enclosed wells and are between six and 22 inches wide. They are enclosed in steel and cement. The Health and Safety Executive scrutinises the well design and monitors its progress, as well as the fracturing process. Nobody goes down these wells; it is a totally different industry. The UK has more than 50 years’ experience of regulating the oil and gas industry. I am sure he did not mean to suggest that anyone would be going down a shale gas well.
I thank my right hon. Friend the Member for Arundel and South Downs, and my hon. Friends the Members for Lichfield and for Newbury for their remarks. I confirm that we will make clear, as soon as possible, the specific policy on banning surface drilling in our most valuable and precious areas, and that will include national parks and areas of outstanding natural beauty. It is complicated to ensure that we have covered every area that we want to and that we have the most robust means of doing so. To clarify, all those rules will apply to hydraulic fracturing. I want to be very clear about that. We have a very successful onshore oil and gas drilling industry. Changes are not proposed to the legislation for that industry, which has a long-standing successful regime.
To the hon. Member for Aberdeen South—I am very disappointed. The statutory instruments were laid on 16 July this year. That was months ago. He has had every opportunity for further debate. I am afraid to say that he is scaremongering to suggest that fracking would be allowed in water sources. That is simply not the case and he should not be saying it. However, I agree with one of his points, which is that we should start with a limited number of wells. I can assure him that it would be great to start with one well. A limited number of wells would be fantastic.
The hon. Member for Hyndburn said that we talk too much about jobs, growth and revenues. I make no apology for that. The country needs energy security, jobs and growth. We need to protect our environment. Communities will gain £100,000 per explored well, and 1% of revenues, which could be worth £5 million to £10 million for the average 10-well site, and there will be a sovereign wealth fund. I assure all Members that we have taken the matter extremely seriously. The regulations seek to improve safety for the environment and for members of the public. I commend them to the Committee.
Cat Smith (Lancaster and Fleetwood) (Lab)
I associate myself with the remarks made by my hon. Friends the Members for Southampton, Test and for Blackpool South. The regulations are nothing but a U-turn from this Government. I have been contacted by many constituents on this issue. Well before that, I was determined to turn up at this Committee and express my huge concerns, especially on the safety of drinking water in my constituency. Not all my constituents are on mains water. Many of them take water from the ground, and it is for them that I am here.
Question put.
Immigration Bill (Fifth sitting)
(8 years, 6 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 8 / Noes: 10 - Question accordingly negatived.
The Chair
We now begin line-by-line consideration of the Bill. May I congratulate members of the Committee on how enthusiastically they took part in the evidence sessions.
Before we begin, I remind Members that they may remove their jackets during Committee sittings. Everyone should also ensure that all electronic devices are switched off or to silent mode. Tea and coffee are not allowed in our sittings.
The selection list for today’s sitting is available in the room. It shows how the selected amendments have been grouped for debate. Grouped amendments are generally on the same or a similar issue. The Member who puts their name to the lead amendment in the group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments in the group. A Member may speak more than once in a debate.
I work on the assumption that the Minister wishes the Committee to reach a decision on all Government amendments. Decisions on amendments take place not in the order in which they are debated but in the order in which they appear on the amendment paper. In other words, debate occurs according to the selection and grouping, and decisions are taken when we reach the clause that the amendment affects. Therefore, Members sometimes debate things and think they are going to vote on them then, but they vote on them later. I hope that that explanation is helpful.
I will use my discretion to decide whether to allow a separate stand part debate on individual clauses and schedules following debate on the relevant amendments.
Clause 1
Director of Labour Market Enforcement
Keir Starmer (Holborn and St Pancras) (Lab)
I beg to move amendment 55, in clause 1, page 1, line 6, after subsection (1) insert—
‘(1A) The primary purpose of the Director of Labour Market Enforcement is to secure the enforcement of labour market legislation, as defined in Section 3(3) of this Act.”
To ensure that the functions of the Director of Labour Market Enforcement are exercised for the purpose of protecting those vulnerable to labour market exploitation and to make this explicit on the face of the Bill.
I preface my remarks on amendment 55 by indicating that Labour supports a director of labour market enforcement, provided that the purpose of the director is effective enforcement of labour standards and that the relevant agencies are properly resourced to that end. That is the in principle position. With that, there should be no overlap with or merging into inspectorate or immigration enforcement functions. Part of the Bill and the Government’s associated consultation document suggests that the role is a director of labour market enforcement in name but not in design. The aim of amendment 55 is to resolve that issue.
The purpose of the amendment is to ensure that the functions of the director of labour market enforcement are exercised for the purpose of protecting those vulnerable to labour market exploitation and to make that explicit in the Bill. I will not go through the wording unless that is necessary. It is proposed that the director will report to the Home Secretary and to the Secretary of State for Business, Innovation and Skills. That is welcome, but the position is being created via an Immigration Bill sponsored by the Home Office. Therefore, that concern, and particularly the overlap between immigration enforcement and labour market enforcement, gives rise to the amendment.
Immigration enforcement threatens the success of labour inspection. A better approach to reducing illegal working is effectively to enforce labour standards, thereby reducing the demand for illegal workers, who are more vulnerable to being exploited due to their irregular immigration status. The OSCE has said:
“A rising challenge to effective labour inspection is an increasingly widespread imposition of measures that compel labour inspectors to conduct immigration enforcement activity as part of their workplace inspection agenda.”
That is the concern that we have about the Bill—hence, amendment 55.
The International Labour Organisation said:
“the primary duty of labour inspectors is to protect workers and not to enforce immigration law.”
Other countries have experienced the dangers of merging those two functions. For example, research in the Netherlands shows that dual labour inspection priorities to identify, on the one hand, undocumented workers, and, on the other hand, victims of trafficking have negative impacts on the uncovering of trafficking cases. There are two reasons for that. One is that victims of trafficking are too scared to come forward and the second is that labour inspectors fail to identify them. In the Dutch research, there is a classic example of that, involving an individual who was trafficked into commercial cleaning in the Netherlands. Labour inspectors came to his workplace on many occasions, but he did not come forward; in fact, he claimed not to work in the establishment rather than come forward and be identified as an employee. For that reason, he was missed by the inspectors. As I say, this is a classic example of its type.
It is not just in the Netherlands where there is such evidence. In the USA, there is now a memorandum of understanding between the Department of Labor and the Department of Homeland Security, the purpose of which is to ensure that immigration control does not interfere with the protection of workers’ rights. For example, when the Wages and Hours Directorate investigates a case of unpaid wages, its officials must not ask for immigration documents. So there is a clear separation of roles, and the fact that workers’ rights are protected in the USA regardless of immigration status prevents retaliation and intimidation by employers, who could otherwise threaten to report undocumented workers if they exercised their labour rights. Our position is that in order to tackle labour exploitation effectively, there must be a strict firewall between immigration control and labour inspection. That offers the best prospect of success for this director of labour market enforcement.
We have some questions for the Minister, and I will just run quickly through them; he may be able to pick up on them in his remarks. First, how will the director of labour market enforcement prioritise non-compliance in the labour market when non-compliance constitutes a range of offences in relation to requirements set out under the labour market legislation, and what assurances are in place to ensure that the work of the director will prioritise the protection of vulnerable workers from abuse and exploitation? Secondly, what overlap will the director’s consideration of non-compliance have with the work of the Home Office to control immigration and identify undocumented workers? Thirdly, what is the intended overlap between the twin aims of tackling the undercutting of British workers by undocumented workers and addressing worker exploitation, and how does the Minister see those two aims being achieved in unison?
I have set out the principal reasons why we have tabled the amendment. It may be helpful at this stage, Mr Bone, if I indicate that although we will not push a number of amendments to a vote, we will push this one to a vote. I hope that is helpful.
Mrs Emma Lewell-Buck (South Shields) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bone.
I will speak briefly about amendment 55, which has the modest aim of making it explicit that the new director of labour market enforcement should have a duty to stand up for those who are at risk of exploitation. This amendment has been tabled because Labour Members believe that if such a position is going to exist, whoever holds it should be responsible for enforcing all aspects of labour market law and not just some of them.
If they accept this amendment, the Government will signal that part 1 of the Bill is truly about improving labour market enforcement and not simply about grabbing headlines to bolster their credentials of being tough on immigration. If the Government are willing to make that commitment, I think we will all welcome the creation of the new director.
The amendment is important because without it there would be a worrying ambiguity in the new role of the director, which could see the resources allocated to the director directed primarily at illegal migrants in work rather than at those who employ them.
There is a tonal shift in the Bill towards criminalising the employee over the employer, which is concerning because it seems to focus on the symptom rather than the cause; the focus appears to be on the workers rather than on the organised gangs who traffic and exploit them. That approach will not have a lasting impact on illegal labour market activity in Britain. The reason is simple: if workers are arrested and deported, employers will find others to take their place. If you strike at employers, however, that market soon disappears. There is even a risk, as witnesses told us last week, that an emphasis on criminalising workers will actually be counterproductive in fighting illegal working. If people fear that they will be harshly punished if their immigration status is discovered, that can be used by their employers as a threat, driving them even further underground and opening them up to worse forms of exploitation.
The Government therefore need to make it explicit that the new director will have powers and duties that allow them to act in all areas of the labour market and that the role will be used to tackle exploitation at its source. Without that commitment, the director is unlikely to be an effective office because it will be limited to clearing up the symptoms, rather than the root causes, of labour market exploitation. Such an approach might bring some great headlines for the Home Secretary, but it will do little to prevent trafficking and abuse or to reduce the number of illegal migrants working in this country. I am sure that the Minister will agree that if public money is going to be spent establishing a new agency, we need to be sure that it is going to get results, and that is why he and his colleagues should back this amendment today.
Paul Blomfield (Sheffield Central) (Lab)
It is a pleasure to serve on the Committee with you in the Chair, Mr Bone. I echo the comments made by my hon. Friends, save that I have one caveat in relation to the point made by my hon. and learned Friend the shadow Minister. I hope that we do not need to push the amendment to the vote. I hope that there can be agreement, because we are on the same page on several of these issues, in the wider sense in relation to an effectively managed immigration system, and particularly on labour market enforcement. Many Opposition Members commended the Government on their work on the Modern Slavery Act 2015. We had differences on points of detail, but very much agreed with the main thrust of that legislation. There is strong support for the principle of more effective labour market enforcement. The Prime Minister spoke powerfully about that when he spoke, at that stage, not about a director but about the establishment of a labour market enforcement agency. Clearly, the Bill has a slightly different, but nevertheless welcome, approach to seek to co-ordinate the efforts of those agencies dealing with more effective enforcement in the labour market.
However, it does not sit comfortably that our debate about labour market enforcement is in the context of an immigration Bill—so there is perhaps a point of confusion. At the heart of this clarificatory amendment is the desire to be absolutely clear on the role of the director of labour market enforcement. The post—the function—should do what it says on the tin: it should be focused on labour market enforcement. My hon. and learned Friend the shadow Minister has cited international examples. It is useful to learn from other countries, though we do not do it as often as we might. There are powerful examples of where confusion between labour market enforcement and immigration control and enforcement is counterproductive. It neither supports effective immigration enforcement—because it drives undocumented workers underground and out of the way of the authorities—and does not help with labour market enforcement either.
Sarah Champion (Rotherham) (Lab)
It is a pleasure to serve under your chairmanship. If I may add to what my hon. Friend is saying, Caroline Robinson, the policy director of Focus on Labour Exploitation, said in her witness statement,
“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.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 27, Q54.]
That is what the amendment is trying to get at.
Paul Blomfield
I thank my hon. Friend for her helpful intervention. Throughout our deliberations, we should seek to draw on the evidence that we heard. The evidence cited by her and by my hon. and learned Friend the shadow Minister has powerfully made the case that the confusion of immigration functions and labour market enforcement is damaging and counterproductive to our objectives for the labour market and for immigration. The amendment seeks to provide absolute clarity. I hope that the Government will accept it.
Anne McLaughlin (Glasgow North East) (SNP)
The Scottish National party tabled the amendment with Labour because we believe that the primary purpose of the director of labour market enforcement should be to enforce the rights of workers and protect people from exploitation. Indeed, the Government’s background briefing states that the new labour market enforcement agency will be established to protect people against being exploited or coerced into work. The Immigration Law Practitioners’ Association has said:
“Where those working or living in very poor conditions are deterred from accessing assistance because of their immigration status”—
this will clearly make it harder for them—
“or because of their vulnerability to threats by unscrupulous employers in relation to their immigration status, agencies will be restricted in their ability to gather the intelligence needed to exercise their regulatory functions and protect against labour market exploitation. A lack of clarity over the protective function of the labour market enforcement agency may therefore undermine its aims.”
It would be good to have a little more clarity.
Last week, one of the Conservative Members really shocked me with a statement about illegal workers. On reflection, I wonder whether there is a genuine, fundamental misunderstanding about some of these people that might need to be addressed. The comment was that if people knew that the Bill was being introduced and that it was going be so much harder to work here illegally, they would be less likely to allow themselves to be trafficked. That really shocked me. We are talking about the most vulnerable people, who are taken from other countries against their will. They do not choose or allow themselves to be trafficked. They are used and abused. The Bill will make it so much worse for them. Does the Minister believe that people are trafficked here because they choose to be or not? If there is a belief that there is an element of choice to trafficking, I understand where the measures come from. I would like to know that the Minister intends to protect the most vulnerable people.
Simon Hoare (North Dorset) (Con)
If the hon. Lady accepts the premise that the trafficker is the conduit for the individual to go from A to B, does she accept that if the individual understands that entry to B is now harder and tougher, it is likely that they will not be sought to be trafficked in the first place or that they will ask the traffickers to traffic them elsewhere? It is all about signal and message.
Anne McLaughlin
So there is the answer to my question. I really would love the Minister to respond and to understand that people do not choose to be trafficked. They do not say, “Please kidnap me, tie me up, bundle me into a van, and take me to a country that I’ve never been to where I can’t speak the language.”
Simon Hoare
That is kidnapping; it is not trafficking. Trafficking, in my judgment, is when somebody goes to somebody else who is providing that service and says, “I want to get from A to B. Will you get me there?” That might be in a private motorcraft, an aeroplane or whatever it might happen to be. When I talk about trafficking, that is what I am talking about, not about kidnap, which is illegal.
Anne McLaughlin
In legal terms, the hon. Gentleman is wrong. That is not what trafficking is. He needs to look up the legal definition of trafficking because trafficking happens against somebody’s will. We have to protect those people. Now that the hon. Gentleman understands, perhaps he will support this amendment.
Byron Davies (Gower) (Con)
Does the hon. Lady accept that when I worked as a police officer in Romania, young ladies who wanted to come to the UK through Spain would look for a trafficker to facilitate that journey to Spain and the UK? That is trafficking, contrary to what the hon. Lady is suggesting.
Anne McLaughlin
I think the hon. Gentleman is making the decision to do what a lot of today’s media do, which is to focus on people who have an element of choice. Most people who are trafficked—well maybe not most people, but a significant number—are trafficked against their will. They are the most vulnerable people and the people we have to protect. This amendment is asking only that the new director pays attention to the rights of the most vulnerable people. We cannot say that one person has had an element of choice but another person has not, so we will not protect the second person. So no, I do not accept what the hon. Gentleman says.
Craig Whittaker (Calder Valley) (Con)
The premise of the amendment is:
“To ensure that the functions of the Director of Labour Market Enforcement are exercised for the purpose of protecting those vulnerable to labour market exploitation and to make this explicit on the face of the Bill”—
Where in the Bill is that purpose not explicit? Clause 3 refers to non-compliance and the interpretation of it. It specifically refers to the Employment Agencies Act 1973, the National Minimum Wage Act 1998, the Gangmasters (Licensing) Act 2004 and anything else prescribed by the Secretary of State.
Anne McLaughlin
If the hon. Gentleman thinks that it is already explicitly stated, surely he will have no problem supporting this amendment.
Paul Blomfield
I wanted to develop the point, because I think that some of the discussion about trafficking is a diversion. Does the hon. Lady agree that the primary purpose of this amendment is simply to clarify the role of the labour market enforcement director and make it clear that there is no disagreement on either side of the House that such a director should focus on preventing those vulnerable to exploitation in the labour market?
Anne McLaughlin
If the hon. Gentleman was asking me to agree with him then I agree with him.
Sarah Champion
It is a clarification, courtesy of Google. The UN defines trafficking as
“the recruitment, transportation, transfer, harbouring or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability”.
As my colleague has just said, this gets to the nub of the problem. My understanding, and perhaps the Minister could provide clarity, is that when we are talking about trafficked people, the legislation is in place already so it can be enforced. What we are saying here is that a large number of people are in a grey area. They might, as in the example given by the hon. Member for Gower, have paid to come into this country to work but then, very quickly, find themselves in an exploitative situation.
We need clarity about the role of the labour market enforcement director. Is he very clear that he is responsible for enforcing good labour practice? Does he have the resources to do that and can he work collaboratively with the other agencies to make sure that when something like the Modern Slavery Act 2015 is enforced, that vulnerable person is taken care of?
The Chair
Just before we move on, I want to say that I have allowed the debate to go fairly wide of the mark on trafficking as it does indeed go to the heart of the Bill. If you recall, I did ask for one of the witnesses to define trafficking. I myself was none the wiser after she had finished speaking, unfortunately.
The Minister for Immigration (James Brokenshire)
I welcome you to the Chair, Mr Bone, and other members of the Committee to our consideration of part 1 of the Bill, which deals with labour market enforcement. I look forward to the debates that we will have in the coming sittings to, I hope, improve the Bill and to reflect on significant issues relating to labour market enforcement and immigration more generally. I look forward to debate that I am sure will be wide ranging and well informed and that I hope will be good natured. These Committees are about scrutiny of the detail of the legislation. There will be strong views on certain issues, but the approach that I always take on Bill Committees is to listen and to reflect, and I hope to be able to inform and provide evidence and further background to the Committee during the detailed consideration of this Bill. With those words of introduction, I will move on to clause 1 and the amendment tabled by the hon. and learned Member for Holborn and St Pancras.
The effect of the amendment would be to specify the primary purpose of the director of labour market enforcement in clause 1. Although I appreciate the desire to include a strong statement up front on the director’s remit, I believe, for reasons that I will explain, that the amendment is unnecessary. The director’s role and remit are already clearly set out in clauses 1 to 7. When we look at the provisions in clauses 2 and 3, which we will debate in the course of this morning, and the specific definitions of “labour market enforcement functions” and “labour market legislation”, we see that that provides a clear framework as to the intent behind the creation of the director, but I will explain this a little further.
We are creating the director of labour market enforcement to lead efforts to tackle abuse and non-compliance in the labour market. As we will explain in the debates on later clauses, that will include setting the strategy for the Government’s work to tackle all types of labour market exploitation and creating an information hub to facilitate better sharing of tactical and operational intelligence. I think that that is equally important. On some of the issues of vulnerability that have already been flagged in terms of identification, it is important to be able to share that information and get it to the right agencies so that they are able to act. I think that that goes beyond the remit specifically of the director, but I certainly understand and respect the points that have been made.
Paul Blomfield
I want to push the Minister on that point. As I said, the confusion arises because a director of labour market enforcement is being proposed in the context of an immigration Bill and it is a post that will report to the Home Secretary. Were the director of labour market enforcement sitting in a different Department, reporting perhaps to the Secretary of State for Business, Innovation and Skills, the necessity for this absolute clarity might be diminished. Does the Minister agree that the fact that the labour market enforcement function is within an immigration Bill and the post reports to the Home Secretary means that it would be helpful to have absolute clarity on the purpose, so that this post holder is not distracted by other—quite legitimate but other—considerations of Government?
James Brokenshire
I welcome the hon. Gentleman’s welcome for the creation of the director of labour market enforcement and what he said about the way in which it is framed and the intent behind it. I will go on to respond to his direct point, but let me address the issue about whom the director reports to. It is to the director of business and to the Home Secretary. Let us look at the agencies in relation to which the director has a remit. One of those is the Gangmasters Licensing Authority. That sits within the Home Office and therefore it is appropriate for the director to report to the Home Secretary in respect of the overarching work; the GLA is a Home Office-sponsored and led agency. The hon. Gentleman may want to engage in a broader debate as to whether he thinks that that is appropriate, but it is important that it is structured in that way.
Keir Starmer
Obviously, one of the concerns is where the director reports to. I understand the point about the need to report to the Home Secretary as some of the other agencies do. I am trying to explore where we have common ground. The experience in other countries is that merging labour market enforcement with immigration is counterproductive. There is a concern that this is an immigration Bill and therefore there is the potential for that merger. Other countries have experienced a practical problem in exercising the primary function because it has been merged with immigration control and enforcement. Does the Minister accept that there are real examples in other countries of action which started with a good intention but went wrong because it morphed into what was, in truth, immigration control and enforcement?
James Brokenshire
I would point to the fact that immigration enforcement—the directorate within the Home Office that is responsible for the enforcement of immigration rules—is not one of the structures that the director has responsibility for. I will cover in turn the point about remit because there is an important aspect to this. When hon. Members have heard what I have to say, I hope that they will understand that the hon. and learned Gentleman’s concern about some sort of merger is not what this is about. We intend the director’s remit to cover labour market breaches, not immigration offences. The director and the enforcement bodies will work closely with Home Office immigration enforcement wherever labour market breaches are linked to illegal immigrants or people working in breach of their visa conditions, but that is an adjunct and not the purpose of the director.
I was asked why this measure was in an immigration Bill. There are two reasons. First, immigrant workers can be particularly vulnerable to exploitation by rogue employers, a point that has been flagged by hon. Members already this morning. I am sure that that will be a continuing theme during our consideration of the Bill. Secondly, by ensuring that workers are treated fairly, we are preventing businesses bringing in cheap labour that illegally undercuts the wages of people already in this country. Good labour market enforcement has knock-on effects.
Modern slavery has been a theme of some of the contributions this morning. With the Modern Slavery Act, Britain is once again at the forefront of the fight against the inhuman crimes of slavery and forced labour—the hon. Member for Sheffield Central and others made comments on this—but it is important to understand that exploitation occurs in many forms and can start with abuse of employment law. We must step in to protect not just the vulnerable—I will address the point about vulnerability—but also local workers and responsible businesses affected by those who are prepared to exploit cheap labour. That is why there is the need for this strategic approach and for the director to work with the different organisations that are in place. This is not a merger, as the hon. Member for Sheffield Central highlighted in his contribution, but rather we have an over-arching strategy of looking at ways in which we can promote good practice.
I would direct hon. Members to the consultation published alongside the Bill to set out some of those details. It says that:
“The Director will lead and co-ordinate work to promote compliance by employers and labour providers with labour market legislation, and to encourage and enable people to report infringements and exploitation.”
We are conducting a consultation at the moment around the director. We look forward to receiving feedback and input so that we are able to reflect fairly and appropriately.
Our employment law framework guarantees decent minimum rights for workers, including from next April the national living wage for over-25s, and promotes fair competition between businesses. The majority of employment law is enforced by individuals taking their employer to an employment tribunal to seek redress if they believe they have been wronged. State enforcement bodies step in to enforce legislation where there is a higher risk of exploitation or vulnerability.
As I have indicated, clause 3 already defines the director’s role by reference to the legislation and enforcement functions that will be within his remit. It makes it clear that the three enforcement bodies for which the director will set the strategy are the Employment Agency Standards Inspectorate, HMRC’s national minimum wage team and the Gangmasters Licensing Authority. We want the director to bring co-ordination across the whole spectrum of breaches of employment law—from employers who do not know the rules right through to organised, criminal exploitation of workers. That will be the director’s broad remit. However, I am concerned about some of the pictures we see of organised immigration crime and organised criminality more generally that seeks to exploit labour markets and uses the front of employment. We are dealing with a broad spectrum, which ranges from vulnerability all the way to good practice and compliance. It is right that the director should have that remit—setting up strategy, commenting on the balance of resources across each of the three agencies and reporting to the relevant Secretary of State.
Sarah Champion
Could the Minister give clarity on how the director would work in collaboration with the Independent Commissioner for Modern Day Slavery? Whether it is in guidance or within the Bill, it would help if the two roles could be clarified, because there is a grey area.
James Brokenshire
It is important to stress that they are separate roles. We make that point clearly in the consultation document, where we say that the director will have a role that is distinct from the commissioner’s role. Obviously, the commissioner looks at all types of modern slavery, whereas the focus of the director will be on labour market exploitation and enforcement. The practical roles are equally different:
“The Director will set the strategic plan, priorities for targeted action and overall approach”,
whereas
“the Commissioner has a broad role to look at the effectiveness of all the bodies engaged in the fight against modern slavery, encourage best practice, and make recommendations for improvements. That role will in future include looking at the effectiveness of the new Director and the reformed GLA”,
which we are consulting on now. I hope that is helpful and explains that these are complementary roles. I think that the commissioner, Kevin Hyland, is doing an excellent job. He has a great deal of practical experience from his time in law enforcement. I remember a couple of years ago going out with Mr Hyland on an enforcement raid to do with trafficking, so I know the real passion he has for that job. I think that he will use and work with the new director in a very positive way to continue to confront the appalling evil that is slavery and trafficking, with people being horribly exploited and enslaved for gain. We continue to need to shine a light on this, so that it is seen for what it is.
Paul Blomfield
I endorse the points that the Minister made on enforcement, but I want to come to the issue he raised about the review of the Gangmasters Licensing Authority. I agree that effective enforcement is important. The opportunity for exploitation in the labour market is growing. Can he reassure us that the review of the GLA will not mean that we will be moving to voluntary licensing?
James Brokenshire
I think that the hon. Gentleman may be straying a little from the specific amendment. He will have seen the clear manner in which the consultation document is set out and the various questions that are being asked about the licensing function in ensuring that that is conducted appropriately, is evidence-based and is used as a tool to prevent exploitation in the highest-risk sectors. I direct right hon. and hon. Members to the relevant sections on pages 40 and 41 of the consultation document, which set that out. Obviously, we will reflect carefully in the context of the feedback we receive around the consultation.
Keir Starmer
Before the Minister moves on from that point, he has understandably set out the functions in clause 3(3) that are of primary relevance. I understand that. The purpose of the amendment is to say that, among those purposes or functions, this is the primary one and it is protective. That is the sole purpose of the amendment. His point is that it is not needed in the light of clause 3(3). The concern is that there is no clear reference in the Bill to the primary purpose. The measure comes in an Immigration Bill that, a few clauses on, includes offences of illegal working. Does he understand that, although we do not quarrel with the functions or why he has chosen them, we want to underline what I think is common ground, that the primary purpose is protective? In this environment, and given other international examples, it is helpful for all concerned to have that included in the Bill.
James Brokenshire
I think I have already explained that the functions of the director of labour market enforcement are by their nature framed within the context of the various pieces of legislation that the hon. and learned Gentleman set out. I have also explained, as set out in the consultation document, that the measure is about promoting good practice and highlighting issues where employers can equally comply. That is why I responded as I did to a number of hon. Members about the spectrum of activity engaged here.
We are very clear that the purpose of the director of labour market enforcement is to tackle labour market exploitation across the field. We believe this measure will give the stronger drive to deliver that step change in tackling exploitation. The director will have that purpose set out in terms of appointment and, in delivering that, will be accountable to the Home Secretary and Secretary of State for Business, Innovation and Skills.
We also believe that the requirement to publish the strategy and annual report—it will not be a private document but will be visible according to the legislative framework—will demonstrate the clear commitment to protecting the vulnerable and tackling exploitation. That is again why we are clear on the remit, role and function. From a tactical operational perspective—I am sure we will come on to the information hub—that will support the activity.
Paul Blomfield
I am grateful to the Minister for being generous with his time. I have listened carefully to his comments and there is little in them that I can disagree with. Given that we are seeking to be on the same page as far as we can on all these issues, will the Minister explain why he feels that the Bill would be diminished by the amendment?
James Brokenshire
As I have already indicated, I simply do not think it is necessary, because the Bill is already framed so as to cover the points hon. Members are highlighting. I have always taken the approach in legislation that, if the situation is clear through other mechanisms, adding provisions that are not needed is not appropriate. I had hoped in my comments to assure the Committee why the amendment is not necessary, the purpose of the provisions and the intent of the Government. Transparency will be provided through the annual reporting to see what is happening in practice, and therefore the amendment as expressed is not needed. The director’s strategy will be evidence-based, which will allow the plan to be from year to year, based on where non-compliance is most likely to cause harm. That will be reflected in the plan.
Mrs Lewell-Buck
I have also listened carefully to the Minister, but I am confused and puzzled. If the purpose of the measure is to tackle labour market exploitation across the board, why did the Government see fit to include it in the Immigration Bill?
James Brokenshire
I have already responded to that point by mentioning the vulnerability faced by people who are here through immigration. Equally, the measure can be a means of ensuring that we have a good, regulated labour market that therefore does not add to exploitation, nor encourages people to come here illegally or through trafficking, which is why it sits in the overall framework of an immigration Bill. I hope that I have explained that the purpose and remit of the director is labour market enforcement. The provision is not intended to stray into the separate issues of immigration enforcement, but if cases of people who are here illegally are highlighted, the director would be duty-bound to report that and to pass on intelligence through the hub that is being created. We will no doubt have a separate debate about that when we reach the relevant provisions.
Keir Starmer
I am sorry for intervening again. Although I disagree with very little of what the Minister is saying, that last point is a cause for concern. Of course it makes sense for the director to have these primary functions and to co-ordinate with other action on immigration, but the concern is that when we put the two functions together and do not clarify the primary purpose, there will be a misunderstanding about how this works.
We support this good initiative of having a director, but the good work—the head of steam—will be lost if the primary purpose is not clear. People will feel that the measure is, on the face of it, about labour market enforcement, but it carries with it immigration checks and it is in an immigration Bill. What the Minister says makes perfect sense, but that concern is the cause of our discomfort and the reason behind the amendment, which would make the provision much more powerful.
James Brokenshire
In many ways, the purpose of a Bill’s Committee stage is to tease out some of these issues, and to get the Minister—in this case, me—to set out and clarify the purpose and intent of a Bill’s provisions. We strongly believe that the Bill gives certainty and clarity about how the director will provide co-ordination.
The measure is about existing agencies that are already carrying out functions. If intelligence is already discovered by those agencies, sharing will already take place. This does not change anything about operational practice; rather, the director will provide strategy, co-ordination and an overarching response. We need good work on enforcement between agencies so that we do not—I do not think we have this, but the provision ensures that that is the case—have a silo-based approach, given that there is an overlap and that we need to look at this as an overall market. Those are the reasons why we do not believe the amendment is required, so I ask the hon. and learned Gentleman to withdraw it.
Keir Starmer
As I have already indicated, I am grateful to the Minister for setting out so clearly the purpose behind the director of labour market enforcement. In one sense, there is nothing between us on that. Our concern is clear: this positive development comes in an immigration Bill, yet there is clear evidence from other countries that unless we are clear about the primary purpose of such a measure, we run the risk of losing everything that we have tried to gain.
As I have said, the offences of illegal working in relation to employers and employees are set out just a few clauses later in the Bill. When such measures are together in one Bill, a clear explanation of the primary purpose of the director would cut through a lot of the concern and help that person to devise a strategy that focuses on that primary purpose, rather than other possible purposes. I welcome the comments of the Minister and other members of the Committee, but I will not withdraw the amendment.
Question put, That the amendment be made.
James Brokenshire
I shall be brief, given that we have had quite a wide-ranging debate about the purpose of clause 1. I underline that the purpose of and the rationale behind the appointment of the labour market enforcement director is that the three main enforcement agencies work together. They are well respected, with distinct expertise, knowledge and skills, and collectively they span the spectrum of infringement from the simplest forms of non-compliance to exploitation that may include some form of slavery. There has been a shift in the nature of such exploitation from individual abuses of employment regulation towards organised criminal activity, which is why it is important that we have an overarching response that ensures that we join the work of the bodies together.
To enable the enforcement bodies to address the problem collectively, we have determined that there is a need for greater co-ordination among them, as well as the need for a single set of priorities. We want to ensure that there is strong, effective co-ordination of the three enforcement bodies, but we also want to achieve that with minimal disruption and while avoiding significant structural change.
We believe that the key lies in establishing effective overarching leadership and co-ordination of the enforcement bodies, so the clause creates the position of director of labour market enforcement. The director will lead efforts to tackle abuse and non-compliance in the labour market. As we will debate later, that work will involve setting the strategy for the Government’s work to tackle all types of labour market exploitation, and heading an information hub to enable better sharing of tactical and operational intelligence, as well as to build a stronger evidence base to inform future interventions.
Creating a director provides the greatest scope for achieving the strategic integration of the three enforcement bodies without losing their different specialist skills. It is vital that those skills are retained to deal with not only day-to-day compliance issues, but serious criminality. If the system focused exclusively on either serious exploitation or lower-level breaches, it would not provide the necessary protection for vulnerable workers, which is why we have drafted the Bill in such a way.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Labour market enforcement strategy
Keir Starmer
I beg to move amendment 57, in clause 2, page 2, line 9, at end insert—
(ia) the threats and obstacles to effective labour market enforcement,
(ib) the remedies secured by victims of non-compliance in the labour market,”
To ensure that the labour market enforcement strategy sets out an assessment of the threats and obstacles to effective labour market enforcements and the remedies secured by victims of labour rights infringements and labour market offences.
The Chair
With this, it will be convenient to discuss the following:
Amendment 58, in clause 2, page 2, line 12, leave out paragraph (b) and insert—
“(b) contains a proposal for the year to which the strategy relates setting out—
(i) how the non-compliance outlined in the assessment required by subsection (2)(a) (i) and (ii) is to be addressed,
(ii) how the threats and obstacles identified under subsection (2)(ia) are to be overcome, and
(iii) how the provision of remedies for victims of non-compliance in the labour market identified under subsection 2(a)(ib) is to be improved.”
To ensure that the functions of the Director of Labour Market Enforcement are exercised for the purpose of enforcing all existing labour market standards, rather than prioritising a limited number of areas, and to link the Director’s strategy with his or her assessment of non-compliance with labour market standards.
Amendment 56, in clause 2, page 2, line 24, leave out subsection (3) and insert—
‘(3) The proposal mentioned in subsection (2)(b) must set out the resources required to—
(a) address the non-compliance in the labour market,
(b) overcome the threats and obstacles identified under subsection 2(b)(ia),
(c) improve the provision of remedies for victims of non-compliance in the labour market.”
To oblige the Director of Labour Market Enforcement to provide an assessment of the resources required for effective labour market enforcement and remedies for victims, rather than simply to determine how currently available resources should be allocated.
Amendment 59, in clause 2, page 2, line 26, at end insert—
‘(3A) Nothing in the strategy shall—
(a) restrict, or
(b) reduce the resources allocated to
the labour market enforcement functions as defined in Section 3(2) of this Act.”
To clarify the relationship between the Director of Labour Market Enforcement and the UK’s existing labour inspection agencies, ensuring the current role, remit and resources of labour inspectorates are safeguarded.
Amendment 65, in clause 3, page 3, line 6, at end insert—
“(da) any function of the Health and Safety Executive and the Health and Safety Executive for Northern Ireland;
(db) any function of local authorities in relation to the “relevant statutory provisions” as defined in Part 1 of the Health and Safety at Work etc. Act 1973;
(dc) any function of local authorities under the Children and Young Persons Act 1933 and by-laws made under that Act, the Management of Health and Safety at Work Regulations 1999, and the Children (Protection at Work) (Scotland) Regulations 2006.”
To include the remit of the Director of Labour Market Enforcement to cover functions relating to health and safety at work and child labour, functions carried out for the most part by local authorities.
Amendment 66, in clause 3, page 3, line 12, at end insert—
“(ca) Part 1 and The Health and Safety at Work etc. Act 1973;
(cb) Sections 3 and 4 and Part 2 of the Children and Young Persons Act 1933.”
This a consequential amendment to amendment 65.
Amendment 63, in clause 3, page 3, line 31, before “in this section”, insert “Subject to subsection 6A,”.
Amendment 64, in clause 3, page 3, line 33, at end insert—
‘(6A) A person is not prevented from being a worker, or a person seeking work, for the purposes of this section by reason of the fact that he has no right to be, or to work, in the United Kingdom.”
To ensure that labour market offences committed against all workers are included within the scope of the Director of Labour Market Enforcement’s work, irrespective of immigration status (as under subsection 2 of section 26 of the Gangmasters (Licensing) Act 2004).
Amendment 62, in clause 4, page 3, line 42, leave out paragraph (a) and insert—
“(a) An assessment of the extent to which the strategy developed under section 2 of this Act has—
(i) addressed the non-compliance identified under Section 2 (2)(a)(i),
(ii) improved the provision of remedies for victims of non-compliance in the labour market identified under 2 (2)(a)(ia), and
(iii) overcome the threats and obstacles identified under 2 (2)(a)(ib)”.
To ensure the Director of Labour Market Enforcement’s Annual Report links with his or her assessments about non-compliance in the labour market (and assessment of the remedies secured by victims and threats and obstacles to effective enforcement).
Keir Starmer
I should have said earlier that it is, of course, a privilege to serve under your chairmanship, Mr Bone—better late than never. If it is convenient for hon. Members, I will deal with all the amendments in one go. On the other hand, if that is not the best way forward, I hope that somebody will indicate that.
The amendments address the strategy that it is envisaged that the director will set out. Amendment 57 would ensure that the labour market enforcement strategy would include an assessment of the threats and obstacles to effective labour market enforcement, and the remedies secured by victims of labour rights infringements and labour market offences.
The Bill requires the director to make an assessment of non-compliance in the labour market, but does not require him or her to assess the threats or obstacles to effective enforcement, including, for example, powers and resources, or to examine remedies secured by victims of non-compliance in the labour market. The amendment would oblige the director to incorporate those considerations into his or her strategy—in other words, to add value to what the labour inspectorate is already doing. The director needs to look at how enforcement could be done better, as well as the extent of non-compliance.
We want to build on the victim-focused legacy of the Modern Slavery Act, so we suggest that the director should look at the remedies for victims of labour exploitation as part of his or her strategy. Let me point to some gaps in the data. Recorded data on compensation for infringements of labour market standards are limited. For example, HMRC does not keep data in a format that enables the provision of statistics on the amount of arrears paid or not paid to workers. Data on civil claims brought by victims of trafficking and damages awarded are not available.
During the financial years 2010-11 to 2012-13, no prosecutions by the Gangmasters Licensing Authority resulted in compensation orders for victims of human trafficking. Data on compensation secured through the criminal injuries compensation scheme for victims of human trafficking for non-sexual exploitation, forced labour, slavery and servitude are not being recorded, so there are clear gaps. Why does not the Bill make provision for the director to assess why non-compliance is at its current level, as well as an assessment of non-compliance within the labour standards? How can the Government know whether they are making progress on meeting the needs of victims of exploitation if they are not collecting data on remedies?
Craig Whittaker
The hon. and learned Gentleman and I both had lives outside this place before we were elected, and I know that he had a high-profile role. Has he written a strategy for any job he has held that did not take account of threats and obstacles relating to the strategy that he was trying to write?
Keir Starmer
The straight answer is no; of course that would be within the strategy. The purpose of the amendment is to make it clear that that has to be part of the strategy for this director. I am sure that members of the Committee share concerns about resources. The amendment is an attempt to ensure that this step forward is as effective as possible, and that touches on strategy and resources. While my answer to the hon. Gentleman is no, I do not think that that is a good enough reason not to support the amendment.
Paul Blomfield
Is my hon. and learned Friend, like me, keen for the Minister to give us a bit more clarity about what seems to be a shift in narrative towards more serious issues of exploitation, which has not been defined? Our hope is that we are seeking to enforce all standards for all workers.
Keir Starmer
Yes, I thank my hon. Friend for his contribution. I will come later to where the director will put his or her emphasis—on what might be called the higher end breaches, or on more routine breaches. I welcome that contribution and I ask the Minister to deal with it if he can in his comments.
Amendment 59 is intended to clarify the relationship between the director of labour market enforcement and the UK’s existing labour inspection agencies, ensuring that the current role, remit and resources of labour inspectorates are safeguarded. By way of background, I give an example, because practical realities follow from what we hope is a very good initiative. This year we saw the pay and work rights helpline merge with the Advisory, Conciliation and Arbitration Service. The pay and work rights helpline used to provide vital advice; it was a service with an annual cost of £500,000, yet, when it was merged, the money did not go with it, which has led to a strain on the service. As a result, ACAS struggles to meet extra demand with no extra resources. There is some evidence that representatives have been asked not to use it. By making explicit the resource implications in the strategy, we hope to avoid this sort of implication. Where there is a merger of various functions and enforcement without the resources, it becomes ineffective.
Sarah Champion
I give another example. During the witness session, I asked Professor Metcalf whether he believed that there were sufficient resources and he said,
“Probably not, but in the consultation document and, I think, in the Bill, it does not actually set out quite what the resources are.”
I went on to ask him what he thought they should be and he said:
“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.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 19-20, Q36-37.]
Keir Starmer
I am grateful for that intervention, which is another example from the evidence that we heard last week about resources. Unless we tackle the resources issue head on, all that will be achieved is the creation of a director without any real powers to carry out the functions, which I think everybody accepts need to be enforced and enhanced. In a sense, if we try to do more with less, services are jeopardised and, in truth, the vulnerable workers suffer and we will not succeed in reducing the pull factor for illegal migration because exploitation will not be uncovered and penalised.
By way of example, the number of Gangmasters Licensing Authority investigations into the illegal activities of gangmasters dropped from 134 in 2011 to 68 in 2014, and prosecutions were down from 19 in 2010 to three in 2014. I accept that underlying this reduction will be some intelligence-led work, but those figures are stark and they underline the general point made by the witnesses last week, namely, that the concern about labour market enforcement is not so much about the agencies and the enforcement powers as about the fact that the resources are simply not there to allow for investigations and action to be taken very frequently. Unless that problem is addressed head-on, there is the danger that all we will create is a director who does not actually carry out the enhanced functions that it is hoped will be carried out.
Sticking with the GLA itself, its budget, of course, has been cut by 20% since 2010, so we are in an environment where the enforcement agencies are already suffering quite significant cuts. It means that the GLA regulates labour in a £100 billion sector with a budget of 0.004% of that figure.
I have some questions that I hope the Minister will be able to address in his reply. On page 8 of the Government’s consultation document, “Labour market exploitation: improving enforcement”, it states that there has been
“a shift from abuses of employment regulation towards increasingly organised criminal activity engaged in labour market exploitation.”
That shift has occurred during the past 10 years. But what is the evidential basis for that assertion? In other words, that is the shift of abuse from, as it were, lower-level routine abuse to increasingly organised criminal activity. Linked to that is another question. Does the Minister agree that if we do not enforce employment legislation effectively at the lower end of abuse—if you like, minimum wage, health and safety and so on—we will create conditions for higher levels of abuse to develop. So, as I say, where is the evidence to support that assertion? And if we abandon the lower end or do not put resource into it, do we not run the risk of creating conditions in which unscrupulous employers will get away with whatever they want?
Amendments 65 and 66 would include the functions relating to health and safety at work and child labour within the remit of the director. May I just be clear about the spirit in which amendment 65 was tabled? It aims to explore the thinking behind the division of functions here, and to understand why all the functions are not brought together under this director, while also recognising—as we do—the work that the Health and Safety Executive is currently undertaking. So, amendment 65 was tabled in that spirit of properly understanding the Bill’s limited remit. The health and safety at work aspects of the Bill speak for themselves; I think that the child labour functions are enforced by local authorities.
Earlier this morning, the Minister said that the purpose of the Bill was to cover the whole spectrum of labour market enforcement, and therefore the ownership of the HSE and of the legislation to deal with child labour were obvious. There may have been a good deal of thinking behind that, but it would be useful through this exercise to understand that thinking properly, because the exclusion of those functions from the remit of the director of labour market enforcement could have an influence on the issue addressed by amendment 55, namely, the primary purpose of the director. Why is the HSE excluded and what is the thinking behind that exclusion?
Of course, there is also a budgetary consideration. The budget of the three labour inspection agencies covered in part 1 amounts to just over £14 million. That is compared with the £81 million for the Health and Safety Executive, which adopts a cross-labour market role. If the aim is to cover the whole spectrum and there are already resource considerations—of course there are—why do these provisions not cover the whole spectrum and leave out the health and safety and child labour aspects?
Amendments 63 and 64 aim to ensure that labour market offences committed against all workers are included within the scope of the director of labour market enforcement’s work, irrespective of immigration status. I will try to explain our concern clearly. Trafficking offences, as we understand it, are outside the remit of the Bill, save where they touch on the role of workers. That makes sense on one level because we would not expect the director of labour market enforcement to be looking at trafficking offences outside the employment or labour context. The problem as we see it—which may simply require clarification or may require amendment—is that the definition of “worker” within the Bill is then not wide enough to cover all those who may be in the labour market, including undocumented victims of trafficking. Perhaps there is a clear explanation; there may be a simple amendment. We follow the logic of the scheme, but we are concerned that the definition of “worker” is in fact too narrow and will leave some who it is probably the intention of the Government to include outside the scope of the protection. The amendment is put forward in that spirit.
Sarah Champion
On that point, I wonder if the Minister could also clarify why clauses 3 and 9 use two different pieces of legislation relating to workers? It seems to be a bit of an anomaly. Some clarity on that would be welcome.
Keir Starmer
Finally, amendment 62 touches on the annual report and is intended to ensure that the director of labour market enforcement’s annual report links with his or her assessment about non-compliance in the labour market and the remedies secured by victims and threats and obstacles to effective enforcement. The bullet point is this: as drafted, the director’s strategy does not link with his or her assessment of non-compliance in the labour market and his or her annual report does not link back to the assessment of non-compliance as a baseline. The amendment aims to ensure that the strategy covers everything that it should and that the annual report is tied into the same process.
Mrs Lewell-Buck
I rise to support the Opposition amendments, which will be helpful in clarifying the role and duties of the director of labour market enforcement. I will also echo some of the comments made by my hon. and learned Friend the Member for Holborn and St Pancras.
The creation of the role is welcome, as my hon. Friends have said, but if the director is to have real influence and impact, they need to be involved across enforcement of labour market standards and not confined to a narrow area. The director should be able to take the lead on issues of labour market enforcement, to command respect from employers and be a strong advocate for compliance and tougher enforcement. The Opposition amendments are designed to make that happen. Amendment 56, for example, would require the new director to set out the resources that are needed for effective labour market enforcement.
Witnesses told the Committee that the problems with the immigration system are due not to a lack of powers but to a lack of resources, which undermines enforcement. The Government can introduce all the legislation they like, but criminal employers will not bat an eyelid unless they believe that there is an actual chance of their door being kicked down. That chance is incredibly low right now. The UK has less than one inspector per 100,000 workers, which is one of the worst ratios in Europe. The director should be able to tell the Government when they are not doing enough, and amendment 57 would introduce a clear duty to examine and identify where enforcement is failing and where there are obstacles to effective enforcement, thereby helping to identify where further resources are needed. There are currently too few data on the scale of labour market exploitation, and the director could and should be able to fill that gap.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
It is a pleasure to serve under your chairmanship, Mr Bone. I rise to support amendments 56 to 58 and 62 to 64, but I will focus on the first three of those amendments lest I test the Committee’s patience.
Clause 2 is perhaps the only clause that my Scottish National party colleagues and I fully support. I wish that were the case for the remainder of the Bill, but I am afraid it is downhill from here. It is an outrage that we are talking about modern day slavery. The director of labour market enforcement, first and foremost, should be used to take action against exploitative employers and to protect workers from being abused and taken advantage of. Nice chap though he is, there is not much on which I agree with the Minister for Immigration on this Bill—or anything else for that matter. However, I find myself in the unusual position of agreeing with him that it is unacceptable for any employer to recruit staff whom they think they can exploit because those employees are less likely or less able to complain about working conditions. It is a scandal that we still have to talk about slavery and exploitation in modern-day Britain. However, that is the experience facing many workers, particularly migrant workers, when they clock in each morning. I am sure that we have all been appalled, upset and angered by the frequent newspaper reports on the level of exploitation that some migrant workers have faced and, truth be told, we could possibly be accused of not responding appropriately or quickly enough.
I hope that the recruitment of a new director of labour market enforcement is the first step in addressing the plight of many migrant workers. It should be welcomed that we have already started to talk about the work that the director will undertake, and the strategy in clause 2 outlines the action that will be taken to eradicate modern day slavery and exploitation in the workplace. There is currently a worrying lack of information on the level of exploitation faced by migrant workers. We do not know how many are being exploited. We have little evidence of the physical exploitation that they face, and we have little insight into the activities of gangmasters.
Therefore, amendment 57, which is supported by Focus on Labour Exploitation among others, would allow us to gain a greater understanding of the challenges to operating successful, fair and effective labour market enforcement. An assessment of the risks will allow us to gain the appropriate level of evidence so that we can take action against rogue employers. The amendment details our vision for addressing the exploitation that can arise from illegal migrant working and the steps that should be taken to gather the required level of evidence. Amendment 58 would ensure that we can use the evidence that has been gathered to take an evidence-based approach to addressing worker exploitation. That is important, as it prevents any prejudice-based opinions or judgments from influencing what action should be taken.
During our evidence sessions last week, Caroline Robinson of Focus on Labour Exploitation said:
“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.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 27, Q54.]
She also raised the point that, along with the director, the inspectorate needs further resources to ensure that our position is comparable to that of other EU countries. At the moment we have just 0.9 inspectors per 100,000 workers.
Anne McLaughlin
Other hon. Members have mentioned that figure; I will give a bit more information to put it into perspective. As the hon. Member for South Shields said, that figure compares very unfavourably with figures for the rest of Europe. In Ireland, for instance, there are 4.6 inspectors per 100,000 workers, Belgium has 12.5 and France has 18.9. I got that information from a policy blueprint published by FLEX in the past couple of weeks. FLEX has said:
“Enforcement of employment law…is at desperate levels, creating the perfect conditions for modern slavery to take place.”
I agree that there must be proper funding for inspection, otherwise it is pointless.
Gavin Newlands
My hon. Friend has highlighted the paucity of resources in this area, something that we will come back to time and again throughout this debate.
The resources question, raised by amendment 56, was also a cause of concern for Professor Sir David Metcalf, the chair of the Migration Advisory Committee. During our evidence session last Tuesday, Professor Metcalf raised concerns about the resources required to enforce measures and punish rogue employers who are failing to abide by labour market enforcement. After we have gathered evidence on labour market enforcement, we cannot be put in a position where we cannot use that evidence effectively because of a lack of resources. Professor Metcalf stated that, as things stand, he does not believe that the director will have the resources to be able to effectively deal with the problem of worker exploitation.
Professor Metcalf also stated that when working on the implementation and enforcement of the minimum wage he estimated that an employer would get a visit from HMRC once every 250 years and there would be a prosecution once in 1 million years. Quite frankly, that is a ridiculous position for us to find ourselves in, and we cannot allow ourselves to be put in it when it comes to tackling the issue of workers who are being exploited. Amendment 56 would require that the resources required to tackle the problem should be set out and calculated.
As I have said, we broadly support the clause, but clarification is required on a few matters, not least resourcing for the position of director. In our evidence session last week, Professor Metcalf said
“I suspect we just do not have the public finances for sufficient enforcement”
before going on to say that
“in the Bill, it does not actually set out quite what the resources are.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 18-19, Q33-36.]
I hope the Minister will go some way to answering that point today or else will support amendment 56, which would allow the new director the opportunity to assess the required resources.
Paul Blomfield
I will speak to a number of the amendments in the group, starting with amendment 14. Following on from our earlier discussion, it is important—
Paul Blomfield
I meant amendment 57, Mr Bone. I apologise—I do not know where I got 14 from; you ought to see my notes!
It is important that the director has a broad oversight and is able to inform Government and the agencies, when they are taking work forward, of all the issues that are a challenge for us, in government and in this place, when trying to ensure effective labour market enforcement.
It is worth mapping out the scale of change within our labour market, as that causes some of the difficulties. For example, according to the Office for National Statistics labour force survey, from 2010 to 2014 jobs paying below the national minimum wage went up 14.8%, zero-hours contracts were up 343%, the number of agency workers went up 20% and bogus self-employment rose substantially.
We all celebrate the entrepreneurial spirit that leads to genuine self-employment, but the level of self-employment in the construction industry is of particular concern—66.7% of workers are now self-employed, which compares with 9% in the finance and insurance sector and 8% in manufacturing. There is concern in the construction industry, where we know that exploitation is rife, that about half those in self-employment are bogusly self-employed.
That sets part of the context for the need to ensure that we have a proper and comprehensive assessment. Kevin Hyland, the independent anti-slavery commissioner, who has been mentioned already this morning, talked about the scale of the problem in the Daily Mail, which I was reading last week—I note the Minister’s surprise, because that is not my habit, but I happened to be catching up with the paper last week. The article stated:
“Up to 13,000 people in Britain are forced to work in factories…sold for sex…or kept in domestic servitude, among other forms of slavery...But in 2014 only 2,340 potential victims were referred to the National Referral Mechanism…And there were only 39 convictions”.
The commissioner made the point that many people have fled from countries where confidence in the rule of law and in the authorities is low, which makes them reluctant to come forward in Britain. He said:
“Victims who come here with a promise of a better life and then become exploited, they’re going to be fearful of going to the authorities through previous experience.”
Such barriers and issues are precisely those that ought to be within the scope of the consideration of the director of labour market enforcement.
The amendment also relates to the remedies secured by victims. Compensation is of enormous importance. Earlier this year I asked the Secretary of State a written question about compensation for victims of trafficking identified by the Gangmasters Licensing Authority. The answer on 17 September was:
“During the financial years 2010/11 to 2012/13, no prosecutions”—
no prosecutions—
“by the Gangmasters’ Licensing Authority resulted in compensation orders for victims.”
I find that shocking. Again, that sort of issue ought to be within the scope of the director of labour market enforcement and within the strategy. Amendment 57—not, indeed, 14—provides that clarity.
On amendment 59, the whole purpose of the director of labour market enforcement is to provide co-ordination, but we need greater clarity. I am interested in the Minister’s response about the relationship between strategic planning, co-ordination and line management. For example, the Gangmasters Licensing Authority is a non-departmental public body and has its own board, which sets its budget and defines its priorities. We want to see an overall strategy, but a number of us would be concerned if the integrity of the GLA as originally constituted was in any way undermined. Amendment 59 will, I hope, draw clarification from the Minister.
Amendment 65 is on the Health and Safety Executive. As the shadow Minister pointed out, we are seeking clarity. Why has the HSE, among others, been excluded from the director’s remit? The Minister will recall from the evidence we received from the chair of the Migration Advisory Committee that there is a real case to include the HSE, local authorities and, potentially, sections of DWP. When we look at the scale of labour market enforcement between different agencies, the Employment Agency Standards Inspectorate has nine inspectors, the GLA has 69, the national minimum wage inspectorate has 232, and the HSE has 1,047 staff, of whom 972 are front-line inspectors. If we are to have a coherent approach to labour market enforcement, it would be useful to have a clearer understanding of the Government’s thinking on why at this stage the HSE is excluded.
I am not sure whether this is an oversight on the Government’s part—again, clarification would be helpful—but amendment 64 is seeking simply to ensure that labour market offences committed against all workers are included, because the current definition of “worker” suggests that it would not include—
Craig Whittaker
Not just amendment 64, which I shall come to, but all these amendments were perhaps summed up best by the hon. Member for Glasgow North East, who said that they are about the enforcement of employment law. Is not that amendment asking employers to specifically break employment law, which currently excludes them from employing anybody who is not legally allowed to work in this country anyway?
Paul Blomfield
No. I thank the hon. Gentleman for his intervention because it allows me the opportunity to clarify that the amendment is seeking to ensure that labour market offences by employers committed against all workers be included within the scope of the director of labour market enforcement’s work. The point is that, as currently drafted—unless the Minister can provide contrary clarification—the measure suggests that undocumented workers will be excluded. Clearly, it is nonsense that a labour market enforcement director who is seeking to challenge all abuse in all parts of the labour market would have excluded from his terms of reference that part of the labour market which, by definition, is most likely to be subject to substantial abuse and exploitation. The Minister might be able to provide clarification that makes the amendment unnecessary.
James Brokenshire
I thank all hon. Members for their contributions in this mini-debate. Equally, I should celebrate and recognise the contribution from the hon. Member for Paisley and Renfrewshire North. I appreciate that this may be a rare moment in the consideration of the Bill—he is supportive of the measures—but, in good spirits, I welcome his comments and the support he has given. I think that there is a shared recognition that we need to deal with exploitation and to achieve better co-ordination, and that we need the strategic response that is provided by the Bill. I welcome his comments in the spirit in which they were made.
The hon. and learned Member for Holborn and St Pancras asked me at the outset about organised criminal activity and the evidence base. It is feedback from enforcement officers that tells us that the incidence of forced labour may be growing at a faster rate than other types of exploitation. It appears to be due to criminal gangs infiltrating the supply chain, which I know is a broader issue that was debated during the passage of the Modern Slavery Act. I will not stray widely, but perhaps that will give him a sense of what we have been looking at.
Amendments 57 and 58 relate to the contents of the director’s annual strategy to address non-compliance in the labour market in the forthcoming financial year. Although I agree entirely with the intention behind the amendments, they are unnecessary because it is the Government’s expectation that the director will feed information of that nature into the planning and reporting cycle. Page 24 of the consultation document says of the strategy:
“It will set out, for the financial year ahead: the priorities for enforcement; the outcomes required from the enforcement bodies; and the budgets for the enforcement bodies, within the total envelope of available funding.”
So we have been quite clear about our expectations.
The issue of how non-compliance in the labour market should be addressed is at the heart of the strategy, which is why clause 2(2)(b)(i) requires the director to propose how labour market enforcement functions should be exercised, or, to put it another way, how the three enforcement agencies under the director’s remit should operate to address non-compliance.
The Government would not consider the strategy to be effective if it did not identify the threats and obstacles to effective labour market enforcement. We expect the director to turn over stones to tell us where the gaps are and to propose how they can be addressed. That is a crucial and valuable aspect of the role. Similarly, the Government would not consider any strategy or report to be effective if it did not examine the important issue of securing remedies for victims, which would naturally include recovering wages owed to workers and sanctions against employers for labour market offences.
Sarah Champion
Therefore, will the Minister confirm that, as in amendment 62, non-compliance will be reported on and used as a baseline for forthcoming reports?
James Brokenshire
As the hon. Lady will note from the consultation document, the strategy is about setting out information and issues concerning the work of different bodies and agencies, including some themes of non-compliance. How that feeds into communication, good practice and sharing information is at the heart of the matter and needs to be reflected in the strategy.
Amendments 56 and 59 bring me to the director’s role in setting the resources of the enforcement bodies. It is the Government’s intention not that the director of labour market enforcement decides the budgets of the three enforcement bodies, but that the director should recommend how resources should be allocated within the total envelope of available funding. Hon. Members will be aware that the Gangmasters Licensing Authority is funded by the Home Office, and the Employment Agencies Standards Inspectorate and HMRC’s national minimum wage enforcement teams are funded by the Department for Business, Innovation and Skills. Funding for those agencies is secured via the usual departmental bidding process. While the Government intend that the relevant Secretaries of State will take the director’s proposals on resources into account during the preparation of those bids, it is right that the Government set the overall level of resources devoted to labour market enforcement in the context of the totality of pressures on public spending. I point out that HMRC has increased its budget for enforcing the national minimum wage; for 2015-16, that has increased by £4 million, meaning that the total budget has increased to £13.2 million.
Keir Starmer
I do not want to lose the central concern—a concern that gives rise to the amendment and that was in all the evidence, both written and oral evidence given to us last week. The existing agencies have their budgets and their funding. Funding streams will be set by different parts of the Government and different bodies. Although HMRC is an example of where there has been an increase, budgets are being cut. The real concern being expressed across the board is that the resources at the moment for the existing agencies are such that the likelihood of any inspection or action being taken is very low. I am the first to accept that some of the statistics about one visit every 250 years and a prosecution once every million years have to be put into proper context; if it is intelligence-led, that gives a different perspective. I completely understand that, but the point made by independent body after independent body is that the likelihood of inspection and enforcement action is so low that it does not operate as much of a deterrent for most of those who may be involved in abuse of the market. That is a real concern. The Migrant Advisory Committee has been mentioned, but plenty of others charged with overseeing some of these issues are extremely concerned about the resources.
In that context, and understanding that it will not be the director’s role to require resources to be used in a particular way, what assurance can we be given that there will be a shift—a step change—in approach? Without providing the resources necessary to give some assurance to the many people, including Opposition Members, who have raised their voices on this issue, it is difficult to see how the strategy will achieve the desired objective and be the positive step forward that it needs to be. Accepting the constraints and the framework in the Bill, what assurance can be given in response to the powerful evidence about the lack of resources and the limited likelihood of inspection and enforcement action being the real problem, rather than the penalties after the event?
James Brokenshire
I would point to what Professor Metcalf said during the evidence session about checks taking place every 250 years. He said:
“I am exaggerating when I say once every 250 years for a visit. Of course, they will do it based on risk.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 21, Q40.]
Our reforms are about enabling better targeting of enforcement activity, to make best use of the resources available and, therefore, to best protect vulnerable workers.
I return to my point about the additional support that HMRC is providing in terms of the national minimum wage. Where the director feels that the overall level of resources available has had an impact on delivery of the strategy, he or she will be able to say so in the annual report, which is laid before Parliament. That report can be redacted only for reasons of national security or the safety of any person in the UK, or if an investigation may be prejudiced, so it would be open to the director to make any comments.
It is right that, overall, the director is able to prioritise between the different agencies, while the envelope must reside within Government. We are having to make savings, and that is well recognised across the House. We have to deal with the deficit and a number of other issues, which I will not rehearse in this Committee. This is about being more effective and about using collaboration and co-ordination to step up our response. Amendment 59 is therefore unnecessary, as the director would be unable to restrict or reduce the resources allocated to labour market enforcement functions overall.
Amendments 65 and 66 would extend the director’s remit. The enforcement bodies and pieces of legislation that should be included are those relating to workers who are most at risk of infringement of their labour market rights—workers on low pay, those engaged through agencies or those working in sectors deemed at high risk. They are most likely to be vulnerable to abuse by unscrupulous employers. The amendments would include other areas of state enforcement—namely, health and safety and the protection of child workers. We do not agree that those should be within the director’s remit, and I will explain why.
The Health and Safety Executive, the Health and Safety Executive for Northern Ireland and the health and safety functions of local authorities play an important role in ensuring that risks to health and safety are properly managed in a worker’s place of work. That is a wide responsibility; some of the requirements that those bodies enforce relate to labour market and employment rights, and others to different types of risk, from the storing of chemicals to the training necessary to operate machinery.
We want the director to remain focused on enforcement of the most relevant employment rights. The current way in which the Health and Safety Executive and the Health and Safety Executive for Northern Ireland use their specialist expertise to set their strategy is best placed to protect workers from workplace hazards. However, we are consulting on information-sharing powers for the director. Those will include the ability to share information with other enforcement bodies, including the Health and Safety Executive and local authorities. That will enable all enforcement bodies to take a shared view of risk, and that is the right way to approach the issue.
Similarly, the Children and Young Persons Act 1933 provides protections for those younger than 18 who work. It covers a range of scenarios, from very young children who may act or model, to older children who take a job in the school holidays. While the protections that it affords can be seen as employment rights, they are fundamentally about protecting children and their health, wellbeing and education. That naturally fits with local authorities’ other responsibilities towards children and young people. We do not believe it would be in the child’s best interest to separate this piece of legislation and enforcement and have it within the remit of the director. We think that local authorities are best placed to know the particular risks in their areas. As I have indicated, the sharing of information and intelligence is the most effective way in which the provisions in the Bill can contribute to that important work.
Paul Blomfield
Will the Minister elaborate a little on how he sees that information sharing developing? Given the scale of the HSE inspectorate’s opportunity to identify, for example in the construction industry, wider labour market abuses, that is clearly significant. I am keen to hear how the Minister anticipates HSE inspectors being briefed, trained and supported on those wider potential labour market infringements, in a way that would inform and guide the other three agencies under the jurisdiction of the director of labour market enforcement.
James Brokenshire
The hon. Gentleman will be aware that information sharing is a specific point in our consultation. There are barriers—legal and otherwise—to sharing data between enforcement bodies. That is why we are consulting on that point, and some suggestions have been highlighted in the consultation document.
We are reflecting carefully on that and have put it out to consultation to consider the most effective and appropriate ways to do so. We want these gateways to information sharing, which we have in other enforcement spheres. I want to reflect on the responses to the consultation on that point to ensure that we act appropriately.
I hope I have set out why we think this role is different in character and nature, in terms of workplace safety and the best interests of the child, and why we do not think it would be appropriate to include the proposal in this part.
Sarah Champion
Does the Minister believe the consultation will be complete by Third Reading and able to influence the Bill?
James Brokenshire
We have today announced an extension to the consultation period. It was originally due to close at the beginning of November, and it has been extended by about four weeks—I can come back to confirm that. I want to ensure that we get the provisions right on some of these detailed points. The consultation may inform later parts of the Bill. Our judgment is that we should ensure that the consultation is framed to get the right responses from those actively engaged at the front end. That is why we have announced a time extension, which I believe will be welcomed by the different sectors.
There were comments about redefining the term “worker”. The clause and the proposed amendment do not redefine “worker” for the purposes of the Employment Agencies Act 1973, the National Minimum Wage Act 1998 or the Gangmasters (Licensing) Act 2004. The coverage of those respective Acts continues to apply. That means that the Employment Agency Standards Inspectorate and the GLA will still tackle non-compliance by employment agencies, businesses and gangmasters, regardless of whether the affected workers have the right to be or to work in the UK.
We see the director as being focused on improving the way we enforce labour market and employment law rules. The Bill is not about extending labour protections to illegal workers, and we think that the director’s focus should be on making sure that workers who are properly here are better protected.
However, we are committed to tackling serious crimes against individuals, whatever their status. We have set out in the modern slavery strategy and the Modern Slavery Act 2015 enhanced powers and an improved approach to tackling slavery and human trafficking, whether victims are trafficked for sexual exploitation, exploitation involving criminal activity or indeed labour exploitation.
That is why we have implemented life sentences for modern slavery offences, new preventive orders to stop harm before it takes place and improved protections for victims such as a statutory defence. We see an important but specific role for the director in supporting this crucial work. The director’s remit includes modern slavery offences where they are committed against a worker or person seeking work, or where a person is subject to slavery, servitude or forced or compulsory labour. We are also consulting on additional powers for the Gangmasters Licensing Authority to include tackling such offences in their proposed enhanced enforcement role. I draw Members’ attention to that.
We think the balance is right. The director’s role is focused on workers who are here legally, although he can include in his plans action against forced labour as well. Trafficking people from around the world to work in brothels in the UK is an absolutely unacceptable crime, but we judge it is right for the director of labour market enforcement to tackle those aspects that are within the remit outlined in the Bill.
Keir Starmer
I wish to understand what the Minister has just said, because it is a concern in relation to the amendment. Is the Minister saying that an amendment along the lines of amendment 64 is simply unnecessary because the individuals will be fully included within the protection, or that, contrariwise, they are not fully included, but that hopefully the strategy will include action that would protect all workers in the broader sense? To be specific, is it that amendment 64 is simply not required and is a misunderstanding of the definition or limitation, or is there a broader point? It is quite important.
James Brokenshire
I think it is the latter of the two points that the hon. and learned Gentleman has articulated. We think it is covered by other means, but, for the purposes of defining the specific role, it is about lawful entitlement to be within the UK. For the reasons that I have outlined, there are other mechanisms and ways in which the issue is being addressed. It is about labour market enforcement and the lawful upholding of existing legislation. The amendment appears to take us in a direction that would apply new rights to those who are here illegally, whereas there are other mechanisms through the linkages, through the rights that the Gangmasters Licensing Authority will have, and through the consultation. It is about the extension of those aspects through other means. That is why I made the point about the specific role for the director in supporting this crucial work through a different mechanism, through the work that the Gangmasters Licensing Authority will take forward. The role concerns the lawful upholding of existing labour rights, rather than the extension of those rights, which the amendment appears to suggest. That is why we have not found the amendment attractive.
The director’s role that we have proposed supports our wider strategy on modern slavery, enhancing the response to labour exploitation. Crucially, it should not confuse or undermine the responsibility of the National Crime Agency and the national policing lead to lead the operational law enforcement response to modern slavery, overseen by the independent anti-slavery commissioner. Where an illegal worker is a victim of modern slavery, appropriate support mechanisms are available to them via the national referral mechanism. Their status as a victim will be reflected in how they are subsequently treated by the immigration system, including the relevant reflection periods during which the person will be granted leave to remain. There are also crucial protections within the criminal justice system, which we will come to later.
Amendment 62 seeks to specify the content of the director’s annual report in the same way as amendments 57 and 58 did for the director’s strategy. I do not propose to repeat the same arguments that I made in respect of the earlier amendments, but I want to be clear that this amendment is unnecessary.
Clause 4 as drafted states that the annual report must include:
“an assessment of the extent to which labour market enforcement functions were exercised in accordance with the strategy”.
As we expect the director’s strategy to propose how the enforcement bodies should tackle non-compliance, seek remedies for victims and overcome obstacles to compliance, it follows that the director’s annual report will set out how successful the enforcement bodies were at doing exactly these things.
Paul Blomfield
I am still puzzled by the Minister’s comments on amendment 64 and how the director of labour market enforcement would be able to consider all workers irrespective of their immigration status. If I understood him correctly, undocumented victims of trafficking would not be covered by the work of the director. If that was the case, would that not hinder his or her work?
James Brokenshire
No. It is complementary to the work of the National Crime Agency and the independent commissioner, so the Bill provides clarity in that regard.
Immigration Bill (Sixth sitting)
(8 years, 6 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 9 / Noes: 7 - Question accordingly agreed to.
The Committee divided: - Ayes: 9 / Noes: 2 - Question accordingly agreed to.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 58, in clause 2, page 2, line 12, leave out paragraph (b) and insert—
‘(b) contains a proposal for the year to which the strategy relates setting out—
(i) how the non-compliance outlined in the assessment required by subsection (2)(a) (i) and (ii) is to be addressed,
(ii) how the threats and obstacles identified under subsection (2)(ia) are to be overcome, and
(iii) how the provision of remedies for victims of non-compliance in the labour market identified under subsection 2(a)(ib) is to be improved.’
To ensure that the functions of the Director of Labour Market Enforcement are exercised for the purpose of enforcing all existing labour market standards, rather than prioritising a limited number of areas, and to link the Director’s strategy with his or her assessment of non-compliance with labour market standards.
Amendment 56, in clause 2, page 2, line 24, leave out subsection (3) and insert—
‘(3) The proposal mentioned in subsection (2)(b) must set out the resources required to—
(a) address the non-compliance in the labour market,
(b) overcome the threats and obstacles identified under subsection 2(b)(ia),
(c) improve the provision of remedies for victims of non-compliance in the labour market.’
To oblige the Director of Labour Market Enforcement to provide an assessment of the resources required for effective labour market enforcement and remedies for victims, rather than simply to determine how currently available resources should be allocated.
Amendment 59, in clause 2, page 2, line 26, at end insert—
‘(3A) Nothing in the strategy shall—
(a) restrict, or
(b) reduce the resources allocated to
the labour market enforcement functions as defined in Section 3(2) of this Act.’
To clarify the relationship between the Director of Labour Market Enforcement and the UK’s existing labour inspection agencies, ensuring the current role, remit and resources of labour inspectorates are safeguarded.
Amendment 65, in clause 3, page 3, line 6, at end insert—
‘(da) ny function of the Health and Safety Executive and the Health and Safety Executive for Northern Ireland;
(db) any function of local authorities in relation to the “relevant statutory provisions” as defined in Part 1 of the Health and Safety at Work etc. Act 1973;
(dc) any function of local authorities under the Children and Young Persons Act 1933 and by-laws made under that Act, the Management of Health and Safety at Work Regulations 1999, and the Children (Protection at Work) (Scotland) Regulations 2006.’
To include the remit of the Director of Labour Market Enforcement to cover functions relating to health and safety at work and child labour, functions carried out for the most part by local authorities.
Amendment 66, in clause 3, page 3, line 12, at end insert—
‘(ca) Part 1 and The Health and Safety at Work etc. Act 1973;
(cb) Sections 3 and 4 and Part 2 of the Children and Young Persons Act 1933.’
This a consequential amendment to amendment 65.
Amendment 63, in clause 3, page 3, line 31, before “in this section”, insert “Subject to subsection 6A,”
Amendment 64, in clause 3, page 3, line 33, at end insert—
‘(6A) A person is not prevented from being a worker, or a person seeking work, for the purposes of this section by reason of the fact that he has no right to be, or to work, in the United Kingdom.’
To ensure that labour market offences committed against all workers are included within the scope of the Director of Labour Market Enforcement’s work, irrespective of immigration status (as under subsection 2 of section 26 of the Gangmasters (Licensing) Act 2004).
Amendment 62, in clause 4, page 3, line 42, leave out paragraph (a) and insert—
‘(a) An assessment of the extent to which the strategy developed under section 2 of this Act has—
(i) addressed the non-compliance identified under Section 2 (2)(a)(i),
(ii) improved the provision of remedies for victims of non-compliance in the labour market identified under 2 (2)(a)(ia), and
(iii) overcome the threats and obstacles identified under 2 (2)(a)(ib)”.’
To ensure the Director of Labour Market Enforcement’s Annual Report links with his or her assessments about non-compliance in the labour market (and assessment of the remedies secured by victims and threats and obstacles to effective enforcement).
The Minister for Immigration (James Brokenshire)
When we broke for our short adjournment, we were touching on the use of a particular term: we were looking slightly ahead to the use of the term “worker” in clauses 3 and 9. I want to ensure clarity about where that term is used because that may be informative to the Committee and perhaps help to narrow the debate and argument.
I assure hon. Members that the definition of worker in clause 3(6) applies only in one context, which is in respect of clause 3(4)(e)(i), which relates to sections 2 and 4 of the Modern Slavery Act 2015. The definition of worker in all other Acts in the director’s remit is unaffected. The hon. and learned Member for Holborn and St Pancras may find that and the context in which the definition applies helpful.
The definition of worker in the Employment Agencies Act 1973 is unaffected. The Employment Agency Standards Inspectorate will continue to take action against rogue employment agencies and businesses regardless of whether the worker is here legally or illegally. Similarly, the definition of worker in the Gangmasters (Licensing) Act 2004 is unaffected. The Gangmasters Licensing Authority will continue to take action against rogue gangmasters regardless of whether the worker is here legally or illegally. That matches the concerns raised in contributions this morning.
Furthermore, the definition in the National Minimum Wage Act 1998 is also unaffected. That will continue to apply only to legal workers—that is how it is framed. The provisions are about not extending rights to illegal workers, but bringing strategic oversight together under one person. We do not think it is appropriate to give illegal workers the right to the national minimum wage. Of course, the employer who employs an illegal worker and pays them less than the national minimum wage will still be committing an offence under section 21 of the Immigration, Asylum and Nationality Act 2006, which comes with a higher penalty. The Bill also includes measures to enable us to take a tougher enforcement approach to employers of illegal workers, including increased prison sentences if they employ people whom they know or reasonably suspect are illegal workers.
The definition of worker in clause 3(6) has no effect on section 1 of the Modern Slavery Act 2015. All offences of slavery, servitude and forced or compulsory labour will be within the director of labour market enforcement’s remit, because it would be illogical to exclude those forced to work from the director’s purview. Indeed, all offences of trafficking under sections 2 and 4 of the Modern Slavery Act that involve slavery, servitude and forced or compulsory labour will also be within the director’s remit.
The definition in clause 3(6) also has no effect on the trafficking offences criminalised by sections 2 and 4 of the Modern Slavery Act. The only effect the definition has is on which type of trafficking offences are in the director’s remit. Offences involving sexual exploitation, removal of organs, securing services by force and securing services from children and vulnerable persons will be in the director’s remit only if they relate to workers or work seekers provided for in the definition—legal workers. It will still be an offence to traffic an illegal worker for any of those purposes, but we do not think it appropriate for that to be in the director’s remit. Instead, such offences will be dealt with by the police and the National Crime Agency. All modern slavery offences will be in the Independent Anti-slavery Commissioner’s remit.
As I explained before, the definition is not about granting new rights or curtailing offences. It is simply about creating the right remit for the director of labour market enforcement, which I believe the clause does. We are clear that the remit provides the director with the ability to tackle the broad spectrum of labour exploitation, from non-compliance to the most serious harm against workers.
I recall the comment I made earlier about the relationship between the commissioner and director, where the commissioner will effectively have that oversight role. Therefore, we believe that that will lock things together in a clear fashion.
I appreciate that this has drawn us into something more technical than contemplated at first sight by the amendment. I hope, for the sake of clarity, I have spelled out the context in which the definition is used.
Paul Blomfield (Sheffield Central) (Lab)
I am grateful to the Minister for giving way and for the statement he has just shared with us. I am not absorbing its detail as quickly as I would wish; perhaps we can find a way to reflect on it before we reach a final view.
Notwithstanding the points the Minister has made, the concern remains that we are in danger of including only offences committed against workers as defined in the Employment Rights Act 1996, that is, those with a valid contract of employment, so by definition, regular migration status. Although we are trying to achieve the same objective here, the provision might risk leaving the director powerless to investigate trafficking in the very sector of the labour market—illegal working—that the Bill is designed to target.
As the Minister indicated, this is about not conferring new rights on workers, whether in relation to the national minimum wage or whatever, but ensuring that the director can cover all the listed offences, no matter against whom they are committed. As it stands, the clause is potentially in violation of article 3 of the European convention on action against trafficking in human beings, which guarantees the provisions of that convention, irrespective of national origin.
I take it that the purpose of clause 3(4)(e)(i) is to narrow the remit of the director so that he or she covers human trafficking offences only for labour exploitation, as opposed to sexual exploitation or organ harvesting. In that case, subject to reaching agreement on the position in our amendment, the Minister would have our support. The way the clause is currently drafted seems to exclude human trafficking of illegal workers from the remit. Further confusion is created by including human trafficking offences committed against “a person seeking work” in the director’s remit. We just need a bit of time for reflection on that, if the Minister would agree.
The Chair
Before the Minister answers, these are detailed and complex matters, which is why I am allowing the interventions to be relatively lengthy. I would not normally stand for an intervention that long, but I will because it is on a technicality. Do not think, ladies and gentlemen, that you will get away with it later.
James Brokenshire
I am grateful to you, Mr Bone. It is important on these points of detail where issues have been raised that we try to give clarity in Committee. I entirely understand your ruling; as always, the Chair is entirely sensible.
In response to the hon. Gentleman, when he reads the record of what I said—as I know he will as he is assiduous and focused on getting things right—I hope he will see in the explanation the distinction we are drawing between labour market and what is straying beyond labour market issues, and why we have drawn the provision that way.
I apologise for straying slightly, but clause 3(6) links to the amendment and it is appropriate to comment on the point now. This definition of “worker” is used only once in the context of clause 3(4). I will reflect on the drafting of that, since we are clear on the intent and how it works through. The intention is not to imply or impute any limiting of that definition into the other provisions listed in clause 3(4). That is not the intent and hence my comments. Without any commitment, I will certainly look at the wording of that to satisfy myself that it does not give any wrong impression. As I have said, that is not the intention.
Keir Starmer (Holborn and St Pancras) (Lab)
Thank you, Mr Bone, for your indulgence on this. I want to make sure that we have got the point right, because it may be that the area of dispute is considerably reduced. I am grateful to the Minister and the team that has been behind him over the last hour and a half for this clarification, which really helps. As I understand it, the definition of “worker” in clause 3(6) is limited for the purposes of this measure alone and therefore does not affect anything beyond it.
Keir Starmer
That removes one concern, so I am grateful for that clarification.
As far as clause 3(4)(e) is concerned, what is being said is that the offence itself is unaffected by any definition; it only goes to the remit of the director. Again, that removes a concern. Therefore, the only remaining concern is that the director has a remit only over certain types of worker for the offences in clause 3(4)(e), as I understand it. The Minister put forward a reason for that—just to make sure I have understood that. I am not sure how it works in a Committee such as this, but I wonder whether it is possible to have that in some written form over and above what the Minister has said already, which I know will be on the record. It is critical to the international obligations and how other people will look at this and understand it. I am grateful for the clarification.
James Brokenshire
I am grateful for the way in which the hon. and learned Gentleman has raised the matter. If it helps the Committee, I will be happy to write to him to set out what I have said and give that clarity in context. I get the sense that the issue on these provisions is perhaps narrower than it may have appeared at first sight. It relates to the way the provision operates within the Modern Slavery Act itself and the way in which the term “worker” is used within that. It is perhaps not even as complete as he was suggesting in that context. Given this is quite a narrow, technical, but important point, I think it will probably be helpful if I write to him to set that out in further detail. It would be open to him to reflect on that as we look towards Report.
The Chair
Could you write to the Committee, too, and we will circulate it? Then every Member will have it.
James Brokenshire
Of course. It is important that all Committee members see that, so I am happy to undertake to do that.
Various comments were made about the Gangmasters Licensing Authority and prosecutions and investigations. Over time, the GLA has undertaken a number of more complex investigations that focused more effectively on serious and organised crime. I think that reflects a targeting and risk-based enforcement approach by the GLA. Only one GLA-initiated prosecution has ever failed to return a conviction. This year alone, the GLA has undertaken 92 investigations—already more than the 72 undertaken in 2014 and its highest since 2011. During that time, the GLA also secured four prosecutions of unlicensed gangmasters, with the same number last year. That demonstrates that the GLA continues to be capable of targeting rogue gangmasters effectively. That is why we see it as an important component of the director’s new remit to tackle labour exploitation. We are reflecting further in relation to the GLA as part of the consultation, albeit that that strays wider than the group of amendments we are debating today.
On the labour market consultation, I mentioned this morning that we have announced today that the consultation has been extended. It now closes on 7 December, rather than 9 November. As I said, I hope that that will give further opportunity for interested parties to feed in and ensure that this is understood and well-reflected.
Keir Starmer
I am grateful to the Minister for his clarification, not only on the technical point we have just discussed, but more generally on the health and safety and other agencies that are not included in the Bill. I now understand that that is because of the particular function and focus of their activity and, in relation to children, because of the localised knowledge of some authorities that would not otherwise be more generally available.
I am going to withdraw the amendment, so I shall be brief. However, it would be helpful if there could be greater clarity about the sharing of intelligence. Although they are separate functions, there will be a huge overlap between what the health and safety and other agencies are doing, and what the director is trying to pull together in the strategy. The Minister says that there will be a sharing of intelligence, so it would be helpful if we had more clarity about exactly how that will work. I say no more about the strategy in relation to obstacles and resources, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Keir Starmer
I beg to move amendment 60, in clause 2, page 2, line 26, at end insert—
‘(3A) The Director must engage with civil society in the development of his or her labour market enforcement strategy.”
To expressly require engagement between civil society and the Director of Labour Market Enforcement in the development of the labour market enforcement strategy.
The amendment would require the director of labour market enforcement to engage with civil society in the development of the labour market enforcement strategy. Page 26 of the Government’s consultation document “Tackling Exploitation in the Labour Market” states that a director:
“will engage with a wide range of stakeholders to gather insights and perspectives on real world practices, improve detection of exploitation and understand external views of the effectiveness of the enforcement landscape. Stakeholders will include Government departments, the IASC, the police, local authorities and other public bodies; organisations representing employers and employees across the economy and in particular sectors of interest; and a range of third sector bodies that engage with vulnerable/exploited groups.”
The amendment would make that explicit in the Bill.
It is important that the voice of organisations working with victims of labour exploitation, trade unions and others are invited to feed their expertise into the director’s work, especially at the strategy stage. The absence of any formal engagement strategy will mean that the director may fail to gain the breadth of front-line experience and expertise required to prepare an evidence-based strategy. This is linked to the resource point that was made earlier. With extremely limited resources, it will be very hard for the director to gather the range of information required to complete a comprehensive labour market assessment, so strong engagement mechanisms will be required to ensure that all expertise is integrated into the strategy. The amendment would strengthen the strategy and formalise the involvement of others who have expertise and experience, as is recognised in the consultation document, and ensure that the strategy is as strong as it needs to be, if the approach is to be the step change that we hope it will be.
Chloe Smith (Norwich North) (Con)
The hon. and learned Gentleman has tabled an extremely interesting amendment. Has he given more thought as to how “civil society” ought to be defined? If he is going to put that phrase into primary legislation, it should be well defined. Of course, he would expect there to be consequences if the director does not do what the Bill says the director must do. Could the hon. and learned Gentleman better define civil society and explain how he would enforce such a thing?
Keir Starmer
I am grateful to the hon. Lady for that intervention. In a sense, the intent is to formalise what was envisaged in the consultation document, which contained a fairly lengthy list—I read it out a moment ago—of stakeholders, including organisations representing employers and employees, and third sector bodies that engage with vulnerable and exploited groups. It might be helpful to go a bit further than that, but the intention was to formalise what was rightly set out in the consultation document—the bodies with which the director should engage—using the words “civil society”. That is what lies behind the amendment.
James Brokenshire
As the hon. and learned Gentleman highlighted, the amendment would require the director of labour market enforcement to engage with civil society in developing the enforcement strategy provided for by the clause. I sympathise with the intention behind the amendment, but it is not necessary or, for the reasons highlighted by my hon. Friend the Member for Norwich North, workable in its current form.
The hon. and learned Gentleman rightly highlighted the consultation that we are undertaking, and he read out the relevant part, about our expectations regarding stakeholder engagement. It is right that the director should speak to a range of people—the widest range of sources—to identify the scale and nature of non-compliance in the labour market. That will include securing information from the information hub we will consider when we reach clause 6, but it will rightly also include engaging non-governmental organisations, bodies representing employers and workers, and other organisations to develop the fullest picture.
The consultation published on 13 October contains more information on how we envisage the relationship working. We will flesh that out further in the light of the views received in response to the consultation. I want to see what the responses look like before we reflect on whether anything further needs to be undertaken.
The director will play a leading role publicly in bringing greater co-ordination and coherence to the enforcement of labour market legislation. The strategy they produce will be public, so I have no difficulty in principle with their consulting civil society in developing it, however that may be framed or defined.
Sometimes, when we go into legislation, we can close things off, rather than opening them up. We need to define things in a very legalistic way, and the issue is how we can properly give effect to the desires in the consultation document. I do not want to risk creating unnecessary scope for legal challenges to be brought against the director or, bearing in mind the legalistic approach we have to take, closing things down.
I do have sympathy with what the hon. and learned Gentleman said, and I will obviously review the responses to the consultation. With that reassurance about how we are approaching the issue, however, I hope he will be minded to withdraw the amendment.
Keir Starmer
I am grateful to the Minister for that reassurance, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
James Brokenshire
I intend to speak only briefly because we have had quite a wide-ranging discussion of the priorities for enforcement and the outcomes required from the enforcement bodies, which the director will be looking for in the strategy, as well as a number of other themes relating to the nature of the director’s operations, which we touched on in the group of amendments before last. Crucially, the strategy will be evidence-based. It will contain the director’s assessments of non-compliance in the previous year—points were raised about that in previous debates—and predictions for the next two years, based on information drawn from a range of sources, including the three enforcement bodies, other Government bodies and civil society organisations. That will allow the plan for the coming year to be based on where non-compliance is most likely to occur and to cause harm. It will be subject to more public involvement, and the strategy will be published in the way I have outlined. I trust that the Committee will support the clause.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3
Non-compliance in the labour market etc: interpretation
Question proposed, That the clause stand part of the Bill.
James Brokenshire
We have had a detailed debate on one aspect of the clause, which I will not go back over.
The clause defines certain aspects of the operation of the director, highlighting the three enforcement bodies that fall within their remit. We want that remit—what they consider in their assessment of non-compliance and their strategy for addressing it—to include the work of the three bodies on non-compliance and the offences they enforce, and to capture the most serious end of the exploitation spectrum. We also want the director to inform his or her strategy by consideration of the rate of instances of slavery, servitude, and forced or compulsory labour as defined by the Modern Slavery Act 2015.
We see the director’s role as focused on labour market offences and therefore distinct from the role of the Independent Anti-slavery Commissioner, upon which we have touched in preceding debates. We have therefore limited the remit to where offences relate to work. As I have said, I will write to the Committee on that particular point.
Question put and agreed to.
Clause 3 accordingly ordered to stand part of the Bill.
Clause 4
Annual and other reports
Question proposed, That the clause stand part of the Bill.
James Brokenshire
The clause requires the director to produce an annual report at the end of the year. That complements the director’s strategy by requiring them to set out their assessment of how labour market enforcement functions have been carried out during the year and the impact of that activity. It provides accountability for the director and an independent assessment of the enforcement body’s work.
The clause also allows the director to make reports throughout the year if needed. That is an important point. Ministers may wish to ask the director to report on the causes of a new, evolving challenge in fighting labour market exploitation—for example, if the rate of phoenix companies perpetrating exploitation were to grow—or to consider an issue in greater depth than the annual strategy permits, such as the effectiveness of penalties as a deterrent to employers. The reports will add to our understanding of how to tackle exploitation and, ultimately, will make us better equipped to stop it.
Question put and agreed to.
Clause 4 accordingly ordered to stand part of the Bill.
Clause 5
Publication of strategy and reports
Question proposed, That the clause stand part of the Bill.
James Brokenshire
The clause requires the Secretary of State to lay before Parliament any strategy or report produced by the director, to provide transparency and accountability for the director’s role and to inform Members of the House. As I have indicated, we want the director to be a visible leading figure. Laying their reports before Parliament in a very public way will inform debate. It will also allow for greater scrutiny and accountability for Ministers on the performance of the three agencies, and on how the director’s function is working and operating, and why it is framed as it is.
Question put and agreed to.
Clause 5 accordingly ordered to stand part of the Bill.
Clause 6
Information hub
Keir Starmer
I beg to move amendment 61, in clause 6, page 4, line 31, after “market” insert
“to facilitate the labour market enforcement functions as defined in Section 3 of this Act”.
To prompt debate about the information hub proposed in Clause 6 of the Bill.
We have tabled the amendment to prompt a debate exploring how the information hub will work. We welcome the co-ordination and joined-up thinking that the hub will bring about, we hope, for the director of labour market enforcement, as that will lead to better enforcement. We raise the question against the backdrop of concern expressed earlier about the overlap between immigration enforcement and labour market standards enforcement, which brings the information hub into sharp focus. Page 23 of the consultation document states that the information hub
“will gather available data from the labour market enforcement bodies and other sources, such as Immigration Enforcement, the police, NCA, HSE, local authorities and the voluntary sector”,
which is a wide range of information.
James Brokenshire
As the hon. and learned Gentleman has highlighted, the amendment seeks to clarify the role of the proposed information hub. In our ongoing consultation on tackling labour market exploitation, we set out the intention behind our proposal for an information hub, which is to
“inform and support delivery of the Director’s strategic plan”.
The hon. and learned Gentleman highlighted the relevant section in paragraph 71 of the consultation document. We will continue to reflect on that as we receive submissions in response to the consultation.
I stress that there is already close co-operation between the different labour market enforcement bodies, often in tackling abuses. However, that is sometimes impeded by barriers to sharing data and because the bodies cannot share data. The clause therefore gives the new director the responsibility to lead an information hub, which will form a coherent view of the nature and extent of exploitation and of non-compliance in the labour market.
The director will use the hub to formulate the strategy. The information hub will gather available data from the labour market enforcement bodies and other sources, such as immigration enforcement, the police, the National Crime Agency, the Health and Safety Executive, local authorities and the voluntary sector. The hub will analyse information and develop a much richer picture of the nature, extent and impacts of exploitation in the labour market. It will identify where workers are at risk of abuse and use that information to formulate the enforcement strategy. It will also provide tactical intelligence to the enforcement bodies for use in targeting their enforcement activity. The hub is intended to help strategically and tactically. It will be able to assist in the tasking of operations and to see and understand what practice might inform strategy. It will assist in the promulgation of good practice and in employers fulfilling their duties and responsibilities.
The hon. and learned Gentleman highlighted resourcing. Resources will be provided by the Secretary of State and may include officers from the enforcement agencies, their parent Departments and the wider law enforcement community, so there is that sense of people, as well as of how data are provided and linked. We are giving further consideration to how things would work practically and who would be involved, but in fairness we also want to allow the consultation to inform further development. I am highlighting the nature of what we envisage that the hub will provide—a centre for the sharing of intelligence and data to inform the director and to inform, potentially, the tactical response.
Paul Blomfield
I reassure you, Mr Bone, that this is a brief intervention. I thank you for your indulgence earlier; I thought that that was an important point that needed to be resolved.
On the question of funding, the Minister spoke earlier about the integrity of the budgets of the three separate agencies over which the director of labour market enforcement will have strategic overview. He pointed out that the agencies sit within individual Departments. He is obviously right—we agree—that data sharing and better use of data are critical to the effective development of the role, but that will presumably require, apart from people pooling, some additional resource. Is he saying that that resource will not be drawn from any of the three existing budgets and will, therefore, be found by the Secretary of State as an additional support?
James Brokenshire
Matters of resourcing, and indeed the support that the director will require, are under careful consideration by Ministers. They are working on the recruitment of that individual and how that office will operate and be resourced. I would certainly wish to reflect further on the consultation, given its focus on the role and after hearing views in the debate on this Bill. We have not made final decisions about budgets or staffing—those decisions will be taken once there is agreement on the role and following the spending review. Clearly, the operation hub as part of that activity will be part of the overall examination of what is appropriate.
It is right that the consultation seeks views on the need for powers to share data and intelligence across the enforcement bodies and with other organisations. We are consulting a range of partners within and outside Government to understand what information they hold that might be of use to the director in designing the strategy to tackle performance and non-compliance and building the hub itself. We want to reflect further on how the hub is established, given what I have said about resourcing, the nature of the people who might need to be part of it, who would add the most value, and connections with different agencies. We have set the framework for this and I think that I have clearly set out the intent and what we wish to achieve. In implementation, we will certainly reflect on the further submissions received and the comments that have been made.
Sarah Champion (Rotherham) (Lab)
This really is not meant to be a difficult question. The Minister is putting a lot of weight on the consultation, as we are. Is there not the facility to pause proceedings on the Bill so that the findings of the consultation can actually affect the Bill and we achieve the best legislation, which is what we all want?
James Brokenshire
No, the provisions of clause 6 state that the director must gather, store, process, analyse and disseminate information relating to non-compliance in the labour market. It is important that we provide this statutory mechanism. Equally, in terms of further development and implementation, it is not appropriate for us to legislate while constantly taking into account further submissions. I do not think that that cuts across the need for clause 6 or the manner in which the labour market enforcement director would conduct his duties. I do not see them in any respect as being at odds. I hope that in the light of those points the hon. and learned Gentleman will be minded to withdraw his amendment.
Keir Starmer
I am grateful to the Minister. As I said, the aim of the amendment was to enable us to understand better how the hub would work and be resourced. On that basis, I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 ordered to stand part of the Bill.
Clause 7
Restriction on exercising functions in relation to individual cases
Question proposed, That the clause stand part of the Bill.
James Brokenshire
Clause 7 prevents the director getting involved in individual cases. This is to allow the enforcement bodies to preserve their operational independence, a theme that was also highlighted in earlier contributions on the Bill. It is not appropriate for the director to have the power to influence decisions about the enforcement action to be taken against individual businesses. However, the clause allows the director to consider individual cases where these provide useful information in relation to general issues and to inform the director’s strategy or other work. Sometimes the individual parable, or the experiences of an individual can be important to understanding the reality of the abuses that take place. It is in that context that the clause has been introduced; we do not seek to encroach on the operational independence of other agencies in pursuing cases against particular employers or in particular circumstances.
Keir Starmer
I have, as it were, a genuine question; perhaps assurance on this will do the trick. At the moment, clause 7(1) would prevent the director making a recommendation after completion of a case, whatever legal proceedings were contemplated. Therefore, it may be over-narrow. In other words, the director may see a completed individual case and want to make a recommendation about whether it was good, bad or indifferent.
I can see the point in a provision that prevents interference in ongoing proceedings or the carrying out of functions by other bodies. A simple assurance or explanation may help, but at the moment the clause may be read as preventing a recommendation after the event about a particularly good way of doing something or a problem that needed to be avoided in future.
James Brokenshire
It will be open to the director, in looking at individual cases, to make broader recommendations on strategy or the manner in which agencies conduct their duties. We have to be careful, which is why we have structured the director role in this way, that there is operational independence for each of the agencies to pursue a case using their expertise and their chosen manner.
The position is more strategic. The director should not be drawn into how an agency should or should not have acted in a specific case. It is still open to the director to look at individual circumstances and cases, hence my earlier comment, and to make recommendations for the future. I do not think that that strays in relation to the language that we have here, into making a recommendation in an individual case; that would be to second guess the operational thinking of the different agencies. That is the intent behind the drafting, and I hope that is helpful.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8
Offence of illegal working
Keir Starmer
I beg to move amendment 68, in clause 8, page 5, line 6, after “if”, insert “without reasonable excuse”
To provide for a defence against the offence of illegal working.
We have reached an area in the Bill on which there is greater disagreement. We welcome the provisions that bear down on employers who exploit employees. That is in keeping with our welcoming of the director of labour market enforcement. However, we have considerable difficulty with the notion of creating an offence that can be committed by employees, which is strict and without any defences.
I begin by drawing the Committee’s attention to the baseline evidence from the Migration Advisory Committee 2014 report, which makes a number of comments pertinent to clause 8. It says:
“The combination of non-compliance and insufficient enforcement can lead to instances of severe exploitation, particularly of vulnerable groups such as migrants.”
That same 2014 report records the Committee’s research on labour market exploitation of migrant workers in particular:
“We were struck on our visits around the country by the amount of concern that was expressed by virtually everyone we spoke to about the exploitation of migrants in low-skilled jobs…The TUC told us that migrants, particularly from lower income EU accession countries, are often likely to take up low-skilled work, partly due to the nature of the labour market but also due to the labour market profile of such migrants.”
A little later the report says:
“During our visits to places which had experienced relatively high levels of migrants the point that migrant workers are more likely to be exploited than resident workers as they are not aware of their rights and are afraid they may be sacked/evicted/deported if they complain was raised on a number of occasions.”
The Committee cites its meeting with the Equality and Human Rights Commission, which
“expressed the view that migrant workers, and especially agency workers, were more likely than resident workers to put up with poor working conditions and bad treatment by employers because they were not aware of their rights, they do not know who to complain to and are scared that if they do complain they could lose their job. The EHRC said it is often better for a migrant to be in the UK with a job, albeit a low-paid one, than in their home country without a job.”
James Brokenshire
To understand the hon. and learned Gentleman’s logic and thinking, is he arguing that some offences that already exist for people who have entered the country illegally should be done away with? If I follow his line of argument, he is saying that any criminal offence is problematic and should not be there.
Keir Starmer
I am grateful to the Minister for that intervention. No, I am not going that far. Those offences are on the statute book. They are much wider than offences in the working environment. I am starting from the proposition that this group of people has been recognised as the most vulnerable and exploited in the workplace, and the least likely to be able to come forward and explain what has happened to them.
The Minister raises a different point, which is that it is often thought—I certainly think this—that new criminal offences should not be introduced in legislation unless there is a clear need for them and there is a gap in the current enforcement mechanisms that the new offence is intended to fill. For many years, there was criticism of Governments for simply introducing criminal offences as a response to a non-problem when there was no evidence of the need for the offence. This is an example of that. As we heard in evidence last week, the problem is the low likelihood of intervention, inspection or any enforcement action. There is no evidence that this offence, for employees, is needed. There are existing offences with which they can be charged. In those circumstances, the clause fails the fundamental non-immigration test that we should not be legislating to introduce offences when there is no evidence that the offence is needed because there has never been any evidence of a case where action could not be taken because the offence did not exist.
James Brokenshire
Following what the hon. and learned Gentleman is saying about offences, it seems that his principal point is about those who are vulnerable coming forward. That takes us into broader issues on the national referral mechanism and some of the steps we have taken through the Modern Slavery Act to shine a light. Our focus needs to be on those broader issues—if I have followed the line of his argument—on helping people to come forward. This offence would not have the impact that he is suggesting, because of all the other inhibitions about those who may be enslaving people and putting them in fear. Rather, we need to tackle the broader themes and help people to come forward, which is what the Government and Members across the House have rightly focused on.
Keir Starmer
I am grateful to the Minister. Of course, any measures to give people the confidence to come forward should be pursued. There would be general agreement about that—in particular, in relation to some of the offences we have been discussing. However, adding an offence when there is no evidence that it is needed simply makes a bad situation worse. If the Minister has evidence that anybody at all has ever said, “The problem here is that we haven’t got an offence for the employees”, I have not seen it and it has not been set out in any great detail.
Paul Blomfield
Does my hon. and learned Friend accept that the nub of the Government’s argument in relation to this offence, as we understand it, is to reduce pull factors—to create a disincentive for those coming to this country to enter into illegal work? Is he concerned, as I am, that the Government seem to have no evidence that it will work? We have heard substantial evidence that this may be counterproductive, but there is no evidence from the Government that it will work as a deterrent and undermine pull factors.
Keir Starmer
I agree with my hon. Friend and am grateful for his intervention. What is important is that the objective behind the Bill is properly pursued. There is a real risk that introducing an offence against the employee will be counterproductive if it drives underground the very group of people who are the most vulnerable when there is little or no evidence that the offence is needed.
I want to go a little further than that, because this is an offence without any mental element in the Bill. It is strict in the sense that absent the right status, the offence is made out, and then it is an offence without a defence, which is an unusual combination in criminal law. For example, some people will be here working in the belief that they have the right status because they are sponsored by the employer or somebody else. However, unbeknown to them, they may not have status because their employer has not correctly completed all the necessary arrangements for sponsorship. They fall into a category of individuals who are here without the required status, but without any knowledge of that or any intention to be in that position. Given the inflexibility of the offence, they would be immediately criminalised without even the opportunity of raising a defence of reasonable excuse. Their defence would be, “I am working. I had understood that my employer or somebody else had completed all the necessary forms and legalities. It now transpires they haven’t, but I had absolutely no reason to think that to be the case.” At the very least, if the clause is to stand, such an offence—there could be many other examples—ought to have a reasonable excuse defence, and that argument lies behind the amendment.
Sarah Champion
I speak in support of my hon. and learned Friend. It is fundamentally wrong to make the employee a criminal—it makes no sense. I have not been convinced by any of the witnesses we have heard or any of the evidence that I have seen that this is the right way to achieve the Government’s objectives.
My main concern is that the measure will compound exploitation. I would like to quote Caroline Robinson, one of our witnesses, from FLEX—Focus on Labour Exploitation—who put the three issues more succinctly than I can. She said:
“First, we think that people will be fearful of coming forward to be referred into the UK national referral mechanism as victims of trafficking…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…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.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 24-25, Q50.]
My biggest concern is that the measure will stop whistleblowers. How will we identify bad employers if the very people who can give us that evidence are too scared to come forward for fear of being criminalised? It is not only bad employers that could be overlooked, but health and safety risks that could impact on a number of employees.
I am pleased about the Modern Slavery Act, which is a good and strong piece of legislation. I am also very pleased that the Minister has made it clear that people are protected under the Act if they are trafficked into the country. If they are used as a slave, they are exploited. However, I would like clarification from the Minister about how someone will be dealt with if their status shifts. For example, if someone was trafficked into the country and forced into slavery, but then managed to escape and became an illegal worker, would they be protected because at the start of their journey they were protected under the Modern Slavery Act, meaning that they would be treated as a victim, or would they be criminalised because, at the end of their journey, they were an illegal worker? What happens the opposite way round? If a person comes to the UK as an undocumented worker and is then exploited by their employer, at what point would they be protected if, having come to the country illegally as a worker, they were then used as a slave?
Chloe Smith
The hon. Lady and I both served on the Committee that considered the Bill that became the Modern Slavery Act. I looked at the list of exemptions in that Act while we heard the piece of evidence that she quoted. It is worth reminding the Committee that there is a set of defences in the Act, and to that set of defences, there is a set of exemptions. In that set of exemptions—this is rather like a Russian doll, but bear with me—there is an exemption on this point of criminal damage. In other words, an individual might be at risk of being accused of criminal damage only if they had behaved recklessly and endangered somebody’s life. That is in the Modern Slavery Act 2015, which the hon. Lady and I debated. Has she reflected on that before trying to advance this line of argument that the provision is all one thing, rather than being nuanced?
Sarah Champion
I thank the hon. Lady for her intervention; she is always fantastic on detail. My answer is yes, but I am not a lawyer, so I would like the Minister to lay out, in language that a former charity worker can understand, the protections for people who are exploited. To be honest, I am unclear. A number of our witnesses said they were unclear, although I recall that clarification was sought on this point.
I will give the hypothetical example of a woman who paid a criminal gang for her passage here and came expecting a job. She was given a job, but then told that she had to pay additional costs, which took away all of her income, effectively making her a slave without legal protection under our current system. She could be beholden to that employer for an indefinite period and be too terrified to speak out, because I can guarantee that the employer would use the fact that she would be reported and become a criminal if she did.
I do not see how clause 8 helps that person in any way. I would like clarification from the Minister about how that person could have the confidence to come forward when their employer is telling them that they will be criminalised if they do so. Surely the best approach is to stick with clause 9, under which the employer becomes liable for the actions and will be criminalised for those actions.
We know where the employers are. They will be registered at Companies House and they will be filing their taxes. It will be a lot easier to follow that trail to get the prosecutions, particularly with limited resources, rather than spending an indefinite period trying to track down illegal workers when we do not know who they are, where they are working or their status, just on the off chance that we might catch and criminalise them so that we send out the right message. Surely it is better to go for the employers.
Anne McLaughlin (Glasgow North East) (SNP)
I wonder whether there is a misunderstanding, or at least an underestimation, of how vulnerable some of these workers are. Does the Minister realise the extent of their vulnerability? If he does, will he change his mind about criminalising those who work illegally?
I will cite an example of not a young vulnerable woman trafficked here as a sex slave, but someone whom hon. Members might use as an example of why we need to criminalise. On my travels a few years ago, I spent time with a man called Mehdi, who was fit and healthy in his mid-thirties. He was married to Rezi, who was pregnant with their first child. They sought asylum in the UK—I met him some years after all this happened—and ended up in Glasgow where, despite their best efforts, they were refused asylum because they could not prove they were in danger. She had a miscarriage and they were made destitute. They were told they would be deported and they embarked on a terrible downward spiral. They removed themselves from all support mechanisms, so frightened were they of being found and deported to certain danger, but they could not survive here, so Mehdi found a job. He knew he was not allowed to do that, as did his employers, who took advantage of that knowledge and made him work extremely long hours for £3 an hour.
Mehdi was abused, exploited and occasionally beaten. He was worked until he would regularly collapse with exhaustion, but he had no choice. Some Government Members might argue that he did have a choice because he could have gone back to his home country. However, he was not working not just to feed himself and get by in life in Glasgow, but to save money to buy false passports so that the couple could get out of the UK and away from the danger of deportation to his home country. Who among us would not do whatever it took to protect our loved ones and our own lives if we had to?
If the Bill had been in force when Mehdi was doing all that, what might the outcome have been for this loving and protective husband? This kindly but damaged man could very well have ended up in jail, followed by being deported to the country that he was so afraid of returning to. For him, the worst part would have been leaving his wife—
The Chair
Before I ask Anne McLaughlin to continue her speech, I thought it might be advisable to take discussion of the clause with the amendment and not have a stand part debate. If anyone wants to make a contribution on the clause, please feel free to do so now.
Anne McLaughlin
It has come to my attention that some Conservative Members did not listen to absolutely every word, so I wondered whether they would like me to recap from the start, or just to summarise where I was.
I was speaking about someone I met on my travels who had sought asylum in the UK and ended up in Glasgow. Mehdi, with his wife Rezi, were refused asylum, were destitute and were threatened with deportation. They were terrified of being returned to their country of origin because of what would happen to them. Mehdi ended up working illegally for £3 an hour, being completely exploited, and he did that because he did not have a choice. The point I was making was that he did not do that just to get by and to be able to buy food and clothes. He was doing it because they were saving up to be smuggled out of the country, not back to their country of origin, but to another country that they would enter illegally because they were so afraid of being sent back to their home country.
I was making the point that if this Bill had been in place then, Mehdi would have faced the additional risk of going to prison. I spent some time with him and he was most certainly not someone who—
Kate Hollern (Blackburn) (Lab)
What situation would the family have been in had this legislation been in place then?
Anne McLaughlin
It would depend on whether he had been caught working. He would be prosecuted and could have been imprisoned. Thankfully for Mehdi and Rezi, that did not happen, but there are many other people like them. She was extremely vulnerable. Had the Bill been around and they had been imprisoned, she would have been left destitute, facing deportation without him by her side. With him by her side, she was terrified enough. He would have gone to prison and then, undoubtedly, he would have been deported separately from her.
A fit, healthy married man in his 30s who is working illegally is not someone we typically highlight when trying to attract compassion from those who wish to control illegal working and are also concerned about vulnerable people, but who among us could not feel compassion for Mehdi and Rezi? We should remember that even those who are not the archetypal exploitable worker often have truly heart-breaking stories and are often left with no choices. The Bill would make it even riskier for them. If it is riskier, they will become ever more dependent on their abusive, exploitative employers. They deserve our compassion and support to get out of those situations. They do not deserve the threat of a prison sentence hanging over them.
Paul Blomfield
On amendment 68, I welcome the observations the Minister made in his latter comments. The Bill creates an unreasonable anomaly between the caveats it provides for employers and the absence of any for employees. As I understand it, under clause 9, employers are only guilty of the offence of employing an illegal worker if they do so “knowing” or
“having reasonable cause to believe”
that the person is an illegal worker.
We are saying to employers that there is a test of reasonableness before they are criminalised for the act of wrongful employment. The problem with clause 8 is that there is no such test of reasonableness. With the amendment, we seek to bring some equivalence between the way we approach employers and the way we approach employees by enabling them to be able to demonstrate “reasonable excuse” for the predicament in which they find themselves. Although I have reservations about the entire clause, were the Government successful in retaining it, I hope they would look generously on the amendment, which could provide that equivalence.
I have concerns about clause 8 more generally, as it criminalises the act of illegal working. I take the point made by my hon. and learned Friend the shadow Minister that we might disagree on this matter across the House. However, I do not think we need to. A number of us have said that we are at one on the objectives of the Bill, as we were with the Modern Slavery Act. In seeking to ensure that clause 8 does not stand part of the Bill, we are at one with the Government’s policy objectives of achieving effective labour market enforcement and, indeed, of combating modern slavery. Less than two years ago, in November 2013, the Home Secretary made combating modern slavery a priority. I do not have the experience that Conservative Members and, indeed, my hon. Friend the Member for Rotherham have of serving on that Bill Committee but I commend those who were involved on that legislation, just as I commend the Home Secretary on the priority that she placed on combating modern slavery. That aim won wide support, found expression in the Modern Slavery Act, and took us in the right direction. The problem with clause 8 of this Bill is that it risks undoing some of the good of the Modern Slavery Act.
I am sure that the Government do not intend to undermine their own legislation so soon after it has become law so I hope that the Minister will give serious regard to the points that we are raising in suggesting that clause 8 should not stand part of the Bill. I hope he recognises that if it does, slavery is more likely to thrive. I notice that he is shaking his head and I look forward to his response.
I put this to the Minister: what do we know? What is all the evidence clear about? I am happy for him to intervene if he disagrees, but all the evidence is clear on one thing. The more vulnerable workers are, the stronger the hand of the gangmasters or the unscrupulous employers who seek to exploit them. I am sure that the Minister agrees, as I notice he does not wish to intervene. Vulnerability plays into the hands of those who seek to exploit, such as unscrupulous employers. The more vulnerable workers feel, the less likely they are to come forward to report their abusers. Clause 8 increases that vulnerability and strengthens the hands of the gangmasters. I note that the Minister is again shaking his head. I would be happy for him to intervene if he can provide any evidence to suggest that that is not the case. When we took evidence from witnesses, we heard from many experts who said that this was the case; none said that it was not.
The clause, by threatening exploited workers with 12 months in prison if they are deemed to have committed the offence of illegal working, gives another crucial card to the suit of cards that gangmasters can play. It does not only affect those who have committed the offence of illegal working; it changes the psychology and relationship even between the employer and the employees who have not committed an offence. According to the National Crime Agency, in cases that it has taken up, 78% of those who have been exploited for their labour in the UK actually have the right to work here as EEA nationals. Rights awareness among those workers is low and their options are limited, which allows unscrupulous employers to hold the threat of removal over them.
James Brokenshire
I have listened carefully to the hon. Gentleman. In the example he just gave, he said that the individuals concerned had the right to work. How would they be caught under the clause if they would not be working illegally?
Paul Blomfield
I thank the Minister for that intervention because it gives me the opportunity to explain more clearly; I apologise if I did not do so before. The point I am making is that clause 8 affects those who do not have the right to work, because it criminalises them and makes it less likely that they will whistleblow and report their employers. Rights awareness is low, even among those who have the right to work here. We have seen various cases where exploitative practices have been blown apart. Part of the intimidation and the way in which employers were enforcing compliance was by cloaking a series of threats that did not apply in those cases. That is my point.
James Brokenshire
The hon. Gentleman makes an interesting point, but he seems to be articulating some of the broader issues that we know are redolent around slavery and trafficking, on debt bondage, housing, and physical enslavement. It is those threats and issues and the threat of deportation that might be more redolent in the examples that he has given, rather than law enforcement.
Paul Blomfield
I take the Minister’s point, but why give those who exploit yet another card to play? The threat of 12 months’ imprisonment and criminalisation is the card that will be exercised both in relation to those who have no right to be here, or to be working, and in relation to those who do.
Sarah Champion
One of our witnesses, Caroline Robinson from Focus on Labour Exploitation, said:
“We know that 78% of those exploited for their labour are, in fact, documented in the UK.”––[Official Report, Immigration Public Bill Committee, 20 October; c. 28, Q59.]
Paul Blomfield
My hon. Friend makes exactly the point that I was seeking to make. Even where people have rights to work, the lack of rights awareness and the intimidatory relationship between exploiter and exploited make this another card to play. I see the Minister is still shaking his head. Even if we were to restrict the measure simply to those who did not have the right to work, we are still giving the exploiter another card to intimidate and therefore make it less likely that people would be willing to whistleblow. I am happy for the Minister to intervene on me. Perhaps he could illustrate the evidence that suggests the clause will be of assistance—not the intuition, the belief, the view, but the evidence.
James Brokenshire
The hon. Gentleman is encouraging me to intervene. I will take him through the logic as to why we think the clause is necessary. The interesting and thoughtful way in which he always presents his case identifies broader issues, and I do not see this offence changing the situation in the way that he says. The cases that he has enunciated and the evidence that the hon. Member for Rotherham highlighted show that in the majority of cases people did have rights and are not touched by the offence. The area is complex, and I know that the hon. Gentleman understands this. It is about the broader issues and themes that I touched on earlier.
The Chair
Order. Mr Blomfield, I have used that trick a lot of times, but, given that the Minister is going to speak and that some of the responses will have to be lengthy, the matter is not right for an intervention, so it might be better if the Minister deals with some of the issues in his remarks later.
Paul Blomfield
I am pleased to know that I am following in sound footsteps, Chair, but I will take your advice.
Anne McLaughlin
Is the hon. Gentleman aware that it is not only the exploitative employer who can continue to exploit the person who is working illegally? Undocumented workers face threats from all sorts of people. I spoke to somebody who had worked illegally for different reasons to the previous person I talked about. They were not only ruthlessly exploited by the employer, but were blackmailed by colleagues who themselves were working legally, but were aware or at least suspected that this person was working illegally. He faced blackmail, threats and intimidation. Although he said, “Actually, you don’t know what my status is”, the point that the blackmailers made was, “Are you willing to take that risk?” Of course, such workers are not. The exploitation comes from all around, not just from one employer.
Paul Blomfield
The hon. Lady adds another dimension to my argument that the clause makes those who are already in a precarious situation more vulnerable and open to exploitation. In an earlier intervention, my hon. Friend the Member for Rotherham mentioned the evidence given by Caroline Robinson from Focus on Labour Exploitation, which works directly with victims of trafficking for labour exploitation and of which I am the trustee along with some Members from other parties.
FLEX has identified three drivers of labour exploitation. The first is the feeling among migrant workers that they deserve less or have fewer rights than UK citizens. The second is a lack of checks on labour standards in the workplace, including everything from health and safety to minimum wage enforcement. The third is a fear of officials, especially of immigration officials. The Bill makes each of those drivers worse, and clause 8 has a particular effect on the first and third factors.
First, on the rights of migrant workers, the clause puts the focus on immigration status as a condition of asserting labour rights. By criminalising the exploited worker, whether they are committing the offence of illegal working or not, they can be treated and threatened by a gangmaster as if they are. On the second driver, we have talked at length about a number of aspects of labour market enforcement. The Bill seems to reflect the Government’s desire to move further towards an intelligence-based approach to enforcement. Essential to that intelligence is whistleblowing. We need to ensure that we do nothing in the Bill to discourage exploited workers from coming forward and thereby give gangmasters another card to play. Sadly, the clause risks doing exactly that.
On the third driver of labour exploitation, the problem that we identified earlier—the overlap between labour market enforcement and immigration enforcement—is at the heart of the Bill. The clause gives undocumented workers another reason to be worried. The consequence is that labour exploitation is not rooted out and continues to be a pull factor for migration, which is against the Government’s policy objectives.
Mr Bone, I will take your advice. I will not ask the Minister to intervene, but I press him to share evidence from anywhere in the world that shows that the approach of criminalising workers, unlike many other aspects of the Bill with which we agree, assists in the policy objective that he outlined and we share.
Sarah Champion
Will my hon. Friend comment on something else that Caroline Robinson said, which gets to the nub of his point that clause 8 does not meet the Government’s objective? She said:
“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.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 28, Q59.]
Paul Blomfield
My hon. Friend will not be surprised to know that I agree. The quotation adds very much to the case that I seek to make; perhaps it makes the point more clearly than I was doing.
I want to move on and talk about international examples. I have challenged the Minister and I am confident that he will come back with examples later. I have challenged him to give comparisons, but let me share one that was shared with me yesterday when I met representatives of the Council of Europe convention on action against trafficking in human beings—GRETA. They shared with me the example of Italy. They had done some work and talked about the amendments made to the Italian Consolidated Immigration Act in 2002, the so-called Bossi Fini law, which was aimed at regulating migrant worker flows by introducing a system of entry quotas, and which was supplemented in 2009 by the criminalisation of irregular entry and stay. Their concern was that the requirements of a formal employment contract in order to obtain a residence permit exposed migrant workers who were already at risk of labour exploitation because of their irregular migration status. They were worried that irregular migrants would be afraid to report cases of exploitation to the authorities because they were concerned about being detained and expelled. The United Nations special rapporteur on trafficking in persons, especially in women and children, reported on the negative consequences of the criminalisation of irregular migration for victims of trafficking.
In response to points made to them by GRETA, the Italian authorities indicated that there were 14 convictions for trafficking in human beings in 2010 and nine in 2011. GRETA was concerned that those conviction rates were very low and urged the Italian authorities to strengthen their efforts to ensure that crimes related to trafficking were proactively investigated and prosecuted promptly and effectively. They asked the Italian authorities to study the implications of their immigration legislation, particularly the offence of illegal entry and stay. As a consequence, in January 2014, the Italian Senate approved Government measures to decriminalise those aspects of illegal immigration. They had recognised that the approach of criminalisation was not only unhelpful and policy-neutral but actively counterproductive.
James Brokenshire
I am interested in what the hon. Gentleman is saying, but does he accept that the approach of immigration enforcement in relation to those who have entered the country illegally and committed an offence is to deport rather than prosecute?
Paul Blomfield
I accept that it is to deport. Clearly, those who are here without rights, having exercised due process to establish whether they have a right to remain, should be deported. There is no disagreement on that, but does the provision of criminalising illegal working in clause 8 assist in that process or not? All the evidence seems to suggest that it will drive people underground, out of sight and make them less likely to whistleblow. That will frustrate the aspirations of the Government, with which we agree, to tackle both illegal working and its exploitation.
James Brokenshire
We have had a wide-ranging debate on clause 8 and the amendment tabled by the hon. and learned Member for Holborn and St Pancras. It is important to take a step back. In all the contributions to date, the focus has been on the victims of trafficking and the effects of it; I will come on to those issues in more detail. There has not been much focus on the impact of illegal working on the rest of the population. For example, an illegal worker in effect takes a job from someone who is here legally—people born in this country, or those who have gone through all the right routes to come to this country.
Sarah Champion
I could have used exactly that point in my argument, because it is the employer who makes the decision whether to employ the legal person or the illegal person. Why are we going after the illegal people when already, under section 24 of the Immigration Act 2014, we have the power to deport them? The Minister has cited other Acts under which we can deport. Why are we not punishing the employer who is wilfully employing illegal workers?
James Brokenshire
The Bill is doing both. It is taking steps in relation to employers and to employees, including with the overall enforcement approach. That is why I put things in that broader context. I will respond later to some of the specific questions on purpose, intent and how things fit in the overall deportation strategy. It is important to contextualise that so that the Committee understands the intent of the Government.
Anne McLaughlin
The argument I was making was not that we should allow people who are not permitted to work in this country to work in this country; my point was that those people are often the most vulnerable. A man who is fit and healthy and in his mid-30s might not appear to be that vulnerable on the face of it, but imprisoning him would not make him less likely to commit the offence—he was left with no choice—nor would it change his situation. My argument was not that it is in some way acceptable for people to lose their jobs because others are working illegally; I was arguing that the imprisonment aspect, the criminalisation, is not necessary and will make no difference.
James Brokenshire
I hear the point that the hon. Lady is making, although I do not want to get into the specifics of the case, as I am not entirely familiar with it, so it would not be appropriate or fair, for her or myself, for me to do so. In many cases, however, there is that choice of leaving the country. She might want to make a broader point about assisted voluntary returns and other means of appropriate removal, but that is the context for my arguments about the purpose of the clause and how it fits with other measures in the Bill to support the approach of discouraging people from coming to this country and to deal with some of the broader impacts of illegal working.
James Brokenshire
I will give way to the hon. and learned Gentleman, but I hope that the Committee will then allow me to articulate some of the broader issues that will help our debate.
Keir Starmer
I am grateful. The Minister talks about illegal wage undercutting. Professor Metcalf rightly said in his evidence that if more rogue employers were brought to task for exploitation, it would reduce illegal wage undercutting and unlock wealth creation by legitimate business by releasing them from unfair competition from exploitative rivals. We need to bring rogue employers to book for all the reasons that the Minister has set out, but our central point is that if we are to achieve that, it will be important that those who are being exploited feel able to come forward.
The evidence to date is that even for documented individuals, there is a huge problem, which I think is generally accepted. The next proposition—it will be interesting to know whether the Minister disagrees with the proposition—is that while we have a bad situation for documented workers, it is likely to be far worse for undocumented workers. What assurance can the Minister give that the accepted bad situation will not be made worse by these provisions and that, in the end, the goal of bringing more rogue employers to book will not be lost?
James Brokenshire
The hon. and learned Gentleman, perhaps understandably, given his perspective, is fastening on to this issue without looking at the broader context that I outlined. We can have a broader discussion about the national referral mechanism—we had such debates during our consideration of the Modern Slavery Act 2015—and elements that inhibit people from coming forward. More direct control is likely, as the hon. Member for Sheffield Central highlighted, because this is a complex arena. A debt bonder may wish to impose a number of different conditions and restrictions may be put in place. That goes to other issues such as confinement and the challenge of removal, rather than the legal issues that we are highlighting today.
I want to develop a point that I started in interventions on the hon. Member for Sheffield Central. Home Office immigration enforcement’s normal response, when it encounters illegal workers with no permission to be here, is to try to remove them from the UK as quickly as possible, which has to be the right approach. Action is also taken against non-compliant employers in the form of civil penalties or prosecution. We will come on to that in the next clause, although a strict liability approach is taken against employers under the civil penalty arrangements, so the prosecution element is added to that. That remains the right approach.
James Brokenshire
If I may, I would like to make a bit of progress.
We are also keen to take action in the Bill to address a genuine gap in the law that currently impedes the Home Office’s ability to address the economic incentives behind illegal work and impairs our clear message that those engaging in such activity should not profit from it. It is already a criminal offence to enter or remain in the UK illegally, as I have highlighted. However, migrants who require permission to be in the UK but do not have it, such as overstayers, may not be committing a separate offence of working illegally if they engage in paid work, including employment and self-employment. That is the gap for overstayers who go on to work. In other words, they have not come into the country illegally, so the courts do not always regard earnings derived from working illegally as the proceeds of crime when considering cash seizure or asset confiscation cases. The new offence tackles for the first time the difficult issue of those in self-employed occupations.
What is important in the context of the Bill is how the offence links to economic incentives and proceeds of crime legislation. As hon. Members will see, there is a specific reference to the Proceeds of Crime Act 2002 in the clause. I would articulate this as focusing on some of the economic benefits that might be derived. We think that there are benefits in how this is framed to assist immigration enforcement officers in their work, because they have identified this specific element in the course of their activities when seeking the removal of people from this country.
Paul Blomfield
It would be helpful if the Minister could tell us how many people fall into the category of those who are working illegally because they are overstayers. I anticipate that the number will be much smaller than the general figures. This is about balancing the impact on one group against the negative impact on another. Will he provide those numbers, both specifically and as a proportion of overall illegal workers?
James Brokenshire
The hon. Gentleman makes an interesting point, but as he will well know, one challenge that we have faced is understanding overstaying, which was why we introduced exit checks at the start of this year to identify more clearly patterns of behaviour, sectors and other elements that are relevant to those who are not overstaying the leave granted to this country. He asks me for information that is not currently held, and it is equally difficult to estimate the size of the population who are working illegally. I am sure that the labour market enforcement director will consider that when he examines the size of the problem in his reports to Ministers, but that does not undercut what immigration enforcement representatives say to me about the gap in the existing legal framework.
We need to ensure that there is an overarching approach on criminal law and, as I have said, there is a criminal aspect of people entering the country illegally. We are creating an additional offence for those who are overstaying, who are not covered by the existing criminal law. That means that they are not subject to proceeds of crime legislation, which is having the negative impact about which we have heard.
I share the concerns of the hon. and learned Member for Holborn and St Pancras about ensuring that an offence is used when circumstances suggest that it is the right approach. However, it is important to remember that individuals with an irregular immigration status will have committed a criminal offence under existing legislation by coming into the UK in the manner that I have described, regardless of whether they are working. Therefore, I do not accept arguments made about how the criminal law, or an extension to it in the form of the offence we are discussing, will make the situation more difficult, as has been suggested. However, there are some important points to which I want to respond, including what the hon. Member for Rotherham said about slavery and existing offences under the Modern Slavery Act 2015. She served on the Modern Slavery Public Bill Committee, so she understands these issues.
James Brokenshire
If I may finish this point, I will be happy to give way to the hon. and learned Gentleman.
The provisions of the Modern Slavery Act aim to encourage victims of modern slavery to come forward and give evidence, and to provide them with the confidence to do so, without fear of being inappropriately prosecuted or convicted. However, section 45 was carefully drawn to avoid inadvertently creating a loophole through which serious criminals could avoid justice, such as if they had been a trafficking victim at one point, but eventually became a member of an organised crime group and, motivated by profit, victimised others. There is always a balance to be struck, as was the case when framing the defence under section 45, and that balance applies to the defences that will operate under the Bill. This issue needs to be seen in that context.
As the hon. Member for Rotherham will understand—I know the hon. and learned Member for Holborn and St Pancras understands this, given his experience—the statutory defence acts as an additional protection on top of guidance from the Director of Public Prosecutions on whether prosecution is in the public interest. It is also in a court’s powers to stop an inappropriate prosecution for abuse of process. Although we need to think about the relevant section of the Modern Slavery Act, it is also important to bear in mind the DPP’s guidance. The normal decisions that the Crown Prosecution Service takes are equally relevant to these issues.
I said that I would give way to the hon. Member for Blackburn, so I will; I apologise for not doing so sooner.
Kate Hollern
On economic stability and the creation of unfair competition through what is, to my mind, exploitation, I find it difficult to understand why the penalty for an employee is much harder than that for an employer. We would presume that an employer would be more aware of rules and regulations in this country, yet they have a get out: they did not know or have “reasonable cause to believe”. The balance needs to be shifted and more onus should be put on the employer who is exploiting people to the detriment of other businesses within the same field. At the same time, we are criminalising people who, whether here illegally or because of a process of right to stay, will probably be unaware of their situation, and certainly—
The Chair
Order. I apologise for interrupting the hon. Lady, but either I am getting more tired or the interventions are getting longer—perhaps it is a combination of the two. She is making a perfectly fair point, but it might be better if she tries to catch my eye later as her intervention was veering towards a speech.
James Brokenshire
As I have said, the primary response will be to seek to remove people from the UK. We judge that the offence will be helpful in particularly serious cases in which there may be aspects of culpability or links to organised crime, so it gives us an important additional mechanism. Given that the hon. Lady wants additional sanctions against and more punishment of employers, I hope she will welcome clause 9(2), which provides for an increase in the punishment for employers.
Keir Starmer
I have two quick points. As I understand it, the Minister is saying that for the vast majority of cases in which other offences have been committed, the policy will remain as deportation rather than prosecution—that is a pretty long-standing position. For that class of individuals, the Bill therefore adds absolutely nothing, except to the unlikelihood of people coming forward. The new offence is in fact designed to tackle a smaller number of individuals—the numbers are unknown—who might not fit within that category of “deport not prosecute”, so as to get to any proceeds. The new offence is being introduced to crack that particular nut. My second point—
The Chair
Order. As we are trying to do this properly through interventions, why not sit down for a minute and then you can intervene again with your second point?
James Brokenshire
To respond to the point on proceeds of crime, the Government are committed to taking robust action to prevent illegal working. In our judgment, the current situation encourages illegal migrants to come to the UK, and those who are already here to overstay their leave and remain in the UK. We are clear that working without permission should be an offence that has consequences for an immigrant’s earnings. It is unfair if firms are undercutting their competitors through exploitation and the use of illegal labour. The Government will have the ability to seize cash sums and, as the hon. and learned Gentleman will know from other provisions of the Bill, that may have implications for bank accounts. The way in which powers could be used operationally in various contexts is a thread that goes through the Bill. Some of the unlawful proceeds that are being derived can be actioned through various mechanisms in the Bill.
It is important that we are closing a gap and sending out a clear message on the implications of illegal working. I underline the core element behind the Government’s focus, which is to deport and remove those with no entitlement to be here.
Keir Starmer
I want to move on to the question of defences and the guidance that the Director of Public Prosecutions may issue. I am not concerned about the defence under the Modern Slavery Act—we had that exchange earlier and I understand the position—but the wider point of when that defence is unavailable. There is no defence of reasonable excuse in the Bill, so the individual in the example I cited earlier, who may not know that their leave to remain has ceased to have effect but therefore becomes a criminal, has no escape route. Does the Minister accept that in such circumstances it is not right to leave it to the DPP’s discretion? In other words, should not the DPP’s discretion be exercised according to the known offence and known defences? If there is a case for a defence, that ought to be in the Bill, rather than left to the discretion of the DPP. That is not to suggest that discretion does not operate in many cases, but if there is a proper case for having a defence, it ought to be for Parliament to write that into the Bill and then for the DPP to exercise discretion as to how it operates in individual cases. The alternative is the DPP effectively introducing a back-door defence, which has not been thought to be an appropriate use of guidelines.
James Brokenshire
First and foremost, I underline the point that, for those who are in the country unlawfully, the priority will be to see that they are removed. That is the first line of approach that immigration enforcement would take. Secondly, the use of the DPP’s guidance makes it clear that it is generally not in the public interest to prosecute an adult victim of slavery or trafficking where the crime they committed was a direct consequence of their slavery or trafficking situation and they were compelled to commit the crime.
A wide debate took place prior to the Modern Slavery Act as to whether that was sufficient in its own right or whether additional provisions were required. There was an extended debate between the non-governmental organisations, the DPP, the Crown Prosecution Service and policing. On balance, it was judged that the further defence provided in section 45 was appropriate. However, guidance can be provided on what is in the best interests of justice in that determination. Clearly, this will be a matter for individual cases, but, as I have already indicated, the primary approach that we want to take in respect of people who are here unlawfully is to see that they are removed.
The offence is to strengthen the message that the Government and the country send. Also, we want a method of dealing with serious or significant cases where an individual may be seeking to absolutely frustrate the system. The offence can be seen as an appropriate and effective tool in the work of immigration and enforcement in conducting their work. I suspect there will be a point of difference between us on that and it may be for the Committee to express its view on the issues, rather than to try to suggest there is not a difference of opinion when there is.
All victims, regardless of their involvement in criminal activity, are entitled to the same level of protection and support through the national referral mechanism and are assessed against exactly the same criteria. Support is tailored to each individual’s need and can include accommodation or outreach support and access to medical, legal and psychological support. As many hon. Members will know, the Government fund the Salvation Army to provide that service through a network of specialist charities across England and Wales.
On the point about whether the measures will strengthen the hands of the exploitative employer, as has been postulated, that is precisely why we are taking tougher action in the rest of the Bill against employers who exploit illegal labour. We are changing the knowledge base required in relation to the subsequent offence, as well as strengthening the approach to enforcement through the creation of the new role of director of labour market enforcement. Where employers repeatedly flout the law, we propose to use new powers to close their business premises and apply special measures as directed by the courts. Again, it is about the broad context.
I know that traffickers and those involved in such criminality are insidious in some of the techniques that they use. They use a wide range of techniques to exploit their victims, including debt bondage, physical force or threats to put victims in fear. There is no way entirely to stop traffickers misleading victims about what will happen if they come forward; they will often use such direct tactics to intimidate. The Government are making identifying and protecting victims of modern slavery, and giving them the confidence to come forward, fundamental to our modern slavery strategy.
That is why the Modern Slavery Act introduced the new statutory defence for victims who commit crimes due to their exploitation. Last year, the Home Office set up a modern slavery helpline and website and ran a national television campaign, with which many people will be familiar, to reach out to victims and encourage the public to report suspected modern slavery. In many cases, it is happening under our noses, in our communities and across our country.
As I have consistently said during my involvement in the initial preparation of the Bill, we must shine a light into those dark places, to see what is there in plain sight but is somehow unseen by us. That is the reason for the practical implementation of the Modern Slavery Act and the work that we are doing through a number of measures through the commissioner. It is about raising awareness and knowledge within law enforcement, so that the signs of slavery can be spotted and victims given the support that they need. That includes setting up specialist teams at the border to identify and protect victims when they enter or leave the UK. We are taking a multi-faceted approach in a way that has not been undertaken before. That is not a partisan view; good work has been done across the House on confronting modern slavery, and I welcome the contribution made to that work by numerous Members over an extended period.
Because of all that complexity and the elements that I have highlighted, I am simply not persuaded that the proposals make the situation worse in the manner postulated. As has been said, it is often those with the right to be in this country who are held here and kept in appalling conditions. We want to shine a light on those dark places from which they cannot escape, often physically, due to the manner in which they have been enslaved. That is precisely the reason for raising understanding in law enforcement and more generally across the population of this country, in order to deal with these issues when they become apparent. I know that I should refer to the contribution that you have made over a number of years, Mr Bone, to get us to a position in which we can have this debate with much greater understanding of the issues concerned. It is significant.
I see the issue in the broader context of what we are seeking to achieve in the Bill in terms of dealing with labour market exploitation, but I do not see that as inconsistent with the important work that we have done and will continue to do to confront slavery, traffickers and exploitation, and to go after those causing human misery in our country. I am proud to be part of a Government who take these issues seriously and are seeking to make a difference in that way.
The Chair
Kate Hollern, would you like to say something now, as I have rather rudely cut you off?
Keir Starmer
In the light of the fact that we have discussed the clause and the amendment together, I do not feel the need to add anything on the amendment, save to say that we will press it to a vote.
Keir Starmer
I beg to move amendment 67, in clause 9, page 7, line 6, leave out subsection 1 and insert—
“(1) In section 21 of the Immigration, Asylum and Nationality Act 2006 (offence of knowingly employing an illegal worker), delete subsection (1) and substitute—
(1) A person commits an offence if he knowingly or recklessly employs an adult subject to immigration control, where—
(a) this adult has not been granted leave to enter or remain in the United Kingdom, or
(b) this adult’s leave to enter or remain in the United Kingdom—
(i) is invalid,
(ii) has ceased to have effect (whether by reason of curtailment, revocation, cancellation, passage of time or otherwise), or
(iii) is subject to a condition preventing him from accepting the employment.”
To adopt a test of recklessness rather than negligence for the offence of employing an illegal worker, so as to avoid discriminatory employment practices by employers.
I can be relatively brief. The extension of the offence has been advanced on the basis of the need to deal with repeat offenders, but there is nothing in the Bill that requires an offender to have already offended before the new test is applied. Therefore, it is applied more generally. In our submission the right approach is to move to a position of recklessness rather than negligence for fear of the default position of employers, which could be discriminatory in its effect.
James Brokenshire
As the hon. and learned Gentleman says, the amendment seeks to avoid discriminatory practices by employers through adopting a test of recklessness for the offence of employing an illegal worker. The Government’s intention of using the “reasonable cause to believe” test is to make the current test more objective and easier to prove. It is intended to capture those employers who have wilfully turned a blind eye to someone’s immigration status.
It must be emphasised that the test of “reasonable cause to believe” is not the same as negligence, as the hon. and learned Member for Holborn and St Pancras will well understand. The intention is to continue to apply the civil penalty sanction to those employers who are simply negligent; that is to say, those employers who act without reasonable care and skill in terms of not checking a person’s right to work, or not doing so correctly.
We judge that introducing a test of recklessness would not assist in increasing the number of prosecutions of those employers who flout the rules on illegal working. It would remain a subjective test and would require proof that the employer foresaw a risk that the person had no right to work, yet went on to take that risk and employ them. It is precisely the difficulties in establishing the state of mind of the employer that the Government are seeking to address in the Bill, by introducing an objective element to the test. Having “reasonable cause to believe” will capture circumstances in which an employer wilfully turns a blind eye to anything that would give them reasonable grounds to believe that the employee has no right to work.
In addition to being more difficult to prove, a test of recklessness would also potentially go too wide and be more likely to lead to discriminatory behaviour, which the amendment seeks to avoid. In our judgment, the Bill’s test that the cause to believe must be a “reasonable” one strikes the right balance between making the offence easier to prove and guarding against discriminatory behaviour.
I do not believe that the test of “reasonable cause to believe” will encourage further discriminatory behaviour on the part of employers, because they are already required to undertake prescribed right to work checks to establish a statutory excuse in the event of illegal working. That does not change.
The Secretary of State has published a statutory code of practice on avoiding discrimination while preventing illegal working. If an employer is simply negligent, they will be dealt with under the civil penalty scheme. What we are changing is our ability to prosecute those employers who choose not to undertake the necessary checks because they have reasonable grounds to believe that such checks will reveal that the employee has no right to work. That is in addition to our intention to continue to prosecute those we can show actually know that someone has no right to work— which is where we largely sit currently—as we can do now under the current wording of the offence. Obviously, however, it inhibits and limits that sense of having to prove the knowledge of the employer in those circumstances. That is why the change has been brought forward.
Having given that explanation, I hope that the hon. and learned Gentleman will feel able to withdraw his amendment.
Keir Starmer
I am grateful to the Minister for that explanation and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
James Brokenshire
As part of our drive against illegal working in the UK, the Government intend to toughen their approach to employers who deliberately, cynically or systematically use illegal workers. The Immigration, Asylum and Nationality Act 2006 introduced a civil penalty scheme, under which employers of illegal workers may be liable for a civil penalty of up to £20,000 per worker. That remains the principal means of dealing with cases of non-compliance by businesses that negligently employ illegal workers. In 2014-15, 1,974 civil penalties were issued to employers, with a total value of £29.6 million.
The 2006 Act also introduced a criminal offence of knowingly employing an illegal worker, which provides the appropriate response to those employers who deliberately flout the law. The Government believe that we continue to need both the penalty scheme and the facility to prosecute in order to provide a comprehensive and appropriate response to the whole spectrum of employer non-compliance. However, we have concluded that we should take action in this Bill to strengthen the capability to prosecute where employer non-compliance goes beyond negligence or error.
Some employers are deliberately not checking whether their employees have the right to work. They routinely choose not to know, and so cannot be found to be knowingly employing an illegal worker. The new offence will also capture those employers who should have known that the employment was illegal. In addition, some employers are dissolving their businesses and simply creating a new business, in order to evade civil penalties for illegal working. In such circumstances, it is appropriate to hold an individual employer personally to account in their capacity as a company officer, and that can be done by prosecuting the individual for committing a criminal offence. Clause 9 amends the criminal sanction in the 2006 Act to make it easier to bring prosecutions successfully and to increase the maximum custodial sentence that a Crown court may impose.
Anne McLaughlin
Is the Minister not concerned that making it easier to bring about prosecutions and prove negligence will mean that employers are much more fearful of employing someone who, to them, does not sound, look or seem British? My fear is that people who genuinely intend to do the right thing will steer clear of employing anyone who does not appear to be British because they will be frightened of being prosecuted. They will be taking a big risk.
James Brokenshire
That is why I made the point about negligence and how that is dealt with under the civil penalty regime but not the criminal provisions that I explained earlier. That feeds back into the debate we have had in respect of the bar that needs to be set for bringing prosecutions. That is why I made the comments I did in the previous debate about discrimination. The most serious cases involving the exploitation of illegal labour will continue to be dealt with under legislation that prohibits facilitation and trafficking. It is important to make that point in the broader context of the provision.
Subsection (1) amends section 21(1) of the 2006 Act by inserting, after “knowing”,
“or having reasonable cause to believe”.
That is the test. It is not negligence. The effect is to amend what is known as the mens rea, the knowledge or intention needed to make out the offence, in order to make the test more objective and the offence easier to prove, but still with that safeguard.
Kate Hollern
My understanding is that for an employer to take on an employee the latter needs a national insurance number. Would that not automatically say that someone had the right to be here?
James Brokenshire
It is rather that the employer has to show the right-to-work check, which is what the provision relates to. There is certain documentation with which employers should be familiar. We still work on the basis of trying to raise awareness of the issues. We are not trying deliberately to catch out employers. I certainly want employers to know the relatively simple steps they have to take to comply. The obligation was introduced into law in 2006, when the civil penalty scheme was put in place by the Labour Government. That is, therefore, what needs to be shown and it is why the negligence piece sits within the civil penalty regime.
The amendment to the definition of the offence—having reasonable cause to believe—is for those who close their eyes and put their fingers in their ears so that they cannot be liable, trying to get around the existing knowledge requirement of the Act. Those employers are, frankly, trying to play the system, and we are making the changes because of the problems that the pre-existing offence presented for our ability to bring prosecutions. I think that hon. Members would want us to be able to bring prosecutions in such circumstances.
Sarah Champion
Building on what the Minister said in response to my hon. Friend, what would be a reasonable defence for an employer?
James Brokenshire
It will depend on the circumstances. It is about the distinction between negligence and having reasonable cause to believe. The legal tests are slightly different, and I do not want to hasten into issues of law as I am sure that the hon. and learned Member for Holborn and St Pancras will be well enough equipped with his knowledge and expertise in those matters to be able to underline the distinction, as will the Solicitor General. I will not hasten to stray into matters of law with such august representatives in the room.
At the moment, if a document that looks legitimate and real is presented to someone, that is often a defence in relation to the negligence argument. The employer has not been negligent. They have checked. We are not trying to make employers, or landlords—we will come on to them, I am sure, under the right to rent—into some sort of extension of immigration enforcement teams. If it is shown that the basic checks have been conducted in good faith, the civil penalty regime would not apply, even on the test of negligence—let alone the criminal sanction in clause 9. On that basis, the measure is an important step forward and fits within the broader enforcement strategy. I hope the clause will stand part of the Bill.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clause 10
Licensing Act 2003: amendments relating to illegal working
Question proposed, That the clause stand part of the Bill.
James Brokenshire
With clause 10 and schedule 1, we move on to a slightly different provision. We will come to amendments to schedule 1 in the next group. Clause 10 deals with amendments to the Licensing Act 2003 that relate to illegal working. Home Office immigration enforcement officers frequently encounter illegal migrants in premises involved in the sale of alcohol and late-night refreshments. It is clear, on the basis of intelligence, that this is a high-risk sector for illegal working. Accordingly, we want to adapt the licensing regime to prevent illegal working in the sector.
Clause 10 and schedule 1 will prevent illegal migrants and those whose status does not permit them to work here from holding premises and personal licences. They provide a mechanism for the Home Office to object to the issue of such licences when it considers that necessary to prevent illegal working. Immigration officers are provided with the same power to enter a premises as licensing enforcement officers, for the sole purpose of checking whether immigration offences are being committed in connection with a licensable activity—namely, selling alcohol or providing late-night refreshment.
Clause 10 gives effect to schedule 1, which amends the Licensing Act 2003. The Licensing Act applies to England and Wales. We are consulting Northern Ireland and Scotland with a view to making similar amendments to their legislation in the Bill or, if that is not possible, in regulations, for which provision is made in the clause.
The provision links to schedule 1, on which some technical amendments will be moved. I will sit down at this point and move on to schedule 1 when we discuss the next group of amendments. The provisions are interlinked but I am conscious of the separation between them.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The clause and schedule pertain to the Licensing Act 2003, which is England and Wales legislation, but clause 10(2) empowers the Secretary of State to implement, by regulation, similar changes to Scotland. That is completely unacceptable and goes against the spirit of devolution and the Sewel convention. I am sure that the Minister will argue that it pertains to immigration, which is reserved, but it obviously has a big impact on a devolved matter.
Powers that ride roughshod over primary legislation—whether that is here in Westminster or at Holyrood in Edinburgh—without proper scrutiny by elected Members should be used very sparingly. The measure should be dealt with in primary legislation subject to debate prior to a legislative consent motion. The Government state that a significant proportion of illegal working happens on licensed premises where there is the sale of alcohol and late-night refreshment or the provision of entertainment. I have previously received an answer from the Minister, which confirms that the UK Government have no evidence that suggests that takeaways and off-licences are far more likely to employ illegal migrants compared to other businesses. That rather highlights the lack of evidence base for this part of the Bill. Surely, the starting point for any legislation is the requirement of evidence. To use hearsay or assertion in supporting this or any other legislation makes for neither good politics nor good law. Even if Members accept the premise of the proposal, the very need for this part of the Bill is called into question by John Miley, the chair of the National Association of Licensing and Enforcement Officers, who stated:
“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.”––[Official Report, Immigration Public Bill Committee, 20 October 2015; c. 32, Q67.]
The most concerning thing about the provision is the new power whereby an immigration officer
who has
“reason to believe that any premises are being used for a licensable activity”
can enter the premises
“with a view to seeing whether an offence under any of the Immigration Acts is being committed in connection with the carrying on of the activity.”
That terminology is a big concern to my colleagues and me. As framed, it gives immigration officers a very wide power to search any licensed premises. Home Office statistics show that an alarming number of offences pertain to small businesses that serve ethnic cuisines and are therefore likely to be run by ethnic minority owners. Is that because they are the gravest offenders or because they are searched most frequently? Will the same be true of licensed premises? The Migrant Rights Network states:
“These are small businesses who will be less able to deal with the additional burden of carrying out and recording frequent and complex immigration checks.”
The Secretary of State is given an additional power, as she can object to the granting of the licence, and that is to be taken into account by the licensing authority. Again, that is a completely devolved area and highlights the need for further reflection by the Government. Unlike other sections of the Bill, the Home Secretary is given leave to appeal against the granting of a licence or refusal to cancel a licence despite her objection. This is additional bureaucracy that most businesses will not welcome and that is surely not in keeping with a long-term economic plan.
Restaurants and bars—especially those serving ethnic cuisines—feature heavily on the list of those given civil penalties for employing illegal workers. Is that because they employ illegal workers more frequently than other employers or because they are targeted more frequently for enforcement activity? If it is the latter, can the Minister tell us why?
In concluding, I should point out to the Committee that if the clause is passed, we will table further amendments on Report to remove the power to extend the provision to Scotland through regulations.
James Brokenshire
As I have indicated, there are ongoing discussions with the Scottish Government about the impact of the clause and the potential for regulations. While the hon. Member for Paisley and Renfrewshire North and I were in agreement this morning, this may be a point on which we are not of the same view.
As the underlying purpose of the clause relates to immigration, our view is that a legislative consent motion is not required. We are in the process of consulting the Scottish Government on any necessary amendments to make provision for Scotland on the face of the Bill, and similarly for Northern Ireland. Management information for 2014-15 highlighted a number of operations from immigration enforcement in Scotland.
The hon. Gentleman asked me for evidence of why we think this is an important area to legislate on by building a mechanism into the licensing provisions—evidence of people with no status in the UK being captured within those sanctions and mechanisms. Of all civil penalties served in the year to June 2015, I am advised that 82% were served on the retail industry or hotel, restaurant and leisure industry, a large proportion of which hold premises or personal alcohol licences. That is why we see this as an issue affecting a particular sector. In building the legislative framework, it seems appropriate to strengthen the mechanisms available and to build the provisions in the Licensing Act and the potential sanctions in this way.
I appreciate the points that the hon. Gentleman makes and the different view he holds, but it is for the purposes I outlined that we view this as a reserved matter and are taking this stance. I assure him that discussions continue with the Scottish Government on how this may be applied within Scotland.
Question put, That the clause stand part of the Bill.
James Brokenshire
I beg to move amendment 1, in schedule 1, page 49, line 38, leave out sub-paragraph (6) and insert—
‘( ) After subsection (5) insert—
(5A) Where an interim authority notice is cancelled under subsection (3)(b)(ii), the licensing authority must also give a copy of the notice under subsection (4) to the Secretary of State.””
This amendment requires a licensing authority to notify the Secretary of State of its decision to cancel an interim authority notice where the Secretary of State has given notice under section 48(2B) of the Licensing Act 2003 that granting the interim authority notice would be prejudicial to the prevention of illegal working.
James Brokenshire
These minor and technical amendments strengthen and clarify the amendments made by schedule 1 of the Bill to the Licensing Act 2003. The amendments to that Act in general build in additional protections against illegal working in the licensing regime governing the sale of alcohol and late-night refreshments. The amendments must be considered within the context of clause 10 and schedule 1 to the Bill.
Amendment 1 requires a licensing authority to notify the Secretary of State—in effect, the Home Secretary—if the licensing authority decides to cancel an interim authority notice where the Secretary of State had notified the licensing authority that failing to cancel the interim authority notice would be prejudicial to the prevention of illegal working.
Amendment 2 ensures that a chief officer of police may take into account whether an immigration civil penalty, for employing an illegal worker or renting a dwelling to an illegal migrant, would undermine the crime prevention objective when considering whether to object to a personal licence application.
Amendment 3 makes a similar provision to amendment 2 where the chief officer of police is notified, after a personal licence has been granted, that the licence holder was required to pay an immigration penalty in the period between the application being made and its being granted.
Amendments 4, 5 and 6 substitute “licence holder” for “applicant”, so that they are consistent with the other amendments to section 124 of the 2003 Act.
Amendment 7 requires a licensing authority to notify the Secretary of State of its decision whether or not to revoke a personal licence where the Secretary of State has served an immigration objection notice under section 124(3B) of the 2003 Act.
Amendment 8 makes consequential amendments to section 10 of the 2003 Act and amendment 9 makes consequential amendments to sections 109 and 111 of the Police Reform and Social Responsibility Act 2011.
Amendment 10 makes transitional provisions, so that the amendments to sections 13, 16, 42, 47 and 120 of the 2003 Act do not apply in relation to applications made, or interim authority notices given, before the commencement of the respective paragraph of schedule 1.
Keir Starmer
On a point of clarification in relation to proposed new section 179(1A) of the Licensing Act 2003, as inserted by paragraph 22(2) of schedule 1, I want to ask the Minister an open question. Why is the test there for an immigration officer to enter premises that they have “reason to believe” the premises are being used, rather than, as I think is the case elsewhere in the Bill, that they have “reasonable grounds” to believe that? It may to be align the Bill with other licensing legislation, but on the face of it, that is a much lower threshold than the usual threshold for entering premises, and it is with a view to seeing whether an offence is being committed. This is a genuine, if probing, question.
James Brokenshire
I think the amendments are being made on the basis of consistency with other legislation. However, in the spirit in which the hon. and learned Gentleman raised that issue, I will have a look at that point of detail in relation to previous legislation and how this is framed in some of the other tests that are being applied. If there is an issue, I will come back to him.
Amendment agreed to.
Amendments made: 2, in schedule 1, page 51, line 27, at end insert—
‘( ) In subsection (5)—
(a) omit the “and” at the end of paragraph (a);
(b) at the end of paragraph (b) insert “and
(c) the applicant having been required to pay any immigration penalty,”.”
This amendment ensures that a chief officer of police may have regard to an applicant being required to pay an immigration penalty when considering whether granting a personal licence would undermine the crime prevention objective.
Amendment 3, in schedule 1, page 53, line 11, leave out sub-paragraph (3) and insert—
‘( ) In subsection (3)—
(a) in paragraph (a)—
(i) for “applicant” substitute “licence holder”;
(ii) for “, and” substitute “which occurred before the end of the application period,”;
(a) in paragraph (b), after “relevant offence” insert “and which occurred before the end of the application period”;
(b) at the end of paragraph (b) insert “and
(c) the licence holder having been required before the end of the application period to pay any immigration penalty,”;
(c) in the words after paragraph (b), omit “which occurred before the end of the application period,”.”
See the explanatory statement for amendment 2.
Amendment 4, in schedule 1, page 53, line 20, leave out “applicant” and insert “licence holder”
This amendment and amendments 5 and 6 substitute “licence holder” for “applicant” to be consistent with the other amendments to section 124 of the Licensing Act 2003.
Amendment 5, in schedule 1, page 53, line 22, leave out “applicant” and insert “licence holder”
See the explanatory statement for amendment 4.
Amendment 6, in schedule 1, page 53, line 26, leave out “applicant” and insert “licence holder”
See the explanatory statement for amendment 4.
Amendment 7, in schedule 1, page 54, line 7, leave out sub-paragraph (6) and insert—
‘( ) After subsection (5) insert—
(5A) Where the authority revokes or decides not to revoke a licence under subsection (4)(b)(ii) it must also notify the Secretary of State of the decision and its reasons for making it.””
This amendment requires a licensing authority to notify the Secretary of State of its decision whether or not to revoke a personal licence where the Secretary of State has served an immigration objection notice under section 124(3B) of the Licensing Act 2003.
Amendment 8, in schedule 1, page 56, line 24, at end insert—
In section 10 of the Licensing Act 2003, (sub-delegation of functions by licensing committee etc), in subsection (4)(a), in sub-paragraphs (v), (vi) and (x), omit “police”.”
This amendment makes consequential amendments to section 10 of the Licensing Act 2003.
Amendment 9, in schedule 1, page 57, line 17, at end insert—
In the Police Reform and Social Responsibility Act 2011, omit sections 109(9) and (10) and 111(3) and (5).”
This amendment makes consequential amendments to sections 109 and 111 of the Police Reform and Social Responsibility Act 2011.
Amendment 10, in schedule 1, page 57, line 19, at end insert—
The amendments of sections 13, 16, 42, 47 and 120 of the Licensing Act 2003 made by paragraphs 3, 4, 6, 9 and 15 respectively of this Schedule do not apply in relation to applications made, or interim authority notices given, before the coming into force of the respective paragraph.” —(James Brokenshire.)
This amendment makes transitional provision to the effect that the amendments to sections 13, 16, 42, 47 and 120 of the Licensing Act 2003 do not apply in relation to applications made, or interim authority notices given, before the coming into force of the respective paragraph of Schedule 1 making the amendment.
Ordered, That further consideration be now adjourned.—(Charlie Elphicke.)
National Insurance Contributions (Rate Ceilings) Bill (First sitting)
(8 years, 6 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
The Chair
Before we begin, I will make a few preliminary points. Please switch electronic devices to silent. Tea and coffee are not allowed during the sittings. We will first consider the programme motion on the amendment paper. We will then consider a motion to allow us to deliberate in private about our questions before the oral evidence sessions, and then a motion to enable the reporting of written evidence for publication. In view of the time available, I hope that we can take those matter formally, without debate.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 27 October) meet at 2 pm on Tuesday 27 October;
(2) the Committee shall hear oral evidence on Tuesday 27 October as follows—
TABLE
Time | Witness |
|---|---|
Until no later than 10 am | Office of Tax Simplification |
Until no later than 10.45 am | HM Treasury |
(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5 pm on Tuesday 27 October.— (Mel Stride.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication—(Mel Stride.)
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.—(Mel Stride.)
The Chair
We will now deliberate in private to discuss lines of questioning. If anyone wishes to remove their jacket, please feel free to do so.
The Chair
Q 1 Ladies and gentlemen, good morning to everyone, including members of the public, officials and the Minister, who have just arrived.
We will now hear oral evidence from the Office of Tax Simplification. Before calling the first Member to ask a question, I should like to 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 am. Could the witness please introduce himself for the record?
John Whiting: Thank you. I am John Whiting, tax director of the Office of Tax Simplification. I am also a non-executive director of Her Majesty’s Revenue and Customs and a board member of Revenue Scotland.
Rebecca Long Bailey (Salford and Eccles) (Lab)
Q 2 The Bill legislates to prevent rises in the current rates of class 1 and secondary class 1 national insurance contributions, but says nothing about the thresholds. In your opinion, are changes to thresholds absolutely ruled out for the duration of the Parliament?
John Whiting: From a simplification point of view, we tend to leave rates and thresholds as a policy matter for Ministers, but naturally, one of the main projects we have on our agenda is looking at closer alignment of income tax and national insurance. As part of that review, we are inevitably considering the impact of thresholds and other factors about the structure of national insurance, and whether bringing them into closer alignment with income tax in some way would bring some simplification. As I read the Bill, it is all about capping rates rather than thresholds, but I stress that how those are treated is really a matter for Ministers.
John Mc Nally (Falkirk) (SNP)
Q 3 You will know that there has been a lot of speculation in the past two days regarding the possibility of changing the national insurance contribution because of the tax credit cuts. Have you any comment to make on that as a possibility?
John Whiting: Again, Mr Mc Nally, I have to say that the actual rates of national insurance are something that we at the Office of Tax Simplification steer clear of, other than to consider whether they add complexity or simplification. To give an example away from national insurance, we drew attention to having two rates of corporation tax. Obviously, that was a complexity, as they have now been harmonised on one rate. That is an obvious simplification and easier for business. That is about as far as we tend to go with rates, but in terms of absolute rate setting, I cannot comment, other than to say that, whenever you make a change to the tax system, it adds a measure of complexity and confusion.
Wendy Morton (Aldridge-Brownhills) (Con)
Q 4 The balance of the national insurance fund has continued to fall sharply in spite of the modest economic recovery. Is not legislating to prevent even small rises in national insurance contributions throughout the Parliament irresponsible under those circumstances?
John Whiting: The national insurance fund is obviously something that I am aware of, and how it operates is an interesting question. It is certainly something that we, with our current review, want to look at. What I can say is that we want to examine how much people really understand about how the fund operates and whether they really appreciate, in effect, what national insurance pays for and where it goes. For me to come up with an opinion about where the fund sits at the moment is a little premature. However, I can say that just how it operates is something we want to examine, and, as I say, there is the fairly crucial question of how much people really understand about national insurance and how it operates.
Rebecca Long Bailey
Q 5 This is linked to the previous question. In the light of the response that you just provided, how would you say the fund would cope if there were an unforeseen crisis, given the restrictions that are placed upon it?
John Whiting: I know that the mechanics of the fund are such that the balance on the fund is assessed every year by the Government Actuary’s Department, and of course, if it looks as if the fund is too low, or if there is not sufficient coverage for its likely liabilities, as happened earlier this year, the Treasury will make a grant to the fund to keep it at the level that the Government Actuary’s Department feels is appropriate. I suspect that in terms of a sudden crisis—given that the fund’s main function is pensions and similar outgoings, hopefully there will not be a sudden crisis; it is a demographic trend that we can see or not—or a problem with the funding, it is over to the Treasury to make a grant and I have no doubt that Committees such as yours would have a view on such matters.
Huw Merriman (Bexhill and Battle) (Con)
Q 6 This question is linked to previous questions on the fund. Perhaps using your expertise, would you tell us what steps have been taken to ensure that the fund’s 16.7% threshold is maintained?
John Whiting: It really is down to the Government Actuary looking at how adequate that is and preparing reports for Her Majesty’s Revenue and Customs and Ministers on the balance of the fund. That leads to decisions as to whether the fund is adequate or whether supplementary grants are needed and will, I presume, influence Treasury Ministers’ minds on what level of contributions is appropriate. However, without wishing to duck the question, I have to say that we are getting into matters of rates, which is beyond matters of the OTS.
Huw Merriman
Q 7 May I further ask whether you agree with the Government Actuary that a subsidy from the Treasury will be required this year? If you do agree, do you have a view on how big this would need to be?
John Whiting: From figures I have seen, a grant will probably be needed this year. I do not have the figures to hand, but I believe that a grant will be needed. I believe an amount has already been tabled and discussed.
Huw Merriman
Q 8 In a way, you have just touched on this, but to be absolutely clear, how much money from the fund do you think will be required to maintain it above the threshold for the remainder of the Parliament? I know that is perhaps a little more into the future.
John Whiting: It is. I am not an actuary—I can only refer you to the Actuary’s reports that have been published. The annual reports of the national insurance fund will shortly be laid. I believe that the Comptroller and Auditor General, Sir Amyas Morse, has just signed them off on behalf of the NAO, so they will shortly be tabled.
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)
Q 9 I was wondering what the process is for determining the 16.7% threshold and when was the last review.
John Whiting: The honest answer to that is I do not know. I am afraid I have to say, again, I am not an actuary. It is the figure that I believe has been set for a while as a prudent level of funding, but it is for the actuaries to determine. As far as I am aware, the Government Actuary looks at the funding of the national insurance fund annually and makes appropriate recommendations.
Rebecca Long Bailey
Q 10 Are you aware of what steps the Government have put in place to reverse or amend this legislation in the future, and do you believe that there are any specific triggers that should lead to its suspension?
John Whiting: I have no knowledge of any plans the Government have to reverse this legislation, nor should I. As I read it—and I come back to the job that I have in hand, which is to look at alignment of income tax and national insurance—clearly, the areas that we are looking at could produce recommendations to make some structural changes to national insurance. Those recommendations would go to the Chancellor and Treasury Ministers, and it would then be up to them to consider them and to bring them forward. They would come before Parliament in the normal way and would no doubt lead to a full debate. Could that lead to an amendment to the Bill? I presume that it could, but that is for Parliament to decide. What I would stress is that our recommendations will no doubt be subject to an awful lot of scrutiny and debate. If we come up with recommendations, they will be long-term and it would be highly appropriate to have a full debate on them.
Mr Alan Mak (Havant) (Con)
Q 11 The Government have said that the Bill has no financial implications. If a grant is needed from the Treasury to maintain the mandated threshold of 16.7% of expenditure, do you think that this constitutes a financial implication?
John Whiting: I think that, in those terms, the nature of the national insurance fund, certainly as I have seen it over the years, inevitably goes up and down with the economy to a certain extent. The fact that there is a grant perhaps this year is not of itself exceptional. We are back to attempting predictions, which actuaries are very good at in this area, and seeing what the trends are. This is governed by such things as employment, because if more people are employed, earning more, there is more national insurance going into the fund, so potentially less need for a grant. Of itself, if we take the Bill as it stands, the question of a grant or whatever, is subject, as I said earlier, to what the Government Actuary is going to say about the likely outcome and the likely balances on the fund, which will have to take into account economic circumstances and the general position of contributions.
Matt Warman (Boston and Skegness) (Con)
Q 12 Given the fall in the national insurance fund, are there implications for continued NHS funding from the fund?
John Whiting: We are back to the question of what the fund is for. It is predicated on paying out benefits, particularly pensions. It is really a question you should address to the Treasury, with respect, because it determines where the money comes from. On an entirely personal level, I do not see a direct connection between the balance on the fund and funding for the NHS, but we are going into areas well beyond my compass with the OTS.
Matt Warman
Q 13 From your perspective, you are not anticipating making any cuts to NHS funding, or NHS funding going down overall?
John Whiting: I am afraid that I do not have the power to change the tax system, far less make cuts. My role is to make recommendations and it is for Ministers and Parliament to decide on such weighty matters. I know my place.
Lucy Frazer (South East Cambridgeshire) (Con)
Q 14 The Bill is part of the Government’s commitment to simplifying the tax system, but might the freeze on rates and on other taxes lead to complicated attempts to raise taxes in other areas? You have already mentioned that there might be a grant, which might necessitate raising taxes in other areas. Does that, in your opinion, exacerbate the problem of simplifying the tax system?
John Whiting: The fact that rates are kept stable is of itself a simplifying measure, because work we have done in the past has shown that the greatest source of complexity is change. It is as simple as that: the more changes you make to the tax system, the more businesses in particular and individuals to a lesser extent are confused and have difficulty with the tax system. Simply keeping rates stable is of itself a simplifying point. Your question, could this lead to more complexity elsewhere, is a very good one. I hope that, whether or not the rates are kept the same, that still leaves plenty of scope for us to bring forward recommendations about simplifying the structure of the tax system, making it easier to run.
We are looking at things such as the definition of earnings—although, conceptually, income tax and national insurance both broadly apply to earnings, the definitions are subtly different. Should those be harmonised? Should national insurance perhaps run on an annual, cumulative basis, rather than on a week-by-week basis as it does now, with parallel PAYE? Considering those areas, which could lead to simplification, is not in any sense affected by the tax rates, the ceilings that we have on this. As one or two people have pointed out, these ceilings do not preclude reductions in rates but, either way, as I read it, this does not hamper at all our work in looking at how the system will work and whether we can find areas that would simplify its operation for employers, individuals and, indeed, HMRC.
The Chair
That concludes the questions of which I have been given notice. Does any Member wish to ask any further or additional questions? No. I thank Mr Whiting for his evidence. We will now move on to the next panel.
Examination of Witnesses
David Gauke MP and Cerys McDonald gave evidence.
The Chair
Q 15 We will hear oral evidence from the Treasury. We have until 10.45 am. I ask the panellists to introduce themselves.
Mr Gauke: Good morning, Mr Rosindell. I am David Gauke, Financial Secretary to the Treasury, and this is Cerys McDonald, deputy director of personal tax at the Treasury.
John Mc Nally
Q 16 I will repeat the question I asked earlier. There has been a lot of speculation in the media and the press about the possible effects on the thresholds of the tax credit cuts. The Bill legislates to prevent rises in the current rates of class 1 and secondary class 1 national insurance contributions, but says nothing about the thresholds. Are changes to thresholds absolutely ruled out for the duration of this Parliament?
Mr Gauke: The thresholds are kept under review, and announcements are made at Budgets and autumn statements from time to time. They automatically increase in line with inflation, but as I said, it is a matter that is always kept under review.
John Mc Nally
Q 17 Are you saying that there is a possibility that they will be changed?
Mr Gauke: The Bill relates to rates. That was the policy set out by my party in the general election. It does not specify anything with regard to thresholds.
John Mc Nally
Q 18 What I am trying to get at, Minister, is that there will have to be some sort of transition period for working-class people. We in this Committee are trying to find out whether that will be a possibility. During the transition period, it looks as if national insurance contribution thresholds will be moved.
Mr Gauke: Just to clarify the point I made a moment ago, there is an area relating to thresholds, in terms of the link with the upper earnings limit in the Bill. As for the vote in the House of Lords yesterday, the Chancellor will set out his response to that in the autumn statement.
Wendy Morton
Q 19 The balance of the national insurance fund has continued to fall sharply in spite of the modest economic recovery. Is not legislating to prevent even small rises in national insurance contributions throughout this Parliament irresponsible in such circumstances?
Mr Gauke: No. Our commitments as a Government—our additional expenditure on the NHS, for example, and the triple lock guarantee for the state pension—are clear statements that we will fulfil. If it is necessary to top up the national insurance fund, we will do that to fulfil our objectives of increasing spending on the NHS and meeting our obligations on the state pension. Ultimately, meeting those objectives depends on the state of the economy and the public finances, not on the position of the national insurance fund.
Wendy Morton
Q 20 How can the fund cope if there is an unforeseen crisis?
Mr Gauke: First, as Mr Whiting pointed out, the fund is unlikely to face an unforeseen crisis due to expenditure. There is flexibility within the regime for top-ups from the Consolidated Fund from the Treasury to ensure that the national insurance fund can fulfil its obligations. In terms of our commitments, this requires us to have a strong economy and sound public finances and to control public spending in other areas, so that we are in a position to see the increase in departmental spending in the NHS that I am sure we would all like.
Rob Marris (Wolverhampton South West) (Lab)
Q 21 In terms of the national insurance fund, the trend is not looking good. In 2008-09, the fund was sufficient to cover 71% of its liabilities. By last year, that had dropped to 25%. Some commentators are suggesting that this year it will fall below the Government Actuary’s recommended one sixth, which is 16.7%. I understand that the Government Actuary has indicated that a top-up will be required this year from the Consolidated Fund, I imagine as you just indicated. I understand what you said about flexibility. Can you give an indication of how big that top-up from the Consolidated Fund for the national insurance fund is likely to be for this financial year and for the remaining years of this Parliament?
Mr Gauke: I can say that, for the 2015-16 tax year, a top-up of £9.6 billion has been provided for in legislation. That is the potential number; it is not to say that that will be necessary. I am not sure that I can give a number for future years as such. It will depend upon various factors, but there is provision for top-up from the Consolidated Fund if necessary.
Rob Marris
Q 22 Forgive my ignorance, but does it require primary legislation? You talked about the £9.6 billion being provided for in legislation for this financial year. Is that secondary or primary legislation? What is the mechanism?
Mr Gauke: It is secondary legislation.
Rob Marris
Q 23 So if the transfer needed to be more than £9.6 billion in this financial year, that would require fresh secondary legislation this year? I am not saying that will be the case, but asking what would happen if it were.
Mr Gauke: I think that is an assessment of what could be necessary this year, but for future years we would require further secondary legislation to provide such a top-up.
Rebecca Long Bailey
Q 24 What steps have the Government put in place to review this legislation in terms of reports or otherwise? Are there any triggers that will lead to its suspension?
Mr Gauke: There are no formal processes for reports or triggers for suspension. All legislation is of course kept under review. I remind the Committee of the purpose here. It is to emphasise and underline our commitment not to increase national insurance contribution rates in the course of this Parliament. That is what my party set out at the general election, and this legislation is to support that.
Wendy Morton
Q 25 The Government have said that the Bill has no financial implications. If a grant is needed from the Treasury to maintain the mandated threshold of 16.7% of expenditure, is it your view that this constitutes a financial implication?
Mr Gauke: We have various commitments in terms of Government spending and we also have various commitments in terms of taxation, one of which is not to increase the employers’ or employees’ rates of national insurance contributions. As a Government, we will abide by those commitments. This legislation emphasises and underlines that commitment by passing a law to support it. The point I would make is that if there is a shortfall in the national insurance fund, our response is not to increase the national insurance contribution rates.
Rebecca Long Bailey
Q 26 There is real concern that, given the fall in the balance of the national insurance fund, there will be implications for NHS funding. Can you confirm that there are no anticipated funding cuts on the horizon in terms of the NHS?
Mr Gauke: Yes, I can confirm that. I come back to what I was saying earlier: if the Government are committed to funding the NHS properly, as we are, we will find the resources. The fact that the national insurance fund, for argument’s sake, goes in one direction does not mean that spending cannot go in a different direction. It is ultimately a spending decision to decide how much we spend on the NHS. Of course, Government need to fund it, but that funding could come from the national insurance fund or the Consolidated Fund, or there could be a transfer from the Consolidated Fund to the national insurance fund.
Rebecca Long Bailey
Q 27 What measures will the Government put in place to provide assurances on this? The Government have imposed the Bill to provide assurance about the ceiling rate on national insurance contributions, but will they do the same to protect the NHS funding element?
Mr Gauke: We do not intend to legislate on that funding, but I point to our record in the last Parliament of increasing expenditure on the NHS in real terms. We are committed to doing the same in this Parliament.
Mark Menzies (Fylde) (Con)
Q 28 Following up on that point, is there a clear commitment from the Government to put measures in place to ensure that NHS funding is not reduced as a result of the measures in the Bill?
Mr Gauke: The measures in the Bill will not reduce NHS funding. There is not, in truth, a hard and fast link, because expenditure on the NHS is not confined simply to money coming from the national insurance fund. It is a clear commitment from our party at the last general election, and of course, we have a spending review coming up next month that will set out the details. A Government who are determined to focus support on the NHS, who can deliver a strong economy and who are prepared to make difficult decisions on other aspects of Government expenditure are in a position to provide the support to the NHS that we believe is right.
Lucy Frazer
Q 29 The Government have committed to simplifying the tax system. Mr Whiting confirmed that this measure will do that, and that it will bring certainty and stability through lack of change. Do you think that the change will have an impact on any other tax measures?
Mr Gauke: Of course, in the Finance Bill, we also brought in the tax lock in respect of income tax rates and VAT. I hope that that provides a degree of certainty and stability to taxpayers. In particular, in the context of employers’ NICs, the Bill provides an important degree of certainty for employers that they will not be hit by an increase in the rate of the jobs tax, if I may use that term. I hope that that provides certainty and stability. Of course, we are taking other measures as a Government, and we intend to publish a business tax road map by April next year setting out our plans over the course of this Parliament. It is all about creating an environment in which businesses can grow and invest, knowing that they have a Government who want a tax system that is supportive of them.
Andy McDonald (Middlesbrough) (Lab)
Q 30 Rather than simplifying the tax system, this effectively does a big fat nothing. It keeps things exactly as they are. Have you made any assessment of how much the process has cost?
Mr Gauke: First, what you might describe as a big fat nothing— keeping things as they are—can, as Mr Whiting said, at times be something that businesses welcome in terms of providing greater certainty. Also, as you heard, the Office of Tax Simplification is looking at the relationship between income tax and national insurance contributions to see if there is scope for simplification in that area. I think that the costs of the process would be negligible, but it is nevertheless of value to have legislation that underlines the Government’s commitment regarding tax rates.
Andy McDonald
Q 31 Is keeping things as they are, not making any changes and putting Parliament through this, really a wise use of parliamentary time?
Mr Gauke: Yes, I think it is. I think it is a justifiable use of parliamentary time to underline the commitment that my party made at the general election to not increase the rates. The fact that we have legislation to that effect underlines that commitment, and I hope that, at the end of the day, Mr McDonald, you do not feel that you have had a futile day.
Huw Merriman
Q 32 To turn the question from the hon. Member for Middlesbrough on its head, does the Treasury keep estimates of how the stability that this gives business will benefit the economy?
Mr Gauke: It is difficult necessarily to measure that. It is difficult to take the things in isolation. Overall, if you look at what we have done, as both a coalition Government and a Conservative majority Government, in terms of, for example, reducing our rate of corporation tax, addressing the worst effects of the jobs tax, which we inherited in 2010, some of the measures we have taken regarding capping business rates, and so on—over a period of five and a half years or so—we have taken a large number of measures to help businesses and to ensure that we have a thriving private sector, creating the jobs and tax receipts that we need to fund the NHS and so on.
Rob Marris
Q 33 Reversing that, I would suggest that the Bill arguably creates greater uncertainty, because although the Government have chosen, following your party’s manifesto commitment, to lock in a cap on national insurance contributions, you are taking action in some areas and not others. For example, there are about 1,300 tax reliefs and you are not locking all of those in.
In answer to an earlier question, you referred to a review of business taxation, which I think you said would be launched in the spring. That in itself creates uncertainty, and I suggest that the argument that the Bill creates greater certainty is wrong. It creates greater uncertainty because people say, “You’re locking in this but we notice you’re not locking in other stuff, so other stuff might change and adversely affect businesses or individuals.”
Mr Gauke: First, to be clear, we will publish our business tax plan—road map, if you like—in the spring, setting out what we will do. It is not the announcement of a review as such. It is, to some extent, conclusions.
Rob Marris
Until then there is uncertainty.
Mr Gauke: But my wider point is that it is important in terms of the larger taxes to provide greater certainty to the British people. We will not be putting up tax rates. We do not believe that that would be the right thing to do. I also make the point that my understanding is that, at the general election, the Labour party also made a commitment not to increase the rates of employer and employee national insurance contributions, income tax and VAT. The difference between us that we are legislating for it but, as I say, the idea of ruling out increases in tax rates is not, as I understand it, something to which your party, Mr Marris, is opposed.
Rob Marris
Q 34 We did not say that we would do it for business certainty.
Mr Gauke: Well, whatever the reason for doing it, that, I think, was your party’s position. It was a manifesto commitment, and it is right that we fulfil it.
The Chair
Those are all the questions of which I have been notified. Does any other hon. Member wish to ask a question or raise an issue that has not been covered thus far?
Rob Marris
On a point of order, Mr Rosindell. May I thank you for your chairing of the Committee today, particularly as I suspect that, like me, you missed the Canadian breakfast this morning?
Rob Marris
I had a meeting. I thank you, Mr Rosindell, for your commitment to your service as a Chair and for chairing the Committee today.
The Chair
Thank you. I thank the witnesses for their attendance today and for duly answering the questions. If there are no further questions, I thank hon. Members for their attendance.
Ordered, That the debate be now adjourned.—(Mel Stride.)
National Insurance Contributions (Rate Ceilings) Bill (Second sitting)
(8 years, 6 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
We now begin line-by-line consideration of the Bill. Please ensure that all electronic devices are turned off or switched to silent mode. It is unseasonably warm today—very pleasant. If Members want to remove their jackets, they should feel free to do so.
Clause 1
Main and additional primary percentages
Question proposed, That the clause stand part of the Bill.
The Financial Secretary to the Treasury (Mr David Gauke)
It is a very great pleasure to serve under your chairmanship, Mr Bailey. I welcome all hon. Members to their places. Progress was brisk and efficient at our evidence session this morning and if it were up to me, that momentum would continue, but of course it is not up to me.
Clause 1 specifies that the class 1 contributions payable by employees at the main primary percentage shall not exceed 12%. Class 1 contributions are payable at 12% on earnings between £155 and £815 a week. For earnings above £815 a week, the additional primary percentage shall not exceed 2%. The provisions in clause 1 will apply to any tax year that begins after the day on which the Bill comes into force before the next election.
Rob Marris (Wolverhampton South West) (Lab)
It is a pleasure to serve under your chairmanship again, Mr Bailey. You commented on the weather. Of course, you and I know that that the weather in West Bromwich and in Wolverhampton is always lovely, especially at this time of year.
Through clause 1 the Government are limiting their room for manoeuvre. I am aware, as are all hon. Members, that there was a commitment by the Conservative party in the general election not to freeze but to put a cap on national insurance contributions at both rates. That was also the policy of my party, so I think that we will have a fairly brisk afternoon.
However, the Bill, as primary legislation, puts restrictions on Government, which, as I suggested to the Minister in the evidence session this morning, creates a measure of uncertainty. When some things are restricted, like this and other tax measures, such as the 1,300 tax reliefs, of which the Audit Commission says that only about 200 are tracked properly, it can create uncertainly by a kind of ripple effect—if one is being certain in one sphere but saying nothing about this other sphere, whatever it may be in terms of the tax regime, perhaps one has plans to change that.
Do the Government currently have any plans to change, in any way, the regime for national insurance contributions, whether in terms of the upper earnings limit or the percentage rates at which it is levied? There are different rates, of course, depending on the different classes, including class 3A, which runs out at the end of next March. Are there any proposed changes to the regime?
Mr Gauke
I am grateful for the hon. Gentleman’s comments and I am encouraged, as I am sure you are, Mr Bailey, by the consensus, at least on being brisk this afternoon.
As for future plans for national insurance contributions, of course, all taxes—and for these purposes, we count national insurance contributions as a tax—are kept under review. Any announcements are made by the Chancellor in Budgets and autumn statements. I have nothing to add to what has previously been said in Budgets and autumn statements. As was touched upon in our evidence session this morning, the Office of Tax Simplification is looking at national insurance contributions and their alignment with income tax. It has examined that in the past, and it and the Government believe that it would be helpful to draw out some of the related issues in quite a complex matter.
Rob Marris
I appreciate that consultation is ongoing and evidence is still being gathered, but is the Government’s preferred option at this point to have such an alignment?
Mr Gauke
The Government’s position is very much an open one. There is no preferred position as such. Clearly, the matter has been raised on numerous occasions over many years. I suspect that all parties have looked at this issue to a greater or lesser extent. The Office of Tax Simplification has made recommendations in the past on this matter, and we think that it would be beneficial for it to continue to look at the subject with a view to developing potential ideas and then, after that further investigation, for us to have an informed debate on whether to take the proposals forward. The Government do not have a predetermined position, but we think that it would be beneficial to the general debate for the OTS, which is a respected organisation that has already done good work in this area, to take the matter forward.
In short, we do not have further proposals other than those that we previously set out—not least, of course, the cap. The hon. Gentleman is right to say that the Bill provides for a cap, not a freeze.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Secondary percentage
Question proposed, That the clause stand part of the Bill.
Mr Gauke
Like clause 1, clause 2 is a simple provision and I do not intend to detain the Committee for long in explaining it. The rate of secondary class 1 contributions payable by employers for employees who are not under the age of 21 is 13.8%. It is payable on earnings above £156 per week. The clause simply provides that the rate shall not exceed 13.8%.
Rebecca Long Bailey (Salford and Eccles) (Lab)
Again, as this is part of the Government’s policy to cap national insurance contributions for this Parliament, we do not oppose it in principle, but I hope that the Minister will address a few issues.
The national insurance fund is used almost exclusively to pay for contributory benefits. However, one portion, as we discussed this morning in the evidence session, is used for the NHS. Will the Minister assure us that the Government are not tying their own hands should there be another economic crisis? There could be a danger in such circumstances that the Chancellor may decide to reduce public spending further, just at the point when a stimulus is needed.
Economists the world over warn that the global economic situation is becoming increasingly precarious, and the Minister will no doubt be acutely aware that the Opposition have concerns that the Government are not taking sufficient measures to increase our financial resilience. I ask the Minister, in the words of Keynes: if the facts change, will the Chancellor change his mind? Alternatively, if the Government are committed to keeping this framework in place regardless, what contingency plans exist to protect the fund if unemployment starts to rise and receipts from national insurance consequently fall?
On Second Reading, the point was made that the Chancellor’s spending plans are predicated on,
“a forecast rise in revenue yield from NICs”.—[Official Report, 15 September 2015; Vol. 599, c. 941.]
However, should this yield be less than forecast, whether due to unforeseen circumstances, simple miscalculation or, indeed, economic policy failures, what will the Government do? Will further cuts be imposed on public expenditure, or will borrowing rise and the Chancellor simply change his targets once again?
I was grateful for the Minister’s response this morning when he confirmed that NHS funding would not be cut directly as a result of any impact that the Bill has. However, in the same way as the Bill provides an assurance to the market that the Government will keep their promise on national insurance, it would be prudent to legislate for the promise on the NHS. I trust that the Minister has listened diligently to my concerns and I look forward to his response.
Mr Gauke
I am grateful to the hon. Lady for her questions. She asked whether we are tying our hands in these circumstances. To the extent that we are not putting up the employers’ rate of national insurance contributions, for which the clause provides, or the employees’ rate, for which clause 1 provides, we are making it clear that we do not believe that that would be the right thing to do.
The hon. Lady draws me on to hypothetical ground when she asks what would happen if there were a crash, but even on a Keynesian analysis, I do not think anyone would particularly advocate, as an immediate response to an economic downturn, increasing employers’ or employees’ national insurance contributions. I do not claim to be an expert on Keynesian orthodoxy, but I do not think that that would constitute an orthodox Keynesian response to a downturn.
On the hon. Lady’s points about the impact on the national insurance fund, let me repeat the assurances that I gave this morning. There is no question of the fund not being able to fund pensions or the NHS. The Government will introduce the new state pension from 2016, which will make pensions affordable and improve the sustainability of the national insurance fund in the long term and provide the right support for private saving.
The Government Actuary recommends a working balance of one sixth of benefit expenditure for the national insurance fund, as we heard this morning. There is provision to top up the national insurance fund from the Consolidated Fund to maintain the balance at that level. For the 2015-16 tax year, a top-up of £9.6 billion has been provided for in legislation. The future funding of contributory benefits, should NICs receipts prove insufficient, is a matter for the Chancellor and that decision would need to be made at the relevant fiscal event, based on the latest projections available at the time, and taking account of this Bill. I hope that that provides some reassurance that there is flexibility.
It is not the case—nor is this an argument that a future Government would make—that, if the national insurance fund were lower than we expected, we would not honour our commitments on the NHS and on the state pension. I have to make the point that, when it comes to ensuring that we can have a properly funded NHS and properly funded pensions, we need to make sure that the economy is on a sound footing, and that the public finances are strong. That means that we have to make choices, and, in some cases, difficult choices about public finances. That includes, for example, identifying savings in the welfare budget, but, Mr Bailey, that would be taking me away from clause 2.
Mr Gauke
Tempting though that is, I should return to the clause. I hope that those points of clarification are helpful to the Committee and that clause 2 can stand part of the Bill.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3
Upper earnings limit
Question proposed, That the clause stand part of the Bill.
Mr Gauke
This clause provides that the upper earnings limit for any tax year for the duration of the Parliament shall not exceed the weekly equivalent of the income tax higher rate threshold proposed for that tax year. The class 1 upper earnings limit is the point at which an employee transitions from paying class 1 contributions at the main rate of 12% to paying class 1 contributions at 2%. Since April 2009, this point has been aligned with the higher rate tax threshold.
Rebecca Long Bailey
Hon. Members will be pleased to hear that I do not wish to go into great detail on clause 3. We are aware that the clause links the upper earnings limit to the higher rate income tax threshold by setting out that it shall not exceed the weekly equivalent of the proposed higher rate threshold for that tax year. That means that employees stop paying national insurance contributions at the 12% rate when their income reaches the higher rate income threshold, and thereafter the rate of national insurance is 2%.
Mr Gauke
I am sorry if we are detaining the hon. Lady. I am sure she has many useful things to do this afternoon, so I will not detain her longer than I have to. I come back to the point that we debated this morning. It was a manifesto commitment that we would legislate for this and it is similar to the argument on rates that we have just had on clauses 1 and 2. It underlines our commitment.
I suspect that, had the Bill contained just clauses 1 and 2, and not dealt with the upper earnings limit alignment, the hon. Lady would have been one of the first to identify an apparent lacuna in the legislation and would say that there was nothing to stop us increasing the 12% band of national insurance contributions above the point at which the higher rate threshold came into place. Indeed, I think that that was Labour party policy in 1992, so it is not an immaterial issue or one that has never been considered in public debate.
To be consistent with the capping of the employees’ NICs rate, it is right to set out the threshold and the fact that that is tied in with the higher rate threshold. That has been the practice for some years now and we wish to maintain it.
Rebecca Long Bailey
On highlighting a lacuna, several need to be highlighted and we will take the same approach as the Government to the Bill. If they are going to legislate for every single pre-election promise, surely they should apply the same sort of legislation to every manifesto pledge. They are certainly not doing that.
As my hon. Friend the Member for Wolverhampton South West rightly said this morning, while the Government might be providing assurances to the market on this issue, they are certainly not providing any assurances on all their other pre-election promises because they are not legislating for them in the same way.
Mr Gauke
Again, I come back to the central point. The Conservative party, and indeed the Labour party, made pledges during the last general election campaign not to increase rates. We wished to underline our commitment to the British people by announcing during the election campaign that we would legislate for this. It further emphasised our commitment on this issue.
Having set out that we would legislate on rates, it is also right that we legislate on the way in which the national insurance thresholds currently tie in with the income tax thresholds, which is at the point where the upper earnings limit meets the higher rate threshold. It was logical to include clause 3, which meets exactly the same objective as clauses 1 and 2. We made a commitment that we would not increase the 12% band above the point at which higher rate income tax would be paid, and I think—I am sure I will be corrected—that the Labour party made the same commitment. Given that we are legislating in the Bill on rates, it made sense also to address that threshold point. That is why the clause is part of the Bill, and why I hope the Committee will support it.
Question put and agreed to.
Clause 3 accordingly ordered to stand part of the Bill.
Clauses 4 and 5 ordered to stand part of the Bill.
Mr Gauke
On a point of order, Mr Bailey. I am not sure whether it is appropriate or necessary to make a point of order at this point, but I think I should. I thank you for your guidance over the last 21 minutes. You have demonstrated all the skills we needed this afternoon, and I am grateful for that. I also thank Mr Rosindell for his assistance this morning.
I thank all hon. Members for their participation in our proceedings. They can report back to the Whips that they have served on yet another Bill Committee, and I hope they feel that this has been a day well spent.
I thank the Whips—the Lord Commissioner of Her Majesty’s Treasury, my hon. Friend the Member for Central Devon, and the hon. Member for St Helens North—for their assistance. I also thank Opposition Members, including the Front-Bench spokespeople, the hon. Members for Wolverhampton South West and for Salford and Eccles, for their constructive engagement with the Bill.
This is the second Bill that some of us have completed in recent days. It has taken considerably less time than the Finance Bill, for which I, for one, am very grateful.
May I conclude by thanking the Clerks, the Hansard reporters, the police and the attendants, as well as the officials from Her Majesty’s Revenue and Customs and the Treasury, for their assistance with this short but important Bill? I look forward to discussing these issues again—no doubt at some length—on Third Reading.
Rebecca Long Bailey
Further to that point of order, Mr Bailey. I reiterate the thanks the Minister has expressed. I also thank him for what has, as always, been a lively and engaging debate. It has been a pleasure.
John Mc Nally (Falkirk) (SNP)
Further to that point of order, Mr Bailey. This is the first Bill Committee on which I have sat. May I, too, thank the Minister and the Clerks for taking us through the Bill and for the guidance they have given us? I am equally glad that our proceedings have been quite short and relatively simple to follow and that I could associate them with my constituents back home in Falkirk.
Bill to be reported, without amendment.
Psychoactive Substances Bill [ Lords ] (First sitting)
(8 years, 6 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
Before we begin, I have a few preliminary announcements that I hope will be helpful. First, the Committee’s quorum is six members, including the Chair. Secondly, will people be good enough to switch any electronic devices to silent? I remind the Committee that, regrettably, tea and coffee are not allowed during sittings. Any Members who wish to remove their jacket, or any other limiting item of their apparel, should feel free to do so.
We will now consider the programme motion on the amendment paper before considering a motion to enable the reporting of written evidence for publication. In view of the time available, I hope we can take those motions formally without debate.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 27 October) meet—
(a) at 2.00 pm on Tuesday 27 October;
(b) at 11.30 am and 2.00 pm on Thursday 29 October,
(2) the proceedings shall be taken in the following order: Clauses 1 to 3; Schedule 1; Clauses 4 to 39; Schedule 2; Clauses 40 to 56; Schedule 3; Clauses 57 to 59; Schedule 4; Clauses 60 to 62; new Clauses; new Schedules; remaining proceedings on the Bill;
(3) the proceedings on the Bill shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 29 October.—(Mike Penning.)
Resolved,
That, subject to the discretion of the Chairman, any written evidence received by the Committee shall be reported to the House for publication.—(Mike Penning.)
The Chair
Copies of written evidence received by the Committee will be made available in the Committee Room.
We now begin line-by-line consideration of the Bill. The selection list for today’s sittings is available in the room and shows how the selected amendments have been grouped together for debate. Grouped amendments are generally on the same or a similar issue. A Member who has put their name to the lead amendment in a group will be called first, and other Members are then free to catch my eye to speak on all or any amendments within the group. A Member may speak more than once in a single debate. I will work on the assumption that the Minister wishes the Committee to reach a decision on all Government amendments.
Please note that decisions on amendments take place not in the order they are debated but in the order they appear on the amendment paper—in other words, debates occur according to the selection list and decisions are taken when we come to the clause that the amendment affects. I hope that explanation is helpful. I will use my discretion to decide whether to allow separate stand part debates on individual clauses and schedules following the debate on relevant amendments.
Clause 1
Overview
The Minister for Policing, Crime and Criminal Justice (Mike Penning)
I beg to move amendment 1, in clause 1, page 1, line 5, after “9”, insert “and (Possession of a psychoactive substance in a custodial institution)”
This amendment is consequential on NC2.
The Chair
With this it will be convenient to discuss the following:
Government amendment 7.
The motion to transfer subsection (9) of clause 6.
Government amendments 10, 17, 18, 26, 30 and 33 to 36.
Government new clause 2—Possession of a psychoactive substance in a custodial institution.
Mike Penning
It is a pleasure to serve under your chairmanship, Mr Howarth. I also look forward to serving under Sir David’s chairmanship. Thank you for setting out so concisely how the Committee will proceed.
I thank Her Majesty’s Opposition and the Scottish National party for being so supportive of the principle behind the Bill, on which there was extensive discussion in the other place. One area that was discussed extensively in the other place is the use of psychoactive substances in prisons and other custodial places. The Lords sought to address the issue by amending clause 6 to make the supply of psychoactive substances, and offers to supply psychoactive substances, on prison premises a statutory aggravating factor. On reflection, we are content with the Lords amendment, not least because the governors and the Prison Officers Association support making possession a specific offence.
We also support the Lords amendment following the campaigning by my hon. Friend the Member for Winchester and the hon. Member for Barnsley Central (Dan Jarvis), who has spoken to me privately about this matter on more than one occasion—I can see the shadow Front-Bench team nodding. He really understands the matter and has been campaigning on it for many years, and it would be inappropriate if we did not acknowledge that.
I am pleased that my hon. Friend the Member for Winchester is a member of the Committee. He knows all too well that the substances are a dangerous and pervasive problem in prisons and other secure estates, not only for prison officers but for other staff and prisoners. Having reflected on the Lords amendment we are content to retain it; Government amendment 7 simply makes some drafting improvement so as to ensure that the measure is tight and, in particular, to provide a definition of a custodial institution.
We have concluded, however, that we need to go further, with new clause 2 introducing a new offence for a person who is in possession of a psychoactive substance in a custodial institution. I think everyone agrees that the use of psychoactive substances needs to be addressed, and it is not about just prisoners; it is about other staff who may, sadly, wish to bring such substances on to the premises, and visitors. The safety of visitors, prisoners and staff is, of course, paramount.
The introduction of a possession offence in prison would enable the police and the Crown Prosecution Service to pursue cases of prisoners, visitors or staff being found with small quantities of psychoactive substances in prison, and would support the stance that psychoactive substances are not to be tolerated in prison. The measure is fully supported across the House, by all the experts and panels, and within the Prison Service and other custodial suites. The measure concerns not just prisons, but any form of custody, particularly immigration detention centres and youth detention centres. I hope that in that way, along with the help we have had from the Lords, a simple case will be made about the possession of a psychoactive substance in prisons and other custodial centres, as opposed to in the community where it is not an offence. That is needed, to make a difference. We have listened carefully, and that is exactly what we will do.
Lyn Brown (West Ham) (Lab)
Mr Howarth, I look forward to serving under your chairmanship and receiving your guidance. This is my first outing as a shadow Minister on a Bill, and I know that I am sitting under two experienced Chairs who will make my life so much easier than it might otherwise have been. That is a plea, in case you had not worked it out.
As I made clear during my speech on Second Reading, we support the Bill’s principles and general approach. The 2015 Labour manifesto included a commitment to ban the sale and distribution of dangerous psychoactive substances. A blanket ban with listed exemptions appears to be the most effective means of beginning to tackle the serious public health problems that the drugs have brought about. During the Committee stage, we will look at the weaknesses in the drafting of the Bill, and will table amendments to try to improve it. I hope that the Government take our critique and suggestions in the constructive manner in which they are intended. We want to work with the Government, through the Committee, to make the Bill as effective and robust as possible.
The Government have elected to insert a new clause into the Bill, which will make it an offence to possess a psychoactive substance in a custodial institution. The new clause amends clause 1, which is consequential on the new offence. The Bill already contains offences of supply, and of possession with intent to supply, psychoactive substances, which apply to prisoners and staff as much as to the rest of the public. The new clause makes it an aggravating factor to supply such substances in or around a prison, meaning that the only new power would be the ability to further punish those involved with psychoactive substances. Although I share the Government’s concern about the problem of such substances in our prisons, I am not convinced that we lack enough statutes to bring charges against prisoners, staff and visitors.
I also assume that many of the prisoners in possession of and taking psychoactive substances in our custodial institutions are likely to be addicted and are possibly in prison because they needed to feed their habit. It would perhaps be better to treat such instances as a health issue rather than one of enforcement. As I have said, the Bill already contains offences of supply and possession with intent to supply in or near a prison as an aggravated offence, so I am not convinced that the addition of possession is necessary.
As I said on Second Reading, I am concerned by the findings in the prisons and probation ombudsman’s report of July of this year that new psychoactive substances had been a factor in at least 19 prisoner deaths between 2012 and 2014. Her Majesty’s inspectorate of prisons’ annual report was just as concerning. It found that the availability of new psychoactive drugs has
“had a severe impact and has led to debt and associated violence.”
New psychoactive substances are undoubtedly a real problem for our prisons, which I am sure is what motivated the Minister to table the amendment. However, neither of the reports asked for legislation to help deal with the problem. Indeed, the drugs that the reports mention as causing problems, Black Mamba and Spice, are already controlled by the Misuse of Drugs Act 1971, meaning that possessing the most problematic substances in our prisons is already a crime. In addition, the Prison Service already has powers to discipline and punish prisoners for possessing psychoactive substances though prison rules.
Both reports stress that better detection mechanisms for new psychoactive substances need to be in place. HMIP stated that many new psychoactive substances do not show up in mandatory drug tests, making it difficult for prison officers to know what they are dealing with and the scale of the problem they face. Too few drugs tests are taking place, due to inadequate staffing. The prisons ombudsman highlighted that the sniffer dogs used by prisons to detect drugs often could not identify new psychoactive substances, and that it was still waiting for X-ray body scanners to detect substances concealed in body cavities.
I understand that the prevalence of Spice in prisons can be high. Will the legislation have a deterrent effect? Is it practically possible to enforce, or will it be like handing out speeding tickets at a grand prix? Will the Minister explain what prompted his desire to introduce criminal sanctions for possessing a psychoactive substance in a prison? Does he genuinely feel that the prison system has enough resources to tackle the direct supply and demand of such substances? It does rather feel that the amendment has been tabled out of a desire to do something about the problem in our prisons because the Minister and the Government have not been able to do the right thing, which is to address the staffing and resources issues raised by HMIP and the prisons and probation ombudsman.
During my Second Reading speech, I stressed that we have to reduce supply and demand for such drugs, meaning that we need to focus on education, including education for prisoners and, I suggest, their families. The Minister’s letter to the Chairs of the Committee states that the new offence provided by this amendment will complement the work of the National Offender Management Service to
“educate prisoners, staff and visitors.”
Will the Minister update us on what changes the Home Office and the Ministry of Justice have made to the drug education strategy since July, which is when the prisons and probation ombudsman report recommended that the Prison Service should put in place a specific education programme about the dangers of psychoactive substances?
In conclusion, I am unconvinced that the new offence would provide any useful tools in tackling the problem of novel psychoactive substances in our prisons. It is already against prison rules to possess a psychoactive substance. It is also against the law to possess Black Mamba and Spice—the NPS that currently cause the most damage in our prisons. They are already banned. Custody professionals seem clear that the priority needs to be ensuring that prisons have the resources to deal with these substances and to educate their staff and prisoners. I think that makes sense and I agree with them.
Steve Brine (Winchester) (Con)
Unsurprisingly, I support the Government amendment. I will let my right hon. Friend the Minister answer directly the points made by the shadow Minister; I just want to make a couple of comments.
As I said in my Second Reading speech last Monday evening, there is unquestionably a huge problem in the secure estate. I referred to the work of RAPt—the Rehabilitation for Addicted Prisoners Trust. Before the debate, that excellent organisation sent hon. Members a research briefing, “Tackling the issue of New Psychoactive Substances in prisons”. It lays the situation out pretty starkly. As I did not last week, I will not pull my punches now. RAPt says that NPS use has quickly become widespread among prisoners. The annual report from NOMS affirms that increased NPS use among prisoners is generating high levels of debt, intimidation and violence between prisoners and is likely to be the main catalyst for the recent rise in attacks on prison staff. I will come on to my constituency experience of that in a moment. RAPt says on the scale of the problem:
“The number of prisoners using NPS varies across prisons”—
across the estate—
“but some estimates suggest as many as 60% to 90% of the prison population use, or have used, NPS.”
As the shadow Minister said, Spice seems to be the NPS of choice at the moment. It is also known as Black Mamba—I cannot ever say that without smiling—or Clockwork Orange. Some of the quotes in the report by RAPt are shocking. They include the following:
“Prisoners who had used Spice described it as being ‘like a crack addiction’ or ‘like cannabis, just a lot stronger’…Others have seriously injured themselves head-butting mirrors thinking they were being attacked…One prisoner had witnessed ‘someone bury a knife in someone’s neck [on Spice] ’cause they were paranoid’…There is also a game that is becoming popular in prisons”—
this has been reported to me—
“It is often called the…50 pound challenge. In the game, prisoners are challenged to smoke £50 worth of Spice. If they manage to smoke it all before breaking down or passing out, then they get it for free. If they fail they have to pay for it.”
We can see how this is becoming the new currency in prisons. When I first started going into prisons for my work on the Justice Committee and in my constituency, tobacco was the currency, but without question NPS are becoming the currency. I have Her Majesty’s Prison— and young offenders institution—Winchester in my constituency. As I said on Second Reading, Dave Rogers, who is a very good governor, is struggling to deal with the effects of Spice at the moment inside Winchester prison. He told me that last month there were three ambulances on the estate at one time for three prisoners who had taken NPS in the exercise yard and were unconscious. That is gravely concerning to me.
The shadow Minister says that we currently have powers. Under the Bill, simple possession of a psychoactive substance in the wider community is not criminalised, but the Government have rightly concluded that the problem is such that it requires a different approach in the context of the secure estate because it is particularly destructive there. All my experience of working inside and outside prisons is that control and order is fundamental to prison life. When that breaks down, we have anarchy and people unfortunately die. People are dying in prisons at an alarming rate. There are many and varied reasons for that, but they are dying under our care. The state is their guardian and they are dying under our care.
I completely agree with and want to restate this point made by the Minister in his letter to us:
“The introduction of a criminal offence for possession…in a custodial institution would complement the continuing work by the National Offender Management Service to educate prisoners, staff and visitors about the harms caused by psychoactive substances and…enable firm measures to be taken to punish those who possess psychoactive substances in prison.”
The shadow Minister is right to say that at the moment there is an offence that can add 42 days to an offender’s time in custody. [Interruption.] I think that the Minister agreed from a sedentary position. However, this measure takes that on much further and sends a much clearer message.
Lyn Brown
I completely agree with everything that the hon. Gentleman has said. I want to ask him, however, about education. If we are going to deal with individual prisoners for possession rather than supply—pushing—I am absolutely with him, but surely education and treatment would be more beneficial to not only the prisoner but the community at large.
Steve Brine
I was just about to come on to that; the shadow Minister is a visionary. I want to have my cake and eat it too; I want to strengthen the law in this area, but the wider challenge, as the governor at Winchester prison said to me, is that the debate today is not only about making NPS illegal and changing the law on possession in prisons. In my experience, prisoners will always want to use illegal substances. They will always want to get “loaded”, as I said on Second Reading, whether that be through a class A drug, a class B drug or NPS.
Owen Thompson (Midlothian) (SNP)
I, too, appreciate the opportunity to participate in the Committee. This is my first time, so please bear with me. My party has also tabled amendments, and I look forward to discussing them. I welcome, as do others, the fact that there is broad agreement on many aspects of the Bill. We all want to point in the same direction but the issue is how we get there.
I echo much of what the shadow Minister said, in absolutely recognising both the need for action to be taken on prison estates and the challenges that involves, but I am not yet entirely convinced that the measures will achieve the outcomes we want. My party certainly does not oppose the amendments at this stage, but we wish to see further consideration on Report.
In many ways, the issues regarding prison estates are slightly different from the wider issues covered by the Bill. There is an absolute need for a greater education programme, to ensure an awareness of the effects of NPS. In its evidence, the Trading Standards Institute made a point about testing. How can systems be put in place to ensure that substances that enter prisons can be identified as psychoactive and then isolated and taken out of the equation? I again echo the shadow Minister in saying that in the prison estate the need for treatment is even greater than elsewhere. For those who find themselves in a secure estate as a result of an offence caused by NPS addiction, treatment is critical because removing the addiction is the only way to start to take the substances out of the equation—to remove them as today’s currency of choice.
I will be brief at this point, but I again state that we want to see a far greater focus on education and treatment while recognising the need to take action that focuses on prisons in particular.
Mike Penning
I fully understand many of the points raised by the shadow Minister and other colleagues. The measures are not a silver bullet; I think we all accept that. Action needs to be taken in the context of better treatment programmes. We are starting to understand that. Addiction to NPS is a particularly difficult matter. The action taken categorically has to be about education, and in the prison estate it also has to be about detection.
The blanket ban helps. We spoke earlier about Spice and Black Mamba. Those are generic terms for a substance that is tweaked by chemists every time we chase the matter. We are here now because we have not been able to get on the front foot, in front of the people who are trying to destroy others’ lives and, frankly, make a small fortune as well.
My hon. Friend the Member for Winchester, and the shadow Minister, rightly pointed out that there are already sanctions, but they are fairly limited within prisons, to be honest. We need to listen to the experts, to the people who deal with secure estates on a day-to-day basis. If they say that the substances are a major issue not only in that they are a currency in the estates but because of the safety of staff, visitors and prisoners, we need to act. We have tabled the amendment and are making an exemption regarding possession within prisons because that is what we have been asked to do. My Prisons Minister has told me that it is what is being asked for. My hon. Friend the Member for Winchester has spoken to some prison governors and I have spoken to others. They have asked for the measure. Is it the only answer? No. NHS England in our part of the world, NHS Scotland and NHS Wales need to step up to the plate and do some more work, because they run the treatment programmes within the prisons.
The director general of NOMs is specifically chairing across groups to make sure that we get a better understanding and better education for staff and visitors. The best option here is not actually to convict anybody but to convince people that they should change their behaviour; but we live in the real world and I acknowledge that that is not going to happen. Nevertheless, we have to send a message. That message was sent to me as the Minister from the people on the frontline that they needed this, and it is my job to make sure that they have it, so I hope that we will approve it.
Amendment 1 agreed to.
Mike Penning
I beg to move amendment 2, in clause 1, page 1, line 7, leave out “Section 10” and insert “Section (Exceptions to offences)”
This amendment is consequential on amendment 11 and NC3.
The Chair
With this it will be convenient to discuss the following:
Government amendments 5, 6, 8, 9, 12, 28, 29 and 37.
Government new clause 3—Exceptions to offences.
Government new schedule 1—Exempted activities.
Mike Penning
The Government made a commitment in the other place during the Bill’s passage there to review the existing exemption for research activities and to strengthen it. That commitment was important and we shall push forward with it now, as we would all agree that bona fide research is a vital area. In doing so, we are following the consultation of the Academy of Medical Sciences and others, and we are confident that this exemption is necessary, sufficient and robust.
The new schedule also provides an exemption for healthcare-related activities, which I think we would all support. That is obviously very important. We do not want to make a problem for individuals. We see that this exemption has a complement in the exemption of medical products in schedule 1. In providing the new exemption we are going for a belt and braces approach, and we fully accept that that is what we are doing. I think that is very important.
New clause 3 enables the Home Secretary to add and vary a list of exempted activities in a new schedule. This regulation-making power replaces that in clause 10 of the Bill which covers the same ground, so we will effectively be removing clause 10 and replacing it with new clause 3. In the light of what we have seen in the other place, we felt that that is important. When we get to clause 10, obviously we will not move it. Hopefully we can move on, because I think this is an agreed part of the Bill. It is important that as different substances become available, the Home Secretary has the powers to add to and vary the list.
Lyn Brown
Government amendment 2 is consequential on later Government amendments, providing for exceptions for medical and academic research. One of the concerns raised by the Advisory Council on the Misuse of Drugs was about the impact of this legislation on legitimate scientific work. As the ACMD made clear, in the original drafting there was an exemption for clinical trials but no mention of exemption made for laboratory research in academia or industry.
The Academy of Medical Sciences also wrote to the Home Secretary to raise its concerns. An example picked out by the AMS is that the Bill could criminalise neuroscience researchers using psychoactive substances as experimental tools to help us better understand the causes of some mental illness. Several Members of the House of Lords raised that as an issue prior to Report in that place. Lord Rosser, who led on the Bill for Labour in the House of Lords, highlighted on Second Reading that it is of vital importance that the Bill does not
“inhibit or restrict important medical research that will help us to improve our knowledge of drugs and their impact”.—[Official Report, House of Lords, 30 June 2015; Vol. 762, c. 1964.]
I thank Lord Rosser for highlighting that, and for seeking assurances from the Government that the original clause 10 of the Bill will not inhibit or restrict legitimate research by the terms of the Bill. I also thank him for emphasising the need for procedures relating to medical research to be made exempt under the Bill. Without his diligent work, the Government’s new clause, which deals with many of the inadequacies of the original drafting, may not have been possible.
I also thank my hon. Friend the Member for Denton and Reddish, who spoke passionately on Second Reading about the need for clearer exceptions for medical research. He was absolutely right to raise concerns that the vague definition of psychoactive substances in the Bill will impede legitimate research.
Andrew Gwynne (Denton and Reddish) (Lab)
It is a pleasure to serve under your chairmanship, Mr Howarth. I am grateful for my hon. Friend’s flattering remarks. The United Kingdom is a world leader in research of this kind. Does my hon. Friend share my concern that the unintended consequence of parts of the Bill may be to inhibit some of that research? We need to ensure, therefore, that the Bill is absolutely tight, so that that research can continue.
Lyn Brown
I certainly agree. On Second Reading, my hon. Friend said:
“Would it not be a tragedy if the United Kingdom, one of the leading research nations in the world, avoided finding a cure for some awful psychiatric disorder due to our failure to include the appropriate exemptions for scientists?”—[Official Report, 19 October 2015; Vol. 600, c. 779.]
Thanks to pressure exerted on the Government, Lord Bates, who led the Bill through the Lords for the Government, wrote to Lord Rosser and other peers to state that the Government were actively considering the issue and were in discussion with the ACMD. He pledged that the Government would table amendments addressing concerns about medical research during the Commons Committee stage. His colleague, Baroness Chisholm of Owlpen, stated that the Government have no intention of stopping “bona fide research”. I am glad that the Government listened to Labour’s concerns and have delivered on Lord Bates’s promise by introducing a new clause that will specifically exempt academic activities. I absolutely support the amendments.
However, I cannot help but feel that the Government could have avoided the need hastily to draft the amendments and table some significant information if they had properly consulted the ACMD before they produced the first draft of the Bill. This has been a very quick—I would not say rushed—Bill. We had Second Reading in the Commons a week ago and here we are in Committee, and there are still issues that are yet to be completely ironed out in Committee to make the Bill enforceable in our courts of law.
We need to take into consideration organisations such as the ACMD, which consists of leading experts on drugs, many of whom work in academia. If they had been consulted on the original draft of the Bill, they would undoubtedly have spotted the problems with the Government’s original plans. The amendment could have been in the Bill from the beginning, and parliamentary time could have been spent more productively in looking at the goals of the Bill and how well the Bill will help the Government to achieve them.
Mike Penning
At the outset, I want to say that legislation is passed in Parliament by introducing a draft Bill, which is then scrutinised. I welcome the scrutiny that took place in the Lords. The reason why the Bill started in the Lords—this is probably above my pay grade—is that there are so many genuine experts there. Perhaps if it had started in this House the same amendments would have been introduced by colleagues on both sides of the House. I do not mind that; colleagues who know me well enough know that I am pragmatic.
I have a couple of points about the shadow Minister’s comments. This should have been done years ago under previous Administrations—I think we all know that. For every day that we do not do this, people are dying. I accept that it is rushed, to a degree—there was a huge gap between the Bill being in the Lords and coming to us—but it is right and proper for this House to expedite the Bill, while doing everything possible about any anomalies that generally concern groups of people, in particular on the research side. If there were any such anomalies in the legislation, I would let no one prevent us from changing things. That is why we have tabled the amendments. Unashamedly, I have already mentioned belt and braces. If we need to amend things further as we go on, we will do so, so that we do not prevent research in such an important area.
I wanted to touch on the scrutiny work done in the other House. I sat in on the debate on Second Reading and Report, on the steps of the Throne—it is a great honour to be able to do such things—and it was fascinating. One group of people was fundamentally opposed, as in our House, but it was a tiny group. We got around bits such as “Will this affect people in churches with incense?” and, once we had got rid of that stuff, we could actually ask, “Does the Bill do what it says on the tin?” and “Does it allow the research to continue to take place?” which is absolutely vital. New clause 3 would improve the Bill, and that is why we can take out clause 10. That is because we were listening, and this is the way forward.
Amendment 2 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Andrew Gwynne
It is a pleasure to serve under your chairmanship, Mr Howarth.
The Committee has the benefit of a two-for-one offer from the official Opposition: we have not one shadow Minister, but two. We feel strongly that we are dealing not only with a home affairs issue but a public health one. As Labour’s shadow public health Minister, I think it is important for us to have a health voice in Committee.
I will not test your patience, Mr Howarth, by going over what we discussed in detail on Second Reading, but I want to make it clear in the clause stand part debate that we support the general aims of the Bill. The Labour party committed to banning legal highs before the last election, and we do not shy away from that commitment today. On Second Reading we pointed to evidence from the Republic of Ireland and it is true that the only way to draft an effective Bill is to include a blanket ban. Most if not all Members of the House of Commons—
The Chair
Order. I am sure that the hon. Gentleman is about to address his remarks to clause 1—
Andrew Gwynne
Absolutely, Mr Howarth. I was only stating our agreement. The clause constitutes the overview of the structure of the Bill and creates a blanket ban on the production, distribution, sale and supply of psychoactive substances in the United Kingdom. That is why discussion of the blanket ban was relevant to the stand part debate.
We have to place it on the record, however, that we recognise the need to control the production and supply of such substances, and the need to educate young people about the real nature of the drugs, as my hon. Friend the Member for West Ham said. The Minister was right that drugs such as Black Mamba and Spice are already banned, but they can be tweaked and we need to be on the front foot. We also need to look at the health of prisoners, which is why I am pleased that the Minister has tabled the Government amendments. I am pleased that the issue of research has been clarified, because that situation needed fundamental improvement in the Bill. I am satisfied that the Minister has committed to further improvements on Report, if necessary. We will hold him to that. With that, we fully support the Government’s aims and intentions to ban legal highs.
Question put and agreed to.
Clause 1, as amended, accordingly ordered to stand part of the Bill.
Clause 2
Meaning of “psychoactive substance” etc
Owen Thompson
I beg to move amendment 51, in clause 2, page 1, line 14, leave out subsection (1) and insert—
(a) is not prohibited by the United Nations Drug Conventions of 1961 and 1971, or by the Misuse of Drugs Act 1971, but which may pose a public health threat comparable to that posed by substances listed in these conventions and
(b) is not an exempted substance (see section 3)”
This new definition includes part of the alternative definition of psychoactive substances proposed by ACMD which clearly merits debate and clear reasons why it should be rejected - if it is to be rejected. This would also incorporate reference to harm.
The Chair
With this it will be convenient to discuss the following:
Amendment 43, in clause 2, page 1, line 15, leave out paragraph (a) insert—
“(a) is a compound capable of producing a pharmacological response on the central nervous system or which produces a chemical response in vitro, identical or pharmacologically similar to substances controlled under the Misuse of Drugs Act 1971, and”
Together with amendment 44 this would replace the definition of psychoactive substance within the Bill by the definition recommended by the Advisory Council for the Misuse of Drugs.
Amendment 44, in clause 2, page 1, line 18, leave out subsection (2) and insert—
‘(2) For the purpose of this Act
“substance” means any compound, irrespective of chemical state, produced by synthesis, or metabolites of those compounds.
“synthesis” means the process of producing a compound by human instigation of at least one chemical reaction.
“compound” means any chemical species that is formed when two or more atoms join together chemically.’
Together with amendment 43 this would replace the definition of psychoactive substance within the Bill by the definition recommended by the Advisory Council for the Misuse of Drugs.
Owen Thompson
We felt that there was a weakness in the Bill around the definition of a psychoactive substance. This is a fundamental aspect of how we move the proposals forward. As the Minister has mentioned, often when substances are brought on to the market, efforts are taken to make them illegal. The chemists go back to the drawing board, try to tweak the formula and the same thing comes out with the same effect but with a different formula, so it is not covered. We need to make sure that the definition is as strong as possible, so that action can be taken where required.
Our amendment moves forward some of the issues on definition that the Advisory Council on the Misuse of Drugs raised at the Home Affairs Committee. We accept that the Opposition Front Bench also has amendments on similar lines which do likewise. However, questions remain on how action can be taken because, even with a stronger definition, how can prosecutors prove that something is capable of having a psychoactive effect? This point was commented on in relation to prisoner status. How are tests done? What are the tests, and who carries them out? Would expert evidence be required in every instance where a substance is being looked at? Would that be considered under the definition and who would carry out that function?
I will be brief, because I simply want to make sure that we can have as strong a position as possible around a definition. I am not seeking to press the amendment to a vote, but to raise the matter with Ministers to make sure that on Report, these comments can be taken into account to make sure that the definition is as strong as it can be.
Mike Penning
Like all things in this House, events are often superseded. I looked carefully at the ACMD’s evidence to the Home Affairs Committee and colleagues now have copies of letters from that very expert panel as to whether it is now confident that we can define “psychoactive”. We will use its expertise as we go forward.
Earlier, we touched on why we had not consulted more with the ACMD when we formulated the Bill. Several colleagues at Second Reading and, I think, the shadow Minister earlier raised that point. Incidentally, the chairman of the ACMD and two members of the Committee were on the expert panel considering the sphere of issues that we needed to bring forward, so we did consult them. Obviously, with the chairman of the ACMD physically present, there was a huge input from the council. The ACMD is working with us. Its letter clearly states that it thinks we can define “psychoactive”. That is very important.
My concern around amendment 44 is the move to “synthesis”. Initially, the ACMD was in that position, but it has moved away from it. We are absolutely adamant that a definition cannot be arrived at through “synthetic”; it has to be a blanket ban. I think everybody is agreed on that. The Irish situation was exactly the same. We have learned from what happened in Ireland. Other countries are now following us. If we were to limit the Bill in the way that the amendments indicate, it would be quite difficult. I will wait to hear the shadow Minister’s comments.
Lyn Brown
I fear the clause gives rise to three issues, which it is important to consider. The first concerns the intended scope of the Bill and how it has apparently widened with Government drafting. The second issue is how the state can prove that a substance is psychoactive, particularly when seeking prosecution. Our amendment is based on language recommended to the Home Secretary by the ACMD, which offers a new definition of a psychoactive substance. We believe that the ACMD’s language may provide a better response to these issues than the current drafting.
The final and related issue is that we need to know whether we have the necessary resources in place to test for psychoactivity. The Committee will be aware that one concern that the ACMD raised about the drafting of the Bill is that it refers merely to psychoactive substances, whereas in previous discussions of the problem—including the impact assessment for the Bill and the expert panel report, which recommended the approach taken by the Government—the words “psychoactive substance” have always been prefixed by the word “novel” or “new”.
According to the ACMD, the prefixes of “new” or “novel” indicate that we are referring to substances that have been produced in order to mimic the effects of controlled substances but currently sit outside the controls of the 1971 Act. The ACMD is concerned that, by excluding the words “novel” or “new”, the Bill has expanded in scope beyond its intended target and is now disproportionately broad.
The Home Secretary has written to the ACMD and indicated that she thinks that the inclusion of the words “new” or “novel” in the Bill would be unworkable, as that would suggest that substances that existed before the Bill came into place ought not to be controlled. She also pointed out that many of the NPS that we want to control are not new, in the sense of being newly created; it is just that they have only recently been used for recreational purposes. For example, mephedrone was first synthesised in 1929 and “forgotten” until it was rediscovered in 2004. Its use became widespread around 2007.
However, on Lords Report, Baroness Meacher proposed that the word “synthetic” be inserted before “psychoactive substances” in order to restrict the Bill to its intended scope of drugs synthetically designed to mimic existing drugs.
On 17 August the ACMD wrote again to the Home Secretary with a series of recommendations of how the definitions in the Bill could be tightened. One recommendation was to include a definition of substance in the Bill to include the word “synthesis” and specifically to mention an effect that has a pharmacological similarity to drugs controlled by the 1971 Act. That would, it argued, cover the intended scope of the legislation.
On Friday, the ACMD wrote once again to the Home Secretary and reiterated that its recommendation was that language be used that invokes pharmacological similarity to drugs controlled by the 1971 Act. Our amendment is based on the language recommended by the ACMD.
I am sorry that I am not able to take in the information just laid before us. I will use my lunch break to read, digest and understand it. I am a woman who did not know what poppers were until two weeks ago. It is not a feasible idea for me to listen to the Minister and the debate and take in this new information.
On Lords Report, it was argued from the Government Benches that adding the word “synthetic” would be inappropriate as there are organic substances such as salvia and kratom that are both psychoactive and harmful and ought to be controlled. In the Home Secretary’s letter to the ACMD she makes a similar argument. She suggests there are substances that have long been tolerated in the absence of a more comprehensive legal framework, yet have known harms.
If these organic substances have known harms, will the Minister tell us why they cannot be controlled by existing powers in the Misuse of Drugs Act? After all, it is surely not possible for drug producers to come up with hundreds of new organic compounds and so overwhelm the authorities in the same way as they have managed with synthetic substitutes. The ACMD does not seem to be worried by a reference to synthesis and has said:
“The small number of problematic psychoactive natural products could be considered by the ACMD for control under the Misuse of Drugs Act 1971.”
We should take seriously the issues raised by the ACMD and look carefully at the language it recommends, so that we can be sure that the Bill targets as well as possible the problem that we all want it to tackle. Currently, there is much feeling that the definition is too unspecific and does not adequately define a psychoactive substance. Unfortunately, that could lead to a situation in which the Bill is unenforceable and open to legal challenge on whether a substance is psychoactive.
I understand that the latest letter from the ACMD to the Home Secretary, published last Friday, suggests a more objective, technical definition with reference to specific groups of psychoactive drugs. Many substances in those groups have been tested and researched and those found to be harmful have already been controlled under the Misuse of Drugs Act 1971. Including a specific list of classes or groups of substances that are associated with psychoactivity and harm, as in the Misuse of Drugs Act, makes it more likely that new related substances will have the same psychoactive capability.
On rereading amendment 43, I wonder whether two different interpretations are possible. The possible ambiguity is in what the phrase
“identical or pharmacologically similar to substances controlled under the Misuse of Drugs Act”
might refer to. My initial understanding was that it referred to the pharmacological response or the chemical response—that is, a substance would be controlled if it produced a response identical or similar to the responses produced by substances controlled under the MDA. However, I wonder whether the phrase could refer to a compound, and so imply that a substance would be controlled if it produced any pharmacological or chemical response and is identical or similar to substances controlled under the MDA.
If interpretation one is correct, the clause captures substances according to their effect, which is what I would have expected; but if interpretation two is correct, the clause would seem heavy-handed as, in principle, it would capture a benign substance that had only a limited effect but happened to be similar to a drug controlled under the MDA. Many exclusions might then be needed. If interpretation one is correct, the approach would capture all substances the ACMD has dealt with to date. Also, I would have thought that adding an inclusion list to the definition of psychoactive drugs would make it easier to manage an exclusion list, as well as helping on the resources required for that.
The Minister will see that I am genuinely struggling on this: we all want the legislation to work, but unless the definition is strengthened and underpinned with ways of testing psychoactivity, the Bill might not result in successful prosecutions or controls. What response does he have to the difficulties I have outlined? If he will not accept the amendments, will he give this matter full consideration before Report and Third Reading?
These are not party political concerns but concerns that emanate from a desire to see this Bill have a proper effect and safeguard all our communities. I genuinely believe that we do not have this matter right as yet, because major loopholes might emerge as attempts are made to prosecute the producers and suppliers of these pernicious drugs.
I now move on to the issue of proving that a substance is psychoactive. I am sure that the whole Committee is aware that the ACMD has written to the Home Secretary warning her that we will have to rely on proxy measures of psychoactivity, such as in vitro neurochemical tests, to prove psychoactivity, and again these tests “may not stand up” in court. It could result in a very resource-intensive forensic strategy and legal costs could well rise due to the need for expert witnesses, who obviously may disagree with each other. In vitro tests—that is, tests carried out in glass test tubes—are not conclusive and some substances that seem to be psychoactive in a test tube have been found not to be psychoactive in vivo, that is in humans. A conclusive test of psychoactivity would require randomised tests on human beings for definitive proof, and obviously that is fraught with difficulties.
I suggested on Second Reading of this Bill that we should take the ACMD’s warnings seriously. There have been only five prosecutions in Ireland since similar legislation was introduced in 2010. Police in Ireland admit that one of the reasons that there have been so few prosecutions there is that it is difficult to prove psychoactivity. Detective Sergeant Tony Howard from the Irish Drugs and Organised Crime Bureau told the BBC:
“We are relying on scientists to assist us with these prosecutions and, unfortunately, they haven’t been able to provide the evidence to us.”
We need assurances from the Government that they are making good progress with the ACMD in resolving this issue. Without the credible threat of prosecution, it will be much harder to disrupt and break up the supply chains.
Amendment 43, which I remind the Committee is based on an ACMD recommendation, would define a psychoactive substance as
“a compound capable of producing a pharmacological response on the central nervous system or which produces a chemical response in vitro, identical or pharmacologically similar to substances controlled under the Misuse of Drugs Act 1971”.
It is my understanding that one of the benefits of this definition is that it would be harder for defendants to challenge proxy evidence of a substance’s psychoactivity, because legally psychoactivity would be defined by proxy indicators. It is important that the Minister outlines why this wording would not be more legally robust than the current wording, because psychoactivity is, after all, right at the heart of the Bill.
If the definition of psychoactivity is limited to the known drug groups, we know that the resources required would be more manageable, and a series of simple biological tests could be done on known targets to indicate the drug group of a substance. According to chemists and toxicologists, this is
“run of the mill profiling”.
Thus, a library of known compounds could be built up and additional testing would only be required where the law was challenged. Leading chemists, including Professor Les Iversen, assure us that it is highly unlikely that new substances will be found that fall outside the known drug groups. If the Minister cannot accept the limitation to known drug groups, I would appreciate his telling the Committee why that is and outlining his difficulty with such a limitation.
Finally, I will move on to the issue of resources needed to test for psychoactivity. The Government will recognise that the proposals in the Bill are not immediately cost-neutral. As we have already seen, this clause gives rise to the need for neurochemical tests in order to prove the psychoactivity of substances. These tests need to be paid for, presumably both by the prosecution and defence teams in any court case. The Forensic Science Service, a public body, was abolished in 2011 and what we now have is a patchwork collection of commercial forensic science providers.
Carolyn Harris (Swansea East) (Lab)
With some laboratories charging up to £100 per test for each individual product to be tested, would my hon. Friend agree that trading standards would need extra financial resources to make any future legislation viable?
Lyn Brown
I certainly agree with my hon. Friend. The expert panel on new psychoactive substances make it perfectly clear that those forensic science providers will only take on the work if they consider it commercially viable. The state will have to pay competitive rates if it wants to test for the psychoactivity of drugs. I would like the Minister to assure us that the burden of paying for these tests will not fall entirely on the prosecution services or local government. The Bill is a radical addition to our drugs control policy and the Home Office has a responsibility to ensure that it is not acting as a drain on already depleted resources at the CPS. Local authorities and police forces may also want to test for psychoactivity before pursuing action against local suppliers. They too need support in this area.
In the Home Secretary’s letter to the ACMD she argued that data sharing in the police and forensic community would be the key factor in the forensic response to the Bill. She also pledged that the Home Office would drive for the mechanisms to ensure data is shared efficiently. I would like to ask the Minister what progress is being made on this front. We do not want unnecessary duplication adding to the expense of enforcing the Bill, nor do we want prosecutions not be brought because prosecutors do not have the same knowledge of a psychoactive substance as a police force or indeed the Home Office.
The Home Affairs Committee report on the Bill highlighted a number of concerns regarding the expenditure needed to achieve a prosecution. The Chartered Trading Standards Institute argued in its written evidence to the Committee that proving psychoactivity in order to gain prosecution would require
“rigorous scientific testing and analysis to obtain a toxicology report detailing the specific chemical components found in the drug.”
That point was made earlier by my hon. Friend the Member for Swansea East. The CTSI estimated that the approximate cost would be greater than £100 per substance to conduct a basic test. What is more alarming is that typical head shop investigations will require multiple tests to be conducted due to the content of NPS being different in different packets of the same branded drug. One packet of something exotic bearing the same name as another packet will contain different compounds. That just will not stand up in court.
Owen Thompson
A Scottish Government expert review group that reported in February this year included a recommendation that a toolkit be developed to support trading standards staff tackling NPS in our communities. Does the hon. Lady agree that it would be particularly useful to roll that out, so that we can ensure the best possible approach, consistent across the country?
Lyn Brown
The hon. Gentleman is absolutely right that data sharing across police forces is essential to ensure we get the right information and can prosecute cases where possible. Police Scotland has voiced similar concerns, stating that a successful case would require evidence from a qualified expert with experience of working with NPS who could identify the substance and prove its psychoactivity. Furthermore, Police Scotland also states that every case that involved NPS offences would require the suitably qualified medical expert to provide evidence in court, which would also incur a cost.
The critical issue in the Bill—the definition of psychoactivity—still has to be addressed, although I suppose there might be something in the letter that has been submitted to the Committee. The ACMD published further advice on 23 October and is still of the view that
“the current definition on the face of the Bill is too unspecific and does not adequately define a psychoactive substance”.
Essentially, the Home Secretary has rejected any qualification of psychoactive substances—for example, by including only synthetic products. The definition in clause 2 remains as originally drafted, without reference to harm, to which we will come later.
Much of the detail of the Government’s discussions has not been published, so the reasoning behind their position is not entirely clear to me. They have not accepted any suggested amendment to the wording of clause 2. It is unfortunate that there has been no agreement between Ministers and the statutory body of expertise, the ACMD. I fear that that risks destabilising the overall soundness and public perception of the proposals, by which I mean the ability to prosecute successfully. If the definition remains largely unchanged, there will be consequences relating to harm measurement, proportional sentencing and credible messaging. If the criminal sanctions apply equally to substances of widely different harm thresholds, that will remove the possibility that sensible and honest messages about health harms can be created.
We tabled our amendments not to be difficult or party political but to try to secure clarification from the Government on the intended scope of the Bill. We need to know that they are certain that they can legally prove that a substance is psychoactive and secure prosecutions. We want to know what provisions they have made to ensure that the necessary funds and resources are available to conduct extensive and expensive tests for psychoactivity.
Mike Penning
I thank the shadow Minister for her detailed and extensive comments, which I take in the context in which they were delivered.
I want to address some of the points that were made. The SNP spokesman mentioned the idea of a toolkit—we do not need to reinvent the wheel every time, do we? In England, local authorities, which have responsibility for public health, spend £830 million a year on tackling drug and alcohol misuse. That is 30% of the national budget, which makes it logical to address the issue.
The explanatory notes set out that the measures will be cost-neutral to the police and local authorities. Let me use some anecdotal evidence to show why. Take, for example, Belfast and Lincoln, two very diverse communities where head shops were banned using local powers. I still do not understand why other local authorities have not used those powers, but there we are. The cost and type of policing in those communities changed dramatically, without the Bill, just by banning head shops. Belfast, which I know all too well from my time as a Minister in the Northern Ireland Office, was transformed simply by people saying, “We do not want that sort of product sold in shops in our communities because people will think it is legitimate and safe.”
I understand that there are concerns, and I know that there are different views coming back from the Republic of Ireland. I went and met the Irish Minister and his scientific experts. I asked why there had been five prosecutions, and the answer was twofold, and not exactly what we have heard so far today. In Ireland, they felt that they had got the prosecutions they wanted using powers that are also in the Bill. A huge part of the Bill has nothing to do with the CPS and the police prosecuting, but is about local authorities. What happened almost overnight after using those powers was that the head shops and the industry collapsed, because people had been educated correctly. Where the local authorities were using their powers—powers that are also in the Bill—it transformed the communities in the way we would all like to see. The Bill is not designed to pick on people who have been using these products perfectly legally and, they feel, safely; it is designed to get the really bad guys—the dealers and those sorts of people. The seven-year prison sentence is in the Bill as a last resort.
In terms of applied science and technology, the Home Office will identify and bring forward the capability throughout the UK on the forensic requirement. We are going to do that. I accept that we will have to give more detail, perhaps on Report, and we are happy to do so.
I am sorry we disagree so early in the Bill, but I have real concerns about amendment 51, which runs counter to the blanket ban. If we are going to go for a blanket ban, we are going to go for a blanket ban. If we start fiddling around the edges, that blanket ban becomes difficult, so I do not support the amendment. I fully accept the fact that the shadow Minister and other members of the Committee have not had enough time to read the ACMD’s latest correspondence. Perhaps that can be addressed on Report. The ACMD understandably moves with debate, as it moves in different areas. As I said earlier, using “synthetics” in the Bill is wrong. A blanket ban is a blanket ban. We have to get ahead the game, and that is what we have been trying to do.
I fully understand why the amendments have been tabled, and that the one from the hon. Member for Midlothian is probing, but sadly at this stage I cannot support amendments 51, 43 and 44 for the reasons I have given. If more discussion and investigation is needed, the Report stage may be a better time for that. A lot of the concerns are that we will not be able to prosecute, but we will. It happens in other parts of the world and in Ireland. There were concerns about harm, but if a blanket ban happens, we are ahead of harm, rather than waiting for harm to happen and for people to die. On that basis, I hope that colleagues will not press their amendments to a Division.
Lyn Brown
I hear entirely what the Minister is saying, and I have some sympathy, but may I push him on a couple of things? The first is the issue of the definition. I did not hear him explain why we cannot use the words “new” or “synthetic”. That would give us a better focus on the things we want to ban. Secondly, I did not hear why we were not able to put the organic substances that we know to be harmful, such as salvia and kratom, within the scope of the 1971 Act. That just seems logical. We know that those substances are harmful and we know what they are. People will not be able to graft new bits on to plants to create new organic substances—certainly not at the rate at which they have managed to create new synthetic substances.
The Minister talked about costs. I used the words “immediately become cost-neutral” in my notes, but I say gently to him that while I accept that there may be savings to the local community and the local police from banning head shops, cutting the supply and getting rid of the demand from our streets, I genuinely do not believe that those savings will be immediate. I gently suggest that one reason why there have not been more prosecutions by local authorities is that they have not had the wherewithal—the finance— to know that what they are taking to court will actually stand up. There is a cost issue that we need to look at.
The Chair
If the hon. Lady has further points to make, it might be advisable to make them at this point.
Lyn Brown
My problem is that it was such a big thing that I did with three clauses that I am worried that I have missed something and I am not getting it out. I am not sure we have got to the bottom of the evidence around psychoactive substances, whether it is provable, and whether the definition that the Government are currently going with would enable provability within the court.
The Chair
I wonder whether it would be helpful to the hon. Lady, and sensible at this point, if the Minister responded to the points that she has made. If she thinks of other issues that she wants to raise, she could do so by way of an intervention.
Mike Penning
I do not want to go round in circles, as I have made the points that I would almost certainly make again. At this point I would like to make some progress. “New or novel” substances have, according to my legal team, no legal meaning within the law, which is why we are not going with that.
Mike Penning
Ireland is a much smaller country and, if we proportionally move the percentage in population up from 5%, we would see substantially more prosecutions. I am really pleased that I went to Ireland as I was amazed at the amount of work done by local government on prevention. One reason why the measure will not come into force until April is to allow what happened in Ireland to happen here. Prosecutions did take place and were not thrown out of court; the evidence base was almost identical to what we have. We are slightly tougher, but only marginally, and perhaps learning from some of the mistakes. They have said they will probably follow us and our legislation going forward, which is exactly what New Zealand and Western Australia are doing as well.
We have to be careful not to pre-empt something that might happen but which has not happened in countries where measures have been taken. I am conscious that the measure needs to be tight and a blanket ban is needed. I am happy and confident that we will have the scientific evidence and the experts out there to make sure that we can do this. Let us hope that, before the legislation comes in, and as they did in Ireland, we get into the schools, we get into local government and talk to communities, and that we get programmes out there that we will all support to make sure, categorically, that everybody is aware not only that the substances are no longer legal, but that they have definitely never been safe and, by the way, there are severe penalties for importing, manufacturing or selling these products.
Lyn Brown
I am grateful to the right hon. Gentleman for clarification on the words “new or novel”. That is the first time I have heard that they might not have a legal standing as a definition. May I push him, therefore, on the definition and ask if he is confident that the definition in the Bill will be robust enough for us to deal with provability within a court? Secondly, may I ask him to address the issue of cost?
Mike Penning
The answer to the first question is yes; I am more than confident about that. As the explanatory notes say, the CPS is responsible for the costs in prosecution terms. We do not think that will be an enormous burden. I am responsible for 43 police authorities, and the costs of policing this type of problem in our communities is huge. Public health is obviously for local authorities. I used to be shadow Minister for public health, and the cost burden is very interesting. We have seen in Ireland that the number of people who turn up to A&E has dropped dramatically. The number of people needing rehabilitation and treatment has also dropped. Those are all cost negatives.
Andrew Gwynne
The Minister makes an important point on the costs, which are borne not only by the Home Office and the budgets he is responsible for but across Departments and within local government. He will know that although Public Health England is responsible for some public health functions at a national level, a lot of the budgets have been top-sliced and devolved to local government. What discussions has his Department had with colleagues in the Department for Communities and Local Government and the Department of Health to ensure the kinds of education programme he talked about are up and running from day one? That will be a crucial element.
Mike Penning
The shadow Health Minister makes an important point. I chair a newly formed inter-ministerial group that includes Ministers from the Departments he alluded to and others, such as the Department for Business, Innovation and Skills, as well as Ministers from the devolved Administrations. We are treating this issue not just in England and Wales but in Scotland and Northern Ireland too. He is absolutely right that Public Health England has responsibility for part of this. Most of public health has been devolved, with £830 million going to local government. Obviously, local government has priorities. However, with 30% of its budget being spent on tackling drug and alcohol misuse, it is pretty obvious what those priorities should be. As chair of the inter-ministerial group, I will be pushing on that.
Owen Thompson
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 ordered to stand part of the Bill.
Clause 3
Exempted substances
Lyn Brown
I beg to move amendment 45, in clause 3, page 2, line 14, at end insert—
‘(3A) The Home Secretary must consider making regulations under subsection (2) if she receives a recommendation from the Advisory Council of Misuse of Drugs to bring forward such a regulation in respect of a psychoactive substance.”
This would enable the ACMD to proactively request that the Home Secretary consider regulations.
On Second Reading, I asked whether the Minister had considered providing credible measures for relatively harmless substances to be excluded from the controls introduced by the Bill. That, after all, is something the expert panel envisaged as a potential part of the Bill when it made its recommendation, following the Irish model. Amendment 45 would be one way of providing such measures, as it would allow the ACMD to proactively request that the Home Secretary consider adding a substance to the exempted list.
There is broad support for the Bill across the political spectrum. However, we know one concern is that it may restrict trade in harmless substances. I put it to the Committee that if people knew it was possible to make representations to the ACMD about substances they wish to exempt and for convincing and evidence-based arguments to make their way up to the Home Secretary, the Bill might have even broader support than it currently does.
As we know, the Home Affairs Committee received much written and oral evidence about the issue of poppers. Colleagues in the SNP have tabled an amendment about them and I will have more to say about poppers in that debate.
Mike Penning
I think there is a very important debate to be had on poppers. That will be the Chair’s decision when we get to poppers—however, at the present time I did not realise we were talking about poppers.
The Chair
To be fair, the hon. Lady has already accepted that that is a subject for further debate.
Lyn Brown
I like help, so do not stop trying to help.
I admit that I am sympathetic to the SNP’s amendment. If the ACMD, through Professor Iversen’s evidence, is suggesting that poppers pose a low risk of harm, it would be within the scope of the Bill to place poppers on the exemption list—but I am not an expert.
John Woodcock (Barrow and Furness) (Lab/Co-op)
I am a little puzzled. Perhaps the shadow Minister or members of the SNP might be able to shed light on this. Why, exactly, is the Scottish National party putting forward amendments about poppers that would, presumably, have an effect in England but not in Scotland itself?
The Chair
I am sure that the hon. Gentleman is trying to be helpful with his amendment, but as has already been indicated, there will be a separate debate on that.
Lyn Brown
When we get to poppers, experts will need to assess the evidence and decide whether the case for exemption has merit. If I may link this to our discussion on the second clause of the Bill, we know that there will be significant costs in testing the psychoactivity of substances, as there will be for enforcement measures contained within the Bill. By introducing a charge on applying for exemption, the Government potentially could raise the revenue and ensure that what is left of the industry pays for its own regulation. Does the Minister think that there might be scope for that?
While we are discussing exempted substances, I want to raise a concern that is pertinent to schedule 1. Paragraph 1 of schedule 1 exempts those drugs that are controlled by the Misuse of Drugs Act 1971 from the scope of the Bill. That is appropriate, because we do not want suppliers of drugs that we know to be very harmful being subject to the lesser tariffs contained within this Bill, rather than those in the 1971 Act. As the Home Secretary herself has stated, the 1971 Act must remain at the apex of our legal controls, and this Bill ought to be considered as complementary.
I want to press the Minister to ensure that part of this legislation will not slow down the process by which NPS we know to be harmful are brought under control through the Misuse of Drugs Act. It seems that there is a danger that the impetus for action will be lost, given that this Bill will provide some measures of control of new psychoactive substances. I do not want to see a time gap between a dangerous drug hitting the market and finding its way on to the controlled substance list as a result of this legislation—particularly given the lower tariffs contained within this Bill for supply. My worry would be greatly eased if the Minister resolved to ensure that this issue is included in the Home Office’s statutory review of the Bill.
In conclusion, the capacity to exempt substances from the controls introduced by this Bill is clearly central to the Bill’s receiving widespread support. The focus of the Home Affairs Committee report on the issue of poppers has already made that clear. I hope that the Minister will give serious consideration to our amendment or to other ways around the problem. I look forward to being able to offer a reassuring response to my concerns about the relationship between this Bill and the 1971 Act.
Owen Thompson
I will be brief. In broad terms, the inclusion of the ACMD in the amendment would perhaps allow an opportunity for greater consideration to be given, not only to the chemical compound, but to the effect that a substance might have on an individual. I would certainly be broadly supportive of that and see merit in its inclusion, or at least we could see what could be brought forward through developing this as we progress to Report.
Mike Penning
I understand fully the shadow Minister’s concerns, but I hope I can alleviate them.
The Home Office greatly values the work of the ACMD. In my meetings, the chairman has been very helpful. The work has been going on for decades. Although we accept that clause 3 only provides for the ACMD to provide advice when asked, the relationship has always been two-way. The ACMD is not shy, and nor are we. Where the ACMD has had concerns in the past, it has come to us and we have dealt with them, and vice versa. Hon. Members have raised in the House issues to do with constituents, and we have gone to the ACMD. It has an ongoing programme of looking at what is out there and whether we need to move something into a different category. I can assure the Committee that that will not change in any way—far from it.
Recently, drugs that were classified as psychoactive have moved into a completely different regime.
John Woodcock
Does the Minister accept that there is a very significant shift in the burden of responsibility? He says the relationship works well at the moment, but the ACMD may now be judging whether something is a food, for example.
Mike Penning
I was about to come on to how we have looked at other parts of the world and how such changes occur.
Andrew Gwynne
I want to press the Minister a little on the issue of consultation and make sure that we get the Bill’s wording absolutely watertight. I fully accept his point of view that the way in which these things work is a two-way process, and that Home Office Ministers are open to receiving advice that perhaps they did not ask for from various regulatory bodies. However, the amendment that my hon. Friend the Member for West Ham has tabled would make it absolutely watertight in the Bill that it is a two-way process. My reading of subsection (3) is that the Secretary of State must consult the ACMD and other such persons as she considers appropriate before making regulations. However, there is nothing to say that the ACMD or others could come to the Home Secretary first and request that regulations are made. Our amendment would make that watertight.
Mike Penning
The shadow Minister would have a point if not for section 1 of the Misuse of Drugs Act 1971, which allows the council—or ACMD—to issue advice to Ministers when it considers it expedient to do so. That provision is in the Act. A protocol between the Home Secretary and the ACMD allows the council to consider drug issues without any advice from us at all. That is in the Act.
Lyn Brown
Okay, but we have tried to helpfully suggest that there might be a way of making this a cost-neutral thing with the industry, proving that a substance should go on to the exemption list because it is harmless. The Bill and the public’s acceptance of it will be strengthened if harmless substances are put on an exemptions list, as we have done with incense.
Mike Penning
That was looked at extensively by the expert panel before the legislation was introduced, and it was rejected. The panel looked particularly at New Zealand, which had already introduced a licence, basically, which is what we are alluding to—to people applying for a licence—for low-harm substances. That has not worked.
Mike Penning
No one has applied for a licence and there is basically a blanket ban. The experts, who are much more expert than I am, looked at it extensively. They examined it and rejected it and were happy with the way we are moving forward. With that in mind, I am more than happy—as I suggested earlier to the hon. Member for Midlothian—to look again at that between now and Report to make sure that I am 100% comfortable with the proposals, because I understand the hon. Lady’s passion for this issue.
Mike Penning
However, at this stage I am comfortable, unless something comes forward between now and Report.
John Woodcock
What if a way of trying to circumvent the ban is similar to what has been practised by some people involved, which is to say, “This is plant food” or “a washing product”? What happens under that scenario?
Mike Penning
The Bill is quite specific, in that the seller of a product needs to make sure that the product is being sold legitimately—[Interruption.] Sorry?
John Woodcock
I am sorry to chunter from a sedentary position, but those sellers are not the people we are trying to stop. They are nefarious people who will try to get round the rules.
Mike Penning
Some of them are. Some of them are genuinely and legitimately people doing business, for example, selling a certain gas that is inappropriately used by other people, such as laughing gas. The Bill is specific in that area to make sure that we protect people. We cannot protect everybody who completely ignores what a label says, but if someone is selling certain products, they will get up to seven years in prison. That is why the harshness is there at that end of the scale, although I fully understand and do not want to penalise people at the other end, who perhaps take the products—in my opinion wrongly, and I am sure that everyone would agree—thinking they are safe. We do not want to criminalise that. I hope that the hon. Lady will not press her amendment. We can look at this carefully again, if necessary, on Report.
Mike Penning
I beg to move amendment 3, in Schedule 1, page 38, line 7, leave out from “products” to end of line 12 and insert—
‘“Medicinal product” has the same meaning as in the Human Medicines Regulations 2012 (S.I. 2012/1916) (see regulation 2 of those Regulations).’
This amendment replaces the definition of “medicinal product” in paragraph 2 of Schedule 1. The revised definition adopts that in regulation 2 of the Human Medicines Regulations 2012, which includes, but is wider than, medicinal products for which a marketing authorisation or an Article 126a authorisation is in force.
Mike Penning
Hopefully, we will agree on this group of amendments and schedule. The amendments do not alter the Government’s objective, which has always been to exclude from the scope of the Bill approved medicinal products. I think we would all agree with that. With a belt and braces attitude, the Government listened to comments made during the Bill’s passage in the other place and recognised that our starting definition was incomplete; that is an example of the Government listening. The Home Office has worked extensively with the Department of Health and with the Medicines and Healthcare Products Regulatory Agency over the summer to revise the exemption.
Amendment 3 will have the effect of exempting all medicinal products as defined in regulation 2 of the Human Medicines Regulations 2012. We are confident, as is the Department of Health, that this well-established definition will exempt medicines from the scope of the Bill.
That is a short comment, but it is a good example of working cross-departmentally and with the other place to address something that we accept was incomplete, which is what Committee stages are for.
Lyn Brown
I rise to speak to Government amendments 3 and 4, which would replace the passages on investigational, homeopathic and traditional herbal medicine in the list of exempted substances with a single wide definition of a medicinal product. Will the Government provide further detail on the exempted substances list and the forensic strategy that underpins the Bill? Some representations, including from the ACMD, have described the exemptions list as potentially unworkable, particularly if there is no inclusion list in the definition of psychoactive substances, as recommended by the ACMD. It is possible that adding an inclusion list into the definition of psychoactive substances makes the management of the exclusion list much more manageable. I would be grateful for the Minister’s view.
Mike Penning
I am really sorry if I am looking slightly puzzled, but I did not think that we were considering these matters at the moment. I will get some notes passed to me, a service which the hon. Lady does not receive. I am puzzled.
The Chair
Order. We need to have a debate about the specific amendments to schedule 1. There is scope for a stand part debate on the schedule, at which point the hon. Lady might find her comments more—
Mike Penning
On a point of order, Mr Howarth. Would it be possible for the Committee to adjourn for a few minutes so I can powder my nose?
Psychoactive Substances Bill [ Lords ] (Second sitting)
(8 years, 6 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
I remind the Committee that with this we are discussing Government amendment 4.
Lyn Brown (West Ham) (Lab)
These amendments would replace the passages defining authorised, investigational, homeopathic and traditional herbal medicines in the list of exempted substances with the definition of medicinal products found in regulation 2 of the Human Medicines Regulations 2012. I understand that the Government feel it redundant to explicitly exempt those types of medicine because they are covered by the new definition. The explanatory statement says that these medicines will fall within the revised definition. How certain is the Minister that that is the case? One reason the Bill has had wide support is that the Government have been explicit that herbal remedies will not be controlled. We must be sure that the redrafting has not moved the goalposts. I understand there is particular concern about the Government’s lack of expertise in eastern medicines that may be deemed psychoactive.
My other concern is that the 2012 regulations appear to offer a very broad definition of a medicinal product. They state that a product is medicinal if it is
“presented as having properties of preventing or treating disease”
or administered with a view to
“restoring, correcting or modifying a physiological function”.
I am not an expert on legal drafting, but both those phrases appear to suggest that whether a product is medicinal is subjective; it depends on how the drugs are presented or viewed, rather than what they actually do. I would like further details from the Minister on that point. We do not want a product to be classified as medicinal and exempted from the Bill just because someone claims it has medical or medicinal properties.
The Minister for Policing, Crime and Criminal Justice (Mike Penning)
I understand exactly where the shadow Minister is coming from. I have seen some of the representations, particularly on Chinese and Asian herbal remedies, and I do not think there is a real concern. The key to this is trying to get everybody to see the new way we are looking at these products within the blanket ban. Everyone seems to want a list of products, but we tried that, and we had to amend it 500 times. Frankly, it does not work. We are very confident about this, and I assure the Committee that we are satisfied the revised definition firms the legislation up. The definition includes investigational medical products, homoeopathic medicinal products and traditional herbal medicines. That is quite specific. I will look at it again between now and Report, but I am very happy that the drafting experts, who we all rely on, have firmed this up. I queried it myself, but I am happy today.
Andrew Gwynne (Denton and Reddish) (Lab)
If it came to light in the review of the Bill’s measures that homeopathic medicines with certain psychoactive qualities were being abused and misused outwith the Bill’s functions, would the Minister look, maybe on Report, to change the regulations to ensure that those medicines are covered by the blanket ban?
Mike Penning
The Home Secretary’s powers within the Bill, should it become an Act, will enable us to ensure that sort of thing happens. I assure the hon. Gentleman that a close eye will be kept on all types of medicine. If what he mentioned was felt to be happening between now and Report, which I doubt, or as we go forward, there are powers within the Bill to make sure that those medicines are covered. I hope that alleviates his concerns.
Amendment 3 agreed to.
Amendment made: 4, page 38, in schedule 1, line 13, leave out paragraphs 3 to 5—(Mike Penning.)
This amendment is consequential on amendment 3. It removes the entries in paragraphs 3 to 5 of Schedule 1 in respect of investigational medicinal products, homoeopathic medicinal products and traditional herbal medicinal products, as these products fall within the revised definition of medicinal product inserted by that amendment.
Owen Thompson (Midlothian) (SNP)
I beg to move amendment 56, in schedule 1, page 39, line 23, at end insert—
“Miscellaneous
11 —alkyl nitrates”
This amendment seeks to implement a recommendation by the Home Affairs Select Committee that “poppers” should not be banned.
I will try to be succinct. We felt it was important to table this probing amendment following the evidence gathered by the Home Affairs Committee and published in its report last Friday. I am not looking to press the amendment to a vote, but it is something that should be taken into consideration as we move towards Report.
The Home Affairs Committee received evidence from the National AIDS Trust and the Gay Men’s Health Collective that seemed to suggest that there was no medical evidence to suggest that poppers are in any way harmful. I am not an expert so I am open to contrary arguments. In this, as in so many areas of the Bill, the amendment is trying to avoid the unintended consequences of action or inaction that might be taken.
We felt that the inclusion of this miscellaneous exemption under schedule 1 would help to prevent any such unintended consequences, such as driving these substances underground and the increasing reliance on class A and class B drugs and other things that could be far more harmful to individuals who currently use poppers. We would be keen to see further discussion on the inclusion of this very specific exemption under alkyl nitrates; however we would not be looking to press it to a vote at this stage but would look to take it forward on Report.
Lyn Brown
The amendment would specifically exempt poppers from the controls contained within the Bill. I am aware that the Home Affairs Committee, as the hon. Member for Midlothian stated, received plenty of evidence on the issue. It concluded that poppers ought to be excluded from the scope of the ban in the Bill. Organisations including the National AIDS Trust and the Gay Men’s Health Collective argued that harm from poppers was low due to the effective regulation of the compounds amyl nitrate and butyl nitrate. Not exempting poppers from the list of psychoactive substances would take the use of alkyl nitrates outside of any regulation.
Andrew Gwynne
My hon. Friend is right to talk about the health of gay men in particular. Is she as concerned as I am that one of the unintended consequences of banning poppers could be the use of harder drugs and the risk from that not only in potential mental health problems of those that are using them but also sexual health because of the heightened risk of unprotected sex and sexually transmitted infections?
Lyn Brown
I thank my hon. Friend for making that point. One of the arguments against poppers is also that it could adversely impact on the sexual health of those imbibing. That argument can be used both ways. My hon. Friend is absolutely right; the Home Affairs Committee is quite clear that if we do not exempt poppers that could lead to increased health harms.
Dr Owen Bowden-Jones, a consultant psychiatrist and lead clinician for the Club Drug Clinic at the North West London NHS Foundation Trust, stated:
“As far as I can speak as a clinician, I do not think I have ever seen anybody come through”—
our clinic
“with harms related to poppers”.
Professor Iversen of the ACMD also stated that the ACMD had not seen
“sufficient scientific evidence”
that would prove harm in the case of poppers
“to justify a recommendation under the Misuse of Drugs Act.”
He was also not aware of any growth in the use of poppers.
I had supper last night with my hon. Friend the Member for Rhondda (Chris Bryant), who told me that the long medical history of the former Member and Labour Foreign Secretary Ernie Bevin meant he took poppers around the Cabinet table quite regularly. Apparently, that was because his doctor told him he had no sound organ left in his 18-stone body apart from his feet, and the poppers kept him going.
The Chair
Order. As my son would say, that possibly falls under the category of “too much information”.
Lyn Brown
I take your advice, Mr Howarth.
Given the evidence published by the Home Affairs Committee on Friday, I am sympathetic to the SNP’s amendment, and I wonder what the Minister makes of the evidence. If the ACMD, through Professor Iversen’s evidence, is suggesting that poppers have a low risk of harm, it would be within the scope of the Bill to place poppers on the exemption list.
I repeat: it is quite clear that I am not an expert on drug taking or drugs. I hear there has been a change in the formula used for poppers, and that a trickle of new evidence suggests the new formulation causes damage to the centre of the retina. Although reports of visual loss are very rare, this underlines the fact that we need an established mechanism for approving exemptions, whereby representations can be made to the ACMD if it is believed that an exemption should be granted. Experts, not me, need to assess the evidence and decide whether the case for exemption has merit. Poppers ought to be subject to the same evidence-based process as any other drug. This debate and the discussion around poppers underlines the need for the sort of established mechanism that I called for in our debate on clause 3.
Mr David Burrowes (Enfield, Southgate) (Con)
It is a pleasure to have the opportunity to contribute to this debate on an extremely significant and welcome Bill. I plead guilty to being a member of the Home Affairs Committee, which made these recommendations. I have had a number of conversations about issues around poppers, although I have never been a particular expert or had the benefit of having dinner with the hon. Member for Rhondda to discuss the issue of poppers in any great detail. I have, however, met with a representative from the Clonezone chain of sex shops, who made the case for having poppers properly regulated and in the open, as well as Boyz magazine, which has expressed concerns. Will the Minister indicate what evidence he has received from the gay community on this issue?
I will not repeat the evidence that the Home Affairs Committee heard, as the points have been well made. The issue is recognising the present harm level. I do not want to interfere in this morning’s debate, as I was not there, but the definition in the Bill is a blanket ban. One has to weigh up the impact of an exemption of alkyl nitrates on the blanket nature of the ban and the precedent that would set.
The case that was made to the Home Affairs Committee and that has been made to me is that we are now in a position where poppers are properly regulated and controlled, not least by the gay community itself. Previous concerns about harm and abuse in relation to poppers were relevant when poppers were compounds, and there were some tragic incidents involving other drugs being combined with poppers. The gay community makes the case that as far as its activities are concerned, poppers are best in the open and not banned.
The wider issue, which has not been mentioned before, is proportionality and where the focus of the Bill is. I think we all agree that those who consume poppers for personal use—we will come on to importing and exporting in a subsequent debate—are not the main target of the Bill. At the very least, we need to look at the focus of enforcement regarding the psychoactive substances that are on the market, and we all agree that it should be on the bad people who shift their evil trade around. Even if the Bill is enacted in its present form, I suggest that those who consume poppers in their private domain will not be a particular target of enforcement activities.
Lyn Brown
Does the hon. Gentleman agree with me—I think he does, because he has said that people who consume poppers are not the target of the legislation —that we are looking at targeting drugs that do a lot of harm? I am anxious that we will spend resources going into clubs and arresting people who have poppers on them, which will look good on the stats but will not take off the streets the drugs and the people that we want to target through the legislation?
Mr Burrowes
We will have the benefit of a 30-month review, where we will be able to look at the impact of the legislation. We need to ensure that it gets on to the statute book so that it can arm the police to get out there and find the people whom we really want to focus on. I cannot believe that those with poppers will be the main focus. We can ask that question in 30 months’ time to, I hope, reassure ourselves. This debate will help with that, and perhaps the Minister will give us some reassurance as well.
How will this be dealt with practically and properly? I hasten to say that those who consume poppers have not so much to fear; it is the people who shift the new psychoactive substances around in bulk who are causing menace. I look forward to the Minister’s response, in which I hope he will outline the evidence that the Home Office has received about the harm caused by poppers, because he has expressed real concern to the Committee about such harm.
Mike Penning
May I touch quickly on the comment made by the shadow Minister in her intervention on my hon. Friend? Possession in a club would not be an offence; indeed, possession is not an offence under any part of the legislation, unless in a secure facility. It is important to send that message out.
The Bill is in no way intended to pick on or cause problems for any individual group in society, but we are looking at a blanket ban identical, or as near as damn it, to what was done in the Republic of Ireland, where poppers were also banned. I looked carefully at the evidence to the Select Committee, particularly the comments of Dr Owen Bowden-Jones, who said—I believe that the shadow Minister touched on this—that there are harms associated with poppers.
I think that the situation is the reverse of what my hon. Friend has said. There are new types of products and poppers coming into the market in this particular nitrite area, which is starting to cause problems. We can look at, for instance, death certificates on which alkyl nitrites have been named, and we see that from 1993 until the latest data were released, there were more than 20 deaths. How people take poppers—a trade name that we all seem to have adopted—is interesting. We have had instances of people with burns who have drunk or ingested them, and there is evidence around damage and deaths. That is a debatable thing, because there are lots of experts out there, but the principle of what we are trying to do is not to have exceptions. As my hon. Friend has rightly said, what we can do is to review the situation in 30 months. At this stage, we are looking at a blanket ban without exceptions. I am only quoting from the pieces of paper in front of me, and I know that there was much more detailed evidence given to the Select Committee.
Andrew Gwynne
Surely the Minister would accept the words of the Home Affairs Committee report, which are quite clear; it says that poppers were
“‘not seen to be capable of having harmful effects sufficient to constitute a societal problem’ and therefore we recommend they should not be banned.”
That could not be clearer.
Mike Penning
I accept the point. I know exactly what it says. I beg to differ with the report and the work that was done by colleagues because of the principle of the blanket ban. If we have exemptions, what other types will be brought forward by others at other times? The principle of the blanket ban would be affected if we accepted the amendment, so I ask the hon. Member for Midlothian not to move it, or to withdraw it. Other Members may of course pursue that.
I have one final point to make. I am conscious that presumably—although we will wait for the business managers—we are not going to have a huge amount of time on Report. If we leave too much to Report, I am conscious that we might not have the time to debate the issues that we have already agreed to in the length of time available.
Lyn Brown
The Minister says that possession is not an offence. We are going to come to clauses later where I want to probe that. One of the issues around clubbing is that one person out of a group of six may well find themselves getting the poppers for the group and then doling them out to the group when they get to a club. In those circumstances, because there would be an “intent to supply”, the possession of poppers would be an offence. However, again, that is about using resources on something that has not been shown to have a harmful effect or to cause harm.
The Minister said that he wants to review, and in the review we can look at whether poppers have been particularly targeted. Can he confirm that when we get the review it will have a breakdown of which psychoactive substances action has been taken on? The issue is again that of resources. To show that action has been taken on psychoactive substances by any particular police force, it would be quite easy to take action on those who are using poppers. I want the action taken on those who are selling really harmful substances, not on the type of substances where the Select Committee’s report suggests there is no evidence of harm. Can the Minister confirm that in that review we will be able to see the types of substances that police forces have concentrated on when they have been taking action?
The Minister also talks about a blanket ban. We have a blanket ban but we also have an exemptions list. We have an exemptions list that includes incense, and coffee—I am grateful for that as I am not sure how I would have managed to get up this morning without it. When we are talking about a blanket ban, we want that to be on harmful substances—substances that cause harm, not substances that do not harm. Would the Minister consider publishing the evidence he has that poppers have entered a realm where they may well be causing harm? That would be helpful.
I think this will be revisited at Report; if not by either of the Front Benches, my guess is that there will be others who will have been moved by the letters and emails that they will be getting over the next week or so, who have perhaps been part of the Home Affairs Committee and are aware of the Committee’s recommendation that this is placed on the exemption list. Could I ask the Minister to genuinely reconsider on this issue? It is not that we are soft on drugs. We are hard on drugs and we want to be hard on the harmful drugs that could cause massive harm to many within our communities. Will the Minister take that on board?
Mike Penning
I assure the shadow Minister that in the evidence I send back to the Select Committee on that report, I most certainly will indicate the concerns that we have around harm to do with poppers.
The blanket ban is not targeted, because it is a blanket ban. It is obviously for trading standards, the police and the Crown Prosecution Service to make the decisions. When we come to the review, data will be available to ensure that we understand how the new Act is being implemented.
Andrew Gwynne
I have two points. First, I wonder whether the timescale for the Minister’s responding to the Home Affairs Committee will coincide with further debates we may have on the issue on Report. It would be convenient to have the Minister’s response in time for such debate.
My second point is about unintended consequences. Does the Minister not accept that if people cannot buy poppers in shops, in a legal format, there is a risk that they will go underground and purchase them from drug dealers, which might be a gateway into harder drugs, because the dealers will want to push more than just poppers?
Mike Penning
I will answer some of those points if I can at this stage. Yes, I will respond to the Select Committee before Report. I am not part of the business management system, but it does not look like we will have reached that stage by next week, so we will have some time. The Committee knows that I have been wanting to expedite the process.
On the second point, the evidence from Ireland, where poppers are banned, shows that that is not the case, and I am sure that the gay community is the same in Ireland as it is here. Interestingly enough, I raised the matter with the Irish Minister when I was with him in the Republic, and he said that it had not been an issue for them or caused major problems. In fact, he was surprised that I raised the matter.
Mike Penning
May I just finish responding to a couple of the other points? My brain will not work well enough to remember them all.
We will, of course, look at the issue of harm. Interestingly, we are all quoting different people. I have quotes from some professors. In addition to Ireland, other countries, including America, Canada and France, are also attempting to put some kind of ban in place. I am conscious that we do not want to be seen to be picking on any individual group in any shape or form. I fully understand that. But if we are trying to protect the public it is difficult to start to have physical exemptions in the way that has been described.
Mr Burrowes
Will the Minister tell us what level of concern has been expressed to him by the gay community?
Mike Penning
I was just coming on to that. When the Bill was going through the Lords I expected that the matter would be debated and extensively lobbied, but it was not. I understand that it was not raised at all. I also expected my door to be bursting open following requests for meetings from the different lobby groups, but I have not received any delegations. I am slightly surprised. One of the Justice Ministers raised the matter when a group was seeing them on a separate issue. I am well aware that colleagues were lobbied when they were named as members of the Committee. However, if the matter was of such concern, I would have expected representations, but I have not had any, and I am not the shyest person if people want to see me.
That is not a criticism. It is just that the question was asked and the answer is that I have not had any representations.
Lyn Brown
I know that this is not scientific, but my Facebook pages had not included anything about the matter until the end of last week. Perhaps the Minister’s door has not yet been knocked on, but my guess is that it might be knocked on, fairly loudly, by those groups as the issue becomes more apparent and the community becomes more aware of it.
Mike Penning
I have made a rod for my own back but, as I said, my door is always open.
The news that we were going to have a blanket ban is not new; everybody has known about the ban. Several other organisations, including the Churches, were worried about this issue. It has been debated extensively within the Lords. I accept that there is now a campaign on this issue, which seems to have started quite vigorously, but during the progress of the Bill in the other place and throughout the investigations that I have carried out, it was not raised with me.
Lyn Brown
May I just say to the right hon. Gentleman that I think one of the reasons that the issue was not raised with him is that there has been an assumption that the legal highs that we are banning are the bad stuff—the materials that actually cause harm? Therefore, there has perhaps been an assumption that poppers, which do not cause harm or at least have not been considered to cause harm, would not fall within the scope of the Bill.
Mike Penning
The knowledge about poppers being part of the debate has been out there in the ether; it was actually partly discussed in Scotland, when the Scots carried out their review. It was certainly discussed when the Irish passed their legislation. It has been known, clearly, all the way through.
What I am saying, however, is that in what I am trying to do—I accept that this is a concern for individuals—this issue could be really difficult for this Bill. Of course, the substances that we are banning are not all the really horrible ones, and I am really genuinely worried that I would open up an opportunity for others to ask for exemptions in areas where we do not really want to have them.
I repeat what I said privately to the hon. Member for Midlothian, namely that I hope that people will understand that this process is about my trying to get a piece of legislation on the statute book that does the job we are asking it to do and that is not challenged in the wrong way.
Owen Thompson
I hear what the Minister is saying. However, it is one thing to say that there is reassurance for individuals who may take poppers, but how do they actually get them if we do not have an exemption for poppers? If we cover poppers in the ban that we are proposing in the Bill, they will become illegal and then those who would not be criminalised by using them cannot actually get them through any legal means. [Interruption.] I hear the Minister saying regularly that there is a blanket ban, but it is a blanket ban with the exception of controlled drugs, with the exception of medical products, with the exception of alcohol, with the exception of nicotine and tobacco, with the exception of caffeine, with the exception of food—
Andrew Gwynne
I appreciate that it is not proper form to respond to a Minister’s comment through a Member who is intervening on him, but if I were to do so I would point out that the Minister said from a sedentary position that that is not the experience in Ireland. Does the hon. Gentleman suspect that what might actually be happening in the Republic of Ireland is that people are going to Northern Ireland to purchase poppers legally, which they can then use themselves in the Republic of Ireland, and that might be why this has not been much of an issue south of the border?
Owen Thompson
I would suggest that there are probably a number of ways in which any individual could acquire substances; indeed, that is part of what we will come on to next.
Mike Penning
Perhaps there is a sensible way forward, not least because the Select Committee report is fairly recent and many colleagues in the House have not had an opportunity to read it. Of course, if we do not vote on this measure now, it can then be brought back for the House, rather than this Committee, to decide. I have concerns as a Minister, not in a personal capacity. However, perhaps it would be sensible if we took some time and took some stock to consider the other evidence, and then the House can decide on Report.
Owen Thompson
I would certainly welcome that approach. We have talked a lot about how we are building the Bill around the Irish experience, but I do not see any reason why we cannot look to that experience and make it better. I think that that is ultimately what we are all trying to do. I do not seek to press the amendment to a vote at this stage; I merely want us to make the arguments and discuss it, as we are doing. I will take the matter forward to Report, when we can discuss it in more detail. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1, as amended, agreed to.
Clause 4
Producing a psychoactive substance
Amendment made: 5, in clause 4, page 2, line 32, leave out from “subject to” to end of line 33 and insert “section (Exceptions to offences) (exceptions to offences).” —(Mike Penning.)
This amendment is consequential on amendment 11 and NC3.
Clause 4, as amended, ordered to stand part of the Bill.
Clause 5
Supplying, or offering to supply, a psychoactive substance
The Chair
With this it will be convenient to discuss the following:
Amendment 52, in clause 5, page 3, line 15, at end insert—
‘(5) It is not an offence under this section for a person (“A”) to supply a psychoactive substance to person (“B”), where A and B are known to each other and such supply is part of an agreement to obtain psychoactive substances for either As, Bs or both’s own consumption, and the supply does not profit person A.”
This amendment seeks to explore how to avoid one person being criminalised when as part of a group, he is responsible for obtaining psychoactive substances e.g. via the internet; when in reality each person in the group is purchasing for their own consumption.
Amendment 49, in clause 7, page 4, line 17, at end insert—
“(d) the person intends to do this for personal gain”
This amendment would mean possession with intent to supply would only be an offence if the person was supplying the product for gain.
Lyn Brown
One of the original recommendations of the ACMD was that the Home Office should redraft clause 5 to exclude social supply, and that is what our amendments are designed to do. I note that the NPS expert group, which recommended a blanket ban, also stated that social supply could be excluded from that ban. The reason for this—we were heading in this direction in the last debate—is that I am told that it is not unusual for a number of young people to club together, and for one person to buy the substances and distribute them among their friends. The crime survey for England and Wales 2014-15 found that around a third—34%—of those using NPS got them from a friend. The reality of drug experimentation, particularly with young people, is that it is social behaviour in a group. It is common for one individual to acquire the substances to be taken by the group. I am of the view that the difference between a young adult purchasing drugs on behalf of a group for an experimental night out, and a professional drug dealer peddling potentially dangerous drugs for profit, is enormous.
Mr Burrowes
I hear the point that the hon. Lady is making, but how does she make that distinction? No one has the label: “I am a professional drug dealer” on their head. I have represented a number of drug dealers, and they may well be quite young and look very innocent, but they can be guilty of supply, whether social or commercial. Either way, they are plying their evil trade.
Lyn Brown
I accept that. I am not a learned person, and I have never defended a drug pusher, so I am quite new to this. My guess is that the way we would do this is to look at quantities—to consider the amount of drugs that somebody had on them and the group of people that they were clubbing with. If I had five poppers with me and I was clubbing with another four friends, I think that that would suggest that there was social supply going on, rather than a drug dealer making a huge profit.
Mr Burrowes
Is not the point that it is about enforcement and the police being able to take a view about what they find, so that they can decide whether the evidence amounts to supply and whether they want to take prosecution further? When they are dealing with the scenario you are describing of a bunch of friends passing round laughing gas, they would have to take a view on how far they would take it. We need to have that discretion in enforcement rather than putting it in the Bill, which could have unintended consequences.
Lyn Brown
I accept what the hon. Gentleman is saying. I think he was in the cannabis debate we had in Westminster Hall two weeks ago—[Interruption.] He was not; I am sorry. In that debate, I raised the issue of equity: somebody might be done for cannabis possession in West Ham but not in West Norwood, because police forces up and down the country take very different views about enforcement in their patch. It is about the way in which they enforce these matters. For me, the law is the law. I want equity across the country in the way in which things are dealt with; I do not see why there should not be equity across the country. I hope that helps the hon. Gentleman.
The clause as drafted makes no distinction between social suppliers and large-scale commercial suppliers. The ACMD is worried that that is disproportionate, and I probably agree. I know there is an argument that social supply is an important part of the supply chain of those drugs, and therefore it ought to be included within the reach of the Bill. Although Home Office research shows that a third of NPS were obtained through a friend or colleague, other surveys of young adults who are clubbers, such as the Global Drug Survey, have different findings that show a much higher level of internet buying of psychoactive substances.
Social suppliers are at the very end of the supply chain. I hope that this legislation, which I know we are going to pass, will enable us to disrupt and break up the immoral organisations that sell drugs to social suppliers: the head shops, the internet sites and, ultimately, the drug producers. We can reduce the social supply without criminalising young people who may not even be aware that they are breaking the law. A criminal record is one of the most harmful and life-limiting penalties we can levy on a young adult. A conviction for drug possession is not well regarded by educational institutions or potential employers. A conviction for drug supply has potentially far worse consequences, as it is rightly regarded as a much more serious offence.
Without a well-funded, comprehensive education and communication programme, there will be plenty of confusion about the legal status of NPS. It will take years to completely remove the dangerous marketing misnomer of “legal highs” from ordinary language. There is bound to be confusion about drugs that are legal to possess but not to supply, import or export, if only because they are new and unfamiliar to our legal framework. The same ignorance cannot be claimed for the drug pushers, professional drug dealers and producers who are the people we really ought to be going after.
Our amendment would add “for personal gain” to the end of the clause. That is similar to the way financial gain is considered an important factor in the sentencing guidelines for drugs controlled by the Misuse of Drugs Act 1971. Those guidelines suggest that those who make substantial gains ought to be considered, for the purpose of sentencing, to have played a leading role in supply. With that careful wording, prosecutors would still be able to prosecute individuals for selling to people they happen to know for the sake of personal profit. Small-scale, local criminals could still be punished for bringing harm to their communities, but genuine social suppliers, who are ultimately the users of the drugs, rather than the people pushing them, would be excluded.
We tabled amendment 49 to clause 7 to have the same intended legal effect as our amendment to clause 5. The same principles that govern the prohibition of supply, which is set out in clause 5, should also apply to possession with intent to supply, which is set out in clause 7. I note that the Scottish National party tabled a similar amendment, which also has the intended effect of excluding social supply from the scope of the Bill. I am quite happy to work with the SNP and the Government to work out which formulation would most effectively exclude social supply without creating easily exploitable loopholes. I firmly believe that we should be working on this problem together.
Steve Brine (Winchester) (Con)
I am listening carefully to what the hon. Lady says. Is the “for personal gain” that she suggests should be inserted into clause 5 consistent with the wording that would appear in, say, the 1971 Act? Has she taken advice to that effect? I appreciate that she might not have the answer at her fingertips.
Mike Penning
The provision in the Bill mirrors the position of substances that are subject to a temporary class drug order. The Bill replicates a piece of legislation that we have been using for some considerable time. The amendment would move us away from that.
Lyn Brown
But there are other things that are moving us away from that, too. The Bill does not talk about criminalising possession, so its focus is clearly on the dangerous, nasty stuff sold in glitzy, pretty packets in head shops, which are targeted at teenagers and young adults in our communities. We might not be mirroring the 1971 Act, but we are genuinely attempting to tackle the real problem of the nasty stuff on our doorsteps. We want to get to the suppliers and get this stuff out of our communities, but we should not criminalise young people who may be completely unaware that the “legal highs” that they have been taking are in fact illegal.
Andrew Gwynne
I am grateful to my hon. Friend for giving way. She makes an important point about personal gain, because there could be a scenario in which prosecutors would still be able to make a clear distinction for somebody who is clearly profiting from the sale of a currently legal high, even if they happen to know the person to whom they are selling on a social basis. That is an important distinction that prosecutors ought to be able to make.
Lyn Brown
I completely agree with my hon. Friend.
If the Minister cannot accept our amendments, I ask him at least to provide strong assurances that sentencing guidelines will be drawn up in a way that makes a distinction between social suppliers and suppliers for financial profit.
Steve Brine
This is where I am on this: I understand exactly what the hon. Lady says, but one could intentionally supply a substance to another person socially and it could still be for personal gain, because they could still make a few quid out of it. Therefore, a prosecutor might struggle with that distinction. I am interested to hear the shadow Minister’s view on sentencing guidelines.
Lyn Brown
I think the hon. Gentleman is absolutely right. We need to be clear in this Committee about who we want to target most. If we can make that clear, we might stand a chance of the legislation producing more than just five prosecutions and making a real impact on the “legal highs” that are out there. We should be going after those who are flooding our communities with invidious substances and tackling the real cause of the problems on our streets.
Mr Burrowes
On personal gain, do we not also want to proportionately tackle people who supply laughing gas to friends at school? They may not be the big people who earn lots of money, but they may gain by being able to get themselves an extra bit of laughing gas or by feeding a habit. They are all part of this supply chain. I would not want my children to be exposed to suppliers, whether professional drug dealers or just people who shift out this bad stuff in schools.
Lyn Brown
I accept that. Had I been lucky enough to be a mother, I would be saying exactly the same thing. Nevertheless, the kids in school who are supplying the laughing gas are getting it from somewhere, often from someone who is also giving them other stuff that they want to have pushed in the playground and in the streets. I am glad to see that the Bill will tackle offences in schools that affect children. We have also heard that there will be a good and effective education programme that will help children to say no to whatever substances are being pushed. I am genuinely pleased to hear that.
Carolyn Harris (Swansea East) (Lab)
Does my hon. Friend agree that we must also look at extending such measures to the vicinity of children’s homes where there are vulnerable young people, especially given the tendency for grooming to become the next stage in taking these hideous substances?
Lyn Brown
I understand that we will come to that later in the Bill with an amendment tabled by the hon. Member for Enfield, Southgate, who has been testing my thoughts on the legislation. I look forward to hearing from him on that.
As I have stated, a similar notion to the one I have been expounding already exists in the guidelines for sentencing under the 1971 Act. I would like to be assured that the Minister will work with the Director of Public Prosecutions to ensure that prosecutions are brought only when there is a clear public interest, which I would suggest there is not in the case of many social suppliers. I would find some reassurance in knowing that the Government will do what they can to ensure that the Bill is intelligently enforced.
Andrew Gwynne
It is a pleasure to follow my hon. Friend the Member for West Ham, with whom I agree that amendments 46 and 52 are so similar as to be almost indistinguishable. I very much hope that the Minister will consider adopting them.
I welcome this moment of harmony between Labour Members and our colleagues north of the border. Both amendments make a pertinent point: although it is right that the supply of existing drugs is considered an offence even if the supplier is not supplying them for personal gain, we should be very wary of criminalising those who are simply part of, say, a small group of individuals who have conspired to obtain psychoactive substances. That point was well made by my hon. Friend the Member for West Ham.
We are still in the early stages of controlling psychoactive substances. We should start from a presumption of ignorance for those not seeking to profit from the flow of such substances. My hon. Friend is absolutely right—I am sure that she does not speak from personal experience; she keeps protesting, so we will take her at her word—that the reality of drug experimentation, I am led to believe, is one of shared experiences. There is a qualitative difference between a group of young people procuring substances for shared use and a profiteer on the high street. The way in which clause 5 is currently drafted makes no distinction between those people and large-scale commercial suppliers; I have to say that that is just wrong. It is true that sometimes friends can be part of a supply chain, but they are right at the end of it. We should not, at this stage at least, impose a criminal record on a young person who gives some of these substances to their friends.
The Labour party is fully supportive of the principle of criminalising those who seek to make money from this pernicious trade. When someone is in the business of selling dangerous substances, we can assume they will be following developments regarding the illegality of their work, so I am firmly behind clause 5 in a general sense. Nevertheless, I urge the Minister to consider very carefully the fact that the amendment is intended to adopt a principle included in the 1971 Act: one of “personal gain”. Prosecutors could then still make a distinction regarding somebody who quite clearly profits from this trade, even if, as I said in an intervention, they happen to know the customer in a social capacity.
I note the reasoning behind subsection (3), and I approve of it. It must be made clear that the substance not being of a psychoactive nature is not a defence in itself if the supplier intimated that the substance would have such an effect, notwithstanding the fact that he or she would have no doubt trading standards on their case.
I urge the Minister to think carefully about this. The point made by my hon. Friend and, indeed, echoed by the SNP amendment is that we need to tread very carefully, so that we do not end up criminalising young people for the sake of it. We want to tackle the real issue, which is the supply of the psychoactive substances we want to ban.
Owen Thompson
I very much agree with the comments from Labour Members. It is not the intention behind any measures in the Bill to target these small groups of people. The Bill is very much aimed at those who put these substances in the marketplace and on high streets on a larger scale. That is the reasoning behind our amendment. If there are drafting issues, it is surely not beyond expert drafters, of whom I am not one, to come up with a form of wording that encompasses the aims of the three amendments we are discussing, while countering some of the issues raised by Government Members.
Lyn Brown
Does the hon. Gentleman agree that the Government have opened the door to this by not wanting to prosecute possession? The Government themselves are therefore saying that they want to get to certain classes of pusher and of people involved in psychoactive substances, not individuals who just possess a drug.
Owen Thompson
It largely comes down to another unintended consequence. We are not looking to target those individuals or small groups of friends, whatever the circumstances happen to be, who are not the object of the Bill. It is a question of how we capture that in a way that leads to successful prosecutions where necessary but manages to support people where it is not the mass-scale issues we have been talking about.
The amendment is a probing one. We will not push it to a vote, but I urge the Government to use it as an opportunity to seek an alternative and look at how best we can manage this aspect in a way that meets the genuine concerns raised by Government Members, while protecting young individuals who may find themselves charged with supply when, in fact, it is what anyone else would see as personal use.
Mike Penning
I fully understand what colleagues on both sides of the Committee are saying, but I have some real concerns. If we exempt a group—not because they are young; we keep saying that, but we are just old and they are all younger than us—we will open up a significant loophole in the Bill, not least because of what my hon. Friend the Member for Enfield, Southgate spoke about from personal knowledge. What is personal use? We have discussed that in lots of other areas. While I desperately do not want to criminalise young people, there is a whole set of measures in the Bill that will prevent us from getting to that position. That is why they are there.
I advise the Committee that some things that have been said are not quite factually correct. Supply does not need proof of payment under the 1971 Act, but proof of payment is a consideration in sentencing, which is exactly what we would look for in this measure. It is not for me to tell the Sentencing Council exactly what its guidelines should be. We have moved away from politicians doing that—it is now people who are much more expert than I am—but I have already committed to writing to the Sentencing Council once the Bill has completed its passage in order to advise it on the will of the House. We will return to that when we discuss children’s homes.
Lyn Brown
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 6, in clause 5, page 3, line 14, leave out from “subject to” to end of line 15 and insert “section (Exceptions to offences) (exceptions to offences).” —(Mike Penning.)
This amendment is consequential on amendment 11 and NC3.
Clause 5, as amended, ordered to stand part of the Bill.
Clause 6
Aggravation of offence under section 5
The Chair
With this it will be convenient to discuss the following:
Amendment 48, in clause 6, page 3, line 43, at end insert—
‘(8A) Condition D is that the person who committed the offence knew, or had reason to believe, that the consumption of psychoactive substance would cause the person consuming the substance harm.”
Makes it an aggravating factor to sell a substance which the person knew or suspected to be harmful.
Amendment 55, in clause 9, page 5, line 26, at end insert—
‘(2) In sentencing, account shall be taken of the relative harm associated with the psychoactive substance that was the subject matter of the offence”
This amendment seeks to ensure sentencing is commensurate with the potential harm done by the substance involved.
Lyn Brown
We have tabled these amendments to address concerns about disproportionate sentencing. I raised this issue on Second Reading, and it figures heavily in the Home Affairs Committee report, which concluded that
“there is a lack of clarity in the Bill with regard to the relative harm associated with different types of NPS and the appropriate sentence commensurate with the offence.”
Amendments 47 and 48 would make it an aggravating factor to supply a psychoactive substance that the supplier knows, or has reason to believe, is harmful.
Under the 1971 Act, sentences are linked to the harm caused by the drug possessed, supplied or produced. The more harmful the drug, the harsher the maximum sentence. For example, someone prosecuted for possession with intent to supply a class A drug such as heroin could potentially receive a life sentence. The maximum punishment for possession with intent to supply a class C drug such as anabolic steroids, however, is 14 years. There is judicial discretion in applying individual sentences, but the general approach of linking to relative harm is important.
The Bill represents a radical departure from previous attempts to control drugs because it legally decouples controlled substances from an independent and objective assessment of the harm they cause. We understand why that might be appropriate. The process by which the ACMD determines the harm of a substance can be lengthy and resource-intensive, which is precisely why the Home Office cannot keep up with the illicit market. It is difficult to introduce a concept of harm in the Bill without denying the Home Office the tools it needs to address the central problem.
However, by introducing the concept of harm in clause 6, which exclusively addresses statutory aggravating factors, I do not believe we would hamstring the Home Office or prosecutors. Prosecutors would not have to prove a substance’s harmfulness to secure a prosecution for supplying, producing, importing or exporting a psychoactive substance; they would only have to demonstrate that the individual had reason to believe that the substance was harmful in order to establish an aggravating factor and a harsher punishment.
Lyn Brown
Just as importantly, the Home Office and enforcement agencies would still be able to control substances without having to prove that they are harmful. This amendment would therefore not place the authorities one step behind the market, which is the problem the Bill is designed to solve.
Section 1 of the Drugs Act 2005 included aggravation within its scope. I understand that this is hardly used. Does the Minister know how often it has been used successfully in court? He may seek inspiration on this one, or I am happy for him to write to me with the answer.
Lyn Brown
The greatest benefit of the amendment is that it would formally recognise that someone ought not to receive the same sort of punishment for supplying a relatively harmless substance as someone supplying a substance which they ought to know could be very dangerous. It keeps the traditional link between harm and sentencing, which is an important principle, without wrecking the Bill.
Andrew Gwynne
My hon. Friend makes an important point on the issue of harm and sentencing. We probably all agree in the Committee that it should be the intention of the law that the more harmful the substance being supplied, the harsher the sentence should be for that supply.
Lyn Brown
Absolutely. I think that were this included in the Bill it could have a deterrent effect on those involved in supply and change the nature of the market towards less harmful psychoactive substances. I note that the Scottish National party has an alternative amendment which seeks to achieve a similar end. I will repeat what I said when we found ourselves in the same situation when discussing how to exclude social supply: I am very happy to work with other parties and with the Government in order to ensure that our shared goals are reached. I hope that they take this offer in the serious manner in which it is intended.
I look forward to the Government’s response with interest. They will know that this is an issue which has exercised supporters and opponents of the Bill alike, and that if a way round the problem can be reached, we ought to grasp it. Our amendment has the potential to bring even more consensus to the Bill.
Owen Thompson
Apologies for my slightly delayed return; I had to act as a Teller for the vote that has just happened. Our amendment 55 is an amendment to clause 9 not clause 6, although it does fit nicely with those that are here. Our approach is to look to ensure that there is a genuine protection in the concept of relative harm, as the shadow Minister mentioned prior to our suspension, and that the associated psychoactive substance is the subject matter of the offence, so that we do take account and any sentence handed down is relative to the offence. I accept that different sentencing regimes are in place within Scotland and the rest of the United Kingdom and I appreciate the points that the Minister will, I am sure, be making about that.
Our amendment is a probing one, but the fact that it mirrors those tabled by the Opposition suggests that the intent behind the amendments is consistent, regardless of which part of this island we happen to be presenting them from—[Interruption.] These islands. I apologise. I suggest that, as the Bill progresses, due consideration is given to the intent behind the relative harm aspects mentioned in the amendments.
Mr Burrowes
I wish to speak to the group of amendments, in particular amendment 55, which provides the opportunity to talk about how the courts would deal with the issue when it comes to sentencing. I accept that the Bill will hopefully help to revolutionise enforcement and provide tools for the police to get out there and deal appropriately and proportionally with getting psychoactive substances off the streets and out of harm’s way for hardworking citizens—all citizens, in fact. That is welcome. The Bill also recognises the civil sanctions and the civil regime regarding the seizure of such items.
When a prosecution comes before the courts—in Ireland there have not been many prosecutions and there may not be a huge number here—we want to ensure that the penalties are just and commensurate with the offence. We therefore have a problem, because the substances are different from controlled drugs, and the Misuse of Drugs Act 1971 contains a classification system that enables relative harm to be attached to a controlled drug, and that is then relevant to the sentence. Because of the blanket ban we do not have that, but I do not want to rehearse our previous debates on the matter.
It is important, nevertheless, not least for the courts because of proportionality, to be able to distinguish between psychoactive substances. No doubt the courts will take account of statutory and non-statutory aggravating factors—we will debate those factors later—and will consider the amount of drugs, the circumstances and the degree of sophistication, but they will also need to reach a judgment on the relative harm of the substance. I draw the Committee’s attention to page 13 of the Home Affairs Committee report, a report I know the Minister read avidly over the weekend—he could not put it down.
Chapter 5, on the concept of harm, draws reference to the evidence of Rudi Fortson, QC, who highlights the position, which the Minister reiterated to the Committee, that the Government do not wish to be disproportionate with sentencing—far be it from them to want to be disproportionate; they certainly do not. There is also wider consideration in case law, principles and conventions that would ensure that every penalty would be considered proportionally.
How, therefore, will the sentencing courts get that assistance? Rudi Fortson states that,
“in the absence of drug classification, or an expert’s opinion (if accepted) as to harm, the courts will have little option but to assume that all psychoactive substances are equally harmful”.
That is the problem we have, and it is why the debate on amendment 55 is welcome.
The Minster has already said that as soon as the Bill has completed its stages he will write to the Sentencing Council encouraging it to take action. The problem with that is that I know from experience that the council is not the quickest vehicle where taking action is concerned. On the desecration of war memorials, there was a commitment from a Justice Minister to write to the Sentencing Council, but it could be considered only when the council was to meet to consider amending its guidelines. I therefore encourage the Minister to make it clear that the process will be expedited.
The Minister and the Government have rightly taken an expedited view in relation to getting on the statute book the legislation regarding the enforcement tools, but we also need it to be fit for purpose for the courts. That is why I would like the Minster to communicate with the Sentencing Council and seek assurance that it will consider the matter in an expedited form so that we will get an answer quickly.
I also take comfort from the recent letter from the Advisory Council on the Misuse of Drugs to the Home Secretary, which now provides a clear scientific framework to establish that this issue can be proved in the lab in vitro. That will also provide an opportunity, with the benefit of evidence that I think is going to be resourced, whether that is from the forensic strategy or the Centre for Applied Science and Technology. That material will all come together to provide the body of evidence for the Sentencing Council to come to an informed judgment. However, that will all need to happen at quite a rapid pace. That is my first point.
The second point is that there will need to be some flexibility, because there are new psychoactive substances coming on stream. How quickly will the Sentencing Council be able to provide appropriate guidance to the sentencing courts for these new substances? I would have thought that there will be a whole new regime for the Sentencing Council to deal with this, given the way that it has taken its time before.
It is absolutely vital for public confidence and the interests of justice that this particular chapter in the Committee’s deliberations is taken to heart. We made a recommendation here that the Sentencing Council be requested to produce appropriate sentencing guidelines, taking account of relative harms. That was a specific recommendation; I think the Minister is intimating that he is on the same page on that one. It is very important that we have something that is fit for purpose, not just for the police but for the courts.
Andrew Gwynne
I support my hon. Friend the Member for West Ham on amendments 47 and 48, which she has tabled. I do not wish to detain the Committee for too long, because there seems to be a degree of consensus breaking out. When we were last in discussion, about the previous clause, the consensus was between the Labour and Scottish National party Members; now it seems to be among Labour, SNP and Conservative Members that there is a degree of consensus.
I urge the Minister to consider very carefully the points that were put forward by my hon. Friend when she moved amendments 47 and 48. I agree with the Minister that all of the aggravating factors set out in the Bill so far are fair and proportionate. However, we need to go that little bit further, as my hon. Friend has said, and I would argue, as she did, that her amendments are an eminently sensible solution to disproportionate sentencing.
As it stands, the Bill makes no distinction between classes of NPS. We should be introducing the concept of harm into clause 6. The hon. Member for Enfield, Southgate made some very pertinent points, which were addressed in the report by the Home Affairs Committee, and I will briefly quote from a couple of passages from page 13 of that report on the concept of harm, because they should help us to form our opinions as we discuss these amendments.
The report starts off by saying that,
“one of the principal purposes of the Bill is to ‘protect hard-working citizens from the risks posed by untested, unknown and potential harmful drugs’”.
We all agree with that. That message was reiterated by Lord Bates—Minister of State in the House of Lords—who said that,
“success would mean reducing the harms caused by new psychoactive substances”.
It is interesting that Lord Bates is referring specifically to the “harms caused”. That is why we argue that we should tighten up on the issue of harm in the Bill.
As the HAC report goes on to admit:
“This bill does not calibrate for harm, and indeed exempts known harmful substances whilst banning substances which are not harmful simply because they are psychoactive”.
I do not wish to regurgitate the debate on poppers, but they are a case in point. That is why harm has to be considered.
I think we all agree that somebody supplying very harmful substances should receive a harsher sentence than somebody supplying a relatively harmless substance. The link between harm and sentencing is an objectively just one, which my hon. Friend the Member for West Ham and the hon. Member for Enfield, Southgate have both made very clear. It would also produce a situation where there is a greater disincentive to sell the more harmful substances.
I urge the Minister to think carefully about including the definition of harm in the Bill. It seems as though his noble Friend Lord Bates in the other place has considered that, as referred to in the Home Affairs Committee report. It does not make sense that we ban substances that are not harmful simply because they are psychoactive, at the same time as we do not calibrate for harm, and known harmful substances, as part of the Bill.
Mike Penning
I thank colleagues for their contributions. The last point raised by the shadow Health Minister, the hon. Member for Denton and Reddish, is probably the most difficult for me, not least because we would be moving away from the blanket ban. That is something that we have tried to introduce for many years. I fully understand the way in which the courts have historically looked at drugs sentencing, but this is new. However, the principle should not be any different. I highlight the fact that I will correspond with the Sentencing Council, as I alluded to earlier on. The situation in Scotland and Northern Ireland is different, but I am sure that they will follow that lead, not least because of the work the Scottish Government have done.
I fully support the principles behind the amendments, and it is clearly right that the courts should take account of the harms and the type of offence, but I feel that this is very much a matter for the independent Sentencing Council. The aggravating factors proposed in the amendments are already broadly covered by the Sentencing Council’s guidelines for drug offences, which we will be replicating. I take the point that my hon. Friend the Member for Enfield, Southgate made about the speed at which the Sentencing Council may need to move, and the speed at which we in Government need to move to give it the facts it needs to make decisions.
The process will be an evolutionary one. We do not want a young person—we keep referring to young people—or a person who had a small amount of a substance and sold it on to someone else because they were broke to be treated exactly the same as a drug dealer who has imported two tonnes of the stuff in a container through one of our ports. Clearly, in sentencing, that would be wrong. I am committed to writing to the Sentencing Council—it already knows that I am going to do this—to say that we expect it to take into consideration not only what the Committee and both Houses decide, but the relevant parts of the Home Affairs Committee report. The part that we have been discussing, in particular, is enormously helpful as we move forward. We do not want people to be treated differently under the law, but we want dealers, as we understand dealers, to be treated differently.
I cannot agree that we should move into the territory of harm, because to do so would completely damage the principle of our thinking. I accept that that thinking is completely new, and it will be quite interesting for the courts, the Crown Prosecution Service and the Director of Public Prosecutions. It is important that the Sentencing Council does its job in England and Wales, and that a similar thing happens in Northern Ireland and Wales. I noted the agreement of the hon. Member for Midlothian and the hon. Member for West Ham on that; when the hon. Gentleman suggested that it would be appropriate, there was a nod from Her Majesty’s Opposition. I have taken that on board, and I will write to the Sentencing Council. We could work together on the content of the letter.
Lyn Brown
I am grateful to the Minister for stating that he agrees with the principle behind the amendments and that he will write to the Sentencing Council to urge it to take note of what the Committee and the Home Affairs Committee have said. That is very welcome, and I therefore beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr Burrowes
I beg to move amendment 40, in clause 6, page 3, line 20, leave out “or C” and insert “, C, D or E”.
The Chair
With this it will be convenient to discuss the following:
Amendment 41, in clause 6, page 3, line 43, at end insert—
‘(8A) Condition D is that the offence was committed on or in the vicinity of any premises intended to locate any vulnerable child;
(8B) In this section “vulnerable child” means any person aged under 18 who is not living with their family and is—
(a) accommodated in regulated residential care or unregulated accommodation under section 17, 20, 25 or 31 of The Children Act 1989, or,
(b) accommodated in accommodation under part 7 of the Housing Act 1996.
(8C) The Secretary of State may by order made by statutory instrument specify the circumstances in which paragraph (a) and/or (b) of subsection (7B) apply.
(8D) Condition E is that the offender supplies a psychoactive substance to any persons under the age 18.’
Amendment 42, in schedule 4, page 48, line 16, at end insert—
“Misuse of Drugs Act 1971
(1) The Misuse of Drugs Act 1971 is amended as follows—
(2) In section 4A (Aggravation of offence of supply of controlled drug) after subsection (4) insert—
‘(4A) The third condition is that the offence was committed on any premises intended to locate any vulnerable child or in the vicinity of said premises;
(4B) in this section “vulnerable child” means any person aged under 18 who is not living with their parents or carers and is
(a) accommodated in residential care under section 17, section 20, section 25 or section 31 of The Children Act 1989, or,
(b) accommodated in a multi-occupant dwelling under part 7 of the Housing Act 1996.
(4C) The Secretary of State may by order made by statutory instrument specify the circumstances in which a court must take into account Condition C;
(4D) The fourth condition is that the offender supplies a controlled drug to any persons under the age of 18.’”
Mr Burrowes
The amendments particularly focus on sentencing, on the aggravating factors when someone is convicted under the Bill and on whether there should be a particular focus on those who supply psychoactive substances to children outside accommodation for vulnerable children. They seek to put those factors on the same footing as supplying in the vicinity of a school.
If one thinks about the purpose of including a statutory aggravating factor applying to those who supply drugs in the vicinity of a school, which is in this Bill and in the Misuse of Drugs Act 1971, although we are dealing with new types of drugs, the principle is the same whether it relates to a controlled drug or a psychoactive substance. If someone is plying their trade outside a school, Parliament takes the view that that is a statutory aggravating factor that does not need to be left to non-statutory guidance from the Sentencing Council. We make it clear that that is an aggravating factor that will lead to an increased sentence.
The amendments seek to tease out from the Minister why there should be a distinction. We are considering psychoactive substances, so we have to look at where they are being pushed and where they are subject to wider abuse and exploitation. That is why the amendments particularly focus on extending the statutory aggravating factor to supplying outside residential children’s homes and supported accommodation such as hostels, foyers or night stops. When dealing with such accommodation, Committee members will know from their constituencies and wider knowledge that they often house vulnerable people who can be prone to other forms of exploitation. Substance misuse, particularly of psychoactive substances, can often form part of that.
The amendments refer to accommodation for vulnerable children in order to capture both residential children’s homes and supported accommodation in which local authorities place children under the age of 18. Evidence that has come before all-party groups and no doubt Ministers suggests that such children in such accommodation are more at risk of exploitation than others. It could be argued that they are more at risk of harm than those affected by the supply outside schools, because of the other types of exploitation and abuse that go on in these types of accommodation.
References are also made in the amendments to different aspects of residential care and why children are at particular risk. The Children’s Commissioner has found that a disproportionate number of children who are sexually exploited are living in residential care. Children at a high risk of sexual exploitation also run the risk of exploitation relating to drugs. The all-party parliamentary group on runaway and missing children and adults’ inquiry highlighted the targeting of children’s homes by perpetrators due to the abuse and high vulnerability of such children, which is why the amendments seek an additional statutory aggravating factor. Children in care often lack the shield of a family to protect them from risks, so 16 and 17-year-olds and others are at particular risk of abuse, whether related to drink, drugs or psychoactive substances.
In addition to children in care, vulnerable 16 and 17-year-olds may find themselves homeless or at risk of homelessness but do not become looked-after children. In that zone, they are prone to having complex needs, whether in relation to housing, substance misuse, including drugs, mental health issues, contact with the criminal justice system or wider exploitation. That is why the amendment seeks a statutory aggravating factor. Why not leave it to the Sentencing Council guidelines, which include the
“targeting of any premises intended to locate vulnerable individuals or supply to such individuals and/or supply to those under 18”?
Non-statutory aggravating factors are already in the guidance.
We have to ask whether supplying to children outside a school is worthy of a statutory aggravating factor. The amendment would amend both the Bill and the Misuse of Drugs Act so that they are consistent with each other. Parliament needs to take the lead, as we did with the Modern Slavery Act 2015, which looked at many areas of exploitation, particularly the exploitation of children. Now is the time to look at the body of evidence and see that the particular vulnerability for children is not so much in schools, where there is more of a protective shield and statutory agencies are trying to prevent things from happening, but away from the eyes of many people. In an area that is sadly subject to exploitation, there may well be a need for Parliament to get on the front foot and ensure that there is statutory provision. That is my position; I hope the Minister considers it seriously.
Lyn Brown
I have enormous sympathy for the motivations that drove the hon. Gentleman to table the amendments. One of my first jobs was working in a children’s home, so I know just how vulnerable children can be. I also know that he has the support of the Children’s Society, which has been helping to make childhood in Britain safer for more than 100 years and is a fine organisation.
The Children’s Society has highlighted the relationship between new psychoactive substances and exploitation. Sometimes, that exploitation is economic, with reports of drug dealers forcing young men to work for them in order to pay off debts they that have accumulated by trying NPS. Sadly, as the hon. Gentleman mentioned, we also face the problem of sexual exploitation. The Children’s Commissioner found that more than a third—35%—of the children most at risk of sexual exploitation were living in residential care.
PACE—Parents against child sexual exploitation—have demonstrated that young girls have been targeted by groomers with NPS to try to get them hooked. We are all shocked by the grooming scandals that have hit many of our cities and towns, and I am in no doubt that the people engaged in such crimes are just the sort of criminals who ought to be hit by the strictest penalties provided by aggravated offences.
I am interested to hear what the Government make of the amendments. If they cannot accept the current drafting, would they be willing to go away, think about it and come back with alternative plans on Report, because this is an important issue? Will the Minister devote special attention to making sure that vulnerable children are given specific and focused education to ensure that they have the resilience to say no to those who want to prey on them with NPS and other drugs?
Steve Brine
On Second Reading, I mentioned Baseline Training, an assessment and training company based in my constituency. Further to what the shadow Minister was saying about the exploitation of young people, Baseline gave me some truly shocking evidence before the Bill was introduced in the House. In April this year, the Hampshire and Isle of Wight drug strategy group had good intelligence that young girls had performed sex acts on men who provided them with mephedrone. There is good evidence coming from Hampshire and, I suspect, other parts of the country that backs up what the shadow Minister said.
Lyn Brown
I thank the hon. Gentleman for his intervention. I emphasise again that young people in care are vulnerable and need us as their parents, in loco parentis, to help them to say no to those who want to exploit them and prey on them with NPS and other drugs. They need support so that they can look out for themselves.
Owen Thompson
I very much agree with the principle behind the amendment. From the correspondence I have had, I know that agencies such as Who Cares? Scotland very much support the proposals. This is a particular problem, because young people in supported accommodation and the type of accommodation we are talking about require extra support, protection and help. The amendment would go a long way towards addressing some of their needs and dealing with that. I voice my support for the aims of the amendment.
Carolyn Harris
I have been greatly troubled by some of the stories I have heard in my constituency of Swansea East from the local police, social workers and organisations. Young women are now grooming other young women, with the fee being legal highs. Some of the stories are absolutely horrendous. The Children’s Society has done great work on that. For 63% of the housing providers who engaged in one of its surveys, the greatest problem they saw for these young people was involvement in legal highs.
Owen Thompson
That is very much the case. In many situations, the young people we are seeking to help and support are at a vulnerable stage of their development. There is a reason we need to give them extra help. It is about ensuring that a situation that has resulted in their being in secure or looked-after accommodation is not made worse by not putting in place extra protection to ensure we help, support and encourage their development towards the better future that I am sure we want for all young people.
Mike Penning
May I say at the outset, as I did in the previous group of amendments, that I have deep sympathy not only with the amendments tabled by my hon. Friend the Member for Enfield, Southgate but with the excellent work that charity has been doing in this area? One of the things touched on by my hon. Friend was the anomaly between schools and children’s homes.
Clause 6 in its original form was included in the Bill for consistency’s sake, to replicate an identical provision in the Misuse of Drugs Act 1971, because that provision was created before the Sentencing Council existed. I looked long and hard at whether it would be right at this stage to try to replicate that, because it would completely go against what we have been trying to do with the Sentencing Council in that area. We will continue to look at this, and it will be part of the submission to the Sentencing Council, which I will probably send to each of the devolved Administrations as well. While I cannot tell them what they should do, they need to know the will of the House.
We need to keep an extremely close eye on what goes on. Section 125(1) of the Coroners and Justice Act 2009 specifically says that courts must take into consideration the sentencing guidelines on this. We need to ensure that the sentencing guidelines replicate the will of the House and of 99.9% of the public, who want to see the abhorrent crimes we have discussed—and things that it would perhaps not be appropriate to discuss here but which I know about within my ministerial capacity—are subject to the full force of the law. As I have said about previous amendments, that is a matter for the Sentencing Council on which we can advise, but there must be consistency throughout the Bill.
While I understand that the amendment is a probing one, I hope I have given my hon. Friend the Member for Enfield, Southgate assurance. The principle behind the previous set of amendments shows my reaction to this. It is something we are keen to keep under review, and it has to be specific within the correspondence I will draft, with help from others, to the Sentencing Council. With that in mind, I hope my hon. Friend will not push the amendment to a vote.
Mr Burrowes
I am grateful for the debate and the cross-party agreement on the principle behind the amendment, which is the concern we all share to ensure that those convicted of supplying their evil trade to vulnerable children get the sentence they deserve. I pay tribute to the Children’s Society for championing the cause.
Mike Penning
I was discourteous; I did not name the Children’s Society nor refer to that charity in my remarks. A charity of such distinction and with that longevity of service to vulnerable young children deserves acknowledgement by name from a Minister.
Mr Burrowes
I thank the Minister for that.
The clause tries to ensure consistency on controlled drugs in relation to supply at school premises, which is understandable, but this is a landmark Bill. Professor Iverson spoke about the Bill being one of the most important and significant pieces of legislation for 40 years. With that comes a need to ensure that sentencing is appropriate to the particular substances and recognises the characteristics of certain substances. It has already been mentioned how, sadly, such substances are used for exploitation, often of children and those in particular types of accommodation and in care. Supply of substances is a characteristic of the abuse, and that is why it is right for Parliament to consider whether it wants to ensure that supply to a vulnerable child is an aggravating factor.
I concede that the Sentencing Council has non-statutory guidelines that seek to address the matter, but it is important to recognise that they are guidelines, not tramlines. As a Parliament, we have a duty to vulnerable people, where there is that power imbalance. The substances that we are seek to criminalise and to set appropriate sentences for increase dependency, create debt, stupefy children and allow them to be exploited. As a Parliament, we should have tramlines, not guidelines, and we should be absolutely clear about that.
We can say too often that we are sending out a message. We should not always send out messages with Bills, but part of this Bill is about sending a message that these substances are illegal and are not good or safe. Part of that message should relate to sentencing so that it is clear that anyone who wants to risk plying their trade to vulnerable people in the type of accommodation specified will face a hefty sentence. Those people will not be looking up the sentencing guidelines that will go to the magistrates court and the Crown court. They will not have a clue about that, but they may well get a clue that the offence has a maximum penalty of seven years or so and that they will be at the upper end of the market for sentencing.
I recognise that the Minister will consider the matter seriously and in good faith. It must be looked at across the piece, along with the relationship between drug sentencing and the Sentencing Council. The Bill is innovative, and we want to ensure that we send out a clear, stark message to those who exploit the most vulnerable. I look forward to the Minister considering the matter further at a later stage. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 7, in clause 6, page 3, line 43, leave out “on prison premises.” and insert “in a custodial institution.
‘( ) In this section—
“custodial institution” means any of the following—
(a) a prison;
(b) a young offender institution, secure training centre, secure college, young offenders institution, young offenders centre, juvenile justice centre or remand centre;
(c) a removal centre, a short-term holding facility or pre-departure accommodation;
(d) service custody premises;
“removal centre”, “short-term holding facility” and “pre-departure accommodation” have the meaning given by section 147 of the Immigration and Asylum Act 1999;
“service custody premises” has the meaning given by section 300(7) of the Armed Forces Act 2006.”—(Mike Penning.)
This amendment replaces the reference to “prison premises” in clause 6(8) with a reference to a “custodial institution”. It then defines a custodial institution; the definition includes adult and juvenile prisons, immigration detention accommodation and service custody premises.
Ordered,
That subsection (9) of Clause 6 be transferred to the end of line 29 on page 3.—(Mike Penning.)
Clause 6, as amended, ordered to stand part of the Bill.
Clause 7
Possession of psychoactive substance with intent to supply
Amendment made: 8, in clause 7, page 4, line 18, leave out from “subject to” to end of line 19 and insert “section (Exceptions to offences) (exceptions to offences).”—(Mike Penning.)
This amendment is consequential on amendment 11 and NC3.
Clause 7, as amended, ordered to stand part of the Bill.
Clause 8
Importing or exporting a psychoactive substance
The Chair
With this it will be convenient to discuss amendment 54, in clause 8, page 4, line 38, leave out sub-paragraph (i).
This amendment seeks to explore how we can ensure that there is no criminalisation of those who order psychoactive substances over the internet for personal consumption.
Lyn Brown
This is a probing amendment that would delete subsection 1(d)(i), which criminalises an individual for importing a psychoactive substance for personal consumption. Committee members will be aware that on Second Reading it was argued that subsection 1(d)(i) creates a troubling inequity. Although it will not be an offence under the Bill to purchase a psychoactive substance from a shop, drug dealer or website that supplies from the UK, it will be an offence to purchase the very same drugs from a website that distributes from outside the UK. That is important because the internet plays a significant role in the supply of NPS, unlike many other substances. According to the Home Office, about 6% of abusers obtain NPS over the internet, but other surveys have found a much higher rate of internet purchase of NPS. The Global Drug Survey 2014 found that 22% of its sample had bought psychoactive substances from the internet.
The inequity created by subsection 1(d)(i) is particularly worrying, because a consensus has been built around the Bill on the basis that it will not criminalise users. Unfortunately, it is hard to see how a ban on importing for personal consumption could have any other effect. In practice, it will often be difficult for purchasers to know whether they are buying from a UK-based site, so they will not easily be able to tell whether they are committing an offence. Unless amended, the law could lead to websites and sellers on marketplace sites such as Silk Road and its successors prominently advertising that they are UK-based, or perhaps foreign-based but posting from the UK, which would make a mockery of the law. Websites may also attempt to trick British users into thinking that they are transferring the drugs from within the UK by adopting a .co.uk address. The subsection is bound to create unwitting criminals. What measures has the Minister put in place to mitigate that?
I suspect that the Government may be concerned that deleting subsection 1(d)(i) will create a loophole that will make it harder for them to tackle the NPS industry, because, if the subsection were removed, UK-based suppliers might be able to claim that they are importing for personal consumption and evade the law by making lots of small purchases. If the Government make that case convincingly, I will happily withdraw my amendment as I am committed to tackling this dangerous industry. However, I seek assurance that the Home Office has seriously considered how this part of the Bill can be effectively drafted not to not criminalise users. For example, quantitative measures of personal consumption could be incorporated into the Bill to differentiate between personal and professional importation, as is the case for regulations that manage the importation and excise duty of cigarettes and alcohol.
I note that Scottish National party Members have also tabled an amendment exploring this issue, and I am sure they seek the same assurances. Just as on the issue of social supply, I ask the Minister to work with prosecutors and the Sentencing Council to ensure that the Bill does not go after the people we do not want it to go after. I include importers for personal consumption within that group.
Finally, I turn once again to the issue of the resources necessary to enforce the Bill properly once it becomes law. The National Crime Agency admitted that it has a continuing problem preventing the importation of NPS, particularly from China. The NPS expert review identified a number of challenges faced by UK border controls. Some of those challenges, such as the fact that Border Force needs greater powers to seize suspicious packages, will be addressed by the Bill. However, some of the challenges identified by the expert panel require a non-legislative response. The expert panel claims that the intelligence picture on NPS trade is very limited and that we have particular difficulty dealing with websites due to the anonymity provided by e-currencies. What progress has been made on addressing those weaknesses identified by the expert panel?
This is one of the most important issues in the Bill. If we cannot get to grips with the importation of such substances, closing the head shops is all the more likely to lead to the same drugs finding their way into the hands of professional drug dealers, including gangs.
Owen Thompson
I will continue in the spirit of harmony and good will that has been a theme this afternoon. Our amendment 53 was identical to amendment 50, so great minds think alike.
The same reasoning lies behind amendments 50 and 54. Amendment 50 would ensure protection for people importing substances ordered online. Exporting is a slightly different situation, but the logic follows through. The spirit of the Bill is about ensuring that individual users are not criminalised; it is about addressing the wider industry and wholesale suppliers and dealers. Society is changing—in the way in which people approach everyday shopping, for example—so we have to take account of the fact that people approach things differently. It is not simply a case of going down the street to a head shop, or whatever it happens to be, to buy a substance. With every other aspect of life increasingly moving online, we must ensure that legislation keeps pace. These amendments would ensure that there is an eye towards that.
We will seek assurances from the Minister if he does not accept the amendment. This is a probing amendment, and we are trying to ensure that these elements are fully thrashed out before Report. As more and more happens online, we need to ensure that our legislation is keeping pace and taking account of changing trends in how people access substances such as NPS.
Mike Penning
Again, I thank both the shadow Minister and the SNP spokesman for indicating that these are probing amendments, so my colleagues can relax.
The shadow Minister summed up exactly why I will not accept the amendment. We are not trying to pick on individuals who purchase these products for personal use but, as we close head shops and other avenues, there will clearly be an increase, as the expert panel highlighted. As the Minister for Policing, Crime and Criminal Justice, the National Crime Agency is my responsibility. I have been working with the NCA and other agencies, and I have particularly been working with my colleague, the Minister for Immigration, because obviously Border Force will have a crucial role.
If we accepted the amendment, the debate would be about what is personal use. During this debate we have heard about cigarettes and alcohol. My family was in the pub trade for many, many years, and there has been an issue with Transit vans—I apologise for picking on Ford—and other large vans going across to Calais and coming back full of cigarettes and alcohol. When those vans are stopped by borders, immigration and customs, the driver says, “This is completely for personal use.” That opens up a difficult area.
The amendment would make it difficult for Border Force to do the job we need it to do. As has been highlighted, we absolutely need the expertise in that relevant area. On the point that the hon. Member for Midlothian made about the difficulties that exist online, some of the expertise that we increasingly need is there, but a lot of this is organised crime, and those are the people we are after. I am absolutely determined that the NCA and the other agencies should have the powers and the expertise they need to go after those people, not the little guy who is in possession for personal use.
The difficulty in law—this has been an issue in the courts—is personal use. It is a really difficult area, and that is why I sadly cannot support the amendments. I understand fully their probing nature. I always argue that it is all too easy to build up points as a constable by picking on the little guy, when the others are the guys that we want. I assure the Committee that we have introduced the measures to allow us to get the big guys, not to pick up the little guys. We will keep a close eye on the situation, but I think we have what we need.
Lyn Brown
Has the Minister given any thought to how purchasers will know whether they are buying from a UK site? I do not think that they will be able to tell whether they are committing an offence. There will be criminals out there who will trick people into believing that they are buying from a UK site.
Mike Penning
If they buy from a UK site, it is illegal under the Bill, because it is selling. If those who run the site try to represent themselves as a UK site to sell the product, that is just as illegal as being a head shop. What we have said all the way through the Bill is that it is not legislation that is the silver bullet but education and understanding. It will be generational for some people, but that is where the proportionality that we talked about earlier in the criminal justice system, in local government and in trading standards comes in. It is important that we discuss this point, but we need to ensure that there are no loopholes and that the agencies that we are asking to look after us and the legislation have the powers that they need.
Mike Penning
I understand fully the point that the hon. Lady is making, and it is a difficult area. What I cannot do is to open up the whole Bill because of what will, I hope, be a small group of people. The likelihood of their being prosecuted in that area is very unlikely, because of everything that we have debated. Purchase and possession would be legal—we have discussed that—so there would be no illegality on the part of the individual. It is the seller or the dealer we are after. I think I am right on that point.
Lyn Brown
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 9, in clause 8, page 5, line 6, leave out from “subject to” to end of line 7 and insert
“section (Exceptions to offences) (exceptions to offences).”.—(Mike Penning.)
This amendment is consequential on amendment 11 and NC3.
Clause 8, as amended, ordered to stand part of the Bill.
Clause 9
Penalties
Amendment made: 10, in clause 9, page 5, line 26, at end insert—
“( ) A person guilty of an offence under section (Possession of a psychoactive substance in a custodial institution) is liable—
(a) on summary conviction in England and Wales—
(i) to imprisonment for a term not exceeding 12 months (or 6 months, if the offence was committed before the commencement of section 154(1) of the Criminal Justice Act 2003), or
(ii) to a fine,
or both;
(b) on summary conviction in Scotland—
(i) to imprisonment for a term not exceeding 12 months, or
(ii) to a fine not exceeding the statutory maximum,
or both;
(c) on summary conviction in Northern Ireland—
(i) to imprisonment for a term not exceeding 6 months, or
(ii) to a fine not exceeding the statutory maximum,
or both;
(d) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine, or both.”.—(Mike Penning.)
This amendment is consequential on NC2. It provides that the new offence of possession of a psychoactive substance in a custodial institution, as inserted by that new clause, attracts a maximum penalty on conviction on indictment of two years’ imprisonment, a fine, or both.
Clause 9, as amended, ordered to stand part of the Bill.
Clause 10
Power to provide for exceptions to offences
Question proposed, That the clause stand part of the Bill.
Mike Penning
This is a technical thing, but it is important. The clause confers on the Home Secretary the power to specify exceptions to the offences in clauses 4 to 8 by regulations. As we have already debated, new schedule 1 lists certain excepted activities on the face of the Bill, so clause 10 is not required.
Question put and negatived.
Clause 10 accordingly disagreed to.
Ordered, That further consideration be now adjourned.— (Jackie Doyle-Price.)
Trade Union Bill (Ninth sitting)
(8 years, 6 months 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: 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 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: 10 / Noes: 8 - Question accordingly agreed to.
The Committee divided: - Ayes: 10 / Noes: 2 - Question accordingly agreed to.
The Chair
Before we begin, may I ask everybody to ensure that all electronic devices are switched off or in silent mode? We will now continue line-by-line consideration of the Bill.
Chris Stephens (Glasgow South West) (SNP)
On a point of order, Sir Alan. I apologise to the shadow Minister for intervening at this stage. The Standing Orders of the House were changed on Thursday in terms of what is referred to as English votes for English laws. Can you advise, Sir Alan, if those Standing Orders apply to any clauses of the Bill or any amendments to it?
The Chair
I have to inform the hon. Gentleman that the changes are not in being yet. It is a proposal that is not as yet completed, so it therefore does not apply in this case and certainly not to this legislation.
Clause 13
Reserve powers
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I beg to move amendment 101, in clause 13, page 9, line 31, at end insert—
‘(c) Save that no such regulation shall have the effect of altering, in respect of any of the matters to which the reserve powers may be directed, any provision of a contract of employment or a collective agreement or of limiting an employer’s discretion as to the contents of contracts of employment or collective agreements to which the employer is a party”.
It is good to be back under your chairmanship, Sir Alan, for what I hope is the last day of our line-by-line consideration of the Bill. I am sure, given the number of inconsistencies and problems that have been exposed during the course of our debates, that we are all looking forward to coming back to the Bill on Report to raise those concerns again.
Clause 13 proposes further regulation of facility time by the extension of a very wide-ranging reserve power of Ministers of the Crown. I do not wish to detain the Committee unnecessarily by repeating the fundamental arguments for why facility time is so important; I simply draw the Committee’s attention to my previous remarks. I believe there is a serious problem with the nature of the power proposed in clause 13 and how it cuts across the devolution settlement, as was touched on in the point of order from the hon. Member for Glasgow South West.
Under current legislation, trade union workplace representatives have a right to reasonable paid time off to perform certain duties. As we have previously discussed, that has huge benefits for employees and employers alike. The clause could allow the Government to cap the percentage of the employer’s pay bill that is invested in facility time. It will give the Government the power to impose an arbitrary limit on the amount of time that public sector union officials can spend on facility work during working hours. That might be time spent on negotiating improved pay and conditions; training, as outlined in section 168 of the Trade Union and Labour Relations (Consolidation) Act 1992; promoting learning opportunities as union learning reps under section 168A of the 1992 Act, which the Minister said he was very supportive of; accompanying individuals in grievance and disciplinary hearings, under section 10 of the Employment Relations Act 1999, which is a very important function that I have been involved in; or on health and safety duties and training, under the regulations made under section 2 of the Health and Safety at Work etc. Act 1974.
The potential consequences of this are deeply concerning. The Government have not set out exactly which of those duties they seek to cap or which particular sectors the clause will apply to. They are leaving themselves a very wide-ranging power for intervening. They say, as they have so often told us, “Trust us, we’re the Ministers,” but that is simply not good enough when it comes to such important matters.
The clause is particularly troubling to Opposition Members because it establishes a clear democratic deficit in three main areas. First, the provisions will mean that Government Ministers can use as yet unseen secondary legislation to push through restrictions or repeal trade union rights contained in primary legislation. While hon. Members on both sides of the Committee recognise the important role that secondary legislation plays, many would also accept that it gives Parliament less opportunity to debate and amend such regulations than would otherwise be the case.
Secondly, the provisions could prevent public sector employers, including in Scotland and Wales who have responsibility for a number of wholly devolved areas of public service provision and who have their own democratic mandate, from deciding how to manage employment relations in their workplace and how to engage with their staff.
Thirdly, the provisions mean that the Government can be selective as to which public and local authorities may be forced to impose a cap, introducing an element of significant discrimination on quite wide-ranging powers to behave in a very partisan and nakedly political way over these matters.
There are significant questions about the legality of such a change. We heard during the oral evidence stage from Professor Ewing, the Welsh and Scottish Governments and others, about the potential contraventions that the Bill provides. There is a risk that the proposal for a cap could conflict with EU law which protects the rights of health and safety representatives to paid time for their duties and training; the rights of trade union representatives to paid time off and office facilities during consultations on collective redundancies and outsourcing under their TUPE rights; and even under general information and consultation arrangements covered by the Information and Consultation of Employees Regulations.
The measures also represent a significant attack on rights that are protected by the European convention on human rights and ILO conventions. We have many questions about the clause. I hope that the Minister can explain what legal advice he has taken on the question of whether the proposal for a cap conflicts with EU law, with TUPE rights and with the Information and Consultation of Employees Regulations 2004. I would like him to be very specific on those three points.
We had a partial debate about the clause in our discussion of clause 12, and I was intrigued by some of the Minister’s comments. He promised that he would write to the Committee and he has done so. He reiterated the point he made in line-by-line consideration and said:
“I promised to write to the Committee before we debate Clause 13 to indicate who will exercise the powers in Clause 12 to require the publication of information about facility time and who may exercise the reserve powers in Clause 13 having regard to that information…It is right that Ministers have the flexibility to propose and, as a last resort, set caps on paid facility time…This will allow the relevant Minister to make regulations tailored to that. So, for example, the Secretary of State for Health will make regulations imposing publication requirements on NHS and other health employers and may exercise the reserve powers in relation to them if he considers appropriate to do so taking account of the information relating to facility time that they are required to publish.”
I am extremely concerned that this cuts across the devolution settlement. It cuts across the powers of Welsh and Scottish Ministers to make arrangements in their own sectors. The Welsh First Minister, on hearing the Minister’s comments in our sitting on Thursday and learning of the contents of the letter, has made it clear publicly that he believes it would require the consent of the Welsh Government.
Will the Minister to clarify the position because it seems to be matter of considerable debate? There are clearly conflicting legal opinions—I know which side I am on—and this is a serious matter, given the wider constitutional debates that we are having at the moment. It appears that the Secretary of State for Health or the Secretary of State for Education would use the powers in the clause to intervene in the day-to-day running of the Scottish or Welsh health services.
Chris Stephens
My reading of the letter indicates that there would also be interference in local government. There will be an impact, given the devolved Administrations’ funding arrangements and agreements with local government.
Stephen Doughty
Indeed, and the Minister skirted round this issue when we discussed it briefly. Will this power on facility time and, more broadly, the powers in the Bill apply retrospectively and therefore affect existing employment contracts up and down the land, whether in local government or devolved public authorities or in other agreements? The measure could lead to the extensive unwinding of contracts that have been entered into in good faith by individuals, employers and public sector authorities.
Furthermore, when we look at public sector contracts going forward, should Welsh and Scottish Government Ministers and local authority cabinet members engaged in discussions with their employers about the nature of the contracts and the balance of responsibilities and rights expect those contracts to be undermined at any time at the whim of a Minister of the Crown, who could strike out clauses or imply that they are not valid because of some arbitrary decision taken about facility time? I fear that this poses an extraordinarily dangerous precedent, where Ministers will be able to act in a partisan and political way to attack, for example, a local authority or a devolved Government of different political persuasion, to intervene in their powers and democratic mandate to run public services in the way they see fit.
Amendment 101 is intended specifically to prevent a breach of article 11 of the European convention, which precludes a state from negating the provisions of a collective agreement. It would prevent the Government from using regulations and powers under the clause to rewrite existing collective agreements and contracts, which is that retrospective point I made. Those contracts of employment had been voluntarily agreed by public sector employers, employees and unions, and provided union reps with time off to represent their members.
The provision would also mean that public sector employers could agree new collective agreements and contracts of employment providing union reps with time off for union duties, effectively setting aside any arbitrary cap imposed by the Government. I draw the Minister’s attention to the case of Demir and Baykara v. Turkey in 2008 in which the ECHR affirmed the fundamental right of workers to engage in collective bargaining and take collective action to achieve that end.
The power in the clause falls foul not only of legal precedents but of decisions, conventions and standards that we are party to. It would fundamentally cut across the country’s constitutional arrangements and the devolution settlements. It is extraordinarily unwise for the Government to do that, given precedents. I hope the Minister can give a fuller explanation, given the nature of those concerns.
Chris Stephens
I reiterate the comments I made on clause 9. This is a bad Bill and this is a bad clause. As the shadow Minister has outlined, we now know the wider implications.
I wish to confine my observations to the comments made by the Minister on Thursday, which he has followed up in writing. First, it appeals to my dry sense of humour that, having rejected amendments on publishing percentages, the Minister writes to us with percentages, in the letter on spending. I am encouraged by that and I hope the Minister will go back and consider publishing percentages on facility time.
The Committee owes a debt of gratitude to the shadow Minister for skilfully wheedling out of the Minister the prospect of the Secretary of State for Health dictating to devolved Administrations on the level of facility time. Presumably the same applies to local government. I am willing to wager that the Minister has not thought through the implications for local governments that have agreements with devolved Administrations on funding and powers through agreements or concordats. It leaves the public with the impression of a Government who conduct first-rate bullying, only days after they declared some Members second class, by a third-rate Administration whose casual approach to legislation does not even provide them with the foresight to realise the constitutional crisis they are sprinting towards.
In no other case do the UK Government have such powers to interfere or dictate to a devolved Administration how to conduct their affairs. The fact that the Government do not consider a legislative consent motion to be appropriate in these circumstances is either remarkable ignorance, gross incompetence or simply the act of a bully. This is dangerous terrain for the Government. I hope the Minister declares what discussions he has had with the devolved Administrations surrounding the reserve powers in the clause, and how they will be enacted.
These proposals are being made in the context of the Scotland and Wales Bills, which have still to conclude their parliamentary journey. It seems extraordinary that the Government can reveal their intentions at the last stages of this process. As the shadow Minister said on Thursday, creating reserve powers signals the intent to use them. The Minister must tell us what, if any, discussions he has had in that regard.
I signal our support for amendment 101. There are clear contractual obligations, and there will be clear costs to public sector employers, which will have to issue new statements of particulars or new contracts to public sector employees.
The proportion of spending on facility time is extremely low, as the Minister confirmed in his letter. Will the Government consider democratic mandates? The Conservative share of the vote at the general election in Scotland was the lowest since universal suffrage. The Conservatives have no mandate in that regard. I was considering whether to press amendment 85 to a Division but, because of the correspondence that we have received, I now feel obliged to do so.
Ian Mearns (Gateshead) (Lab)
It is a pleasure to serve again under your chairmanship, Sir Alan. In the context of clauses 12 and 13, I have been remiss in not declaring a non-financial interest in as much as I am a vice-president of the Local Government Association, which is the umbrella body for local authorities in England and Wales.
Clause 13 includes a Henry VIII power whereby Ministers will be able to use secondary legislation to push through restrictions on or to repeal the right to paid time off for trade union duties in the public sector contained in primary legislation, and Parliament will have very limited opportunity to debate or amend such regulations. It is worrying that Ministers are taking such powers unto themselves and, in essence, sidelining Parliament from effective overview and scrutiny of their actions.
The clause demonstrates the Government’s total lack of understanding of the practice of good industrial relations. First, the clause is, in effect, a blank cheque for the Government: if passed, it would give Ministers the power to limit facilities for trade union officials. It contains no explanation of how or why that power would be exercised, and it certainly provides no logic or justification.
Secondly, the provision applies only to the public sector, just like the provision to record time off for facility time, and we need to ask ourselves why that is. First and foremost, like bad employers, this Government feel it is appropriate to threaten and intimidate their own workforce. Of course, the other people who will be affected by the measure are not directly the Government’s workforce but people who work for other public bodies such as local authorities, local government and the emergency services—public servants. The main reason why the provision does not apply to the private sector is because private sector employers do not really want it.
Good employers know and understand the value of working together with their workers and with trade unions. Good employers know and understand that their greatest assets are the good people who work for them. Good employers invest in their workers—they pay them well, train them and reward them; they do all they can to encourage loyalty and dedication. They try to retain their workforce because it costs a lot of money to train staff in a range of different skills and professions. That is why the best employers work in partnership with their workers, and it is why they encourage independent trade unions.
Trade union officials are an integral part of the best companies, working tirelessly to improve relations, productivity and profits. Trade unions know and understand that workers prosper only in growing, profitable firms.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
Is the hon. Gentleman aware of the review of facilities and facility time conducted by the Department for Business, Enterprise and Regulatory Reform in 2007? The report concluded that the work of union representatives actually reduces the number of cases proceeding to an employment tribunal and the number of working days lost due to workplace injury and workplace-related illness, and that such reductions result in significant financial savings.
Ian Mearns
Yes, I was aware of that, but I thank the hon. Lady for bringing it to the Committee’s attention, because it certainly helps to make the point that I am pursuing.
Clearly, there is a vision of trade unions that this Government do not understand, and that vision is shared by many private sector employers. Unfortunately, this Government see trade unions as the enemy within. They still hark back to the miners’ strike of 1984-85 and to the 1970s, when, we all accept, industrial relations in this country could have been a lot better. However, we are not in the 1970s; it is 2015, and the landscape of industrial relations is very different.
I have been a trade unionist all my adult life. On my second day of employment with British Gas I asked the personnel department how I could see a union official to sign up for my union membership, and I joined the National and Local Government Officers’ Association—NALGO—which is now part of Unison. I think that NALGO was an acronym for “Not A Lot Going On”—[Laughter.] I have been a trade unionist all my adult life, and I had the honour of working with many very decent and honourable union officers, both full-time officials and lay officials who were elected by their peers in the workplace.
I have also been an employer; I was deputy leader of Gateshead Council. Back in the days before we had the severe and harsh cuts that we currently have to go through, we had something like 11,000 employees in Gateshead. They covered a whole spectrum of different professions, providing public services for the people of the borough and the constituency that I represent. We prided ourselves on having good industrial relations and having good dialogue with our workforce on a regular basis. There were of course times when there were problems, but we managed to talk through the vast majority of those problems through good, robust and—on occasion—friendly industrial relations.
I have been above that as well; I have also chaired a national negotiating committee of the LGA called the Soulbury committee. We looked after the interests of advisers for schools, educational psychologists and other professionals of that nature. I therefore have an understanding of the strategic role that employers play in good industrial relations.
The Government need to understand why business is not that keen on these provisions. For instance, they should read Personnel Today, the journal for human resources professionals and practitioners. An article in that journal states that:
“You can have the most sophisticated industrial relations structures, follow all the rules and negotiate ad infinitum, but you will get nowhere if your relationships with staff and their union reps aren’t based on trust”.
It continues:
“This was abundantly clear during the recent civil service industrial action and the narrowly averted strike at British Airways (BA). We see this time and again. An organisation might call us in because it can’t get an agreement signed off, or the process has become too uncomfortable for both sides. What we frequently find when we get there is a climate of mistrust, entrenched ideas, and even outright hostility between union and management, employer and worker.
It doesn’t have to be this way. Look at Co-operative Financial Services, where we recently facilitated a management/union agreement over outsourcing—one of the most sensitive industrial relations issues over the past five years. Similarly at Gillette where, faced with redundancies, the business consulted with employees at the earliest opportunity and asked the staff representatives for alternative proposals, how to approach the situation and what the final redundancy package should contain. Larger, more complex organisations can learn from these successes”.
The UK Government need to learn lessons from the real world. Instead of fighting the ideological battles of the last century, they need to start equipping this country with legislation that fosters and supports good practice, and supports workers and their representatives. The legislation needs to recognise not only that it is right and fair to support the weakest and the most vulnerable but that, ultimately, as the best employers have repeatedly demonstrated, it is good for business too.
The Minister for Skills (Nick Boles)
It is a pleasure to be starting what I hope will be the final day under your chairmanship, Sir Alan. Sometimes during this debate it strikes me that the two sides of the Committee are discussing completely different pieces of legislation. Both Opposition parties portray the Bill as one of the most egregious attacks on fundamental human rights since King John, whereas I would describe it as, to borrow a phrase from the previous speaker, a NALGO Bill, in that there is not a lot going on.
What the Government are proposing here is nothing more than a set of provisions that seek to change behaviour within the public sector. After all, the public sector is funded by taxpayers: they go out to work to earn money and they pay taxes, so they have a right to see that money spent responsibly. We hope that, in the light of public scrutiny of the information relating to facility time that public sector employers will be required to publish under clause 12, public sector employers will voluntarily renegotiate their existing facility time arrangements with trade unions and bring their spending on taxpayer-funded facility time under control.
We could, of course, have legislated now for a cap, so the idea that the clause, to cite another famous monarch, is a Henry VIII measure, an egregious attack, is false. We have heard a lot about the constitution in recent hours. We could have legislated for a cap now and no doubt the Opposition would have attacked that. We have taken the more modest route of suggesting reserve powers, which—the clue is in the name—will be kept in reserve and used only as the last resort. Only if transparency shows unacceptable inefficiencies in relevant employer spending on facility time and poor value for money for taxpayers from existing facility time arrangements with trade unions will Ministers set a cap on the time and money spent on facility time.
Amendment 101 would prevent the reserve powers being exercised so as to effect changes to a contract of employment or collective agreement, or limit the relevant employer’s discretion as to the contents of the contract or agreement concerned. The amendment would, in effect, neuter any consequential provision that regulations could make amending or otherwise modifying contracts of employment or collective agreements. As I have said, it is by no means certain that the reserve powers will ever be exercised and, should they be exercised, it is also by no means certain that this would interfere with, or override, existing contractual rights and rights under collective agreements. Most union representatives do not have contractual rights to facility time over and above their statutory rights, which we are not seeking to change.
Jo Stevens (Cardiff Central) (Lab)
What legal advice has the Minister received as to whether this proposal for a cap conflicts with EU law, with TUPE law or with the Information and Consultation of Employees Regulations?
Nick Boles
We keep going around this merry-go-round. The Government receive a great deal of legal advice from their own officers and sometimes they seek other advice. We do not publish that advice; we are satisfied with the compatibility of all our proposals with all the laws and treaties to which we are signed up. Any cap on facility time will only apply prospectively. It is, on the other hand, possible in theory—though, as I have said, unlikely in practice—that a cap may apply to ongoing, legally-binding relationships; either legally enforceable terms in a collective agreement, or in the contractual rights of individual employees. This is what is flagged in the European convention on human rights memorandum to the Bill. The Government acknowledge, however, that even the potential impacts upon pre-existing contractual arrangements should be fully debated. That is why we considered the affirmative procedure to be necessary to provide the correct level of parliamentary scrutiny.
Before asking hon. Members to withdraw their amendment I want to respond to a question, which is not specific to this amendment, about the devolution settlement. The devolution settlement does not define which individual Ministers in the Government can do things. It defines which areas of policy are devolved and which are not. We have established, and there is general consent—although it might well be wished otherwise—that employment law is not a devolved policy but a reserved policy, and therefore Ministers in the UK Government are entitled to exercise those reserved powers in relation to their responsibilities. That does not imply that, say, the Secretary of State for Health, would be breaching the devolution of health to the Scottish and Welsh Governments by exercising the reserve powers under employment law in the way that we have outlined.
Chris Stephens
First, can the Minister confirm that the Scotland Bill has still to reach the end of its parliamentary journey and so the issue of devolving employment law has still to be settled? The Secretary of State for Scotland is considering that matter, as I moved the devolving of employment law in Committee.
Secondly, can he confirm which Government Ministers will have the reserve power to dictate facility time for local government and health in Scotland?
Nick Boles
It is very clear. First, we are following the Smith commission recommendations. It may be the case that a particular Bill has not yet received Royal Assent and anything is possible, as we are in the process of discovering in our vibrant parliamentary democracy. No doubt, if there is an unexpected result, future legislation will be adjusted to reflect it. The Government’s intention to follow the Smith commission recommendations that employment law remains a reserved policy is very clear. It would be odd if we brought forward a Bill that conflicted with another Bill that we were trying to take through Parliament at the same time by presuming that that Bill was going to fail. We are presuming that the Bill will succeed, because we are following the Smith commission.
I have been clear that Ministers of the Crown can exercise the reserve powers that are reserved to the United Kingdom Government. There is no detailing that this Minister can do this and that Minister can do that. We are all Ministers of the Crown and the reserve powers of the UK Government are clearly set out in the Bill.
Stephen Doughty
What the Minister is admitting is quite extraordinary. The hon. Member for Glasgow South West mentioned the Scotland Bill. There is also a debate about a draft Wales Bill, which many Members of this House and the Welsh Government consider rolls back the devolution settlement. This seems to be a further rolling back. I draw the Minister’s attention to the comment from the Minister for Public Services who, on hearing the Minister’s claims on Thursday, said:
“This confirms our assertion that the UK Government cannot impose these regressive changes on Wales and any change will require our consent.”
Is the Minister proposing to take the Welsh Government to the Supreme Court if they refuse to implement the Bill?
Nick Boles
He would say that, wouldn’t he? He is a member of the hon. Gentleman’s party and he disagrees with the Bill. I entirely respect that, but the fact remains that employment law—to which all these provisions relate—is a reserve matter in the Smith commission proposals that all parties and certainly his party signed up to. We are currently taking Bills through Parliament which will implement the Smith commission proposals in full, therefore all our proposals, including proposals on facility time are entirely consistent with the devolution settlement. On that basis, I ask him to withdraw the amendment.
Stephen Doughty
I did not expect the Minister to do anything other than stick to his guns, but I find it extraordinary. There are very serious questions, not only about how the measure cuts across existing conventions and legal treaties and provisions that we are party to. I hope the Government’s legal advice is very good because I suspect there may be a number of significant challenges to the Bill.
I remain astonished at the admission that the executive powers that have been devolved since 1999 to the Welsh and Scottish Governments are being exposed as limited by the Bill. On top of the debates on the Scotland Bill and the draft Wales Bill, that is extremely revealing. Has the Minister had consultations with the Secretaries of State for Scotland and Wales about this?
Chris Stephens
Does the shadow Minister take the same view as I do, given the Minister’s answer, that there has been no discussion with devolved Administrations as to how this would be enacted? It should require a legislative consent motion—a point that the Minister omitted from his remarks.
Stephen Doughty
It is certainly the view of the Welsh and Scottish Governments that they may well require a legislative consent motion to be passed in order for the legislation to go forward. The level of consultation at a whole series of stages of the Bill, before and during the process, has been very weak. I think that is reflected in the potential undermining of the clause in many respects by existing provisions to which we are party.
Stephen Doughty
I beg to move amendment 53, in clause 14, page 11, line 7, leave out subsection (2).
The Chair
With this it will be convenient to discuss the following:
Amendment 69, in schedule 1, page 18, line 4, at end insert—
‘(b) to take representations from the trade union or unions who are the subject of such an investigation”
The amendment would require a person investigating a breach of an obligation by a union to take representations from the union concerned.
Amendment 70, in schedule 1, page 19, line 4, after “Certification Officer”, insert
“and the trade union or unions who are the subject of such an investigation”
The amendment would require the interim report of the person investigating a breach of an obligation by a union to be sent to the union concerned.
Amendment 71, in schedule 1, page 19, line 7, after “Officer”, insert
“and the trade union or unions who are the subject of such an investigation”
The amendment would require the final report of the person investigating a breach of an obligation by a union to be sent to the union concerned.
Stephen Doughty
After a lively start to the Committee, we now come to the provisions of the Bill that deal with the certification officer. Although the position of certification officer is familiar to many members of the Committee, it does not normally get a lot of attention, although it will in this debate because of the huge extension and change to its remit proposed by the Government.
When we debated clause 6, we discussed how the certification officer will be given powers to gather information on industrial action taken by trade union members, and how trade unions will be required to publish details of all industrial action and ballots in their annual return to the certification officer. When read in isolation, clause 6 poses a risk to the neutrality of the certification officer in the regulation of trade unions. When read alongside other clauses in the Bill, however, and particularly clause 14, it amounts to a vast extension to the role, remit and powers of that position. The clause will insert into the 1992 Act new schedule A3, which is schedule 1 to this Bill, and give effect to schedule 2, which also amends the 1992 Act. As a result of those changes, trade unions will face significant new obligations and further blue tape, as we have discussed, because they will have to report to the certification officer annually on when industrial action takes place and on political fund expenditure.
The provisions will give the certification officer new, wide-ranging investigatory powers on matters such as the register of members, elections, the political fund and union mergers. For example, if the certification officer thinks that there is good reason to do so, they will have the power to demand the production of any documents relevant to their investigation. Furthermore, if they believe that a union has failed to comply with its duty, they may appoint inspectors who can require the production of documents, as well as the attendance and assistance of any persons believed to have information relevant to the investigation. Failure to comply may lead to the certification officer imposing an enforcement order, which carries punitive sanctions.
The TUC believes that those new powers represent a major new intrusion by the state into union affairs and union members’ rights to privacy. The certification officer will—I find this quite extraordinary—be able to initiate an investigation against a trade union even though they have not received a complaint from a member of that union. That power applies to rules governing elections, political funds and union mergers. The TUC is concerned that the certification officer will be expected to act on complaints and intelligence provided by third parties, including employers. We need to discuss that in detail because it provides wide grounds for fishing expeditions, sabotage actions and engagement by people who are not involved in a dispute, but simply want to cause problems, and to provoke legal proceedings and investigation or action by the certification officer.
We have heard from many people who are concerned about the provisions, and such concerns were reaffirmed in oral evidence by legal experts including Thompsons Solicitors. The United Kingdom’s judicial system is lauded by many around the world, and the Minister should note how its founding principles stand in complete contrast to how the certification officer will be able to act. It is important for the Committee to understand that the certification officer will have the power to bring a complaint against a trade union, to investigate the issue, to decide which witnesses will be called, to cross-examine them, to make a decision on the matter, and then to impose a fine on the union that they have investigated and on which they have adjudicated. I cannot overemphasise the point, which was also made by many of our witnesses, that this is simply not consistent with the principles of natural justice or the founding principles of our legal system, which include many checks and balances, not least the separation of powers.
It is quite extraordinary that this is taking place in an era when we have finally done away with some of the anachronisms of our constitutional arrangements. As the Minister mentioned, we have been having many discussions about this—I am sure that we could have a lengthy one about the other House if we wished to—and the fact is that in recent years we have moved forward. We have separated out the roles, and we no longer have the head of the judiciary sitting as the Chair of proceedings in the other place, as a member of the Executive and of the Cabinet, while that Chamber also acted as the highest court of appeal in this land. That was separated out, and we now have the Supreme Court, the independent Judicial Appointments Commission, a Lord Chancellor who is a member of the Cabinet but not of the other place, and so on and so forth. We have taken that step, and rightfully so, to separate the Executive from the judiciary and to remove the blurring of powers, yet the Government are now effectively merging all those powers together in the role of someone who, I am pretty sure, would not want those powers in the first place, and has had a very limited role until this point.
This seems to be an attempt to politicise a position so that it can be used in a very wide-ranging way, and to interfere fundamentally with the rights of trade union members up and down this country. When the provisions are considered alongside other clauses in the Bill, they do look very sinister. I am sure that the Minister will say, “Oh don’t worry, it will be fine. The certification officer will only engage once in a while if something really terrible happens,” and so on and so forth, yet he is proposing to grant huge, wide-ranging powers which, given the previous clauses we have debated, are deeply sinister. We believe that this clause and the relevant schedules are excessive, so we shall oppose them.
I turn briefly to our amendments. Amendment 53 would prevent the insertion into the 1992 Act of schedule 1, which provides for the certification officer’s new investigatory powers. Amendment 69 would provide that any person investigating a breach of an obligation by a union must allow that union to make representations before any decision is taken, which would be absolutely consistent with the principles of natural justice. I find it extraordinary that it is the certification officer who will decide which witnesses to call and to whom they will speak before making a decision. If we are talking about powers that affect the rights of trade unions, it is crucial that, at the very least, those involved should be allowed to make representations that are relevant to the matter at hand.
Amendment 70 would require any person carrying out an investigation to send the union a copy of the interim report at the same time that it is sent to the certification officer. Again, that is only fair. If such decisions are being made, at the very least the parties to the dispute should receive a copy of the report. Amendment 71 would require that the final report relating to an investigation would also be sent to a relevant union.
I hope that the Minister can explain both the intent behind these wide-ranging changes—we will come on to other parts of the role shortly—and how the process sits with the principles of natural justice in this country. I hope that he will also set out whether there will be any safeguards to prevent the officer from interfering unwillingly, or from being forced to interfere in the affairs of unions without just cause.
Jo Stevens
It is a pleasure to serve under your chairmanship, Sir Alan.
The Bill would, if enacted, fundamentally change the role of the certification officer from a neutral arbiter of disputes to a state snooper and enforcer. We have heard the concerns of legal experts, Liberty and others about the implications of these changes for civil liberties, and about the likelihood that they infringe article 6 of the European convention on human rights, on the right to a free trial, and well-established principles in common law on natural justice. No one should sit as a judge in their own cause.
I repeat those concerns today, for the record, in the light of the Government’s changes to the ministerial code, which were quietly sneaked out last Thursday via a ministerial statement in the other place. Until the code was changed last week, it used to refer in its opening paragraphs to an
“overarching duty on ministers to comply with the law including international law and treaty obligations and to uphold the administration of justice and to protect the integrity of public life”.
That duty to comply with international law and treaty obligations, and to uphold the administration of justice, has just been deleted from the ministerial code. It may be a complete coincidence that, at the very point when this Bill is coming under a barrage of expert criticism for its breaches of international law and treaty obligations, the Government have decided to do away with the requirement for Ministers to uphold those laws. Will the Minister explain what possible justification there is for such a change to the standards against which Ministers are held accountable? Why was not Parliament consulted on the change?
Ian Mearns
I was interested to see a TV interview this morning in which the former editor of Conservative Home suggested that the provisions with which the Government are having problems in the House of Lords were in their manifesto, but that as they did not expect to win the election, they did not expect to have to enact many things that were in that manifesto. That theory is very interesting, as it is possible that the Government did not expect to have to enact the Bill.
Jo Stevens
My hon. Friend makes a valid point. I think that we will see more of that during this Parliament.
What was the inspiration for the changes? The Government propose to give the certification officer a whole armoury of weapons. They will be able to investigate, demand documents, demand explanations and start proceedings, which they themselves will hear, acting as prosecutor and judge, before giving a verdict and delivering a sentence. They will be able to impose a fine and, as we heard in evidence, a quasi-criminal sanction. This is an extraordinary attack on the rule of law.
Certification officers’ powers will be extended into areas that have historically been way outside the remit of the role. The CO’s role is to regulate the internal workings of unions and their relationship with their members. That is clear from the existing jurisdictions and procedures involving complaints by union members. The certification officer’s website states that his role is to
“maintain a list of trade unions…ensure compliance with statutory requirements for annual returns…determine complaints concerning trade union elections…rules”
and trade union mergers,
“oversee the political funds”
and
“certify the independence of trade unions”.
That work involves seven staff, and the net cost of the certification officer’s office, according to his most recent annual report of July this year, was £560,232. That represents a 3.7% decrease. Hon. Members might think that that is good value for money, yet the Government want to increase massively bureaucracy, cost and intrusion.
I also note from the annual report that in March 2015, the certification officer’s premises were found to be structurally unsafe. I fear that the proposals in the Bill are equally structurally unsafe. No longer will the CO’s role be confined to legitimate complaints that are not ruled out as scandalous, vexatious, hopeless or misconceived. The real purpose of the proposals was revealed in the questions from the hon. Member for Banbury to Professor Ewing in Committee on the afternoon of 15 October. The hon. Lady envisaged the certification officer being required to take action at the behest of
“someone with a legitimate cause for complaint—someone who is affected by strike action…The certification officer himself might be able to take a view that it was appropriate to investigate non-compliance.”––[Official Report, Trade Union Public Bill Committee, 15 October 2015; c. 131, Q352-354.]
Professor Ewing was understandably perplexed by that question, as even the certification officer’s expanded role would not encompass non-compliance with industrial action requirements, yet it is clear that Government Members believe that it should, and that the certification officer should act as a state enforcer who steps in at the behest of any individual to interfere in the workings of trade unions. One can imagine that the Conservative party’s friends in the TaxPayers Alliance will be keen to waste more public money and resources by pestering the certification officer on all manner of issues and seeking enforcement orders on unions, especially in the light of the oppressive reporting requirements on industrial action and political funds.
The situation shows that the Government and Conservative Members are proceeding on the basis of a fundamental misunderstanding of the law and of the role of a certification officer. They are creating a bloated and distorted role that undermines the independence of the office and offends universally accepted legal principles. As a final insult, they will require trade unions to pay for the privilege. Under the Conservatives, we are used to attacks on trade unions, but now we will have an open-ended tax on trade unions—a blank cheque—on which unions will have no say and no control. It is taxation without representation at its most extreme, enabling ideologically motivated complaints to target union resources. It is another direct, politically driven attack on the finances of unions and their capacity to represent their members.
Chris Stephens
The hon. Lady is making an excellent speech. Is it not ironic that trade unions are being asked to contribute to the costs of a certification officer, but will be prohibited from contributing to employers administering check-off?
Jo Stevens
The hon. Gentleman makes a valid point that shows the inconsistencies throughout the Bill.
I hope that the Government will rethink their proposals on the certification officer. I believe that they should be withdrawn, as they are pernicious, and that the current role of the certification officer, which is widely respected, should be retained. To do otherwise betrays a disdain for independence, impartiality, fairness and, most importantly, the rule of law.
Ian Mearns
I rise to support the amendments. The clause will increase substantially the investigation powers of the certification officer, giving him or her powers to investigate the activities of a union even when a complaint has not been received from a member of that union, or from any trade union member at all. Surely the provision completely misses the point of a trade union certification officer’s role. Trade unions are independent organisations whose function is to represent the interests of their members. Whether or not this Government approve of trade unions, the fact remains that they perform a legitimate—some would say essential—role within a free society.
The certification officer performs a vital role, but that role does not and should not involve attacking the rights of trade unions and their members who, after all—apologies to my colleagues from north of the border—are citizens of the United Kingdom. The role of the certification officer is to protect the rights of trade union members by ensuring that unions operate openly, democratically and at all times in the interests of their members. The guidance on the Bill describes the provision as giving the certification officer new enforcement powers so that action can be taken without the need for an application or complaint from a member to be received first. The certification officer will therefore be able to investigate and take enforcement action in a number of areas where that is currently not possible or appropriate. In particular, the guidance states:
“For example the Certification Officer could act upon information or concerns he had received from a third party or on his own initiative.”
That provision is totally unacceptable in a free society.
There are more than 6 million trade union members in the UK. They are all intelligent and fully capable of raising a complaint or concern with the certification officer if they have a problem with their trade union. Why does the certification officer need powers to act when not one single trade union member raises a concern? On whose complaint or on whose authority will the certification officer act? We all know on exactly whose authority that will be. Every scare story and sensationalist headline in the “Daily Wail” or the “Daily Hexpress” will be followed up. Six million members may be completely content and satisfied, but the editor of the “Daily Wail” screaming about Len McCluskey, Sir Paul Kenny or Dave Prentis having the bare-faced audacity to stand up for their members will in future be the subject of a full investigation. That is a total waste of time, and the costs of such investigations will be passed on to the trade unions, which will have no alternative but to pay.
Chris Stephens
Does the hon. Gentleman agree that the provision could lead to more malicious complaints being sent to the certification officer? It could lead to fascist organisations making complaints about the funding of anti-racist groups.
Ian Mearns
The hon. Gentleman makes a valid point. Once enacted, the provision will give the certification officer the right, or possibly even the duty, to act on any complaint, no matter its source. That is a matter of grave concern. The provision is concerning and an expensive waste of time for trade unions.
As a means of restricting the rights of trade unions and their members, the provision is nothing short of disgraceful, and that has been borne out by the evidence from a whole range of international organisations and lawyers representing many interests. The provision will turn the certification officer’s role from one of protecting trade union members into one that is highly political. They may be forced to react to politicians and newspaper editors, instead of members. Where the certification officer becomes the investigating power, they will become judge and jury over trade unions, their members and officials. Trade union members—the ones we are all concerned about with the Bill—will have to foot the bill while having no easy mechanism to hold the certification officer to account for their actions.
Nick Boles
The Government believe that it is entirely appropriate for a modern regulator to be able to investigate properly when non-compliance with statutory requirements is suspected. The idea is nothing new, as the Electoral Commission and the Charity Commission have investigation powers that can be used proactively when they suspect a breach.
The powers are important because we want the certification officer to be able to determine as quickly and efficiently as possible whether there is a problem so that that can be swiftly remedied. If no problem is found, the quicker the doubts, representations and complaints can be dismissed, which is better for everyone concerned, including unions, employers and the public. The Bill therefore extends the certification officer’s investigatory powers into a number of areas: political funds; union mergers; union leadership elections; and the appointment of a person to, or the failure to remove a person from, a union office when they have been convicted of certain financial offences. To ensure that all the certification officer’s investigatory powers are set out in one place in statute, the Bill also replicates not-yet-commenced investigatory powers in relation to statutory requirements to maintain an accurate register of members’ names and addresses.
We want the certification officer to have investigatory powers in those areas because they relate to statutory requirements that are not only of concern to union members, but of wider relevance to the general public. Members of the public need the assurance that unions are complying with statutory requirements, and they will be given that assurance if the certification officer is able to investigate of his own volition. The investigatory powers will also allow the officer to bring in additional resources or specialist knowledge, should an investigation prove complex and technical. That will give them flexibility when choosing an appropriate inspector, including a third party, to deal with such investigations and then resolve them swiftly and effectively. It will also assist their ability to manage the certification office’s workload, should there be a sudden spike in cases.
Ian Mearns
The Minister seems to be implying that there is zero chance of the certification officer being a political appointment in future.
Nick Boles
There is no proposal to change the appointment procedure for the certification officer. As the hon. Member for Cardiff Central reminded us, the appointment is made in consultation with ACAS. I remind the Committee that ACAS is currently run by Brendan Barber, the former general secretary of the Trades Union Congress. The idea that we are going to be able to stuff in some political stooge is somewhat far-fetched, like almost everything that Opposition Members have said during the Committee.
On amendments 69, 70 and 71, I am happy to reassure Members that a union will continue to have the opportunity to present its case in written representations to the certification officer before a declaration is made. The officer may also allow the union to make oral representations. That right will also apply before the certification officer issues a financial penalty or conditional financial penalty. In practice, a union may have several chances to reply to any allegations and put forward a defence. Any inspector appointed is likely to make a series of enquiries, which will include dealing with the union directly, before providing their report to the certification officer.
Finally, the union will be able to appeal a certification officer’s decision to the Employment Appeal Tribunal. That will ensure that a union has the opportunity to make further representations to an independent tribunal should it believe a decision made by the certification officer was unlawful. I therefore urge the hon. Gentleman to withdraw the amendments.
Stephen Doughty
I welcome the Minister’s clarification on those last points. Given that, I am content to withdraw the amendments, but I hope that when we discuss the subsequent groups of amendments the Minister will explain what other position in Government has the same range of investigatory, adjudication and enforcement powers in the hands of one individual. It would be useful to understand the sort of comparisons we are looking at. The powers are very wide-ranging and the situation is very blurred.
The Minister has given assurances that the position will remain independent and so on, but he mentioned a spike in cases: perhaps he suspects that there might be such a spike. Opposition Members have expressed concerns about the malfeasance that might be attempted by, for example, a fascist group or someone else who wanted to tie up the certification officer’s time or, indeed, a union’s finances in dealing with a bunch of illegitimate cases in order to disrupt and cause problems. That would be of great concern. I hope that the Minister can explain that in subsequent debates, but for now I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Stephen Doughty
I beg to move amendment 54, in clause 14, page 11, line 9, leave out subsection (3).
The Chair
With this it will be convenient to discuss the following:
Amendment 55, in clause 14, page 11, line 11, at end insert—
‘(4) For the purposes of this section and the Schedules to which it gives effect complainant and applicant must be—
(a) a member of the union which is the subject of the complaint or application.”
Amendment 66, in schedule 1, page 17, line 7, leave out “or any other person”.
The amendment would restrict the power to require the production of documents to the Certification Officer and his or her staff.
Amendment 67, in schedule 1, page 17, line 47, after “obligation,”, insert
“where a complaint has been received from a member of the relevant trade union, and where there the Certification Officer reasonably believes there is evidence that indicates a breach of a relevant obligation”.
The amendment would require a complaint to be made by a union member and for the Certification Officer to reasonably believe there was evidence of a breach of an obligation before the Certification Officer initiated an investigation.
Amendment 68, in schedule 1, page 18, line 1, leave out “or other persons”.
The amendment would require a person investigating a breach of an obligation by a union to be a member of staff of the Certification Officer.
Amendment 56, in clause 15, page 11, line 16, after “32ZB”, insert
“and where a valid complaint has been made by a member of the trade union or unions relevant”.
The amendment would provide that only after a valid complaint from a union member can the Certification Officer make a declaration that he is satisfied that a union has failed to comply with the requirements for the annual return in respect of industrial action or political expenditure.
Amendment 57, in clause 15, page 12, leave out lines 16 to 19.
The amendment would prevent a union member who was not party to a complaint giving rise to an enforcement order implementing the order.
Amendment 58, in clause 16, page 13, line 3, leave out
“the applicant or a person mentioned in subsection (5B)”.
The amendment would limit enforcement powers to the Certification Officer.
Amendment 59, in clause 16, page 13, line 6, leave out “or the applicant”.
The amendment would limit enforcement powers to the Certification Officer.
Amendment 60, in clause 16, page 13, line 9, leave out
“the applicant or a person mentioned in subsection (6)”.
The amendment would limit enforcement powers to the Certification Officer.
Amendment 61, in clause 16, page 13, line 12, leave out
“the applicant or a person mentioned in subsection (5C)”.
The amendment would limit enforcement powers to the Certification Officer.
Amendment 62, in clause 16, page 13, line 15, leave out
“the applicant or a person mentioned in subsection (8)”.
The amendment would limit enforcement powers to the Certification Officer.
Amendment 63, in clause 16, page 13, line 18, leave out
“the applicant or a person mentioned in subsection (5C)”.
The amendment would limit enforcement powers to the Certification Officer.
Amendment 64, in clause 16, page 13, line 21, leave out
“the complainant or a person mentioned in subsection (4A)”.
The amendment would limit enforcement powers to the Certification Officer.
Amendment 65, in clause 16, page 13, line 25, leave out
“the applicant or a person mentioned in subsection (7)”.
The amendment would limit enforcement powers to the Certification Officer.
Stephen Doughty
The Bill needs so many amendments because of its complex nature. A lot of information and important detail is contained in the relevant schedules, and it is necessary to apply the changes that we want to make to all the relevant parts of the Bill. I will go through the amendments briefly without repeating our arguments and overall concerns about this part of the Bill.
Amendment 54 would remove schedule 2, which includes provisions permitting the certification officer to carry out investigations, even though no complaint has been made by a union member. Amendment 55 seeks to ensure that the certification officer only carries out an investigation against a union where a complaint or application has been received either from a union member or an employer who employs union members. The amendment aims to tease out our concern about who might bring investigations or complaints.
Amendment 66 would mean that only the certification officer or his or her staff—and not inspectors—would have the power to require the production of documents from unions during an investigation. This is an important point because the Minister made a case in his comments on the preceding group about a potential spike in cases and the need for additional inspectors to help the certification officers conduct their work. That is a very worrying suggestion. While the Minister might give us assurances about the independence and conduct of the certification officer under the new role, appointing a legion of inspectors under them who have some sort of quasi-judicial role separate from existing legal authorities or police does not reassure me about the way in which they would conduct themselves. Will the Minister explain how he sees their role and what constraints they would operate under?
Amendment 67 would mean that the certification officer could only initiate an investigation if they have received a complaint from a member of the relevant union and if they believe there is evidence that the union has breached one of its statutory duties. The aim is to ensure that the certification officer—or one of the inspectors—does not initiate investigations on their own volition or go on fishing expeditions through union records when they have not received a complaint from union members. Does the Minister believe that the certification officer would be allowed to undertake such investigations without complaints being made by a relevant party, particularly where a complaint from the union member involved has not been received? In my view, certification officers should not have the ability to wander around initiating investigations here, there and everywhere without any just cause.
Amendment 68 would mean that only the certification officer or members of his or her staff could investigate a union. Amendment 56 would mean that the certification officer could only make a declaration that a union has failed to comply with the new reporting requirements if they had received a valid complaint from a member of the relevant union. Again, this is to ensure that the certification officer does not initiate investigations on their own volition if no one has complained. Amendment 57 would prevent a union member who was not a party to the relevant complaint seeking to enforce an order made by the certification officer.
It is a very odd set-up where, on our reading of the legislation, somebody who is not involved at all could look at a decision that has been made and then seek to enforce the order. If that is not the case, can the Minister confirm that on the record? The role of organisations such as the TaxPayers Alliance has already been commented on. Many individuals and organisations would attempt to undertake vexatious expeditions, perhaps on the back of fishing, to attempt to enforce orders against trade unions, which would already have spent quite a lot of their own funds in dealing with the complaints. They would potentially then have to fight attempts by another individual who was not even involved to try to enforce the orders made under this clause and the schedules.
Amendments 58 to 65 would further limit the enforcement powers of the certification officer and define their role rather than that of others who might be involved in potential enforcement. The amendments are designed to tease out various concerns we have about the way in which the legislation is drafted and would be applied in practice. I will be interested to hear what the Minister has to say and whether we seek to press any of the amendments to a vote.
Nick Boles
On amendments 54, 55, 56 and 67, the current enforcement regime is limited. With the exception of statutory duties in relation to financial records and as of next year the membership register, the certification officer may only make inquiries and take action following a complaint from a union member. That is not satisfactory. A modern regulator should be able to take action as appropriate where they suspect that there has been a potential breach of statutory duties or obligations. That is not new: the Electoral Commission and the Charity Commission both have such powers. The powers will enable a certification officer to take enforcement action once he has made inquiries and only if satisfied that there has been a breach of statutory duties or obligations in relation to the new reporting requirements. It would be wrong to restrict the exercise of the certification officer’s powers simply to responding to a complaint as the amendments seek to do, so the Government cannot support them.
Amendment 67 additionally seeks to change the test for the use of the officer’s powers of investigation. Currently, the officer may request documents when it is believed there is good reason to do so and appoint an inspector in circumstances that suggest a trade union has breached a duty. The amendment would require the certification officer reasonably to believe that evidence indicates a breach of duty.
It is important to note that the amendment relates to the test of the use of investigatory powers, not the basis on which the certification offer can make a determination that there has been a breach. Of course, there must be evidence and investigatory powers are about gathering that evidence. The tests we propose for the use of the investigatory powers are essentially the same as those that apply to the officer’s long-standing powers to investigate potential breaches of financial affairs under the 1992 Act. Those tests have been in place for a long time.
The investigatory powers are intended to assist with determining whether there has been a breach. The officer will still have to give the union the chance to make representations and then be satisfied that a breach has actually occurred before taking any enforcement action. If a trade union believes that the certification officer has acted beyond his powers or that the officer has made a mistake in applying the law when reaching a decision, it can still appeal to the Employment Appeal Tribunal. I therefore believe that adequate safeguards are already in place.
I turn to the enforcement of the certification officer’s orders. Amendments 57 to 65 aim to restrict the enforcement of orders to the officer exclusively. In tabling the amendments, the hon. Gentleman seems to be under the impression that we are trying to subcontract enforcement of the officer’s orders to individual union members. I assure him that that is not the intention. We simply seek to reflect the current situation in which complainants and other members of the relevant trade union are entitled to apply to a court to enforce obedience with the officer’s orders. That is nothing new; indeed the 1992 Act is clear on that point.
Stephen Doughty
Will the Minister clarify whether he believes it would be reasonable for someone who was not a party to a dispute—the TaxPayers Alliance, for example—to attempt to enforce an order or be involved in such an enforcement?
Nick Boles
As I think I just explained, it is currently the case under the 1992 Act that complainants as well as other members of the relevant trade union are entitled to apply to a court to enforce obedience with the certification officer’s orders. If such a body had been a complainant, there had been a process and the certification officer had made an order, under the provisions of the 1992 Act it is entitled to apply for enforcement of that order. There is nothing new in that; that has been in place since 1992 and, needless to say, throughout the period of the previous Labour Government.
Amendments 66 and 68 seek to restrict investigation activities, including the power to demand documents from a trade union, to the certification officer’s own staff. I understand concerns in relation to data protection and confidentiality, but the ability to appoint a third party gives the officer discretion to identify an inspector with specific expertise or simply to bring in additional resource should that be necessary.
Some investigations might be complex, technical and lengthy, so the officer’s permanent team may not have the time to carry them out. The amendment would reduce the officer’s flexibility in choosing an appropriate inspector to appoint, should such a case arise. It is important to note that the ability to authorise or appoint people to assist with investigations in that way is not new. It is exactly the same as the options currently available as part of the certification officer’s long-standing powers to investigate financial affairs. All the Bill does is to provide similar powers of investigation in relation to other potential breaches.
Stephen Doughty
I want to test the Minister a little more on inspectors. He says that there is nothing new, but he spoke previously about a potential spike in cases leading to an increased need for inspectors to help the certification officer carry out their duties. Will he tell the Committee—if he cannot do so now, perhaps he could write to us—how many inspectors would be required, whether there would be a cap on the number of inspectors that the certification officer could appoint, where those costs would be met from, whether there would be any cap on the cost and what sort of qualities would be required in the recruitment and employment of those inspectors by the certification officer?
Nick Boles
I am happy to write to the Committee with that information. I would like to correct something that I said previously, in case I created a false impression. I had not understood that a complainant has to be a member of the trade union. Under the 1992 Act, any member, whether a complainant or another member, can enforce the certification officer’s orders. That is what we propose to replicate for these other powers. Except in the unlikely event that the TaxPayers Alliance decided to join all the trade unions that it wanted to complain about, it is unlikely that it would be in a position to enforce those orders.
Stephen Doughty
So just to clarify, it would not be appropriate for vexatious individuals outside the dispute, who were not members, to attempt to involve themselves in the enforcement of orders or the investigations.
Nick Boles
That is exactly right. I apologise to the Committee if I created a slightly false impression.
Chris Stephens
Just so I am clear, is the Minister indicating that he is amenable to amendment 55, which would provide that the complainant must be a trade union member? He said earlier that he was going away to consider some aspects of picketing, in relation to what could be defined as outside interference.
Nick Boles
No, I am not indicating that, but we believe that the Bill already makes it clear who has the power to complain and who has the power to enforce. Moving on, I have explained that the appointment of investigators is not new; it happens under existing powers regarding the investigation of financial matters, and the Bill simply extends it to other potential breaches. The new investigatory powers contain specific provisions to impose a duty of confidentiality on any inspector that the certification officer appoints to prevent the unauthorised disclosure of personal information about union members. I therefore ask Opposition Members to withdraw the amendment.
Stephen Doughty
The Minister has provided helpful clarification on a number of points, but I am still not convinced that there are enough safeguards built into the Bill concerning the role and extent of investigations, and the basis on which they are made. He has said that the Bill does not change what was there before, but it will massively extend the powers of the certification officer, so I think it is only right that we look at defining limitations to those investigations, adjudications and enforcements. We may table other amendments at later stages and I would like, at the appropriate point, to press to a vote amendment 67, which would establish limits to ensure that the certification officer does not go on fishing expeditions where they have not received complaints.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 7—Certification Officer—
“For subsections (2) to (4) of section 254 of the 1992 Act substitute—
“(2) The Certification Officer shall be appointed by the Judicial Appointments Commission, and the person appointed shall have expertise in trade union law.
(3) There shall be a Certification Officer for Scotland, equal in status to the Certification Officer in subsections (1) and (2) above.
(4) The Certification Officer for Scotland shall be appointed by the Judicial Appointments Board for Scotland, and the person appointed shall have expertise in trade union law.””
New clause 10—The Certification Officer—
“In section 254 of the 1992 Act (The Certification Officer) for subsections (2), (3) and (4) substitute—
“(2) The Certification Officer shall be appointed by the Judicial Appointments Commission, and the person appointed shall have expertise in trade union law.””
Nick Boles
The previous two groups of amendments afforded us the opportunity for extensive debate on clause 14, so I do not propose to speak at length about it. It extends the certification officer’s investigatory powers and enables the officer to exercise a number of those powers without a complaint from a trade union member. It is entirely appropriate for a modern regulator to be able to investigate properly where non-compliance is suspected.
I turn to new clauses 7 and 10, and I remind the Committee that the provisions in the Bill, including those that relate to the certification officer, concern employment law and industrial relations matters. They are about how trade unions act and how they should be regulated. Those remain reserved matters for Westminster and are not devolved to Scotland or Wales. In my view, the provisions should apply across the whole of Great Britain, and I do not propose to rehearse devolution arguments here. I note, however, that section 254 of the 1992 Act requires the certification officer to appoint an assistant certification officer for Scotland and allows for the delegation of functions relating to trade unions based in Scotland to that assistant certification officer for Scotland. I believe, therefore, that the 1992 Act sufficiently caters for Scotland’s needs and that appointing a separate certification officer for Scotland is not necessary, especially since the 1992 Act provides a regulatory framework for the whole of Great Britain.
Turning to the proposal that the Judicial Appointments Commission should be responsible for the selection and appointment of the certification officer, I do not agree that the certification officer is a judicial office. Currently, the certification officer has a range of functions—administrative, investigatory, regulatory and adjudicatory —all of which are important aspects of the office. Hon. Members will note that the Bill further increases those investigatory and regulatory functions. It would not be correct, therefore, to describe the certification officer as a judge or other holder of judicial office.
It has been long-standing practice that the certification officer should be a ministerial appointment; a practice not, I believe, challenged or questioned by the previous Labour Government. Such appointments are typically made following Department for Business, Innovation and Skills public appointments practice: a panel, which includes an independent panel member, as well as representatives from the CBI and the TUC, considers applications and makes recommendations to BIS Ministers. In making its recommendations, the panel must only put forward names of candidates that are appointable—that is, who have demonstrated competence to perform the role. It is then for the Secretary of State to make the final decision on whom to appoint. This is nothing new and certainly nothing unusual.
I am keen to stress that the certification officer is, and always has been, independent of Governments of whichever party. Ministers have never directed what the certification officer does. Indeed, no one has suggested otherwise since 1975, when the office was set up. The certification officer is appointed by the Secretary of State after consultation with ACAS, but as his annual report, deposited in the Libraries of both Houses of Parliament, points out, he is independent from both ACAS and the Secretary of State for Business, Innovation and Skills. As the Committee knows, we want to enhance the role of the certification officer to ensure robust and effective regulation of trade unions. We want to modernise this regulatory role to bring it up to date with a new, modern system for industrial relations. Our changes increase the regulatory aspects of the role. The Government do not therefore think that appointment of the certification officer by the Judicial Appointments Commission is appropriate.
Turning to the proposal that the certification officer should have expertise in trade union law, I agree, of course, that the certification officer should have knowledge of trade union law, but I do not believe that it is necessary to prescribe this in legislation, primarily because to do so risks limiting the range of candidates that could perform the role in future. In any case, the recruitment panel will only recommend to Ministers appointable candidates for the role of certification officer and those candidates will need to demonstrate to the panel that they have full competency for the role. For these reasons, I ask hon. Members to withdraw the new clauses.
Stephen Doughty
I am somewhat bemused by the Minister’s comment that the certification officer is not a judicial officer. He has explained the wide powers that the certification officer has, so I am very interested to know what positions the Government consider to be comparable. Most people would consider the certification officer to have a quasi-judicial role, at the very least, and therefore we need some very strict controls about how it is regulated. The crucial point is that we are moving well beyond the original role set out for the certification officer. As my hon. Friend the Member for Cardiff Central said, this is not to comment on the suitability or the work that has been done by the current certification officer, who, from all my experience and that of the stakeholders I have engaged with, has done a very good job, but this is a complete change in the role and its powers. That change requires a fresh look at how the certification officer is appointed.
Our new clause would provide that the certification officer in Great Britain would be appointed by the Judicial Appointments Commission. Currently, as we have heard, the role is appointed by the Secretary of State for Business, Innovation and Skills in consultation with ACAS. The Minister went through the process of shortlisting and so on, and obviously, it is great that a number of stakeholders are involved. However, of course the final decision rests with the Secretary of State and that, again, gives wide latitude to a Secretary of State to veto or to appoint someone partisan or political. Given the nature of the rest of the Bill, many of us might strongly suspect that that would happen.
The Secretary of State for Business, Innovation and Skills of course regularly consults many different stakeholders, but as we saw in debates about the steel industry he seems willing to ignore all the advice and carry on regardless. I have no faith as to whether things would continue in that vein, when I consider the intent and purpose of the Bill.
We all agree that the certification officer should be independent of Government and required to have expertise in trade union law rather than just knowledge of it. Demonstrable knowledge could be an ability to list by rote the clauses of the Bill. Someone who takes such a wide range of powers needs a detailed understanding of the provisions. The 1992 Act does not specify the qualifications required, but the Bill gives the certification officer extensive new powers and remits, and it is only reasonable to expect the person appointed to have expertise in that regard, particularly given the various aspects of the role.
If the Minister intends to reject the new clause, will he explain what consultation, as a minimum, he would expect for the new role? Will things just carry on as they do under the old system, with the limited involvement of the TUC, CBI and so on at the shortlisting stage, or does he envisage a wider range of people being involved? Will he give wider assurances about the type of qualifications and other requirements? Given the nature of the proposed role, we believe that the certification officer should be appointed by the Judicial Appointments Commission—that is only right—and that there should be a clear requirement for expertise in trade union law.
New clause 7 is essentially similar to our new clause in its purpose; I understand why the hon. Member for Glasgow South West and his hon. Friends have tabled it, in relation to Scotland. As I have said before in similar debates, we want the fairest settlement in the Bill for workers and trade union members across the UK, and I hope the hon. Gentleman understands that that is what we intend with our new clause. It would deal with the whole of Great Britain, not just Scotland.
Chris Stephens
As the shadow Minister said, the new clauses really deal with who should be the certification officer. If the powers are being enhanced, the new role needs to be reconsidered, because—the shadow Minister is correct—it is at the very least quasi-judicial. The aim of new clause 7 is to ensure that the holder of the post has adequate qualifications and expertise.
The Minister has said he expects the person appointed to have expertise in trade union law, but his successors may not. An adequate provision would make it clear, as the new clause does, that the certification officer should have expertise in trade union law. It cannot be someone we met down the pub, who may be able to recite all the clauses of the Bill. It needs to be someone of a very high standard, with expertise in trade union law, who knows the intricacies of that law. More importantly, the person should be independent of Government, and that is why it is appropriate in the circumstances to involve the Judicial Appointments Commission.
The new clause has another purpose. As the Minister pointed out, there is currently an assistant for Scotland. The enhanced role will have an impact on elections where they are now devolved to the Scottish Parliament, in terms of Scottish parliamentary and local government elections. If there are questions about election funding, that will be a Scottish issue and we believe it would require a certification officer in Scotland to consider it.
Also, there are differences between the legal jurisdictions. There is different civil and criminal law in Scotland, and we believe the new provisions about the certification officer can only impinge on the consideration of civil and criminal law in relation to complaints and so on. The effect of the certification officer provisions will be that Scotland will need not an assistant but a certification officer of equal status to the certification officer for Great Britain.
We have no issue with new clause 10 and we will support it in a vote, but we are seeking a Scottish provision of equal status due to the impacts that the new role of a certification officer will have.
Nick Boles
We do not accept that the Bill would dramatically expand the certification officer’s role. We are simply replicating the investigatory powers that he already has in relation to financial matters with regard to the new matters that he will have the power to investigate, so we certainly do not see any basis for changing how he is appointed. Previous Governments who were happy for him to have those investigatory and regulatory powers in relation to financial matters thought the arrangements for appointment were adequate. I commend clause 14 to the Committee and ask Members to resist new clauses 7 and 10.
Stephen Doughty
To clarify, we will press new clause 10 to a vote at the appropriate point.
Question put, That the clause stand part of the Bill.
Nick Boles
I beg to move amendment 94, in clause 15, page 12, line 23, at end insert—
‘( ) In section 45D of that Act (appeals from Certification Officer), after “31” insert “, 32ZC”.’
The amendment adds a reference to the new section 32ZC (inserted by clause 15) in section 45D of the 1992 Act. The effect is that decisions made by the Certification Officer in relation to the enforcement of the new annual return requirements provided for by clause 15 are subject to a right of appeal.
The amendment rectifies a small omission in the clause relating to appeal rights. Where a union fails to comply with the new annual reporting requirements, the certification officer will have the power under the clause to make a declaration to that effect. If the certification officer makes a declaration, he will have the power to make an enforcement order unless it is in inappropriate to do so; he will also, under clause 16 and schedule 3, have the power to issue a financial penalty.
It has always been our intention that if the certification officer makes such a declaration or order, the union will have a route of appeal to the Employment Appeal Tribunal on a point of law. That is consistent with the approach taken elsewhere in the 1992 Act. However, the clause as it stands will not provide for such rights unless a reference to the new provisions is inserted into the correct place in the 1992 Act. The amendment corrects that oversight. I trust that hon. Members will be content to accept this minor amendment.
Stephen Doughty
I appreciate the comments the Minister made. Given that this is a rare chink in the cloud that allows trade unions some rights to challenge use of the draconian powers provided for elsewhere in the Bill and in the clause, I do not intend to oppose the amendment. However, we will oppose the clause to which it relates.
Amendment 94 agreed to.
Question put, That the clause, as amended, stand part of the Bill.
Stephen Doughty
I want to ask the Minister a few questions. The clause inserts new section 32ZC into the 1992 Act and gives effect to schedule 3, which we will come to shortly. The certification officer will have a new power to impose financial penalties on unions when an enforcement order has been made, and the Government will have the power to set the level of penalties in regulations. Paragraph 6 of schedule 3 states that penalties will range from £200 to £20,000. The clause also extends the ability of individual members of a union to enforce the certification officer’s orders even if that order was no concern of theirs.
Will the Minister explain a little more about the penalties—how they will be applied, the different gradings and so on? Do the Government plan to increase the limit at any point? How often does he expect them to be used in the different categories? What size of penalty does he expect to be applied?
I also want clarification on the individual member’s ability to enforce orders. Thankfully, we had clarification from the Minister that individuals outside a dispute cannot be involved, but there is a possibility that members of the union that was party to the dispute who were not personally involved could attempt to enforce orders.
The Committee might wonder why I am worried about that, but there are circumstances in which a couple of individuals who are members of a union may be involved in malicious activity and attempt to undermine others who have taken a wider, collective decision that was endorsed by other members. I want to understand who can be involved in attempting to enforce a certification officer’s orders. Can that be any member of the union involved whether or not they were personally involved in the case? I would be grateful if the Minister would clarify those points.
Nick Boles
New schedule A4 to the 1992 Act will enable the certification officer to issue financial penalties or conditional financial penalties in those areas where he has existing powers to issue declarations and enforcement orders, which will provide a consistent approach. He will also be able to issue those penalties for breaches of the new annual reporting requirements on trade unions in relation to details of industrial action and political fund expenditure. Those areas are all listed in paragraph 1 of the new schedule.
Paragraph 4 of the new schedule requires the certification officer, before issuing a penalty, to provide written reasons for his decision, which will allow the union to know why the certification officer has found against it. The union will also have the opportunity to make written representations and may be given the opportunity to make oral representations.
Paragraph 5 of the new schedule provides for appeals to the Employment Appeal Tribunal based on an error of fact or a point of law, or on the grounds that the decision to impose a financial penalty or conditional financial penalty is unreasonable. The appeal grounds are similar to those provided for in other financial penalty regimes and will ensure that a wrong decision can be challenged.
Paragraph 3 of the new schedule provides for enforcement of conditional penalties. In cases of non-compliance, the certification officer will issue a further order requiring that a penalty be paid immediately or by a certain date. Where a union has provided evidence of partial compliance, the certification officer will have flexibility to reduce the amount of the penalty should he choose to do so. That will encourage unions to comply with conditional penalty orders while punishing those that take no steps towards compliance.
The hon. Member for Cardiff South and Penarth asked whether any member of the union about which a complaint has been made, including members who were not themselves complainants, can apply to court for the enforcement of the certification officer’s orders. My understanding is that currently, under the 1992 Act, it is possible for any union member to apply for enforcement of such orders, but I am happy to write to him with the full detail if that is helpful.
Stephen Doughty
Are there any cumulative limits on the number of financial penalties or the total amount that can be imposed on any one subject in the legislation within a year, or could numerous orders of up to £20,000 be imposed, with no limit on the overall amount sought? Obviously, due to vexatious actions or fishing expeditions and so on, a union could be subject to hundreds of thousands of pounds in penalties in a year as a result of investigations, without any kind of limit.
Nick Boles
There is no limit, but as the hon. Gentleman points out, if a union is subject to vexatious complaints, the certification officer will not find in favour of the complainant or impose a penalty. As I have explained, the union will have every opportunity to appeal any penalty imposed improperly. Although I understand the drift of his concern, the provisions already protect unions from vexatious complaints that might lead to an accumulation of penalties.
Ian Mearns
There is, of course, a downside for the trade unions even in that situation, in that it is the trade union that will have to pay for the investigation.
Nick Boles
We will move on, I believe, to the question of how the costs of the certification officer will be paid for. It is absolutely right that the Government are proposing that, in common with other regulators, the certification officer will be paid for by the regulated. However, again, if vexatious complaints are made, we have every reason to expect the certification officer, who has all the powers necessary to do so, simply to dismiss them and not to pursue them to the detriment of union finances.
On that basis, I commend the clause to the Committee.
Question put, That the clause stand part of the Bill.
Nick Boles
I beg to move amendment 95, in clause 17, page 14, line 1, leave out
“(b) payments made by ACAS under section 254(6),”.
Section 254(6) of the 1992 Act is spent: it depends on section 115 of that Act, which has been repealed. The reference to section 254(6) in the new section inserted by clause 17(1) was included in error, and this amendment removes it. Amendment 97 repeals section 254(6) itself and the reference to it in section 254(5A).
Nick Boles
Clause 17 inserts new section 257A into the Trade Union and Labour Relations (Consolidation) Act 1992, to provide the Secretary of State with the power to make regulations requiring the certification officer to charge a levy on trade unions and employer associations to recover the cost of the certification officer’s expenses. New subsection 257A(3) sets out the sorts of expenses that the regulations might specify are recoverable by the levy; this includes payments made by ACAS under section 256(6).
The payments under section 256(6) were intended to enable the certification officer to make payments towards expenditure in connection with secret ballots. However, the provision to make those payments—section 115 of the 1992 Act—was repealed more than 20 years ago by the Trade Union Reform and Employment Rights Act 1993. That in turn means that section 256(6) is not required—in fact, it should have been repealed when section 115 was repealed back in 1993. Amendment 95 corrects that oversight and repeals section 256(6). Amendment 97 completes that tidying up. It removes reference to those sums being included in the expenses of the certification officer that the regulations could require the levy to recover. I commend Government amendment 95 to the Committee.
Stephen Doughty
I accept the Minister’s point about the two Government amendments being technical in nature, so we do not intend to oppose them, but I do want to explain briefly our concern about clause 17.
As we have discussed at length, the Bill imposes significant new administrative obligations on unions in a range of matters. They face a major increase in regulation that the Government simply would not apply to other sectors in society—certainly not to business. They will also be expected to pay for the pleasure of the enforcement of the new obligations.
As discussed, clause 17 contains a power permitting the Government to levy a charge on trade unions to cover the running costs of the certification officer, which currently stand at approximately £1 million but are expected to rise. I suspect that they will rise under the new regime, given the wide expansion of powers. The levy looks set to apply to employers’ organisations—I hope the Minister can clarify this point—including the Engineering Employers’ Federation, the Electrical Contractors’ Association, the Federation of Master Builders and the National Farmers Union. The measure will apply not only to trade unions but to a whole range of employers’ organisations.
We understand that the Government are consulting on how much should be levied, but, like on so many areas of the Bill, they have not published their consultation responses, so we are in the dark on this matter. We are expected to vote on the Bill without knowing what will happen. Will the Minister explain a little more about how the levy is expected to work, whom it will be levied on and whether it will apply to the organisations I mentioned? What level can we expect it to be at? Will it rise in the future? What provisions will there be to review it? How will it be put into operation? It is not acceptable that a Committee considering matters of this nature is making its decisions largely in the dark.
Nick Boles
Trade unions and employer associations, like many other organisations, should be regulated. Proportionate regulation helps to improve confidence in the way such institutions are run, which can only be a good thing. It is only fair that the cost of such regulation falls not on the taxpayer, but on those who are regulated. I note that the previous Labour Government introduced an almost identical provision, which I believe all members of the Committee support, in the financial services industry, whereby the costs of financial regulation and the regulator fall on the members of that industry.
James Cartlidge (South Suffolk) (Con)
I ran a small financial services business and remember paying high fees, which went up steeply, to the Financial Services Authority. I recall no consultation, about which we were unhappy, but the key issue was that the regulator failed rather substantially in the credit crunch. If such payments are made here, can we have assurances that we will have a good quality system for all those affected?
Nick Boles
I am certainly trying my best to ensure that the regulation of trade unions is more effective than the regulation of the financial services industry preceding the 2008 crash. I do not think that the risks are as great, and I have been the first to point out that it is unlikely that the trade unions, which mostly do an excellent job, will crash the economy in the way that the under-regulated financial services industry did under the previous Labour Government. Sir Alan, I think you are going to say that I am moving away from the point, so I will return to it.
The clause enables regulations to be made so that the certification officer can charge a levy on trade unions and employer associations.
Nick Boles
I am going to make some progress.
It is important to understand that employer associations are also subject to the levy. The Bill does not prescribe the amount of the levy because the certification officer is independent. It is for the certification officer to decide each year how much they need to charge to cover the costs of performing their functions. We have taken the approach of providing a regulation-making power, rather than setting out in the Bill exactly how the certification officer is to determine the amount of the levy, because the Bill expands the certification officer’s role. It is only once this new expanded role is established that it will be possible to determine precisely how the regime should work. Having said that, we also recognise that Parliament and those directly affected rightly expect to see how the regime will work when Parliament is being asked to agree the detail of the legislation. That is why the Bill sets out specific parameters for the content of the regulations. It is also why the regulations will be subject to the affirmative procedure. The clause also requires consultation before any regulations are made.
To meet our objective of cost recovery, the levy must be enough to cover the cost of the certification officer’s functions, but it cannot be any more than the certification officer needs. The certification officer cannot make a profit from their activities, nor undertake spurious activities to generate funds. That is only right as the certification officer is an independent public appointment and not a commercial enterprise.
Stephen Doughty
I can understand the need for the certification officer to have a role in identifying the costs of their operations, but the Minister and the Government must have a ballpark figure. Are we expecting a doubling of the £1 million figure or an increase by a factor of 10? What sort of ballpark are we in? The people affected by the levy need to have an idea, remembering that it will apply not only to trade unions, but to the employer associations that I have listed.
Nick Boles
The hon. Gentleman is entitled to speculate on any figure he likes, but we are going to leave it to the independent certification officer to assess the additional requirement and to set an appropriate levy.
We recognise that trade unions can vary greatly in size and that employers associations are often small, meaning that the size of the regulatory functions provided by the certification officer to such organisations may vary greatly. Smaller unions and employer associations may require less of the certification officer’s time and resources.
Jo Stevens
I am pleased to hear that clarification about employers organisations. Will the Minister tell us whether federated employers organisations, such as the CBI, will be covered by the measure?
Nick Boles
My understanding is that federated employers associations will not be covered, but all other employers associations will be.
We want to be able to consider whether organisations that use more of the certification officer’s time should bear more of the cost. We will need to consult before determining whether that is the right way to proceed and will only take that approach if we find during consultation that it costs more for the certification officer to regulate larger organisations that it does for smaller ones.
Let me conclude by summarising the safeguards in the Bill on the way the levy is to operate: the amount of the levy will be limited to covering the cost of the certification officer functions; ACAS, unions and employer associations will be consulted before regulations are made; the regulations will be subject to the affirmative procedure, allowing a full debate in Parliament before they are brought into force; and the certification officer will be required to report annually on the amount levied and how that was determined, which will be published and laid before both Houses, ensuring transparency.
Question put, That the amendment be made.
The Chair
Order. Mr Stephens asked a question about EVEL earlier on, so I want to clarify that the EVEL procedures are invoked by the Speaker. The certification process takes place before the Second Reading of Bills or before something is considered as a statutory instrument, so Bills in Committee are not eligible for the use of EVEL procedures. I hope that that is helpful.
Trade Union Bill (Tenth sitting)
(8 years, 6 months ago)
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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: 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: 7 - Question accordingly agreed to.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 10 / Noes: 7 - Question accordingly agreed to.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Minister for Skills (Nick Boles)
I want to clarify a point that was made just before we adjourned this morning. The hon. Member for Cardiff Central asked whether federated employer associations such as the CBI will be covered by the levy, and I said no. Indeed, it was narrowly correct to say that because the CBI will not be caught by the levy, but it may help the Committee if I provide a little more context to my answer.
Federated employer associations would be covered by the levy, provided that they meet the statutory definition in the Trade Union and Labour Relations (Consolidation) Act 1992. The certification officer keeps a list of employer associations that have asked to be listed, as well as a schedule of those that have not applied to be listed but that the certification officer considers meet the statutory definition. The CBI is not listed, so as it stands the levy will not cover an organisation of that type. It will continue to be left to the certification officer to decide who meets the definition in the future. I will be happy to write to the hon. Lady if she would like further clarification on the statutory definitions in the 1992 Act and how they apply in practice.
Jo Stevens (Cardiff Central) (Lab)
I am grateful to the Minister. If he could write to me, that would be good.
Question put, That the clause, as amended, stand part of the Bill.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
It is a pleasure to serve under your chairmanship for our last sitting, Sir Edward. I appreciate that this may be a technical clause. It brings into effect a schedule that contains many minor and consequential amendments. Will the Minister provide a little detail about those amendments, and whether there is any substantive change to Government policy in the clause?
Nick Boles
Nothing would give me greater pleasure.
Clause 18 gives effect to schedule 4, which, as the hon. Gentleman says, provides minor and consequential amendments to existing legislation to take account of the changes to legislation brought in by the Bill. Specifically, the schedule makes amendments to the Trade Union and Labour Relations (Consolidation) Act 1992 concerning the arrangements for the register of members’ names and addresses; minor amendments to accommodate the changes that provide for an opt-in to the political fund, so that where there are references to members not being exempt there is a reference to members contributing; minor changes to the arrangements to ballots, including making clear that spoiled ballot papers are to be included in the count of those voting for the purpose of the 50% threshold; and minor changes to provisions to cross-refer to the additional requirements in the voting paper in clause 4.
The schedule also makes clear, by amendments to the Trade Union and Labour Relations (Northern Ireland) Order 1995, that the Northern Irish legislation will continue to apply to Northern Irish members of unions in Great Britain. It updates the language, so a decision to opt in under the Northern Irish legislation will be treated as a decision to opt in under the new provisions of the 1992 Act.
The schedule also amends the trade union administration aspects of the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014, which in turn also amends the Trade Union and Labour Relations (Consolidation) Act 1992.
Finally, there are other minor repeals to other employment legislation for provisions no longer needed as a result of the Bill’s provisions.
Stephen Doughty
I thank the Minister for those clarifications. I am sure that, as he suggested, a number of the elements are simply technical, but as several of them relate to facilitating the passage of the rest of the Bill and the gagging Act, which the Minister referred to using its formal name, we do not want to support them.
Question put, That the clause stand part of the Bill.
Stephen Doughty
I would not normally seek to speak on the latter clauses of a Bill, but I rise to make a point and to give the Minister one last chance to answer. The Bill’s provisions are clearly extensive, and a number of them are on extraordinarily shaky legal grounds. Will the Minister clarify whether the Government have set aside funds to consider any legal challenges that might arise once the legislation comes into force?
Nick Boles
I think I have pretty much answered that question already. We have not made a specific provision for public expenditure. Indeed, we expect public expenditure to be reduced by the introduction of the levy, which will ensure that the costs of the certification officer that currently fall on the taxpayer will fall on those regulated—the employer associations and trade unions.
Question put, That the amendment be made.
Stephen Doughty
Again, I would not normally rise to speak on such a clause, but I want to do so to underline the very many points that have been made about the potential conflict with the devolution settlement. Much of the Bill makes changes to the 1992 Act, which came into effect long before the advent of devolution in Scotland and Wales and, indeed, London, and before the increased devolution to local authorities and mayors throughout England. I merely take this opportunity to underline that point and to give the Minister another chance to say when he plans to meet his cabinet colleagues the Secretaries of State for Wales and for Scotland and when he plans to engage in discussions with the First Ministers of Scotland and Wales and the leaders of devolved local authorities across England to discuss the concerns that have been raised and whether the Bill should be amended further on Report or, indeed, in the other place.
Nick Boles
We are huge respecters of the devolution arrangements, which is why we do not propose that the Bill should apply to Northern Ireland, except in a very small measure. The position is clear: such matters are handled differently in Northern Ireland. We are equally respectful of the devolution settlement with Scotland and Wales, which is why all the provisions of the Bill apply to Scotland and Wales. They relate to employment law, which is a reserved matter.
Question put, That the amendment be made.
Stephen Doughty
Yet again, it is unusual for me to speak on such a clause, but it is important that I do because I want to give the Minister a chance to enlighten us as to when we might see some regulations under statutory instrument coming forward under the Bill. He refused to be drawn on this matter earlier in Committee, but the trade union community and many stakeholders in the Bill are hearing rumours circulating—the place is awash with rumours—that various draft regulations might be published in the very near future. Does the Minister plan to introduce draft or formal regulations within the next couple of weeks, the next month, the next six months or the next year? Perhaps he can give us an idea of the ballpark.
Nick Boles
I am happy to reassure the hon. Gentleman that we will bring forward draft regulations when they are good and ready.
Stephen Doughty
Briefly, I can think of many other names that would be suitable for this Bill, but I am sure that you, Sir Edward, would rule them out as unparliamentary. We intend to go on the way we have done throughout the Bill, and we will oppose this clause as well.
Question put, That the clause stand part of the Bill.
The Chair
With this, it will be convenient to consider amendment (a) to the new clause, line 43 at end insert—
“(10) 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.”
Nick Boles
I also wish to resist the amendment to the clause tabled on behalf of the Scottish National Party. My right hon. Friend the Minister for the Cabinet Office and Paymaster General announced in August that the Government intended to end the outdated practice of check-off in the public sector. New clause 11 gives effect to that intention. It would prohibit relevant public sector employers in due course from deducting trade union subscriptions from workers’ wages and sending these to the unions concerned.
Check-off is anachronistic. It dates from a time when most workers did not have bank accounts and direct debit payments did not exist. Nowadays all public sector workers have bank accounts, and trade union subscriptions can very easily be paid by direct debit. Trade unions themselves agree that filling in a direct debit form is a simple and straightforward task. Even the PCS union’s own website currently promotes direct debit, saying:
“It’s quick and easy to sign up for direct debit—you can do it online in a couple of minutes. You just need your membership or National Insurance number and bank account number and sort code”.
Direct debits can even be set up on mobile phones. In addition to its convenience, this way of making payments gives employees the freedom to set up the direct debit arrangement with the trade union of their choice, as well as consumer protection under the direct debit guarantee. Such protection was withdrawn for check-off 17 years ago.
In any case, there is just no need for the relationship between a trade union and its members to be intermediated by the members’ employer. Trade unions should have a direct subscription relationship with their members, using direct debit like any other modern member-based organisation. The collection and administration of union subscriptions is no business of the employer. It should be a matter for a union and its members to arrange between themselves.
At a time of fiscal consolidation, taxpayer-funded employers providing the important public services that we all rely on should no longer carry unnecessary burdens. These include the burden of administering check-off on behalf of those trade unions that have not yet modernised their subscription arrangements. This in turn puts employers at risk of an employment tribunal claim if they make a mistake when deducting union dues. Where an employer provides a check-off service, it puts itself under a legal obligation to do so in a particular way under the 1992 Act. An employer that makes a mistake can be taken to an employment tribunal. That should not be at the expense of the taxpayer when it could so easily be avoided by making alternative arrangements to check-off.
The majority of civil service employers have already decided to remove check-off, and trade unions affected by those decisions have been successful in making alternative arrangements for their members to pay their subscriptions by other means. The vast majority of their members have switched to direct debit.
It is important to emphasise that we are not planning to spring this change on public sector employers and trade unions overnight. We recognise that affected unions will need time to implement the change and get their members to switch to direct debit. They have been on notice since we announced the provision in August.
Furthermore, the change will be brought about by affirmative regulations that will build in a reasonable transitional period. That will allow affected unions and their members time to put in place alternative arrangements to check-off, and will be sufficient to ensure that no undue disruption is caused to the unions or their members.
Stephen Doughty
It is good to be on to the new clauses. It is intriguing that the Minister was talking about using mobile phones and the ease of doing things online—almost the very arguments that could be used in support of e-balloting and the methods connected to it—but he has chosen to apply those methods in other measures. That emphasises the debate we have been having throughout the Bill.
New clause 11 would prevent all public sector employers from deducting trade union subscriptions via payroll and would mark the end of what is called check-off. I believe that the Government are deliberately targeting trade union finances by making it harder for individuals, including lower paid workers and many women in particular, to get access to trade union representation in the workplace. That is particularly true for dispersed workforces. I was struck by the evidence I received from the Union of Shop, Distributive and Allied Workers, which works in the retail sector, about the many people working in small shops and retail outlets throughout the country who find check-off a convenient way to have their payments taken, without a complicated process. They will struggle because of the new clause.
The move is almost universally opposed, save for the Government and the TaxPayers Alliance, and we all know that the basis of the oral evidence they gave was very flimsy. It is all rather ironic when we consider that the Government’s claim that the proposal will save taxpayers’ money is, in fact, a red herring, given that many trade unions already cover the cost of check-off services. In some cases, the fees generated in the process and charged by Government employers for check-off provision generate a net gain for the public finances. There seems to be no sense at all in the proposals.
In pressing ahead in spite of the critics, the Government have failed to secure any substantial employer support for their proposals, as far as I am aware. Indeed, many employers, including employers in local government and the health sector—as we have heard with respect to the Scottish and Welsh Governments as well—have expressed concern that the removal of check-off arrangements could undermine constructive relations between managers and unions, which are vital to the quality of public services. Is that any wonder, when employers and trade unions were not even consulted properly?
The proposals have been introduced without a proper consultation process, engagement with the unions, or an assessment of the impact on employment relations. The proposals were not included in the Conservative party manifesto, Her Majesty’s Gracious Speech, or the briefing accompanying the speech, although it would have been easy for the Government to do that. The Minister has said that everyone has long been aware of the change and has had time to prepare, but if the Government are so clear about it, why did they not make it clear when they first suggested introducing the Bill? There was no reference to the proposal in any of the BIS consultations or impact assessments that accompanied the publication of the Bill. Instead, the Government announced the plans on 6 August 2015, and published the new clause introducing the ban, which we are discussing now, only a matter of days ago.
That does not strike me as the most transparent, engaging or consultative process. Unfortunately that has been the hallmark of the Bill from start to finish. To date, the Government have failed to publish any evidence justifying the introduction of the ban, or any assessment of the potential impact of the proposal on those who would be affected.
There are also huge implementation issues. Transferring millions of members on to direct debit would create significant organisational challenges for many trade unions, particularly those operating in dispersed work forces. It will therefore be vital, if this goes ahead, that trade unions are provided with ample time to transfer members on to direct debits. We have talked about the potential unwinding of collective agreements and employment contracts in many sectors, but time will also need to be provided for employers and trade unions to renegotiate existing collective agreements, which often include aspects relating to the check-off provision.
I know many are concerned that no timetable for the introduction has been specified in the amendment. The Minister said he wants to allow a reasonable period and I hope that when he gets to his feet he will specify broadly what he has in mind. The explanatory note similarly suggests that a reasonable period will be provided, but that has no legal effect.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
As I was listening to my hon. Friend’s excellent speech, I was thinking about potential ramifications of this and I would be interested to hear the Minister’s response. For example, if an accountant working for a council is a chartered accountant paying annual fees, does that come out of his pay packet in certain circumstances, in much the same way as check-off does? If a nurse pays annual fees to be registered as a nurse, does that come out of their pay packet as well?
Stephen Doughty
My hon. Friend makes an excellent point, one we discussed during the oral evidence sessions as well as here: there are many things that are deducted in the same format as check-off. We as MPs are allowed to make salary deductions for various things, from repayments of loans to charitable donations. Again, this is one rule for trade unions and another for everybody else and it is simply not acceptable. I hope the Minister will provide an explanation and more detail on that provision and a definition of what is a “reasonable” transition period.
The Minister will be aware of the specific concerns outlined by the TUC that trade unions will be required to sign members up to direct debit payments at the same time as needing to comply with the other significant legislative changes in the Bill. Those include encouraging millions of members within just three months to opt in to the union’s political fund, even though they have voluntarily contributed for many years, gathering additional information for the certification officer and complying with the oodles and oodles of red tape and blue tape that are being put in by the Bill, let alone previous provisions such as those introduced by the gagging Act. In these circumstances, the need for significant time to allow unions to move their members on to direct debit is very clear.
As I have argued throughout this Bill, the Government are not pursuing a plan for modern and forward-looking industrial relations. They are trying to turn the clock back and offering solutions to the problems of yesteryear.
Tom Blenkinsop
I have just thought of another question. This goes back to my industrial background working with predominantly female workforces in the textile industry. Many did not have bank accounts, but were trade union members and worked on piecework rates. How will they be affected if they are disfranchised, rendered unable to join a trade union at all because they do not have a bank account?
Stephen Doughty
That is an excellent point on which I would like to hear from the Minister. Whether we like it or not, many people, particularly on low incomes or starting out on their careers, do not have bank accounts. What provision will be made for them? If they do not have a bank account, how will they be able to make these payments?
As I have said, in reality, deductions from payroll are a very common way that employers across the public and private sectors help employees to manage their finances. I mentioned examples that apply to us as Members of Parliament, but we often see things such as childcare, travel, bike loans or computer payments made through similar payroll deductions. The proposed ban on check-off for union subscriptions will affect millions who currently choose to do that through their wages. We oppose new clause 11 and call on the Government to withdraw it. At the very least, I hope that the Minister will engage with employers and trade unions in the period between Committee and Report, so that we can have some clarity when he comes back to the House on how long the transition and implementation period will be and whether accommodations can be made.
Amendment (a) enjoys the formal support of myself and my hon. Friends the Members for Wallasey (Ms Eagle) and for Edinburgh South (Ian Murray). It is an SNP amendment on securing active consent from the different parts of the UK before the ban on check-off arrangements can apply elsewhere. Were the hon. Member for Glasgow South West to push this to a vote he would certainly have our support.
Chris Stephens (Glasgow South West) (SNP)
It is a pleasure to serve under your chairmanship, Sir Edward.
The purpose of our amendment is to require consent from public bodies, but I wish to make some remarks about the role of check-off and the principles behind it. Our first concern is the impact on collective bargaining arrangements. An employee can pay bills through salary deductions, including council tax and rent. They can also make charitable donations—for example, in Glasgow employees can make trade union charitable donations to organisations such as Action For Southern Africa or Community HEART. Staff association subscriptions, too, can be taken off as a salary deduction. Under these proposals, however, in a collective bargaining arena where there is a staff association and a trade union or unions, the staff association would be allowed check-off, but the trade unions would not. That shows an extraordinary bias towards staff associations. I asked the Minister for the Cabinet Office about this in the evidence sessions and was advised that a staff association is internal and a trade union is not. What remarkable ignorance of how a workplace operates. Surely both organisations are internal, and employees have made a choice about who is to bargain on their behalf?
In our view, new clause 11 is designed to interfere with and unsettle those collective bargaining arrangements. I ask the Minister what is to stop a trade union reclassifying itself to become a staff association. Is that how they will be able to get round the Bill? We are asked to believe that these proposals are modernisation. In reality, they are a 19th century solution in a 21st-century world. If allowing other deductions is modernisation, then why is check-off to trade unions not modernisation? It is a fanciful and quaint notion.
We are also concerned about the legal risks that public sector employers will face in relation to these arrangements. In a recent court case, Mr Justice Supperstone said:
“I am not impressed by the argument that check off is only or primarily for the benefit of the union as such, rather than for its members in their capacity as employees. It seems to me that there is a real benefit to employees in the administrative convenience of not having to make their own arrangements for payments each month, or having to set up a direct debit or standing order and then change it or replace it from time to time as may be necessary”.
Tom Blenkinsop
The hon. Gentleman makes an excellent point. Obviously, it depends on the workplace. If someone is a private sector construction worker or employed in an industry working shift patterns which are not annualised, pay will fluctuate depending upon production targets and what the market is doing. Inevitably, as a result their union subs will change, because most unions have a redistributive model for their subscriptions.
Chris Stephens
That is an excellent point. Trade unions will be denied money on that basis, as in the very example given by the hon. Gentleman. Another concern is that what we are seeing here is a situation where a voluntary agreement between a public sector body and a trade union is effectively to be banned by the state.
Julie Elliott (Sunderland Central) (Lab)
Does the hon. Gentleman agree that one of the consequences—unintended, I am sure—of removing check-off will be that if there is, for instance, an industrial action ballot of a public sector workforce of many tens of thousands, with people working all over the place, it will be even more difficult for people to agree on what the bargaining unit is in that case. If people pay by direct debit—as many trade union members already do—then when they change their place of work, if they are still working for the same employer, their place of work will not necessarily notify their trade union.
Chris Stephens
That is right, and it is an excellent point. There is also the other example of someone who works for a large employer who may have two different jobs for that employer—perhaps part time in two departments. Again, the hon. Lady makes an excellent point.
If the state is banning voluntary collective agreements, I must ask the Minister at what the point the Conservative party went from being laissez-faire to Stalinist. This goes against what I consider to be the principles the Conservative Party was founded on. The arguments advanced are also irrelevant because, if income tax can be deducted at source, then why not trade union subscriptions?
The measure will also leave the public sector at risk of legal challenge. The International Labour Organisation is looking at other countries that have tried the same thing, such as Congo. In 2010 the ILO committee of experts reported
“since the check-off system was abandoned in 1991, there has been no procedure for deducting trade union dues from workers’ pay. According to the Government, in practice, all unionized workers are expected to pay their dues to the trade union office. The Committee once again notes with regret that the Government has still not specified whether the abandonment of the check-off system in 1991 had the effect of barring trade unions from negotiating procedures allowing trade union dues to be deducted from members’ pay. The Committee once again reminds the Government that the deduction of trade union dues by employers and their transfer to the unions is not a matter that should be excluded from the scope of collective bargaining”.
The ILO committee of experts is now making observations on Croatia as well. It noted that
“in general, a legal provision which allows one party to modify unilaterally the content of signed collective agreements is contrary to the principles of collective bargaining”.
Its continues:
“The Committee requests the Government to provide a copy of the aforementioned Act and underlines the importance of ensuring that any future Act on the Realization of the State Budget does not enable the Government to modify the substance of collective agreements in force in the public service for financial reasons.”
Those are very serious matters. The Government are leaving themselves open to risk on that basis.
Once again, the principles of consent are relevant. Some public bodies, as the shadow Minister has said, receive income from trade unions to administer check-off, and the general secretary of Unison, Dave Prentis, made it clear in his evidence that Unison pays for the facility when it is asked to. The public sector does not support the principle of banning check-off. The consent of the devolved Administrations, local authorities and other public bodies should be required, but we believe that the real intention is to make derecognition easier in the workplace. The new clause strikes at the heart of trade union organisation and is insidious.
I do not think that the Minister has yet demonstrated that he understands the principles of consent or devolution. He has made the extraordinary claim that the Government are complying with the Smith agreement, but I think that the only people who think so are the Government; no independent analysis shows that. I think that it is the right of all public bodies to institute their own arrangements for industrial relations, check-off and facility time. We appeal to the Minister once again to try to understand the principles behind those things, and I hope he will accept the amendment.
Jo Stevens
It is a pleasure to serve under your chairmanship for the final Committee sitting, Sir Edward.
In tabling the new clause on check-off, the Government seem extremely concerned to bring trade unions into the 21st century. For the second time in Committee I am forced to admit that I agree with the Minister—not on the content of the new clause, but on the aim of modernisation. The Government seem to believe that paying union subscriptions online, via a bank account, is an acceptable facet of 21st-century trade unionism, but that secure online balloting is not. We must ask ourselves why.
I had an inkling of that while looking back through a 2011 Conservative Home column—I have very exciting evenings—which, thanks to a quotation from the then Under-Secretary of State for Communities and Local Government, specifically tied the issue of check-off to the collection of a political levy. That makes me wonder whether the motive for the new clause has more to do with that issue. About 3.8 million public sector workers could be affected by the proposed changes, yet there is no groundswell of demand for the changes from anyone other than the Conservative party.
I want to set out a few inconsistencies to highlight how the new clause does not make sense. I have mentioned the Government’s hypocrisy in opposing online balloting, so I begin with the fact that the use of check-off is voluntary. No employer has to offer it. As with facility time, the right should be with the employer to decide whether the practice benefits their workforce or not. In the case of local government and the devolved Governments in Wales and Scotland, the Westminster Government are imposing top-down solutions to problems that do not exist on the ground.
Secondly, this is not about taxpayers’ money. In many instances, as we have heard, trade unions pay for the very small cost of administering check-off. As the Minister has pointed out, this is the 21st century: payroll is automated. As Unison noted it its written evidence to this committee, the former Chief Secretary to the Treasury in the coalition Government wrote to stop attempts to end check-off, saying that,
“Departments should be aware that there is no fiscal case for doing this, as the Unions have offered to pay any costs associated with check-off, which are in any case minimal”.
As the hon. Member for Glasgow South West mentioned, Unison general secretary Dave Prentis gave us evidence on 15 October about check-off arrangements and gave numerous examples of arrangements that Unison has in place where it either pays for the check-off system, or the employer that the union works with makes money out of it. He named Fife Council, East Lancashire hospitals, Bradford City Council, and Derbyshire County Council, to name a few. If cost really were the issue here, surely the appropriate response is to ensure that the costs are met, rather than to entirely abolish the system.
That brings me to how check-off is used by other organisations. From animal welfare to cancer charities, from helping the homeless to children’s organisations, payroll giving is commonplace. Workplace Giving UK says that it is the most efficient way to give to charity—it works with huge charities such as the Stroke Association and Macmillan. The Payroll Giving Centre claims that over 8,000 employers use the system, with over 1 million people donating from their salaries. It is efficient and easily understood, yet while this system of giving seems set to continue and indeed expand for charities, it is being removed for trade union members.
Finally, on transparency and accountability, check-off ensures that members do not continue to pay their subscription after they have left employment. It is a very clear and easy way for a member to pay subscriptions when in employment but not to continue doing so when they leave their job. Taken with other sections of this Bill, this new clause contributes to a new, sprawling and costly bureaucracy that is being put in place with the sole aim of impeding the ability of trade unions to organise politically and industrially. This is all that this is.
We oppose the new clause and the Bill, but if the Minister really wishes to demonstrate that he is serious about modernisation, I urge him to withdraw the new clause and instead bring forward measures to ensure that taxpayers’ money is not spent on check-off, if that really is his concern, and to specify that trade unions pay for the facility themselves, as many already do.
Nick Boles
I will start by answering some of the questions raised by Opposition Members. There was a question about the transition period and how long trade unions with check-off arrangements would be given to move people over to direct debits. My right hon. Friend the Minister for the Cabinet Office has suggested that a transition period of six months from commencement of the provisions on check-off would be appropriate.
Stephen Doughty
I am interested in that response. Why is a six-month period suggested for transition on check-off but only three months for the transition on political fund opt-ins? What is the justification for that?
Nick Boles
Probably it relates to the fact that check-off does not just involve the relationship between the trade union and the individual member, as the political fund does. It also involves the employer, so there are more administrative steps to go through. I am surprised that the hon. Gentleman does not welcome the fact that the period is longer. We could have aligned the two periods of course, but no doubt he would have attacked us for doing that. I do not expect to be thanked for these things, but a little generosity at this stage in consideration of the Bill might be nice.
Secondly, a number of hon. Members have made a big play of the fact that a number of trade unions pay for the check-off arrangement. Indeed, they are right to do so. The difficulty is that research carried out by their favourite organisation, the TaxPayers Alliance, revealed that in fact only 22% of public sector employers charge for check-off, so it is a little rich to claim that public sector organisations are somehow making a nice turn on it. I remember from the evidence sessions that the hon. Member for Cardiff Central suggested that social workers would have to be fired if the check-off arrangement were ended. There are relatively few situations in which public sector organisations are being paid for the administrative task that they fulfil.
Several hon. Members rose—
Nick Boles
I have clearly stirred a hornets’ nest. I am spoiled for choice. I will start with the hon. Member for Sunderland Central, because we have not heard from her today.
Julie Elliott
I have made a couple of interventions. Can the Minister advise from what return the figure of 22% was derived? My understanding is that it is not based on 100%, so it is not an entirely complete figure.
Nick Boles
I have no doubt that the hon. Lady quotes surveys, samples and everything else in her contributions to various debates, so she will be aware that it is possible to draw conclusions about the behaviour of organisations without necessarily interviewing every single one of them. Indeed, I believe her own party took a great deal of encouragement from various opinion polls before the election that seemed to offer predictions about voter behaviour.
The TaxPayers Alliance report in 2013 revealed that 972 public sector organisations that it had contacted and from which it received responses deducted membership subscriptions to trade unions in the check-off arrangement. Of those, 213, or 22%, charged the union for the service. Charging arrangements ranged from a proportion of the costs of subscription—between 0.5% and 6%—to a flat charge per employee or a monthly fee charged to the union. I make no claim that every single public sector employer was interviewed, but it is a reasonably large sample, and it would be surprising if the average for the whole were very different.
Chris Stephens
Since the Minister published the new clause, how many public sector employers have written to him supporting the removal of check-off? I am curious about it. If some have decided to provide it freely, there does not seem to be a lot of support in the public sector for banning it completely.
Nick Boles
Funnily enough, the hon. Gentleman’s question gets to the heart of the difference between the Conservative party and the Scottish National party. We believe that the public sector employers are the taxpayers—the people of Great Britain who work and pay taxes in order to pay for us and for everybody else in the public sector, and for everything that the public sector does. They are the employers, not the board of this NHS trust, that police force or this local authority, which are charged by the taxpayer to discharge their responsibilities and handle taxpayers’ money cautiously and carefully. It is entirely reasonable for us as representatives of the ultimate employers of the public sector—the taxpayers—to represent their interests and insist that they get value for their money, which they are currently not getting through check-off. I will now move to the amendment, unless—
Tom Blenkinsop
The main point that we are trying to make is that there are managers who run large public sector organisations who have HR competencies and deal with vast amounts of public sector workers: take the NHS, for example, or any hospital trust. They will be very concerned about any breakdown in recognition—the ability to know where their staff are, who represents them and who to talk to on a collective basis. There will be massive chaos if individual consultation is required on every HR matter.
Nick Boles
I am the first to defer to the hon. Gentleman on intimate knowledge of the detailed realities of working for trade unions and working in an organisation with high levels of union representation—I do not claim to be able to match him on that—but we have got rid of check-off in the civil service over the last few years. There are many issues at debate in the civil service. I am not going to suggest that everything is sweetness and light there, but it is a bit of a stretch to say that the removal of check-off specifically has caused chaos in the civil service.
Nick Boles
No, I will just finish. The hon. Gentleman can put his hand down, because I have noted that he wants to intervene. He will be well aware that some civil service unions—I mention no names—have lost members to other unions, not to no union but to other unions, because, now that there is no check-off, other unions that offer a better service, possibly at a lower cost, can get in and win the support of individuals in the civil service, whereas the legacy union was simply relying on individuals being locked in through a check-off system. I would have thought that the modern Labour party, which I know he always feels he is part of, would want to support the introduction of a little competition among unions in offering a consumer service to their members.
Tom Blenkinsop
Unfortunately, the Minister displays his ignorance, because inter-union competition has been going on for decades, since the Bridlington agreement. In the interest of the nation, its people, the public sector and its employees, we want proper recognition agreements so that both parties know with whom they are talking. Trying to say that this is about helping trade unions to recruit members is pathetic. That is a completely redundant argument, and it does not represent the interest of the British general public. What we want to know is that, when paramedics bring up industrial issues and health and safety concerns, they will be talking to an HR manager who knows what they are talking about, rather than having to talk to various individuals in a scattergun fashion, thereby putting services at risk.
Nick Boles
I feel that I may have touched a nerve, so perhaps I better not press that any further.
I will move on to the amendment tabled by the SNP. The Committee debated similar amendments at length last Tuesday. As I said then, all the provisions in the Bill relate to employment and industrial relations law, which are clearly reserved matters under the devolution settlements for Scotland and Wales. New clause 11 relates to the same reserved matters, so it is entirely in order for the Government to propose that its provisions should also apply to the whole of Great Britain. I see no reason why the Government should seek consent before applying those provisions in particular areas.
In Northern Ireland, on the other hand, employment and industrial relations are transferred matters so, respecting the agreement that was properly reached with Northern Ireland, new clause 11 will not apply there. Certain responsibilities are being devolved to local authorities in England and to the Mayor of London, but none of those responsibilities includes employment and industrial relations law. Amendment (a) seeks to carve out different arrangements for Scotland, Wales, London and English local authorities on matters of employment and industrial relations law, which Parliament has already determined are reserved. I therefore ask hon. Members not to press the amendment.
Stephen Doughty
We received clarification on this in the previous similar debate. Proposed new section 116B(3) of the Trade Union and Labour Relations (Consolidation) Act 1992 states that such regulations may potentially apply to bodies that are wholly or partly funded from public funds. We have talked about organisations that receive small grant funding of, say, £10,000 from public sources. Will the Minister clarify the extent to which the new clause will apply to such organisations?
Nick Boles
My understanding is that the new clause will not apply, for instance, to a charity that receives a grant from the Government—absolutely not. This is for public sector organisations, but I will happily write to the Committee to confirm that the definition will be similar to the one used for other provisions.
Question put, That the clause be read a Second time.
Chris Stephens
I beg to move, That the clause be read a Second time.
I refer to remarks I made when we were discussing the proposed schedule to the Bill that interference in political funds in this way is a democratic and constitutional outrage. Trying to suggest, or even thinking, that political advantage is to be gained by changing political funds in this way is wrong. As we have already heard, the approach being taken on this Bill breaches the Churchill convention.
The purpose of the new clause is to ensure that Government will try and seek agreement with all political parties. This is important because it is not just the Labour party that has benefited from trade union funds. Plaid Cymru candidates have received money from trade unions, as have SNP candidates, Green party candidates and candidates from various socialist parties in all their guises. We simply propose a mechanism for dealing with political fund arrangements and to take a gold standard approach to these matters.
Stephen Doughty
I support the new clause in the name of the hon. Member for Glasgow South West and to indicate our formal support, we have added our names to it. During the course of the debate on political fund opt-ins and so on, we also made it very clear that if the Bill receives Royal Assent in its current form, it will mark the abrupt end of the long-standing consensus in British politics that the Government should not introduce partisan legislation that would unfairly disadvantage other political parties. We also made reference to what is known as the Churchill convention, as raised by Professor Ewing in oral evidence to the Committee.
We support the new clause that would provide that before the Government introduce the Bill, which would affect trade union political funds, they should make a clear statement about whether it is being introduced with or without the agreement of all political parties represented in the House of Commons and that statement should be published. Certainly, I believe that that is the clear aim and that we should encourage the Government to seek political consensus with other political parties before introducing legislation that interferes with unions’ ability in this respect. The hon. Gentleman has mentioned examples. This is a point of principle. We have not seen this attempted before. The Government can, of course, impose their will—they have the maths—on the Opposition if they wish to do so. We all know that that is the case. The question is whether it is right to do that. We have discussed these issues at length, but this clause will seek to make it clear that the Government will have to be very clear about their intentions in future.
Nick Boles
I love the way the Opposition seek to invent conventions whenever it is useful. It is an easy game to play because all that is needed is to find a very great person from the past—hopefully dead so that they cannot be consulted—take something they once said and declare it a convention. It is certainly something that, should I ever find myself in Opposition—God forbid—I will avail myself of.
Stephen Doughty
I am sure the Minister will confirm that the noble Lord Hague is not deceased.
Nick Boles
Very far from it, and long may he not be.
Our manifesto stated very clearly that a future Conservative Government would ensure that
“trade unions use a transparent opt-in process for union subscriptions”.
We were elected on that basis after a prolonged debate in the country of all the policies in all the different parties’ manifestos. That is exactly what we are doing.
The right and proper place to consider the provisions relating to that manifesto promise is in Committee and on the Floor of the House. In that way, the debate is transparent and democratic, and the electorate can see what is agreed and whether it is indeed what they were promised in the manifesto. Those debates should not happen behind closed doors and be presented to the public as a fait accompli.
We heard from the hon. Member for Glasgow South West and other hon. Members during the Committee’s deliberations about excellent campaigns such as HOPE not hate that receive support from trade unions through their political funds. I think we can all agree that those are very worthy causes that would command the support of all of us. I see no reason why they should not command the support of union members in exercising their opt-in to the political funds. I urge the hon. Gentleman to withdraw his new clause.
Chris Stephens
I am not going to press the new clause to a Division, because I think the case should be heard before the whole House, with all political parties present, so I will bring it back on Report. I beg to ask leave to withdraw the motion,
Clause, by leave, withdrawn.
New Clause 10
The Certification Officer
In section 254 of the 1992 Act (The Certification Officer) for subsections (2), (3) and (4) substitute—
“(2) The Certification Officer shall be appointed by the Judicial Appointments Commission, and the person appointed shall have expertise in trade union law.”—(Stephen Doughty.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
The Chair
I am told that there will be a Division in the House in less than a minute so we will suspend now. If there is only one Division, we will meet in 20 minutes. If there is a second Division, we will meet 15 minutes after the start of the second Division.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
I beg to move, That the clause be read a Second time.
It is a pleasure to appear again under your chairmanship, Sir Edward. The new clause pertains to agency workers. We have heard quite extensively from many public sector bodies about their concerns in this regard. They have very clear concerns relating, for example, to patient safety, which has been highlighted again and again.
Repealing the existing prohibition on hiring agency staff to replace workers participating in industrial action fundamentally undermines the right to strike. It reduces the impact of strike action and upsets the power balance between workers and employers. Deploying a replacement workforce during a strike serves only to prolong the dispute, delay resolution and embitter industrial relations.
A change of this nature has implications for all workers. If rogue employers can draft in low-paid temporary workers to break strikes, that is likely to drag down pay and working conditions for workers right across the economy, as fewer people will be willing to stand up for themselves when facing injustice at work because they will know that they can simply be replaced. The change could also have an adverse implication for the agency workers themselves. It places them in an extremely difficult situation. They may risk not getting further work if they refuse such placements and they would have no statutory protection. Furthermore, introducing inexperienced workers to take on the role of the permanent workforce in a workplace that they are not familiar with has implications for health and safety and the quality of the services, as we have heard. That would impact both on the workers and on the public, who may want or require to use the services.
A recent YouGov poll found that of those surveyed, 65% were against bringing in temporary agency workers to break public sector strikes, with more than half saying that they thought that that would worsen services and have a negative impact on safety. Only 8% of the public who were surveyed believed that hiring agency workers during strikes would improve services.
Chris Stephens
In the evidence sessions, we heard from passenger transport groups, which made it plain that if train or bus drivers, for example, were replaced during a strike by people who were not trained, that would have real effects on public safety. Does my hon. Friend agree?
Dr Cameron
My hon. Friend makes an extremely good point. We have heard it time and again not just from the workers to whom he refers, but from healthcare and other workers.
The drawbacks of allowing agency staff to be used in this way are recognised by other European countries. By repealing the current legislation, the UK Government would become an outlier in this regard, as the majority of other European countries prohibit or severely restrict the use of agency workers during industrial disputes. In effect, this would be taking us back in time to the 1970s—a time when workers were pitted against one another. Often, that led to greater discord and disharmony for all, but particularly for the ordinary working person, who had difficulty sustaining their livelihood.
Again, this is partisan legislation and it is just not right. Our new clause is designed to ensure that agency workers would not be brought in. It states that a business
“shall not introduce or supply a work-seeker to a hirer to perform…the duties normally performed by a worker who is taking part in a strike or other industrial action…or…the duties normally performed by any other worker employed by the hirer and who is assigned by the hirer to perform the duties normally performed by the first worker”.
The new clause is designed to give the everyday worker in public services the same rights as others. It would give them the ability to engage in right and proper action as a last resort when they have to but not have their causes undermined. As we have heard, the public do not want that and it would also potentially undermine safety. I therefore look forward to the Minister’s response.
Stephen Doughty
The new clause enjoys the support of the Labour party, and I would be happy to add my name and those of my hon. Friends the Members for Wallasey and for Edinburgh South to it formally. As described by the hon. Member for East Kilbride, Strathaven and Lesmahagow, the new clause would insert into the Bill a ban on the supply of agency workers during industrial action.
The Government are planning to remove the ban through regulations. It seems they have been undertaking a consultation. Regulation 7 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 prohibits agencies from knowingly supplying agency workers to replace striking workers. The change that we understand the Government are planning to bring forward will enable employers to bring in agency workers with a view to breaking strikes, regardless of the consequences for health and safety, which the hon. Lady has gone through in some detail.
We have heard from many witnesses throughout this Committee, both in the oral evidence sessions and more recently via written evidence. It is also important to look at the evidence that many organisations submitted to the Government’s consultation, much of which has been made available publicly. I will touch on a few parts of that evidence that I think are very pertinent.
In the oral evidence, the Government called a witness from an organisation called 2020 Health to support their Bill, but the witness seemed unable to confirm or was unaware that trade unions are required to provide life and limb cover. The Royal College of Midwives gave evidence. When it took strike action in October 2013, the RCM and its local representatives worked with hospitals to ensure that services were still available to women in need of essential care, such as those in labour. In light of that, many will rightly ask whether the provisions on agency workers are necessary.
Recruiters are wary of using temps and agency workers as strike-breakers. Kate Shoesmith, who is head of policy at the Recruitment and Employment Confederation, which has more than 3,500 corporate members, said:
“We are not convinced that putting agencies and temporary workers into the middle of difficult industrial relations situations is a good idea for agencies, workers or their clients.”
The Chartered Institute of Personnel and Development, which we have commented on many times, represents more than 140,000 members working across the public and private sectors. It warned that the Government’s plans to reform trade union laws are “an outdated response” given the challenges faced today.
Frances O’Grady, the TUC general secretary, spoke of the practical problems with the proposal. She said:
“We have very good relations and agreements with agencies and the federation representing agencies in this country. We have always worked very closely on the fair principles of employers needing flexibility to cover peaks and troughs in production, or staff absences, and doing that on the basis of equal treatment within the framework of the union agreement. This proposal is obviously quite different. We are potentially talking about employers having the right to replace wholesale workers who have democratically voted to go on strike with, potentially, untrained and inexperienced agency workers.”––[Official Report, Trade Union Public Bill Committee, 15 October 2015; c. 148, Q383.]
I also want to refer to the TUC’s response to the Department’s consultation, which said:
“Ciett, the International Confederation of Private Employment Agencies, has issued a Code of Conduct which prohibits the supply of agency workers during strikes…The Memorandum of Understanding between Ciett Corporate Members and Uni Global Union on Temporary Agency Work, which was signed by several UK agencies in 2008, prohibits ‘the replacement of striking workers by temporary agency workers without prejudice to national legislation or practices.’”
The TUC makes clear in its evidence that
“the ban on the supply of agency workers to replace strikers has been in place for more than 30 years and is an established part of UK industrial relations practice.”
We heard some striking examples from the hon. Lady, and I want to emphasise my similar concerns, particularly over transport and railways and so on. The TUC points to how:
“Agency cleaners recruited to work in food factories may not have received the requisite safety training relating to handling chemicals or cleaning products.”
That places the safety of customers, let alone that of the agency workers, at risk. There were also concerns about the potential for tensions to be created around migrant workers and all the issues surrounding that, which we have already discussed at different points.
Most people have a great deal of concern about many of the circumstances we have discussed where agency workers could be brought in. The evidence is pretty damning and the Government should be embarrassed that they are trying to force the measures through, despite the chorus of opposition to them.
As I have argued throughout our consideration of the Bill, any one of the clauses on its own is bad enough, but the cumulative impact is worse still. The Government’s apparent proposals on agency workers, alongside clause 7, imply that the extended notice period is being introduced to give employers additional time to organise agency workers to undermine industrial action, as well as to prepare for the legal challenges that I think will inevitably result from the Bill. We are firmly opposed to the removal of the ban on the supply of agency workers during strikes, which will make it easier for employers to break strikes or undermine their effectiveness.
The Opposition believe that the measures would be bad for safety and for service users. Because they could serve to prolong or worsen industrial action, they would be bad for the general public too. It is certainly not a model for modern industrial relations. If our colleagues choose to press the amendment to a vote, they will enjoy our full and hearty support.
Nick Boles
By seeking to enshrine in primary legislation the current ban in regulations on employment businesses supplying temporary workers to cover the duties of striking workers, as well as extend the ban to hiring or engaging such workers through an employment agency, the amendment seeks to pre-empt the outcome of the Government’s response to the consultation on agency workers, the purpose of which was to understand the impact of revoking regulation 7 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003, thus making it lawful to hire agency workers to cover striking workers.
I entirely respect and understand that Opposition Members have many principled objections to the proposal. There will be another opportunity to debate the merits of the proposal after the Government have responded to the consultation, if we decide to proceed with removing the regulations. The removal of the regulations—I might be anticipating the hon. Gentleman’s question—will be done by affirmative resolution, which requires a debate in both Houses of Parliament. I humbly suggest that now is not the time to anticipate the Government’s response to the consultation.
Stephen Doughty
Clearly we are attempting to pre-empt in this case, because we have serious concerns. The Minister rightly points out that the Government have not yet responded to the consultation. As we have seen throughout the process, we do not have the Government responses to consultation that one would think we would have had before getting to this stage of the Bill. Can he outline what percentage or number of the responses received to the consultation so far have been in favour of the Government’s intentions, and how many have been implacably opposed, as our new clause is?
Nick Boles
The hon. Gentleman does not just want to anticipate the publication of the response to the consultation and the Government’s decision whether to proceed with removing the ban; he wants to anticipate the contents of the response to the consultation by asking what the responses were. I am afraid that he will have to wait until we publish the response. There were numerous responses to the consultation, which closed in September, from a wide range of respondents, including businesses, schools, local authorities, emergency services and trade unions and their members, and we are analysing those responses. We will consider all representations made, and will publish a Government response in due course.
Chris Stephens
The Minister is right that we are trying to pre-empt it. Does he not recognise the concern that some of us have? In some places, agency workers have been used during industrial action. The current law is weak in trying to stop that, and we are trying to improve the situation. Does he recognise that?
Nick Boles
I certainly recognise that the Opposition feel strongly about that position, and I have absolutely no doubt that they will return with these or similar clauses, and certainly with similar arguments, should the Government decide to pursue a change in the regulations banning the use of agency workers. However, I do not want to pre-empt the Government’s position, because we have not yet decided how we will respond to the consultation. On that basis, I urge the hon. Gentleman to withdraw the amendment.
Dr Cameron
Although I find the Minister extremely eloquent with an appearance of moderation, as I have done throughout, I must say that the SNP find it disingenuous. We wish to put safety, public opinion and the ordinary worker at the fore. I therefore urge the Committee to support the new clause.
Stephen Doughty
On a point of order, I want to take this opportunity, if you will allow me, Sir Edward, to thank a number of people for the conduct of proceedings during this line-by-line scrutiny of the Bill. It has been a very fulsome and forthright debate, but conducted with good humour and respect, which is always important. I thank the Minister for his good humour despite being under significant pressure. He has had a tough gig with this, having been put in this position by some of his more sinister colleagues—as I once described them—not, perhaps, sitting in this Room, but maybe in the dark recesses of the Cabinet Office and elsewhere. He knows who I mean.
More seriously, I am sure that we will come back to many issues on Report that we are not satisfied with the Government’s position on and we will continue to oppose the Bill at every stage. I thank you, Sir Edward, and your fellow Chair, Sir Alan, for excellent chairing and good humour. I thank the Clerks, in particular Glenn McKee and Fergus Reid, who have provided excellent support. It is always a tough job for an Opposition to hold a Government to scrutiny and it is important that we have the support of the apparatus of the House of Commons in doing so. I also thank Hansard and the doorkeepers, especially for the numerous votes when we have forced them to go out and shout about in the corridor.
I thank my colleagues on this side of the Committee. It has been good to work alongside our colleagues from the SNP on many aspects of the Bill. There is much which divides our parties, but there is much that unites us on this issue. I thank, in particular, my hon. Friend the Member for Newport East, who has whipped the Bill, for her support at all times with all the procedure. On that note, high thanks to all and I look forward to joining the debate when we return in the Chamber.
Nick Boles
On a further point of order, Sir Edward, I, too, want to thank you for your chairmanship of our proceedings and for enabling us to ensure that we have a full complement on the Government Benches at all stages of the Bill, despite some of our attempts to make it hard for you to achieve that. I also thank the Clerks, the doorkeepers and everybody who has supported us in these deliberations.
I hope it will not blight the career of the hon. Member for Cardiff South and Penarth if I say that he has conducted opposition to the Bill with exemplary precision and persistence. I am very much awed by the superb support of the Rolls-Royce that is the civil service in the Department for Business, Innovation and Skills. The hon. Gentleman has to rely on a little help from trade unions and other interested parties, but mainly on the superb work of the Clerks. He has done an admirable job which has demonstrated the support of the Clerks.
I hope that the entire Committee agrees that we have given the Bill a proper going over and the fact that we are concluding proceedings a little before time—we have until 5 o’clock this evening—shows that a full and proper consideration of all the provisions in the Bill has been achieved.
I, too, thank the hon. Members from the Scottish National party. I particularly enjoyed that way that the hon. Member for East Kilbride, Strathaven and Lesmahagow, in concluding, offered me a bouquet and then slid a blade between my ribs without so much as a heartbeat or a pause for breath. Finally, I thank the Hansard reporters for reporting what I have said accurately—unless I said stupid things, in which case they always seem to improve what I say.
On that basis, I thank Committee members from both sides for their contributions to the debate.
The Chair
It is my pleasure to thank you, ladies and gentlemen, on behalf of Sir Alan and myself. We both found the Committee most enjoyable. Obviously feelings run high, but you have all conducted yourself brilliantly: the Minister, the Opposition spokesman, the Opposition Whip, even the Government Whip—[Interruption.] I love teasing him. I love him really; he is a great man. Perhaps he is one of these sinister forces we hear so much about. Seriously though, it has been a good Bill. The fact that we have finished only an hour early shows, as the Minister said, that we have given it a good going over. We have done our job and held the Government to account. All Committee members should be proud of their efforts.
Does anyone want to say anything more?
Chris Stephens
This was my first Bill Committee and it has been a most interesting experience. In any event, I have come to the conclusion that it is no way to run a country. In future, consideration should be given to having more evidence sessions, because some of them were crammed in. I am just putting that out there in general terms as the views of a new Member on proceedings.
I thank you, Sir Edward, and Sir Alan. You have both been very encouraging and explained the processes as they arose. I thank the Clerks, who have been very helpful and talked us through tabling amendments. I agree that we have tried to maintain good humour; I tried myself with cultural references to “Star Wars”, “Game of Thrones” and, I think, “Rainbow” in one instance. I thank all Committee members. The Labour Members have done themselves proud in providing opposition to the Bill, while the Conservative Members have tried to justify it as best they can. I look forward to continuing the debate on Report.
The Chair
On these happy occasions I always feel like I am at a count—I feel like I should thank the returning officer and the policemen. Thank you for all being so fraternal in the best traditions of our trade union movement.
Bill, as amended, to be reported.
Westminster Hall
(8 years, 6 months ago)
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Tropical Diseases
(8 years, 6 months ago)
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Jeremy Lefroy (Stafford) (Con)
I beg to move,
That this House has considered the work of the UK in tackling malaria and neglected tropical diseases.
It is a pleasure to serve under your chairmanship, Mr Davies. I refer Members to my declarations in the Register of Members’ Financial Interests. One thing that is not there that I need to declare is that I have been invited to become a trustee of the Liverpool School of Tropical Medicine. That has not yet been ratified, so will not be in the register.
I have secured this debate at a critical time in tackling malaria and neglected tropical diseases, which affect up to 1.4 billion people across the world. Just to explain, neglected tropical diseases include leprosy, lymphatic filariasis, schistosomiasis, soil-transmitted helminths—or worms—leishmaniasis, human African trypanosomiasis and Chagas disease. All those diseases are preventable and treatable using existing treatments, yet they continue to cause death and disability in a way that would simply not be acceptable were they endemic in the United Kingdom. This debate is particularly important as the 2015 Nobel prize in physiology or medicine was awarded this month for work on malaria and neglected tropical diseases. Professor Youyou Tu was awarded the prize for the discovery of artemisinin, which I will come on to later, and Doctor William C. Campbell of Ireland and the USA and Professor Satoshi Omura of Japan were awarded the prize for their discovery of avermectin, which is effective against river blindness, lymphatic filariasis and a growing number of other parasitic diseases.
Over the past decade and a half, the UK has taken a prominent role in the fight against malaria and neglected tropical diseases, and I will set out the great progress made and the challenges that face us if we are to see their elimination. I ask the Minister to consider the future of the UK’s programmes in both areas.
Twenty years ago, we were losing the fight against malaria—I declare an interest, having had it at least four times—and there was widespread resistance to the main drugs used to cure it: chloroquine and sulfadoxine-pyrimethamine. The international will to tackle malaria seemed absent. All of that changed with the adoption of the millennium development goals. MDG 6 targeted malaria, while MDG 4 focused on child mortality. We have to remember that children are the ones who suffer most from malaria, as more children die from malaria than adults. MDG 5 was on maternal health, and pregnant women are particularly at risk of catching and suffering from malaria. The fight against malaria has resulted in a 58% decline between 2000 and 2015 in deaths from malaria globally. The World Health Organisation estimates that that means that 6.2 million deaths from malaria have been averted, primarily among children under five in sub-Saharan Africa.
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate the hon. Gentleman on securing this debate. Does he agree that while significant progress has been made, the fact that 200 million new cases of malaria have been reported this year alone calls into question our legitimate and worthwhile attempt to try to eliminate malaria in the next 15 years?
Jeremy Lefroy
I entirely agree with the hon. Gentleman. Between 450,000 and 500,000 people—they are mainly children—are dying unnecessarily every year from the disease. How did the tremendous progress—I stress that huge progress has indeed been made—happen? Principally, reliable long-term funding enabled the development and implementation of various interventions, including prevention through insecticide-treated bed nets and the development of vaccines, and diagnosis through the rapid diagnostic tests that enable people, particularly children, to be diagnosed with malaria in the village, rather than having to come to a laboratory in a town when the malaria may be severe.
Graham Stringer (Blackley and Broughton) (Lab)
The hon. Gentleman makes a good point about the progress made and the different ways of making that progress. Does he agree that the earlier regression was partly to do with the mistaken banning of DDT in Africa and elsewhere?
Jeremy Lefroy
I agree with the hon. Gentleman. DDT was banned for clear, understandable reasons, but it had some severe consequences that resulted in malaria taking a grip in areas where it had almost been eliminated. Even today, when DDT is being used for indoor residual spraying, we are seeing its effectiveness when topically applied and carefully used.
There have been some tremendous advances in cures, notably in the artemisinin combination therapies, which I will come to and which are the subject, in part, of this year’s Nobel prize in physiology or medicine. There has also been the welcome development of new medicines. One of them is coming out of Dundee University, and I am sure other Members will wish to discuss that.
The UK has played a major role in providing the long-term funding. It was less than £100 million a year in 2000, but it now stands at £500 million. That is the direct result of the Chancellor’s pledge, while shadow Chancellor in 2007, to increase funding to tackle malaria to £500 million. It is not simply funding that is essential, however; we need the institutions through which the work can be done. It is pointless for several different nations to all work on their own programmes independently. Overseas development assistance is far too precious a commodity for that, so co-operation was essential from the beginning.
I remember how important the first artemisinin-based cures for malaria were when they came out in the mid- 1990s. At last, there was a cure that was very effective and had limited side effects, unlike chloroquine, which was increasingly ineffective, and Lariam, which was effective, but which, as I found out to my cost, had potentially severe side-effects. At between $10 and $15 a dose, the drug was unaffordable to almost all those who needed it. It needed to be more like $1 a dose at the most.
The Medicines for Malaria Venture was established in 1999 as a product development partnership, with considerable UK support from the Labour Government right from the beginning. Its aim was to take up promising new projects from pharmaceutical companies and help them to fruition, so that effective drugs would be available at a price affordable to the poorest and to developing countries’ health systems. The founders of MMV recognised that developing medicines for malaria was not commercially attractive to companies, as those who most needed the drugs were least able to pay prices that covered the costs of development. There is a big lesson there for our work on tackling antimicrobial resistance. Indeed, I believe that Professor Dame Sally Davies, the chief medical officer, refers to the example of MMV when talking in her book, “The Drugs Don’t Work”, about what we need to do to tackle antimicrobial resistance.
By bringing together Governments including Switzerland, the UK and the US, private foundations such as the Gates Foundation and the Wellcome Trust, pharmaceutical companies, critically including small companies and not just the majors, and researchers, MMV was able to do in co-operation what had not been possible in isolation. Two drugs that have come from that work are: Coartem Dispersible, which is for children and has had more than 250 million doses produced and distributed; and the artesunate injection, which is very effective against severe malaria—possibly more effective than quinine—and has had 35 million doses produced.
A second, larger example of co-operation was the Global Fund to Fight AIDS, Tuberculosis and Malaria, which was also established in the time of the Labour Government in 2002 to concentrate efforts to fight those diseases. The UK, along with the US, France and the Bill & Melinda Gates Foundation, was a prominent supporter of the fund right from its creation. Indeed, the first executive director was a Briton, Dr—now Sir—Richard Feachem. The fund has been responsible for supporting programmes in malaria-endemic countries, including programmes on the mass distribution of insecticide-treated bed nets and the introduction of rapid diagnostic tests.
A third example is the Malaria Vaccine Initiative of PATH, which supports the development of promising malaria vaccines. The most advanced is GlaxoSmithKline’s vaccine, which was developed in Belgium and is called RTS,S. It recently received approval from the European Medicines Agency and will, I hope, become available in the not too distant future.
The progress made in the past 15 years has in large part been down to political will through the millennium development goals and the work of the United Nations and the Governments of the United Kingdom, the United States and other countries increasing long-term funding, with the UK taking a lead alongside the US and the Bill & Melinda Gates Foundation.
Mrs Helen Grant (Maidstone and The Weald) (Con)
I congratulate my hon. Friend on securing this debate. Does he agree that the tenacity of malaria means that much more money will have to be spent to beat it? The Gates Foundation estimated that it could cost between $90 billion and $120 billion up to 2020 to deal with it. Does he agree that we must not take our foot off the pedal?
Jeremy Lefroy
My hon. Friend is exactly right, and we have seen the consequences of taking our foot off the pedal in the past. In Zanzibar, malaria was almost eliminated in the 1950s, but it came back with a vengeance. There was another programme in the 1980s, and the foot was taken off the pedal and it came back with a vengeance. The same has happened in Sudan and many other places, so we must deal with that. I think the figures she quoted are accurate, but if we manage to tackle malaria and get to virtual elimination, it will add more than $4 trillion dollars to world GDP, so it is a hugely important investment to make.
Improving health systems is another reason why we have seen progress in many developing countries, with increasing local funding, although some countries really need to step up to their pledges—for instance, the Abuja declaration of committing 15% of budgets to health, which only a few sub-Saharan countries do at the moment, along with unprecedented co-operation, which I have described. We will need all these and more as we face the challenge of the next 15 years, which is to meet the WHO’s global technical strategy for malaria 2016 to 2030.
On top of that, we face two forms of serious resistance: by the malaria parasite to artemisinin-based combination therapies in the Mekong region in south-east Asia, from where resistance to both chloroquine and sulfadoxine-pyrimethamine started and spread to sub-Saharan Africa, which is why it is vital to get on top of this; and by mosquitoes to the insecticides on bed nets, which are becoming resistant to pyrethroids. We also see serious outbreaks where bed net distribution has failed and health systems are weak. I believe my hon. Friend the Member for Mid Derbyshire (Pauline Latham) is going to describe one such instance later in this debate.
The UK is heavily involved in work to counter both those threats, through the Department for International Development’s work and the global fund supported by DFID in Myanmar, working alongside the Government there, and through the work of the Innovative Vector Control Consortium, based in the Liverpool school, in searching for and testing new insecticides for bed nets. The UK has therefore been at the forefront in so many different ways, whether through funding or research—from the London school, the Liverpool school, Dundee, York, Imperial, Keele and other universities, or from business, NGOs, or, above all, people. There are so many I would like to mention, but I will not because of time constraints, but the UK has fantastic scientists in this field at all levels.
Given the effectiveness of UK support for tackling malaria over the last 15 years, will the Minister undertake to do his utmost to maintain that for the future? I am asking the UK not to increase the level of funding, but to maintain current levels. Reaching £500 million a year is a great achievement and others need to come forward to support the UK in this, not least the countries in which malaria is endemic.
The WHO’s roll back malaria framework states that malaria interventions are very good value for money:
“Immunisation is the only public health intervention that has been shown to be more effective than malaria interventions. Beyond the financial return, investments in fighting malaria will have enormous positive effects on agriculture, education and women’s empowerment. They will also contribute significantly to reductions in poverty and the alleviation of inequality.”
Almost exactly the same can be said about the work on neglected tropical diseases. They affect 1.4 billion people—possibly an underestimate—bringing disability and sometimes death. They have a devastating economic impact, yet treating them is cheap and entirely possible. Co-operation plays a vital role, and host Governments have a vital role to play. Many of these diseases can be treated in parallel through local health systems. It makes sense to work together rather than in silos. We saw that when we visited the NTD control programme in Mkuranga district in Tanzania—I went with two other hon. Members in the all-party group on malaria and neglected tropical diseases—where they were tackling lymphatic filariasis, schistosomiasis, soil-transmitted helminth and trachoma all together. Universities also have a vital role to play. In the case of Mkuranga, an important partner was the schistosomiasis control initiative, based in the UK’s Imperial College London. Other universities are very important partners.
In the private sector, we have seen extraordinarily generous donations of drugs. I will list them because it is important that hon. Members understand the scale. Merck and Co. will donate Mectizan—ivermectin—for onchocerciasis and lymphatic filariasis in Africa for as long as it is needed, with no limit. GSK has already donated nearly 2 billion tablets of albendazole for lymphatic filariasis and will continue until elimination, and has also donated 1 billion per annum to de-worm school-aged children. Johnson & Johnson has donated 200 million tablets of mebendazole a year. Pfizer donated 70 million doses of azithromycin for trachoma in 2012 alone. Novartis has donated drugs for leprosy. Eisai, the Japanese company, has donated 2 billion tablets of Diethylcarbamazine for lymphatic filariasis, and E. Merck has donated 20 million doses of praziquantel a year, going up to 250 million tablets a year from 2016 for schistosomiasis. These are huge figures that will substantially reduce the costs of treatment in countries where those diseases are endemic.
There are also product development partnerships. As well as the Medicines for Malaria Venture and the Malaria Vaccine Initiative, we have the Drugs for Neglected Diseases initiative, which focuses on developing new treatments for the most neglected patients suffering from diseases such as human Africa trypanosomiasis, Chagas disease and lymphatic filariasis, as well as paediatric HIV. Again, the UK has taken a leading role. On top of the £50 million committed by the previous Labour Government, a further £195 million was pledged by the coalition. The UK is also the second largest funder of the Drugs for Neglected Diseases initiative, with £64 million donated, second to Gates, who has given $126 million. The one other donor with more than €20 million of donations is Médecins sans Frontières, which has donated €66 million.
The UK has also played a leading role by hosting the London conference—a big conference that set the path for the next few years; we need to find out where we have got to with that—and the declaration on neglected tropical diseases, an important declaration that I want to quote from:
“Inspired by the World Health Organization’s 2020 Roadmap on NTDs, we believe there is a tremendous opportunity to control or eliminate at least 10 of these devastating diseases by the end of the decade”—
that is just over four years away.
“But no one company, organization or government can do it alone. With the right commitment, coordination and collaboration, the public and private sectors will work together to enable the more than a billion people suffering from NTDs to lead healthier and more productive lives—helping the world's poorest build self-sufficiency.”
Jim Shannon (Strangford) (DUP)
I thank the hon. Gentleman for giving me a chance to speak in this debate. Obviously the issue is very important. The number of Members present is an indication of that. I have not yet heard—although I am sure he is coming to it—about the vast contributions that faith groups, churches and missionaries make throughout the world to eliminate poverty and help people to work their farms and so on. Almost every church in my constituency of Strangford has a project to give help directly to an area in Africa, the middle east and the far east. Does he recognise the good work that those churches and faith groups do?
Jeremy Lefroy
I do indeed. I am most grateful to the hon. Gentleman for that intervention. I recognise the huge amount of work done by faith groups and missions around the world. They often run remote hospitals, which even the state health system cannot afford to maintain. I have seen the work that they do. Indeed, my wife ran a public health education programme for 11 years in Tanzania and saw at first hand the work that was done when she worked for the Lutheran Church there.
I will not go through the London declaration in detail, because I want other hon. Members to speak, but I will quote the final words:
“We believe that, working together, we can meet our goals by 2020 and chart a new course toward health and sustainability among the world’s poorest communities to a stronger, healthier future.”
Real progress has been made in the past few years. To take one example of many highlighted by the Overseas Development Institute last year, Sierra Leone made great strides in preventing four of the five diseases that make up 90% of the world’s NTD burden: onchocerciasis, lymphatic filariasis, soil-transmitted helminth and schistosomiasis. In particular, on schistosomiasis, which can lead to death through liver disease and bladder cancer, 562,000 people in Sierra Leone received preventative treatment in 2009. By 2012, that figure had reached 1.4 million, which was 99% of those needing treatment. We have heard of the tragic trials of Sierra Leone in the past year and a half, but it is important that we also recognise the huge amount of work that Sierra Leoneans have done to treat many of these other diseases.
Bob Stewart (Beckenham) (Con)
When my hon. Friend refers to elimination, does he mean the elimination of a disease in human beings or the elimination of the scourge of these diseases from the face of the earth? Have I got that wrong, or is it a combination of the two?
Jeremy Lefroy
My hon. Friend is absolutely right to raise that distinction. The recent leader article on malaria in The Economist discussed eradication, which is what I believe we have to go for. There are slightly different meanings to elimination and eradication, but whatever it is, we have to aim for what we have seen with smallpox and are approaching with polio, with no one getting these diseases anymore.
Bob Stewart
I am sorry, but my question was really about the distinction between getting rid of a disease from the face of the earth, so that it is never there again and human beings cannot catch it, and dealing with a disease in a human being.
Jeremy Lefroy
Ultimately it is about making sure that human beings cannot catch a disease. Whether we can get rid of a disease from the face of the earth is another matter, because they have a tendency to come back. We have to ensure that we have the tools in place so that if a disease does return when we think it is eliminated, we can deal with it.
I have three questions for the Minister. What progress has been made in investing the additional £195 million committed by the coalition Government to work on neglected tropical diseases? Given the tremendous cost-effectiveness of interventions—we are talking about tackling diseases that affect 1.4 billion people by committing over four years the cost of running an average district general hospital in the UK for just one year—will the Minister look carefully at increasing the UK’s support for NTD work, especially drug discovery and support for programmes that strengthen health systems as they deliver prevention, diagnosis and cure? Finally, will he update us on the progress made on implementing the London declaration? We hosted the conference, so it is important that we take the lead in ensuring that the declaration comes to fruition.
Over the past 15 years great progress has been made on malaria and NTDs. The UK has been a vital part of that work, not just via funding from DFID, but through our scientists, universities, NGOs and voluntary organisations such as the Rotary Foundation, which has done tremendous work on malaria on top of its work on polio, and most certainly through our private pharmaceutical sector, whether in its commitment to research and development in unfashionable areas or in its direct donations of billions of doses of essential drugs. Nevertheless, the job is only half done for malaria, and even less so for NTDs. If the UK remains committed over the coming 15 years, I remain hopeful that we can make substantial progress. I ask the Minister to make that commitment. It is not about specific sums of money, but about an overall approach that recognises how much difference this work makes to billions of people and what an effective use of UK taxpayers’ money it is.
Let me conclude by quoting the leader article in The Economist from 10 October:
“Throughout history, humans and disease have waged a deadly and never-ending war. Today the casualties are chiefly the world’s poorest people. But victory against some of the worst killers is at last within grasp. Seize it.”
Several hon. Members rose—
Geraint Davies (in the Chair)
Order. Before I call Kate Osamor, if Members restrict their speeches to five or six minutes, we should have time for everyone who wants to speak. There is no formal time limit at this point.
Kate Osamor (Edmonton) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Davies. I thank the hon. Member for Stafford (Jeremy Lefroy) for securing this debate.
I am glad that we have the opportunity to draw attention to this important issue, about which, as a British-born Nigerian, I feel passionately. According to statistics published by the US Government to coincide with this year’s World Malaria Day, Nigeria has the highest number of malaria casualties worldwide, with an estimated 100 million cases and around 300,000 deaths each year.
The debate is particularly timely given the recent announcement that the roll-out of the world’s first malaria vaccine has been delayed as experts at the World Health Organisation have urged caution. The vaccine requires four doses, and without all four shots children had no overall reduction in severe malaria. That raises important questions about access to healthcare and how less developed countries will be able to administer the four vaccines. It also highlights the disparity in access to healthcare across the world and the more general need to address the issue in order to tackle infectious diseases most effectively. After all, access to healthcare is a human right.
I have been encouraged to see the progress that has been made in tackling malaria. Malaria No More UK states that malaria prevention returns £36 to society for every £1 invested. It is important to note that according to a recent WHO report, carried out jointly with UNICEF, malaria death rates have dropped by 60% since 2000, saving 6 million lives. The number of children under five sleeping under insecticide-treated nets has risen from 2% to 68%. Thirteen countries that had malaria in 2000 no longer have any cases of the disease. That shows that, with funding from the international community, there is hope that malaria, one of the biggest killers at the turn of the millennium, could be eradicated.
Progress must continue to be made. This year alone there have been an estimated 214 million new cases of malaria, with more than 400,000 deaths. Two forms of resistance are threatening to undo the progress that is being made: in south-east Asia, the malaria parasite is able to shrug off the effects of the drug artemisinin; and some mosquitos are becoming resistant to the drugs used to coat the nets. That must be looked into.
Mrs Helen Grant
The hon. Lady is making a really good case. Does she believe that the lack of both adequately trained doctors and health networks is also worrying?
Kate Osamor
That is an important point. We need to invest in the healthcare profession so that this significant and costly disease can be eradicated.
I welcome the fact that the Department for International Development has pledged up to £500 million a year towards tackling malaria. Eliminating malaria is a global effort that involves work from the grass-roots and aid on international and governmental levels. There is still a lot of work to be done and I hope that the UK will continue to lead the way in the fight to end this disease.
Pauline Latham (Mid Derbyshire) (Con)
It is a pleasure to serve under your chairmanship for the first time, Mr Davies. I thank my hon. Friend the Member for Stafford (Jeremy Lefroy) for securing this debate on a topic that is very close to my heart. Although I am going to focus on malaria, we must not forget the many neglected tropical diseases that my hon. Friend outlined. He and I have worked closely on international development issues for a number of years, as well as in the all-party group on malaria and neglected tropical diseases. We expect to continue that work during this Parliament.
It is clear that the work the UK is doing to tackle malaria is having a huge effect. Through a mixture of UK aid, British business, British-led research and non-governmental organisations, the UK has contributed to reducing the global malaria death rate by 60% since 2000. In the previous Parliament, the UK acted in a number of ways to tackle malaria and other diseases, as my hon. Friend outlined. Our financial and political support for the Global Fund to Fight AIDS, Tuberculosis and Malaria, our support for the Gates Foundation’s efforts to eliminate malaria, our work mapping malaria to establish high-risk areas to focus on, and our bilateral work on helping in-country healthcare systems to respond effectively to malaria and other diseases have all had a real, positive effect.
Although we can be proud of our contribution to tackling malaria and other tropical diseases, we must not become complacent or slow down our efforts. If we do, we risk reversing our momentum. Despite all the progress that has been made, malaria remains a substantial global killer, and women and children still overwhelmingly feel its effects. I could say an awful lot about the fact that women and children are disproportionately affected because they cannot access medicines or get to the clinics easily. Children who do not go to school because they have got malaria have worse life chances than those who go to school all the time.
Given the limited time available, I will focus on the situation in Uganda, a country I have focused on for many years and have a real interest in. Access to medical care to treat malaria and other diseases is poor in areas such as rural northern Uganda. Women and girls are even poorer there. I recently had a meeting with Alison Hall, the founder of Seeds for Development, to discuss the urgent situation in northern Uganda, where there is a major malaria outbreak. Her charity has been on the ground in northern Uganda working with farming communities to help rebuild their lives after the 20-year war with the Lord’s Resistance Army. She has been there for about six years. Three of the districts the charity works in are among those affected by the malaria outbreak. The Department should look immediately at the situation she described to assess whether there is anything we can or should be doing to help.
In the middle of July, Dr Jane Ruth Aceng, the director general of health services in Uganda, admitted that tens of thousands in northern Uganda have recently contracted the disease. Many people cannot afford to travel the long distances required to get to the hospital, and those who do are overwhelming the services due to the outbreak. One hospital—Gulu general hospital in the Gulu district of northern Uganda, which Seeds for Development visited to assess how patients are being treated—padlocks shut its outpatients department at 4 pm, leaves patients outside the door and provides nowhere for them to be treated inside. The charity was also told that St Joseph’s hospital in Kitgum, which is supported by DFID, recorded 125 deaths from malaria between June and August, which is much higher than normal. That is just one hospital, not the true picture. Clinics had run out of drugs, and new supplies were taking a long time to arrive. In August, there had not been a delivery of drugs for a month.
We need to look urgently at the situation in northern Uganda to establish the facts and act on them. In particular, I am worried about the lack of access to treated mosquito nets in northern Uganda. We provide financial assistance to the Ugandan Government to provide nets, so why are families in the region not receiving them? I understand that the Ugandan Government stopped its indoor residual spraying of huts programme in 2014. That one act alone will increase the risk of malaria. If the local people get nets, do they know how to use them? Nets often go astray—they are used for fishing and all sorts of other activities—so there has to be an education programme to teach people how to use them. It is very important that women and children sleep under the nets to save their lives. That important issue has been highlighted as among the causes of the current outbreak in northern Uganda.
The UK has a huge amount to be proud of in the way we have taken a lead on combating malaria. We know that the return on investment in tackling malaria is well established and accepted by the Government. However, we alone cannot defeat malaria. It requires a global effort, financially and politically supported by Governments around the world, including those of the countries affected. A lot has been done, but the outbreak in northern Uganda, where hundreds if not thousands have died this year alone, shows that we must not become complacent. I hope the Minister will explain what DFID is doing to help those affected in that region. I understand that DFID acts responsibly in many areas of Uganda, but that area seems to have been neglected, and I would like to know what the Minister can tell us about what is happening.
Mr Virendra Sharma (Ealing, Southall) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Stafford (Jeremy Lefroy) on securing this important debate at the right time.
Since I first entered Parliament in 2007, I have been committed to development and healthcare issues. As a boy growing up in India, I saw the debilitating effects of malaria and parasites such as hookworm. Such conditions are not blind; they affect the very poorest in society. Developing nations face a competitive disadvantage. The west and the more developed nations have mostly eradicated such debilitating, but not necessarily life-threatening, diseases, but the countries with the greatest need often lack even the most basic tools for curing neglected tropical diseases.
I was proud to be in New York last month with four of my colleagues here in the Chamber for the global launch of the sustainable development goals. I pledge my support to two goals in particular: goal 3, on health and wellbeing for all people; and goal 5, on achieving gender equality and empowering all women and girls.
The UK currently invests £536 million in eliminating malaria. The Department for International Development has much to be proud of, but neglected tropical disease funding is being reassessed at the end of this year. NTD funding has to be protected and, as the hon. Member for Mid Derbyshire (Pauline Latham) said, increased where possible. If there is not a predominantly decent level of health across the globe, how can the world face the challenges of the 21st century? Speaking selfishly, if we meet global malaria targets by 2030, we will not only have saved more than 10 million lives but increased global economic output by $4 trillion. That represents a huge new market for British goods, manufacturing and know-how.
Some 44 million households worldwide, representing more than 150 million people, face catastrophic healthcare costs that can cripple them financially. If we can prevent such cruel, horrible diseases from developing, we can free millions of women and girls from lives of servitude when they have to care for sick and ill family members. They will be able to go to school, receive an education and be fully equipped to participate as full members of our society. The life-changing effect of the drugs we support can be immense, and the cost can be just a few pence. The burden of NTDs and malaria traps so many in a spiral of debt, sickness and poverty. We have much to offer, having gained so much ourselves, but although we have done so much, there is much left to do. I hope that by 2050 people will no longer be trapped in poverty spirals driven by sickness. Hopefully, we will help them to become full members of society.
I support the questions put by the hon. Member for Stafford to the Minister. If the Minister can answer all those questions, it will not only satisfy people but give confidence to wider society that the Government are committed to what they have already paid for.
Fiona Bruce (Congleton) (Con)
I congratulate my hon. Friend the Member for Stafford (Jeremy Lefroy) on an excellent speech, not least because of his impressive articulation of so many technical terms, which left many of us in awe. I also acknowledge his equally effective leadership of the all-party parliamentary group on malaria and neglected tropical diseases, which over the previous Parliament and continuing into this one has gathered together many of those involved in research and its practical application, seeking to resolve the challenges that he spoke of and to find solutions to the still deeply concerning impact of malaria and other neglected tropical diseases across the world.
I acknowledge the Department for International Development’s considerable contribution over the past several years and the achievements secured thus far, not least because the constructive partnership working that my hon. Friend mentioned is being so effective in contributing to the improvements that have been made. There is still a long way to go, however. My hon. Friend spoke of the importance of increasing funding for drug discovery, and I want in particular to speak about early-stage drug development funding.
As I said, the all-party parliamentary group has gathered together a number of thinkers at the forefront of this issue, one of whom is Professor Alister Craig from the Liverpool School of Tropical Medicine, who visited us last week. He is a lifelong researcher into the biology of diseases and has several suggestions that could make the funding that goes into this area even more effective. I hope the Minister will take those suggestions away. Professor Craig speaks of the weighting system of the research excellence framework, which is a method of addressing the research of British higher education institutions that can impact on the grant funding received. Professor Craig says that the current UK system is well suited to recognising the researching and developing of drugs that have an ultimate commercial home in western markets—that is to say that the cost of their development will be recouped by pharmaceutical companies. In practice, that can mean that the research excellence framework prioritises pure academic and perhaps more theoretical research over more iterative drug development processes. Drug development, particularly at an early stage, can be under-recognised as a result. Framework points can be accrued through the demonstration of excellence in academia more than through a demonstration of excellence in drug development. That is particularly concerning for the development of drugs for NTDs, because it can be seven to 10 years before apparent progress is made, but unless that work is done, no progress will ever be made.
While the system makes sense for the majority of the UK market, where a commercial operator will put in money to turn academic research into a product that ends up on the market, it can be difficult for grant money to get to development stage research into tropical diseases. Such research is often left under-resourced without a commercial developer to inject cash. In the next review of the research excellent framework, is the Minister prepared to consider measures that would allow drug developers to demonstrate the excellence of their research? We could perhaps consider the matter at a future meeting of the APPG, to which Ministers were generous in giving their time in the previous Parliament, so that the issue can be discussed with the experts in this field.
There is a clear disparity in the funding here. Successful research is rightly rewarded with drug development, but the drugs being developed only have a 0.3% chance of turning out to be an effective and available product. Much development work gets us closer to a final answer while not producing a solution or product. That valuable work—we could perhaps call them useful failures—could be better understood by review panels to give it more recognition.
For example, a number of malaria vaccines did not result in in a marketable vaccine, but each new research stage and trial contributed to the accumulation of knowledge and is valuable in the chain of research that will eventually lead to an effective malaria vaccine. If useful failures could be better understood and identified, that would be helpful. However, funding agencies and review panels are often heavily represented by individuals from the academic sphere of pharmaceuticals and less so by those from the development field. The Government have the power to set expectations about the mix of backgrounds on such panels, but will the Minister consider the balance between those from academia and those from product development?
DFID’s funding has been enormously effective over the past few years, but will DFID look particularly at targeting at early-stage NTD drug development? The purpose would be to support long-term development work from groups that have a deep understanding of NTD challenges. Money is put into development, but it is often directed, even by DFID, towards picking up drugs that are already at an advanced stage of development, leaving early-stage drugs desperately under-resourced. It is particularly important that Government consider that because private foundations and NGOs often want to invest where they can get the biggest bang for their buck and where they can see an early-course impact.
Research in the UK into tropical diseases has been effective, and research into river blindness, as mentioned by my hon. Friend the Member for Stafford, is a good example. For Members’ information, river blindness is a parasitic infection that is spread through the bites of black flies. It often leads to permanent blindness, and millions of people in central Africa and Latin America are at risk of infection. In some west African communities, 50% of the men over 40 had been blinded by the disease. UK research discovered that the parasitic worms could be stopped by attacking bacteria inside the worm as it was much easier to kill the bacteria than the worm. Millions of people are still benefiting from that discovery, which is a great example of UK research benefiting the lives of many. Such strides take time, however, which is why it is important for us to invest in early-stage drug development to make progress as quickly as possible.
I thank Professor Craig for his engagement with the APPG and for his particularly constructive comments. He says that it is not that the UK is not doing this work, but rather that more could be done. We could do more and could do it even more effectively.
Mark Durkan (Foyle) (SDLP)
It is a pleasure to serve under your chairmanship this morning, Mr Davies. Like others, I commend the hon. Member for Stafford (Jeremy Lefroy) on securing this debate and on the helpful way in which he set out the terms of the debate, which was helpful not least because, as the hon. Member for Congleton (Fiona Bruce) said, he covered all the technical terms and jargon, meaning that none of the rest of us has to go over those hurdles. I also pay tribute to the hon. Member for Stafford for his steadfast and sterling work as the chairman of the all-party parliamentary group on malaria and neglected tropical diseases. I try to attend the group’s meetings as often as I can, and I appreciate not only the quality of his work, but the calibre of the evidence and engagement that is brought to the group, which powerfully demonstrates the range of commitment of a number of charities and campaign groups. We have also heard directly from companies, not only about the quality of the work and their research, but about the commitment that they have been prepared to make on things such as price sensitivity. We have also been able to see and hear how important the work of DFID is and about its various partners in the NGO sector, and internationally and multilaterally.
The rate of progress and advance highlighted by the hon. Member for Stafford in his introduction in many ways proves the power of marshalled will when we have multilateral actions and well defined global goals. For some it is fashionable to knock such initiatives, but seeing real success against declared goals should incentivise us to do more and to go further. As the hon. Gentleman said, when we might still be looking at 450,000 or more children dying from malaria and neglected tropical diseases, we clearly need to do more.
This is a time for renewed commitment, rather than complacency about the challenges. Tackling malaria and neglected tropical diseases will be key to achieving the sustainable development goals, especially the health goal, the realisation of universal health coverage and the reduction in maternal and child mortality. Achievement of the global malaria targets by 2030 will mean more than 10 million lives saved, giving all that added productivity, releasing all that quality of life and increasing economic activity.
The UK should be seen to be prioritising sustainable development goal 3. We should therefore sustain and, I hope, increase the annual investment—£536 million at present—to achieve malaria elimination. The UK’s malaria and reproductive health framework for results will run out this year, so we need a renewed vision and a new plan for the UK’s contribution to global efforts towards elimination.
DFID has the credibility, so it should be seen to ensure that SDG 3 is more articulate about neglected tropical diseases by using its own working indicator on the number of people requiring interventions against neglected tropical diseases by 2030. Furthermore, we should heed the caution of the hon. Gentleman about silo approaches, which are understandable in the face of so many difficult challenges and so many pressures, but it is vital that we do not miss the opportunity to use disease-specific vertical programmes for other diseases and other health challenges to contribute towards the defeat of other diseases. It is therefore important for the UK to continue to fund bilateral, disease-specific programmes if we are to sustain the gains that have been made.
There has already been some discussion of “elimination” or “eradication”. It is important whether we use and how we qualify such terms and the differences between them. The goal is, in essence, one of emancipation. When we achieve elimination or eradication, we will have conquered a disease, with all the ravages that it can bring, including death, disability or diverting the life opportunities of those who have to care for the sufferers—women and children in poor countries are affected in particular. At the same time we will need to remember that malaria and neglected tropical diseases are not only a face of poverty, but a force for poverty, not least in their impact on women and children.
We need to see the whole effort as one of emancipation, creating alternatives for people—not only lives no longer lost, but lives that can be better lived and more fulfillingly expressed through economic contribution and in public life. That is why it is so timely that the hon. Member for Stafford has secured the debate and that is why it is so important that we encourage the Minister and everyone he works with in DFID to do everything that they can.
Geraint Davies (in the Chair)
I was hoping to get two speakers in before 10.30 am, but I know that will be rather difficult.
David Mackintosh (Northampton South) (Con)
I am grateful to my hon. Friend the Member for Stafford (Jeremy Lefroy) for arranging for the debate and I support his view that this is a critical time for tackling tropical diseases. I will talk specifically about leprosy, which, along with the other neglected tropical diseases that we have heard about, is preventable and treatable, although it needs to be caught early to avoid complications, side effects or disfigurement.
Last month I visited Bangladesh and met with workers from the Leprosy Mission and people suffering from the disease. We visited Vasantek, on the outskirts of Dhaka, where I met Soloma Akter, a 58-year-old widow who used to live in Boroalgapa village with her son Azizul Haque, who is a rickshaw puller, and his family. Soloma had dismissed the patch on her left arm as “nothing” when it first appeared. When she developed an ulcer on her right foot, her son took her to the hospital, but the doctors failed to diagnose leprosy. She subsequently lost three toes. A few months before my visit, staff from the Dhaka Leprosy Control Project saw her begging on the street. They recognised her symptoms and brought her to the Vasantek clinic, where she is now receiving treatment. Earlier diagnosis and medical treatment would have helped Soloma to keep her toes. There are many more stories like hers.
I also visited a self-help group in the nearby Bashantek slums, where most people who received early treatment and therefore escaped disability now look out for others with symptoms and bring them to the clinic for treatment. One man who had lost all his fingers and toes spoke passionately through the translator about how he now knew and recognised the signs and had spotted them in three other people, who had since been diagnosed and treated.
Dr Tania Mathias (Twickenham) (Con)
I have worked with leprosy in different countries and different continents. Does my hon. Friend agree that disability is 100% preventable and that the UK can lead by ensuring that Governments have proper data collection of every single disability case in leprosy?
David Mackintosh
I agree with my hon. Friend.
I have to confess that that was the first time that I had met people with leprosy, and I was not sure what to expect when I walked into the clinic. I saw people who had lost their toes, sitting with their feet in buckets to clean and hydrate their feet. I was nervous about how I would react, but I wanted to shake their hands to dispel the myth about catching leprosy by touch. But it was fine: my reaction was human, and we all saw how vulnerable these people were, but we also saw the best of humanity—the selflessness of the people caring for them, the local doctors and the people from the Leprosy Mission.
I am pleased that over the past 20 years more than 14 million leprosy patients have been cured throughout the world, and the prevalence rate of the disease has dropped by 90%. Almost all new leprosy cases are now reported from only 14 countries. In order to reach all patients, leprosy treatment, as with treatment of other neglected tropical diseases, needs to be fully integrated into general health services. Education and awareness must remain a priority. As I saw, when people know the signs and symptoms and see the effects, they become advocates for seeking help and themselves help to save many people from similar suffering.
We also need political commitment in countries with the problem, so that leprosy and other neglected tropical diseases remain a public health priority and so that we break down the age-old stigmas attached to these diseases.
Wendy Morton (Aldridge-Brownhills) (Con)
Does my hon. Friend agree that although the global goals give us a greater focus—one of them concerns preventable NTDs and malaria—the focus must now be on all countries buying into the process and into the collection of robust data, which can be shared and used to further the agenda?
David Mackintosh
I agree with my hon. Friend.
The UK Government clearly recognise the importance of neglected tropical diseases. DFID hosted and was a signatory to the London declaration, and it has been championing the issue of neglected tropical diseases on the global stage. In June during the G7 meeting in Germany, the UK Government reiterated their commitment to tackling neglected tropical diseases. The UK needs to commit to continuing to lead on such an important issue and to ensure that at the UN stats meetings, when the indicators are discussed over the next few months, it continues to push for the inclusion of the proposed indicator on neglected tropical diseases, along with discussion of other statistics, as pointed out by hon. Members.
I am grateful to my hon. Friend the Member for Stafford for securing the debate and I am pleased to be able to speak and give my support.
Several hon. Members rose—
Geraint Davies (in the Chair)
Order. I need to call the Front-Bench Members now, as we have half an hour left and three 10-minute speeches to go, but I know that Dr Tania Mathias wanted to speak. Would you like to make a brief point?
Dr Tania Mathias (Twickenham) (Con)
Thank you, Mr Davies; I appreciate it. Contrary to some other people, I want to see 21st-century measures, with local medical teams and local Governments taking ownership.
The UK’s legacy is in data collection by the missionaries. In many of the countries in which I worked, that was not done adequately, and that is where the system will break down. Our greatest legacy is the rigour of data collection. I also commend the work of the late, great Colin McDougall, who was a titan in leprosy work. We owe him so much.
Geraint Davies (in the Chair)
Mike Kane has indicated that he wants only five minutes, so if you want to speak for a couple of minutes, Dr Mathias, you may.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
It is a pleasure to serve under your chairmanship, Mr Davies. I thank the hon. Member for Stafford (Jeremy Lefroy) for securing the debate on this important issue.
It is important to start on the progress made in combating malaria and NTDs. On the basis of reported cases for 2013, 55 countries are on track to reduce their malaria case incidence rates by 75%, in line with World Health Assembly targets for 2015. It is great to see that, in recent years, four countries have been certified by the World Health Organisation director general as having eliminated malaria: the United Arab Emirates, Morocco, Turkmenistan and Armenia. In 2014, 13 countries reported zero cases of malaria within their borders and another six reported fewer than 10 cases. Between 2000 and 2015, incidences of malaria fell by 37% globally and during the same period malaria mortality rates decreased by 60%. An estimated 6.2 million malaria-related deaths have been averted globally since 2000.
That is progress, but there is obviously progress still to be made. According to the latest World Health Organisation estimates released in September 2015, this year will see 214 million cases of malaria and 438,000 deaths. Sub-Saharan Africa continues to carry a disproportionately high share of the global malaria burden: the region is home to 89% of cases and 91% of deaths. Some 15 countries, mainly in sub-Saharan Africa, account for 80% of cases and 78% of deaths. Since 2000, the decline in malaria incidence in those 15 countries has lagged behind that of other countries.
In areas with high malaria transmission, children under five are particularly susceptible to infection, illness and death, with more than two thirds of all malaria deaths occurring in that age group. However, between 2000 and 2015, the under-five malaria death rate fell by 65% globally, translating into an estimated 5.9 million children’s lives saved.
It is often the countries affected by neglected tropical diseases that are increasingly leading the fight to tackle them. In doing so, they are improving coverage rates and making strides towards elimination, with many already achieving elimination goals for individual diseases. In 2014, 126 cases of Guinea worm disease were reported, which is a staggering 99.99% drop since 1986. Only five cases have been reported so far in 2015. Of the 81 countries endemic for lymphatic filariasis, 25 no longer need mass drug administration, including 10 that have successfully eliminated transmission. Fewer than 4,000 new cases of human African trypanosomiasis—also known as sleeping sickness—were reported to the World Health Organisation last year, which is the lowest level in at least 75 years.
According to the UK coalition against neglected tropical diseases—and as the hon. Member for Stafford mentioned—NTDs affect 1.4 billion of the world’s poorest people through mortality, morbidity, disability and stigma. The 10 neglected tropical diseases mentioned in the London declaration of 2012 are reported on each year in the Uniting to Combat NTDs annual report. Its third report was published on 25 June 2015, with its key finding being that increased investment in combating NTDs is hugely economically beneficial for nations afflicted by such illnesses. It is also reassuring to note that more than 5.5 billion tablets have been donated, providing 3.5 billion treatments since the London declaration.
It was good to hear the hon. Member for Northampton South (David Mackintosh) raise leprosy. The report mentioned that leprosy is one of the diseases that is off track, which demonstrates that we need to do more to tackle NTDs and ensure that no NTD is neglected.
Taken together, the NTDs in the London declaration constitute a disability and mortality burden of the same order of magnitude as HIV/AIDS, tuberculosis or malaria. However, the costs associated with reaching the WHO 2020 targets are relatively modest compared with those big three, and the benefits are enormous, providing a compelling case that the WHO road map is a highly cost-effective initiative, with far-reaching global health, societal and economic impacts.
Combating NTDs would unlock the productive and economic potential of hundreds of millions of people who would otherwise be kept out of work and school. As hon. Members have mentioned, sustainable development goal No. 3 is to ensure healthy lives and promote wellbeing for all at all ages. One of that goal’s targets is, by 2030, to end the epidemics of AIDS, tuberculosis, malaria and neglected tropical diseases and to combat hepatitis, water-borne diseases and other communicable diseases.
The delivery of malaria and NTD interventions is essential to achieving universal health coverage, ensuring healthy lives and promoting wellbeing for those of all ages, particularly the vulnerable and marginalised. It also contributes strongly to reducing child mortality and improving maternal health, and provides the opportunity to treat childhood illnesses such as pneumonia, diarrhoea and acute malnutrition.
It is clear that combating malaria and NDTs will significantly help to achieve the sustainable development goals; indeed, the goals will help to combat malaria and NTDs. With that in mind, it would be great if the Minister told us how the action that DFID is taking to combat malaria and NTDs fits into its wider strategy to achieve the sustainable development goals.
Let me finish by commending the work of the University of Dundee, which the hon. Member for Stafford touched on, in tackling malaria, with the discovery of a new anti-malarial compound in June 2015. The imaginatively named DDD107498 has the potential to treat malaria patients, including those with malaria parasites resistant to current medications, in a single dose and to help to reduce the transmission of the parasite. The compound was identified through a collaboration between the University of Dundee’s drug discovery unit and Medicines for Malaria Venture. The discovery of that new anti-malarial agent, which has shown remarkable potency in multiple stages of the malaria lifecycle, is an exciting prospect in the hunt for viable new treatments. Once again, I thank the hon. Member for Stafford for securing the debate, and I look forward to hearing the Minister’s response to some of the points raised.
Mike Kane (Wythenshawe and Sale East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. I, too, thank the hon. Member for Stafford (Jeremy Lefroy) for securing the debate and for his personal leadership in this area. He gave great personal testimony about how the disease has affected him in the past. I, too, went to Tanzania in the early ’90s and was prescribed Lariam while I was helping a friend to set up the first public library in Pemba. I also felt the effects of that terrible drug at that time.
Labour welcomes the sustainable development goals. We are entering a new era in which we hope to eradicate poverty, foster human wellbeing and protect our planet. That universal agenda for people in all countries pledges to leave no one behind. We now need to realise its transformational potential. The UK has shown its strong commitment to international development through spending 0.7% of its gross national income on aid and enshrining that spending in law.
I want to talk about sustainable development goal 3, which, as we all know, is about eradicating disease. Although it is only one of 17, and the target only one among 169—I feel sorry for the civil servants who have to understand all those fully—our contribution must demonstrate an integrated approach, as has been said. We must consider the interplay of all dimensions—social, economic and environmental—of sustainable development. We need to expand innovation and research, empower communities, build a skilled workforce and set up strong regulatory frameworks to promote and improve world health systems.
DFID has a strong track record on combating diseases such as malaria and neglected tropical diseases. UK spending on malaria control and prevention was £536 million in 2013-14, and we contributed significantly to the recently announced 60% reduction in malaria mortality since 2000.
According to the World Health Organisation, more than 70 countries are ready to implement national NTD masterplans, which aim to stimulate an increased demand for donated medicines. Since 2006, more than 5 billion anti-parasitic treatments have been delivered. During 2012 and 2013, the pharmaceutical industry donated 2.5 billion treatments—the hon. Member for Stafford made the industry’s contribution clear. Over 800 million people were treated in 2012 alone. DFID has increased its expenditure on combating NTDs to over £250 million. As he said, it takes reliable long-term funding to tackle these diseases.
Global malaria control is one of the great public health success stories of the past 15 years, and our efforts to combat NTDs are on the right track, but we face substantial challenges, such as the spread of resistance to drugs. In addition, we face funding shortfalls for research and development targeted at new diagnostics for, and prevention and treatment of, NTDs. Yet the prevention of deadly diseases is one of the best uses of aid. If global malaria targets are achieved by 2030, it is estimated that more than 10 million lives will be saved and over $4 trillion of additional economic output will be generated.
DFID has great experience in fighting malaria and NTDs, but we can do even more. The UK has excellent resources in the NHS that could be brought to bear in the task of building strong health systems around the world. Following the idea of co-development, the NHS could engage in a mutually beneficial exchange of professionals. As a global employer, the NHS has obligations to support training and healthcare in the countries of origin of our health workers.
DFID should be a strong partner for malaria-affected countries, which will play the most important role in designing effective national strategies, using funds transparently and well, and providing financing from their own domestic resources. Civil society and the private sector also have crucial roles to play. We should encourage new partners to join the global effort, especially private contributors. We also need to support multilateral partners such as the Global Fund to Fight AIDS, Tuberculosis and Malaria. It is essential that we continue to support the fund and build on what has been done, particularly the investment in new vaccines, medicines, insecticides and diagnostics.
Tackling NTDs and malaria promises a number of spillover effects, such as greater productivity and growth, reduced worker and child absenteeism, increased equity and women’s empowerment, and improved wellbeing, particularly for vulnerable and marginalised populations. Failure to act could see a resurgence in disease, with increased deaths and lost opportunities for progress and development. The Ebola crisis in west Africa has painfully illustrated the importance of strong public health systems for fighting disease. That lesson applies to our efforts to combat NTDs and malaria.
I thank the hon. Member for Stafford for leading this debate. I also thank hon. Members for their testimony about their time in Tanzania, Uganda, Nigeria, India and Bangladesh, and for the great expertise they have brought to the debate. We need to scale up our efforts to combat malaria and NTDs by investing in research and development, tackling resistance to life-saving medicines and insecticides, and boosting health systems across the world to help to bring an end to these terrible diseases.
The Minister of State, Department for International Development (Grant Shapps)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Stafford (Jeremy Lefroy) on securing this debate; I do so out of more than just the usual courtesy, as I also wish to commend him for his tremendous work on the Select Committee on International Development and for his chairmanship of the all-party group on malaria and neglected tropical diseases, which is one of the most effective APPGs in this House. It is well respected, frequently convenes high-quality debates and produces extremely influential reports. His knowledge and expertise have been acknowledged by hon. Members from across the House this morning.
The opening words of the “leave no one behind” pledge—many of us were at the United Nations General Assembly last month where that global promise was signed—are:
“We commit to putting the last first.”
Today’s debate is therefore welcome and timely. Malaria and NTDs affect the poorest of the poor. Every year, neglected tropical diseases affect the lives of over 1 billion people, causing disability, disfigurement, stigma and an estimated half a million deaths, as we have heard. Malaria still kills more than 400,000 people a year, mostly children in Africa.
Since the start of this Parliament I have visited seven different African countries; the hon. Member for Wythenshawe and Sale East (Mike Kane) will be pleased to hear that I have been taking not Lariam but Malarone. My most recent visit was the week before last, to Nigeria—the hon. Member for Edmonton (Kate Osamor) will be interested to hear that—where I discussed these very issues. This morning, I returned from the United Arab Emirates; as the hon. Member for West Aberdeenshire and Kincardine (Stuart Blair Donaldson) mentioned, the UAE is one of the latest countries to be declared malaria free, so I had interesting discussions there as well.
My hon. Friend the Member for Mid Derbyshire (Pauline Latham) asked what the UK is doing to tackle the resurgence in malaria—in Uganda in particular, although we must be watchful everywhere. As she will know, DFID has provided a significant amount of support to Uganda to try to reduce malaria. The recent outbreaks are of significant concern, and she is absolutely right to raise them. We are responding.
DFID is supporting the distribution of long-lasting insecticide-treated nets, along with capacity building for healthcare workers for the management of fever, specifically in the 10 most affected districts. We are working in partnership with the World Health Organisation to improve the availability and use of high-quality data for decision making—my hon. Friend the Member for Twickenham (Dr Mathias) rightly raised the subject of data—and, through the UK’s significant contribution to the Global Fund to Fight AIDS, Tuberculosis and Malaria, life-saving anti-malarials are being made available to health facilities across the outbreak areas, as a key strategy for reducing transmission.
We are going further, by building on recent analysis by the WHO. DFID has agreed to fund a study—my hon. Friend will be pleased to hear this, as will the whole House—that will provide robust data on the possible causes of the outbreak, to inform the response and, most importantly, learn valuable lessons that we can then use in future programming as we take further decisions on the issue. I will meet the global fund leaders on 9 November, when I will raise that important issue. Through the strong monitoring mechanisms that we always have in place for our programmes, we will also take a close look at the issue of bed nets. I assure hon. Members that that will be a top priority.
The UK has been at the forefront of delivering progress against malaria and NTDs. By tackling them, we prevent pain, suffering and death, and we help to reduce poverty.
Pauline Latham
I am sorry to go back to the issue of northern Uganda, but will the Minister please tell me what is going to happen about the stock-outs of drugs? Are we going to flood the area with drugs to make sure that the people who need them actually get them? They are not getting them at the moment.
Grant Shapps
As my hon. Friend is aware, we are contributing up to £1 billion over three years—2014 to 2016—to the Global Fund to Fight AIDS, Tuberculosis and Malaria. She has my undertaking that I will raise that specific point when I take part in the meeting on 9 November. In addition, my officials are listening to the debate, and we will endeavour to take the issue forward as speedily as possible. We do not want any delay, and she has my absolute commitment that we will process this as fast as possible.
I would like to make three important points—about resources, results and partnerships. On resources, as hon. Members have discussed, the UK committed an additional £195 million in December 2012 at the London declaration on NTDs. I want to update Members, and particularly my hon. Friend the Member for Stafford, about the declaration. It brought together key leaders from health and development organisations, along with industry partners, and they pledged to tackle the 10 NTDs. Its third progress report was launched in London in June, and the DFID Minister of State, my right hon. Friend the Member for New Forest West (Mr Swayne), spoke at the launch. The report indicated the growing number of countries that are meeting their targets.
None the less, there are challenges that threaten our ability to meet WHO road map 2020 targets, and we will all need to step up our efforts to do more. The road map and the London declaration have been game-changing events for NTDs, but the short answer to the questions my hon. Friend the Member for Stafford posed is that, although good progress has been made, there is much more to do. DFID and the British Government will take a lead in making sure that that happens.
At this point, I pay tribute to Members on both sides of the House. In the debate, there has been—almost uniquely, compared with many of our debates—a noticeable degree of cross-Chamber support for the action being taken. That assists the UK in making a full contribution.
We are fulfilling our commitment, and we have expanded our existing NTD programme. As my hon. Friend will be aware, five years ago the UK spent less than £200 million annually on tackling malaria; as has been recognised in the debate, the figure is now well over £500 million. As has been said, tackling such diseases is among the best buys in global health—I had not heard the statistic that £1 brings back £36. Each year, malaria costs the African continent at least $12 billion in lost productivity.
That is why national Government leadership in the endemic countries is critical. The domestic focus in those countries must be on increasing measures to tackle malaria, and Governments must ensure that they put in resources themselves. Ensuring that that happens is a constant battle—a battle I frequently go out and fight to make sure we are all truly sharing the burden. National legislators have an important role to play in making the case for increased health budgets, including for NTDs and malaria. I call on those partners to step up their actions. It is in their countries’ interests to do so, because—quite apart from the very sensible humanitarian reasons—enormous savings can be made.
Let me move on to my second point: results. Just last month, the Secretary of State spoke in the House at the global launch of the report on the malaria millennium development goal target. The report indicated the tremendous progress that has been made, which many Members have mentioned. Since 2000, an estimated 1 billion insecticide-treated bed nets have been distributed in Africa, and malaria mortality has almost halved in just over a decade. That is a huge achievement, and the UK can be proud of her contribution, but there is clearly a lot more to do. One in four children in sub-Saharan Africa still lives in a household without at least one insecticide-treated bed net or other effective protection against mosquitoes, but such things should be the bare minimum.
Mrs Helen Grant
The Minister mentioned the millennium development goals. Is he absolutely confident that the new global goals will be sufficient to continue the progress made under the MDGs, which have obviously done good? Will he and DFID also do everything they can to assist data collection—a subject ably and powerfully raised by my hon. Friend the Member for Twickenham (Dr Mathias)? Without data collection, we will have no measures and we will not be able to make people accountable.
Grant Shapps
On the latter point, about data collection, I had hoped that I had made myself clear: we absolutely support data collection programmes, and I outlined one specific programme. I will come to my hon. Friend’s point about the new global goals in just a second, because the UK remains committed to bringing down the numbers even further.
Hon. Members will be delighted to learn that, just last week, I approved the purchase of a further 2 million insecticide-protected bed nets for Tanzania, which I visited recently. In addition, there are other programmes that will assist in the battle against these diseases. Energy Africa, a programme I launched in London last Thursday with Kofi Annan—Bob Geldof and others are supporting it—will enable energy to be brought to Africa. That means that it will be possible to provide better medical care, using means such as better refrigeration, for example. That is all an important part of achieving global goal 7.
On global goal 3, yes, everything is there. The UK has been at the forefront of supporting this global goal, with all its sub-targets, including preventing preventable deaths among children and ending epidemics of malaria and NTDs. I am therefore absolutely confident that the UK is right behind the push on that.
To really see an impact, we will need to make Herculean efforts. We need think only of river blindness, which once affected vast swathes of Africa, but which is now almost non-existent, to see what can be achieved.
Earlier this year, former US President Jimmy Carter was at DFID to discuss the guinea worm eradication programme. In 1986, guinea worm disease affected 3.5 million people; last year, there were 126 cases. So far this year, there have been just 15. The reduction is a simply amazing achievement, and we look forward to seeing other NTDs quickly follow the same course.
The Government have a strong track record on supporting successful product development and research, particularly through public-private product development partnerships, and some of the innovations have been discussed this morning.
There is, however, great concern about the 2020 vision, as my hon. Friend the Member for Stafford mentioned. Earlier this year, the WHO launched its third report on NTDs in London. Former DFID Minister Baroness Northover spoke at the launch. The report set out the financing and targets involved in meeting the WHO road map goals for 2020. It also discussed the progress that has been made. We need to do a lot more if we are to continue to meet those goals, but the Department and the Government are standing very much foursquare behind that.
My third point is about partnerships and collaborating with others to achieve a greater impact. We must, of course, recognise the substantial contribution the pharmaceutical companies have made. Pharmaceuticals have pledged drugs valued at $17.8 billion from 2014 to 2020 to tackle NTDs—a very substantial amount. There is also lots of capacity among health workers, and the NHS was mentioned. Volunteers and others are also supporting the implementation of these programmes. The UK will stay at the forefront of those many developments.
Lastly, we will strive to ensure that the post-2015 agenda has a transformational impact on the lives of the most vulnerable and, in particular, on tackling NTDs and malaria. It is worth noting that the Conservative manifesto—the manifestos of other parties covered similar issues—included a commitment to lead a major new global programme to accelerate the development and deployment of new vaccines, drugs and diagnostics for the world’s deadliest infectious diseases. I can report that that work is ongoing in DFID and throughout the Government so that we can meet that commitment, which I think the whole House will approve of.
Once again, I congratulate my hon. Friend the Member for Stafford on securing the debate. I am aware that there is one question I need to answer in a little more detail, and I will do so in writing.
Motion lapsed (Standing Order No. 10(6)).
Pakistan
(8 years, 6 months ago)
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Rehman Chishti (Gillingham and Rainham) (Con)
I beg to move,
That this House has considered Government support for Pakistan.
As chairman of the all-party group on Pakistan, I am grateful for this opportunity to discuss Government support for that country, which has long and deep historic ties with the United Kingdom. Our thoughts are with the people in Pakistan, Afghanistan and parts of India affected by yesterday’s earthquake. I lost 25 relatives, including my grandfather, in the 2005 earthquake in Kashmir. I know what amazing support the UK provided then, and I ask the UK to do all that it can to help Pakistan at this difficult time.
There are more than 1 million people of Pakistani background in the United Kingdom. They are the second largest ethnic minority group, and many continue to contribute much to our country, as well as retaining links with family and friends in Pakistan. Pakistan has come a long way in its relatively brief 68-year history, passing an important milestone in 2013 with the first peaceful democratic transition from one Government to another. There is a conviction that a resilient UK-Pakistan relationship is vital to regional and global peace and security. Working together and with key international partners helps to address evolving threats in south Asia. Pakistan has the will, determination and commitment at every level to be a progressive, strong and democratic country at the heart of the international community.
As a country on the front line of the war on terror, Pakistan has faced major challenges and brutal attacks, such as the horrific massacre at the army public school in Peshawar.
Mr Virendra Sharma (Ealing, Southall) (Lab)
I thank the hon. Gentleman for allowing me to intervene so early in the debate. I congratulate him on securing it; it is important, given the historical and cultural relationship of Britain and Pakistan. Pakistan has existed for only 68 years, but things have developed. Given what is happening now because of earthquakes and other things, the area needs peace and increased prosperity. The British Government have a responsibility to look into the issues and work with the diaspora here and with the Government of Pakistan.
Rehman Chishti
I thank the hon. Gentleman for his remarks. He has always been a strong friend of Pakistan, wanting to build on the excellent relationship between our two countries. He often highlights the important role of the diaspora. Of course that is right. The United Kingdom has a huge role to play in ensuring that there is prosperity, stability and security throughout the region in south Asia, by working with all countries—India, Pakistan, Bangladesh, Nepal and China. It has a significant role to play in that respect.
I was touching on the horrific attack in Peshawar, in which, sadly, 134 children lost their lives. After many years of attacks that have resulted in the deaths of more than 47,000 civilians and 5,000 armed forces personnel in terrorist-related violence in the past decade, reports show that in the past nine months major terrorist attacks have declined by 70%. The UK has always stood shoulder to shoulder with those tackling terrorism and has always been a strong ally of Pakistan. As the Prime Minister said,
“in this battle the friends of Pakistan are friends of Britain; the enemies of Pakistan are enemies of Britain”.
Domestically, Pakistan’s main threat emanates from terrorism and extremism, and there is a direct link between those things and external factors such as conflict in Afghanistan, the unresolved Kashmir dispute and increasing chaos in the middle east.
Imran Hussain (Bradford East) (Lab)
This is an important debate and the hon. Gentleman is right to point out that there are more than 1 million people of Pakistani origin in this country. The debate will be important for them. My thoughts and prayers are with those who tragically lost their lives in the earthquake in India, Pakistan and Afghanistan.
Does the hon. Gentleman agree that one issue that remains outstanding in the region, which is in some ways a barrier to peace and prosperity, is the region of Kashmir? Does he agree that there is a need for a peaceful solution to allow the sons and daughters of Kashmir the right to self-determination, and will he call on the Government to encourage both Pakistan and India to have peaceful round-table discussions to promote that?
Rehman Chishti
I pay tribute to the hon. Gentleman for the brilliant work that he does in building the relationship between our two great countries, and for all that he does in his constituency with its large Pakistani diaspora. He touched on an important point about Kashmir; no doubt the Minister and all concerned are aware of United Nations resolution 47 of April 1948, which says that the people of Kashmir should be given a right to self-determination, to determine their own destiny. The resolution includes the words:
“Considering that the continuation of the dispute is likely to endanger international peace and security”.
My response to the hon. Gentleman is that yes, of course, people will say there is a need for bilateral talks between India and Pakistan. However, as we saw in the past year the talks between Foreign Secretaries collapsed, with the Indian authorities withdrawing from them. For talks to continue, two willing parties are needed. At the moment there is no constructive bilateral way forward. The hon. Gentleman is right to say that the international community, including both the United States and the United Kingdom, has a moral obligation with respect to peace and stability in the region to do all that it can to assist in that long, drawn-out issue. I would mention, by way of a declaration, that I was born in Kashmir, so I await a plebiscite for my say, whenever that may come. I think that the international community has a moral obligation with respect to the matter.
Imran Hussain
I thank the hon. Gentleman for his thoughtful response. Will he also comment on the continued breaches and human rights violations in the region, as reported by many international human rights organisations? Will he join me in asking the Government to note that that is perhaps an even more pressing issue at present? Human rights violations in the region must end and the international community must do more to assist with that.
Rehman Chishti
The hon. Gentleman is right about respect for the rule of law and human rights. Both the countries in question are signatories to the International Covenant on Civil and Political Rights, so on that basis everything needs to be done to ensure that people’s basic human rights are respected, wherever they are.
It is said that the UK’s supply of advanced conventional armaments to India has the potential to aggravate the growing asymmetry between India and Pakistan, which will lead to a lowering of nuclear thresholds. Some in Pakistan consider the UK’s nuclear stance on Pakistan to be unfair and that the UK’s support for India’s entry into the Nuclear Suppliers Group and perceived pro-India stance on the Missile Technology Control Regime not only undermines Pakistan-UK bilateral relations but also forces Pakistan to adopt measures in the nuclear domain that it considers to be in its national interest but which may be contrary to the UK’s aspiration within the international nuclear paradigm. The UK-Pakistan defence relationship is strong but not regarded as strategic. A move in that direction could develop even stronger relationships.
One of Pakistan’s biggest challenges and largest opportunities is its growing and young population, which is projected by the UN to increase to more than 300 million by 2050. There is an opportunity to reap that demographic dividend, and Pakistan could be the next South Korea by 2050. According to economist Jim O’Neill, Pakistan has the potential to become the world’s 18th largest economy by 2050—almost the same size of the current German economy.
Lord Maude, UK Minister for Trade and Investment, said in the House of Lords in June 2015 that Pakistan presents “too big an opportunity” to miss. Pakistan has one of the world’s fastest growing middle classes, representing 55% of the total population. In the past three years, consumer spending in Pakistan has increased at an average of 26% compared with 7.7% in Asia as a whole. That increase in consumption-driven demand presents an opportunity for British brands to introduce their products and services to the market, as demonstrated by the success of Debenhams.
Pakistan’s strong relationship with the European Union and the US through the GSP plus programme, which the UK strongly supports, is a significant boost to the country’s exports. Since Pakistan was awarded that status by the EU, exports have increased by 21%, and total UK-Pakistan trade increased by 15% in 2013-2014. The China-Pakistan economic corridor in particular has seen 51 agreements signed, totalling $45.6 billion in 2014, in one of China’s largest overseas investments. The mega-projects that will follow can be given vital assistance by British companies through providing services and expertise to maximise the benefits. Encouraged by that, and in recognition of its being one of the best performing frontier capital markets, Pakistan’s credit rating was upgraded this year by Moody’s for the first time since 2008. The UK Export Finance fund has been revised in order to support the work of publicly managed projects, while the overall size of the fund has increased from £200 to £300 million.
While there is an appetite in the UK to do more business, there are mutual obligations and a moral imperative for Pakistan to reform, including improving the legal process, privatisation, taxation reform and dealing with corruption. Pakistan is rated 127th out of 177 countries on the corruption index. Its controversial and often abused blasphemy laws hinder the country’s international standing, as countries are expected to respect citizens’ human rights and religion freedoms.
Yasmin Qureshi (Bolton South East) (Lab)
The hon. Gentleman is right to talk about human rights issues and blasphemy laws. Does he agree that our Government should also look at human rights issues in the rest of south Asia? For example, in India there has been a surge of sectarian violence in the past year or two, which has often been linked with the rise of Hindu nationalism or fascism—whatever we want to call it. In Burma, there have been killings of Rohingya Muslims. Does he think it appropriate for our Government to look at those countries and their human rights records as well?
Rehman Chishti
I thank the hon. Lady for her remarks and pay tribute to her for the brilliant work she does to promote the relationship between Pakistan and the United Kingdom. It was a real pleasure to be on a British Council delegation to Pakistan with her. She probably read the article I read—I urge the Minister to read it too—in the Times of India on 1 May 2015, entitled “US panel: Minorities under attack in India”. The independent panel that reports on religious freedom to the President of the United States, Barack Obama, highlighted human rights issues concerning minorities in India.
Whether the issue is China or the Rohingya community in Burma, human rights should be a key part of our foreign policy wherever abuses occur, as I made clear to the shadow Foreign Secretary in a Queen’s Speech debate on foreign policy. As I said to the hon. Member for Bradford East (Imran Hussain), everyone’s human rights, wherever they are, should be respected by all, and we should do everything we can to ensure that countries respect basic human rights and religious freedoms.
I have often spoken about the need to reform Pakistan’s blasphemy laws. Last year, I wrote a letter, signed by 54 Members of Parliament, to Prime Minister Sharif and the Chief Justice raising concerns about Asia Bibi, a Christian mother of five who was sentenced to death. I am pleased to see that in July, Pakistan’s Supreme Court announced a stay of execution, but there is still much to do to secure her release. Over the summer, the hon. Member for Bolton South East (Yasmin Qureshi) and I visited Pakistan as part of a cross-party delegation. We met senior Government officials and discussed the need to reform blasphemy laws and minority rights. It is fair to say that we sensed a real desire by those senior officials to look at reforming those laws, which are often abused and target Muslims as well as minorities.
Yasmin Qureshi
I concur with the hon. Gentleman. I remember meeting with a Chief Minister in Pakistan and raising the matter of blasphemy laws, as well as the Asia Bibi case.
Rehman Chishti
The hon. Lady not only raised the issue, but used that meeting to provide alternatives of how abuse could be curtailed. I fully support what she said about reform, whether it is a question of these cases being dealt with at high courts rather than lower courts or having special prosecutors and special judges. Those discussions took place at every level, and I thank her for her expertise and contributions.
The delegation to Pakistan had the opportunity to learn more about the British Council’s excellent work. Members on the trip visited Islamabad and Lahore to see some of the British Council’s projects in action, including Take a Child to School and the Punjab Education and English Language Initiative, which aims to train 300,000 teachers. The British Council in Pakistan works in all four provinces and has built a network with the scale, skills and influence to deliver transformational change. The council aims to expand its presence and reach tens of millions of people across the entire country by reopening libraries, improving life chances and community engagement through citizenship and sport, empowering women and girls, strengthening skills and expertise in English and UK-Pakistan partnerships in higher education, science and the creative industries.
The Department for International Development is investing some £320 million this year in Pakistan in one of its largest programmes. Pakistan was DFID’s third largest bilateral programme in 2014-15, and if progress continues, it could become DFID’s largest such programme in 2015-16. The greatest priorities for the UK as an international development donor to Pakistan are education, women and children, creating jobs and supporting economic growth, strengthening democracy and governance, building peace and stability in conflict-affected areas, and providing humanitarian assistance through life-saving support to people affected by conflict and natural disasters.
There are ways we can further our relations with Pakistan. In particular, I would like the Minister to consider the following issues. Will he ensure that every possible assistance is offered to Pakistan in the light of the earthquake, to assist the country at this difficult hour? There is a clear relationship between the number of direct flights to a country and an increase in trade. However, since 2008, British Airways has suspended its six weekly Heathrow flights. Will the Minister look at that? The Government’s travel advice has been raised as an issue. Will the Minister look at that and the process for reviewing it, in line with the improving security situation in Pakistan?
The Government have a target of increasing bilateral trade to £3 billion by 2015. Will the Minister present an update on plans to increase trade relations, including plans for trade delegations to Pakistan? With the bulk of trade focused on the goods sector, what can he say about the scope to develop trading links across the service sector? Around 10,000 Pakistani students are studying in the UK. However, changes to student visas were raised when we visited Pakistan as a delegation. Will the Minister provide an update on the situation?
On security, Pakistan is on the front line of the battle with terrorism and would appreciate assistance through GSM—global system for mobile communications—intelligence gathering and technology, such as biometric scanners and night goggles, to monitor the Afghan border more effectively.
I come to my last specific point for the Minister. In a recent joint statement with Prime Minister Sharif, President Obama said that US engagement with Pakistan, one of the largest Muslim democracies in the world, should be comprehensive and multi-dimensional to reflect the global challenges of the 21st century. Is that what the United Kingdom is trying to achieve with Pakistan in its long, strategic relationship with the country?
In conclusion, Pakistan still has many challenges, but it is determined to become a safe and prosperous nation at the heart of the international community. With our mutual shared history, our very large Pakistani-origin diaspora and our deep, strong, multi-dimensional relationship based on mutual trust, respect and understanding, our relationship can go from strength to strength by working together to tackle the global challenges facing the international community. I know that the Minister has recently visited Karachi and seen the many opportunities that the country offers. I thank him for the brilliant work that he does in building our two countries’ excellent relationship, and I look forward to hearing from him on this matter.
Geraint Davies (in the Chair)
I call the Minister, who will have to speak quickly.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr Tobias Ellwood)
Thank you, Mr Davies; it is a real pleasure to respond to this debate, and I congratulate my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) on securing it. He spoke with such passion, flair, understanding and expertise on this matter, and in such detail, that he has managed to give me limited time in which to respond. However, such is his enthusiasm for making sure that these matters are discussed in the House that it is fully understandable that he has eaten a little into my time to reply. I will do my best to respond to some of the matters that he has raised, and as usual, I will write to him in the normal manner if there are points that I cannot reply to now. I commend him and other hon. Members for the work they have done in the House.
My hon. Friend began, as I should as well, by offering our condolences, understanding and sympathies to all those affected by the horrific earthquake that has taken place in Afghanistan, but which has rippled right across the region. He asked what Britain is doing. Naturally, we stand ready to give support—we have had no formal request yet, but we stand by, ready to help our friend and ally.
My hon. Friend mentioned the important role of the enormous diaspora that we have in this country, which strengthens our cultural relationships and the understanding of our country, which is very important indeed. I am pleased that he also paid tribute to the British Council, not least the delegation that I had the opportunity to meet recently on a visit to the country. I was very proud to meet those British Council representatives and to hear about the work they are doing to strengthen this important bilateral relationship. I had the opportunity to visit not only Karachi, but Islamabad last month. I saw at first hand how Britain is working very closely with Pakistan on three key areas: security, which my hon. Friend raised, the economy and governance. Before trying to answer his questions, I will cover—in the time available—some thoughts on those three key areas.
First, as my hon. Friend implied, security across Pakistan has improved dramatically. There really was an understanding—almost a wake-up call—following the disastrous attack that killed so many children in the Peshawar public school. The British Government are very much playing our part. We are training Pakistani police and promoting work with prosecutors and the judiciary to investigate, prosecute and sentence terrorist suspects in line with international human rights standards. We have made an awful lot of progress, and I hope that continues.
Secondly, on the economy, the improved security is helping to drive economic growth. It is making the country more attractive. An International Monetary Fund programme has helped to stabilise the economy since the fiscal and balance of payments crisis two years ago. However, more work is needed if we are to increase the country’s growth to the 7% to 8% needed to reduce poverty. We continue to encourage Pakistan to address the energy crisis, tackle corruption and undertake further privatisations, which are needed to boost the economy. We are supporting businesses that want to trade more with Pakistan, where the opportunities, from energy to infrastructure, are clear, as I discovered on my visit. I hope to return to Pakistan, not least to Karachi, in the near future with my own trade delegation. Indeed, I have invited and encouraged the Mayor of London, who is familiar with working with megacities, to provide assistance in making sure that Karachi works towards being a gateway to the region.
Thirdly, on governance, the advances made in security and prosperity cannot be sustained without good governance, and democracy in Pakistan has shallow roots, as we have heard. We are helping to build on that and sharing our experience to cement accountable governance, credible elections and civilian transitions. The Department for International Development, which my hon. Friend mentioned a number of times, has one of the largest bilateral aid programmes and is helping Pakistan to improve healthcare, education and the provision of humanitarian assistance. UK aid has benefited over 6 million primary school children, ensured that over 1 million more births involved medical professionals and helped over 4 million flood victims.
My hon. Friend mentioned Kashmir, which is obviously a very sensitive subject. He is familiar with our long-standing position in the UK—that it is for India and Pakistan to find a lasting solution to the situation in Kashmir which takes into account the wishes of the Kashmiri people. It is not for the UK to prescribe a solution or indeed, to mediate, but we very much encourage both sides to maintain their positive dialogue and to work towards a solution.
In the limited time remaining, I will try as best as I can to answer the series of questions that my hon. Friend asked. As I mentioned, on the earthquake, we stand ready to give support. We will continue to have discussions with British Airways. The time is now ripe for those flights to be reviewed and reinstalled. I hope that will be the case, pending the security requirements that we and the airline need. On travel advice, we want to make things as trouble-free as possible. There are over 1 million visits and movements every year. There is a requirement, occasionally, for us to review travel advice to specific areas. We are quite careful to make sure that we articulate that travel advice on our website.
On bilateral trade, we have the target of £3 billion. I hope we can persevere towards that. My hon. Friend is right to emphasise the fact that the British Government now underwrites and guarantees business opportunities. The money has increased from £200 million to £300 million, which I think is excellent news. That is an indication of how we want to meet the target and to encourage not only businesses that are already there to grow, but new businesses to consider Pakistan as a place to open up and do business.
My hon. Friend mentioned the 70th anniversary in 2017. I very much hope that that is something we can work towards, and it is wise to flag that up now, to ensure that we can mark that important landmark in Pakistan’s history.
On visas, my hon. Friend will be aware of the robust requirement for us to have a thorough visa system in place. However, we want to make sure that we can attract the brightest and best students from around the world and that they are able to come here on legitimate courses, so we very much want to work with Pakistan on that front. On terrorism, I hear what he said about the requests. We will certainly look at that. We have a very strong relationship that is growing ever stronger with regard to helping Pakistan on counter-terrorism.
My hon. Friend spoke of the opportunities for the country to grow and to become the South Korea of the future.
Rehman Chishti
Will the Minister join me in welcoming the high commissioner of Pakistan to our debate and in commending him for the brilliant work he does to build the relationship between our two countries?
Mr Ellwood
That intervention was absolutely deserved. I look forward to meeting the high commissioner in the very near future—I think we have a meeting planned either today or tomorrow—and we are always happy to have the opportunity to meet.
This has been a short debate, but it has articulated the importance of this bilateral relationship and the opportunities for us to work together on security, the economy and governance.
Motion lapsed (Standing Order No. 10(6)).
Met Office
(8 years, 6 months ago)
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Mr Ben Bradshaw (Exeter) (Lab)
I beg to move,
That this House has considered the BBC’s relationship with the Met Office.
The Met Office and the BBC are two of the United Kingdom’s most respected and successful public institutions. The first is our national weather forecaster, owned by the public, and the second is our national broadcaster, also owned by the public; they both have a reach and reputation that go far beyond these shores.
The BBC is a global broadcaster, with a justified reputation for quality, accuracy and impartiality. Our Met Office is independently assessed and widely recognised as the best in the world. Both the BBC and the Met Office earn millions of pounds for UK plc; for example, our Met Office provides weather forecasts for most of the world’s civilian airlines, keeping our flights safe and helping them to plan the most efficient routes. The Met Office does more than just forecast weather. It provides expert advice on a host of hazards, including flooding, air quality, space weather and volcanic ash, and is the world’s leading repository of expertise on climate change.
The BBC and the Met Office are also two of the world’s oldest organisations of their kind. The Met Office was set up by the Government in 1854 to establish meteorology as a science and, initially, to provide weather forecasts to protect the safety of ships and their crews at sea. The BBC first broadcast a radio weather bulletin in 1922 using data from the Met Office, a relationship that has prospered to the present day. The weather men and women we see regularly on our TV screens are fully qualified meteorological scientists, often employed not by the BBC, but by the Met Office. They work round the clock using their scientific expertise and broadcasting skills to communicate vital information to the public. Many of them, across the generations, have become household names. Radio 4’s shipping forecast, again provided by the Met Office, is an iconic part of our national life.
It was with some consternation that I heard back in August that the BBC was planning to end its 90-year-plus relationship with the Met Office. I should say at this stage that the Met Office is in my constituency. Indeed, I helped to secure its transfer to Exeter from Bracknell in the early noughties, and we in Exeter are immensely proud to host it. However, my main motivation for seeking this debate is not the potential impact on my constituency. The current contract with the BBC earns the Met Office about £3 million out of a turnover of £220 million a year. The Met Office has said that any impact on income or jobs from the BBC terminating the contract would be minimal. No, my main reason for raising my concerns and seeking this debate is primarily the wider national interest.
The historic relationship between the Met Office and the BBC and of each organisation with the Government has been and, in my view, remains integral to national resilience and emergency planning and even, in times or arenas of conflict, to national security. The Met Office provides information to a whole host of customers and organisations, including commercial businesses, transport bodies, farmers, seafarers, sports organisations, local government, the NHS and the general public. If we think about it, there is almost no aspect of our lives that is not somehow impacted by the weather. Timely, accurate weather information and forecasting is vital in normal times, but during extreme weather events or at times of national emergency it can be a matter of life and death.
That is why the Met Office is embedded in our civil contingency systems. I remember, as a Minister, attending emergency meetings of the civil contingencies secretariat, COBRA, during severe flooding and the foot-and-mouth and bird flu crises, when the in-time input from Met Office staff was absolutely critical in informing the Government’s response. Communicating severe warnings quickly and accurately through our main broadcaster is vital to enable businesses, public bodies and the wider public to plan and respond.
The BBC has said in response to questions from me that it intends to continue to use the Met Office’s severe weather warnings in its broadcasts, and that is extremely welcome. But what the BBC has not done is explain how it will ensure that those warnings are consistent with its general weather forecasting if they are sourced from a different provider.
Britain’s geographical position on the edge of the European continent and facing the Atlantic makes our weather very difficult to predict. Accurately forecasting the exact route of the deep depressions or storms that are responsible for most of the gales and flooding we experience is particularly tricky. The Met Office has an unparalleled reputation in getting these forecasts right. In fact, the World Meteorological Organisation says the Met Office’s forecasts are consistently the most accurate in the world. But if the BBC goes ahead with its plans, the severe weather warnings from the Met Office could still be broadcast by the BBC but might be inconsistent with or even contradict the BBC’s general weather forecasts.
Accurate and consistent messaging is absolutely essential in weather-related emergencies. Ten years ago, America suffered its worst ever death toll in a natural disaster when Hurricane Katrina devastated New Orleans. Much of the subsequent blame for the high death toll centred on the inconsistent and contradictory weather warnings, which sowed uncertainty and confusion in the area about the need to evacuate. I know our civil contingencies secretariat is extremely concerned about the BBC’s proposals and the potential for mixed messages.
In response to parliamentary questions I have been assured by Ministers that arrangements will be put in place to address those concerns. The BBC has issued similar assurances to the Met Office, but we have not been provided with an explanation as to how that can be done so I would be grateful if the Minister would do so in his response. I wonder whether the Minister shares my concern that we could be facing a situation in which the public will receive and act on information provided through the BBC that is different from that provided to the Government itself and the emergency services by the Met Office. The long-standing and respected environment editor of The Independent, Mike McCarthy, said of the BBC’s proposal to drop the Met Office:
“It may suit the Corporation’s bottom line, or its image of itself as a trendy broadcaster: but the commercial interests of the BBC are not the same as the interests of the nation, and this decision is a nonsense which needs to be reversed.”
I have a parallel concern about the effectiveness of our armed services. The Met Office, which until recently came under the umbrella of the Ministry of Defence, provides regular weather information to our military at home and abroad. Met Office staff in military uniform are currently embedded within our armed services in Afghanistan and Oman. Those armed services will also have access to the BBC’s global weather forecasting, so there is a danger that the information they receive officially from the Met Office could be inconsistent with that provided by the BBC over the normal media, hampering operational safety and effectiveness.
Then there is the further potential vulnerability, in the event of a more serious conflict, war or massive cyber-attack, of our national broadcaster being dependent on a private or foreign weather forecaster. I should be grateful if the Minister would say whether the Government have made any assessment of the impact of the BBC’s proposal on national resilience and security.
I would also like the Minister to tell us whether there have been any discussions across the Government about value for money if the BBC contracts weather services from abroad or from a private company. At the moment, the public pay through the licence fee for the BBC’s weather services, but the public, or the Government, also receive the income as the Met Office is publicly owned. If the BBC goes down its proposed route, the public will in effect be paying twice: first to the Met Office for its work and again to a foreign-owned or private weather provider via the BBC licence fee.
As the Minister well knows, the BBC is about to embark on its 10-year charter renegotiation and renewal. This is the chance for the BBC to agree its size, its scope and its strategy within the financial envelope provided by the licence fee. Given the financial constraints on the corporation because of the funding levels already announced by the Government, there is widespread consensus that the BBC will have to do less if it is to protect quality. However, in a briefing provided to me in response to my concerns about the BBC decision, the BBC says that it wants
“to enhance our position as the leading destination for weather information with ambitions to be the best provider of weather information in the UK and the world.”
We already have the world’s best provider of weather information. It is called the Met Office. This feels like another example of the BBC trying to do everything and grow its empire, rather than doing what its director-general, Tony Hall, says it should be doing, which is “partnering with others”. On the eve of charter review, the BBC is planning to sign a new 10-year contract with a foreign or private weather provider, pre-empting charter review and shutting the public completely out of the process. Does the Minister not agree that it would be far better for the BBC to consider and decide this as part of charter renewal? That would also give it and the relevant Departments the chance to review and address the concerns that I and the Met Office have been raising.
That leads me, finally, to the process. The decision by the BBC was not consulted on and was announced not in any formal way, but in the form of a leak to The Sunday Times. That is unsatisfactory in itself, but it is completely clear from the correspondence that I have received from Ministers and from the answers to my parliamentary questions that Ministers and Departments were kept in the dark over this. The BBC treated it as a narrow commercial decision, with no regard whatever to the wider national and governmental interests. Could the Minister please confirm that he and other Ministers were not consulted on the announcement before the BBC made it? Could he also tell me what subsequent conversations he has had with colleagues in the Department for Business, Innovation and Skills, the MOD, the Department for Environment, Food and Rural Affairs, the civil contingencies office and the other interested Departments and agencies about the potential impact of the BBC’s plans on national resilience and security?
The Met Office website offers a public weather media service that will be made available free at the point of use to all public service broadcasters. That package of information includes weather forecasts, warnings, observations, guidance, scripts and services provided under licence and tailored for the broadcast media, so I am also concerned that the BBC has in effect tendered for services that, at least in part, are available to it free of charge through that service. I recognise that the actual content of any tender is commercially confidential, but I none the less request the Minister to reassure himself that the option to satisfy the BBC requirement through the public weather media service was fully explored before the decision to tender was taken. If it was not, there are serious questions about the process and its ability to deliver value for money. My concern is that the BBC has pursued a narrow commercial tender without fully considering its responsibilities to UK resilience and public safety and value for money. That might explain why it is having such trouble explaining how it is going to address the concerns that it now recognises are real, but if the BBC cannot explain that, it is very important that the Government do.
This episode seems to me to be a classic example of a large organisation—in this case, the BBC—taking a decision without thinking through the wider implications. If it had bothered to consult or even seek others’ views, it might have come to a different conclusion. Now that the wider implications and problems have been pointed out to it, it is frantically trying to reassure us that the potential problems can be resolved, but without explaining how. I hope very much that, in the light of this debate, the BBC will pause this process and see the merit of rolling it forward into charter renewal, so that it can fully explore the potential problems with this plan and consider its weather forecasting contract as part of its overall strategy and reach.
However, the responsibility of Government goes much wider than this. The Government have overall responsibility for national security, emergency planning and managing crises and contingencies. So far, I have not been reassured by what Ministers and their Departments have said on this. I therefore hope that, in his response, the Minister can address those concerns or, failing that, go away and consult his colleagues in BIS, the MOD, the civil contingencies office and elsewhere and provide the detailed reassurances and explanations that I am seeking.
Kevin Foster (Torbay) (Con)
It is a genuine pleasure to serve under your chairmanship for the first time in Westminster Hall, Mr Streeter. I thank the right hon. Member for Exeter (Mr Bradshaw) for securing the debate. It is directly relevant to my constituency, which is not a million miles away, and to your constituency of South West Devon. We will almost certainly have constituents directly affected by this decision. However, although there is a link between Torbay and south Devon’s economy and the location of the Met Office, my focus, like that of the preceding speech, will be on the overall impact of the decision and what it could mean for our country.
It is safe to say that anyone who represents a coastal community knows the absolute importance of an accurate weather forecast and of that being disseminated to the public more widely. It is not the person who has a large shipping operation who relies on the BBC shipping forecast. It is the person deciding whether to go out in their own small boat the next morning. It is the person going to the beach. It is the person who might take their family to the coast. For each of them, it is critical that they can easily get hold of an accurate weather forecast. I see here my hon. Friend the Member for South East Cornwall (Mrs Murray), whose area has a large fishing industry. I have the bay, but I do not have Brixham. That is in the constituency of my hon. Friend the Member for Totnes (Dr Wollaston), but there is certainly a fishing community in Torquay that goes through Torbay, and all rely on being able to have accurate forecasts, with many using the BBC to supply them.
What speaks to me about the importance of the weather is this. We all remember the iconic hanging tracks at Dawlish. Had those winds been true east rather than slightly to the south-east, that storm would have hit Paignton directly, causing a very severe impact. That is why, for me, the relationship between the Met Office and the BBC is crucial.
The BBC has a reputation for gold-standard accuracy in its weather forecasts—perhaps with the exception of Michael Fish not quite seeing the hurricane that was on its way. Therefore, it is vital that it also has the accuracy of the Met Office’s gold standard of weather information and forecasting. The right hon. Member for Exeter was right to talk about potential conflicts between Met Office severe weather warnings, which again are the gold standard for keeping people away from harm, and another provider advising of a slightly different outcome in the weather. It is hard to see how an organisation that has been accurately forecasting Britain’s weather for nearly 170 years will be bested by any other organisation suddenly picking up this contract for the BBC.
It is vital that we look at the need for a resilient source of weather information, as the right hon. Gentleman said, for the military, for our civil authorities and for Government itself. We need to look at everything from energy security to potential issues with our agricultural sector. Many things will depend on knowing the weather and being able to provide what support we can by having had notice well in advance of what the weather conditions are likely to be.
For me, what shows the importance of the weather to Government decisions and planning is that we banned weather forecasts during world war two, because that was seen as such useful information to the enemy that we did not want them to have it. Seventy years later, it is still a vital part of Government planning. It is not just about whether we will get wet when going out for a walk, but about planning services—planning when power stations will need to be brought on to supply, and planning when staff may need to be on standby for everything from snow and ice to flood and wind. Ensuring that we can maintain a resilient and durable Met Office is crucial to the way we run our country.
I accept that the Government do not direct the BBC in its contracting. It is right that the corporation has a level of independence. It would be strange for us to stand in this House one day demanding that it is completely independent of Government and then the next day demand that the Government take various decisions for it. That said, it is concerning that this decision was taken purely on a fairly narrow set of criteria. I, too, would be interested to hear the Minister’s remarks on what consultation was done, given that ultimately the BBC is not a service that anyone can choose to receive. If someone has a television, they have to pay for it under the law, and in fact they are still branded a criminal if they do not pay the licence fee that goes towards it, so I would certainly be interested to hear what consultations were done.
I hope that the BBC will take a close look at the impact of the decision. My concern, as a constituency Member, is for my constituents who will be affected, particularly as such an iconic employer brings quality jobs into Devon that will benefit the community in the long term. I agree with the suggestion from the right hon. Member for Exeter that the BBC should pause this issue during the charter review, in which we debate the whole relationship between the Government and the BBC—between the state and the public broadcaster. I would be interested to hear the Minister’s thoughts and comments. As I said, we cannot say one day that the BBC should be independent and the next that it should do whatever we direct it to do.
We need to know that the gold standard of weather forecasting is available; we do not want a standard that blows with the wind. I hope that the BBC will look again at this opportunity to keep its historic link with the Met Office.
John Nicolson (East Dunbartonshire) (SNP)
It is a pleasure to serve under your chairmanship, Mr Streeter. The Scottish National party Government Minister Humza Yousaf once observed that there are two seasons in Glasgow: taps oan and taps aff. To translate for those who are hard of Scots, that means removing one’s upper garments, or keeping one’s upper garments on. Of course, as everybody knows, the colder and wetter it gets in Glasgow, the more clothing people remove. My constituency is the second-wettest in the United Kingdom, just missing out on the top spot to Cardiff.
Although people from Scotland joke and vent their frustrations about the unpredictable weather that we experience throughout the day, accurate weather forecasting is essential to the country. The landscape and natural environment of Scotland are one reason why detailed weather forecasting is so important. Tourists from all over the world come to marvel at Scotland’s natural beauty, climb our mountains, trek in our glens or explore our cities. They need to know the weather in advance to ensure that they dress appropriately and are adequately prepared. Our country’s winter sport industry is worth nearly £30 million to the economy each year, so hotels and ski resorts also need to have detailed weather forecasts so that they can plan accurately.
In addition, Scotland is home to large shipping, fishing and seafaring communities, who need to be fully briefed on what lies out in the seas to ensure their safety. Those are three of many obvious examples of why weather forecasting makes a huge impact on life in Scotland. It is intrinsically linked to the safety of our people and the prosperity of our economy. People rely on the Met Office.
There are, surely, two key questions that need to be addressed when debating the relationship between the Met Office and the BBC, and the divorce that is taking place. What were the reasons for ending the contract with the Met Office? Will the ending of the contract improve the weather forecasting service for the people of these countries? A BBC spokesperson has stated that during the bid process for the weather forecasting contract, the BBC sought to
“make sure we secure both the best possible service and value for money for the licence fee payer.”
That, of course, is always foremost in any BBC manager’s thought process. Although that is to be expected, can both be prioritised simultaneously or has value for money taken precedence?
There has been some misinformation about the cost of the Met Office to the BBC; reports in the press have stated that the Met Office charges the BBC £30 million a year. In fact, that is the total commercial revenue of the Met Office from a wide range of customers for the whole year. Only a small percentage of that comes from services to the BBC, with presenters being paid at market rate. The Met Office is seen as providing the most accurate predictions for UK weather underpinned by significant research capability and strong infrastructure. It is regarded as a world leader in the field, and provides services in the United Kingdom and around the world.
Many have argued that the BBC’s decision to end its contract with the Met Office has been taken purely for commercial reasons. Dr Grant Allen, an atmospheric physicist at the University of Manchester and a leading expert in the field, has said:
“In my opinion, the BBC’s decision was taken on cost and not on predictive skill. We could get less accurate weather forecasts than before through the BBC, and that is sad news.”
Moreover, the timing of the divorce could not be worse. The Met Office has recently invested £97 million in a supercomputer 13 times more powerful than its previous system, which will increase the accuracy of its forecasting. As part of the new forecasting abilities, the Met Office says that it wants to include the probability of certain weather types. A forecast would give the temperature and a 20% chance of rain, for example—again, vital to my constituents, although our assumption is that there is 100% chance of rain every day for the next year. Such probabilities are available on the Met Office website, and many people are used to using them on smartphone apps. We understand, although this has not been confirmed by the BBC, that the BBC does not want that new service, regardless of how useful it would be to licence fee payers.
If the BBC has opted to end its contract with the Met Office simply to reduce costs and replace it with a service that is not as detailed or accurate, that is worrying and clearly goes against the BBC’s public service broadcasting remit. The BBC is responsible for providing services to inform its audience—services that would not always otherwise be provided where commercial interests are at the fore. Detailed, accurate weather forecasts fall into that category, and attempts to dumb down in order to reduce costs would do a disservice to audiences across the United Kingdom.
On a broader level, the UK has a leading position in the world for atmospheric science, which is the result of sustained institutional support for the science. Questions must be asked about how the end of the BBC contract will affect the Met Office and its ability to deliver. Will investment in the Met Office suffer as a result? Will the change have knock-on effects on the Met Office’s numerous roles outwith the BBC? Will it ultimately affect the future of domestic weather forecasting throughout the country?
The two companies widely reported to be in the final bidding for the contract are a Dutch firm called MeteoGroup and the commercial branch of New Zealand’s meteorological service, MetraWeather. Both must now come under scrutiny. Whichever is selected, we must be assured that it will deliver the high-quality, detailed and accurate weather forecasting required for the BBC and audiences. MeteoGroup is already used by the London Evening Standard and provides services at the Sheringham Shoal offshore wind farm. MetraWeather has attempted to make weather forecasting more interactive during TV bulletins in the Netherlands. Those are, however, small-scale endeavours compared with the scope of the task ahead of them if they are to replace the Met Office working for the BBC.
As Professor Ellie Highwood, joint head of the University of Reading department of meteorology, has said:
“Without any details about the BBC’s new arrangements, it is too early to say how this decision will impact the quality of weather forecasts to the general public”.
She does not welcome the developments. It is now the BBC’s responsibility to award the contract to whichever provider will offer the best weather forecasting service to the public. I strongly hope that it is awarded on the basis of quality of service, rather than as a cost-cutting procedure. At the end of this process, I expect the BBC to show full transparency and detail why the contract with the Met Office was ended and why a new contract was awarded to a different supplier.
In conclusion, I find myself agreeing with the right hon. Member for Exeter (Mr Bradshaw) that the Met Office is part of the family silver. Expelling it from our TV screens seems an unnecessary, destructive step, which has been inadequately explained and unwelcome.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a pleasure to serve under your chairmanship, Mr Streeter. This is the third time in less than 24 hours that the Minister and I have been opposite one another. Yesterday evening he tried to incite me to intervene, although, as the Speaker rightly pointed out, it was against parliamentary procedure—not exactly fair play.
Chi Onwurah
No, it was not cricket. I was obliged to remain silent, but I intend to make up for that today. I congratulate my right hon. Friend the Member for Exeter (Mr Bradshaw) on securing this important debate and on his impressive opening speech. He speaks with experience and authority, as a local MP and a previous Minister.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
He was a Secretary of State.
Chi Onwurah
And as a previous Secretary of State. He knows his subject comprehensively. I am sure that the Minister will extend my right hon. Friend the courtesy of answering all his questions as fully as possible.
As my right hon. Friend said in his introduction, the Met Office is a respected and successful institution. He touched briefly on the origins of what is now known as the Met Office. Those origins reflect many supremely British characteristics: naval power, trade, exploration, science and eccentricity. The Met Office was first founded as the Meteorological Department of the Board of Trade by Robert FitzRoy, who is most famous for being the captain of HMS Beagle, the ship that carried Charles Darwin on his famous voyage. More than 160 years ago, this House roared with laughter when a Member suggested that we might, one day, predict the weather in advance. FitzRoy led an interesting and troubled life, but pressed on in the face of scepticism about weather reporting. Today, his vision of a public forecasting service, funded by the Government for the benefit of all, has endured.
The modern Met Office is respected the world over and has an important place at the heart of the nation’s contingency planning and our culture. Indeed, the hon. Member for East Dunbartonshire (John Nicolson) emphasised its role in the heart of Scotland’s culture. We all like to poke fun at weather forecasters for getting it wrong, but the fact is that the Met Office is critical to our military security and civil planning. Its shipping forecasts make the jobs of those at sea a little safer, as the hon. Member for Torbay (Kevin Foster) rightly emphasised. Its global research links enhance our understanding of how the weather and climate affect our economy and way of life, and its parliamentary advice makes us all—at least, those of us who make use of it—a little wiser.
I hope the Minister will assure us that the Met Office is not on the Government’s list of public sector targets. In fact, I hope that he and his colleagues will go further and champion its work and the unique role it plays. Perhaps, they might even recognise the value that such public sector institutions play in our society and economy. As my right hon. Friend the Member for Exeter said, this decision is not the end of the Met Office—far from it. It does so much more than providing the BBC with weather forecasts. In fact, its data will still drive those forecasts. The decision raises questions about the strategic relationship between the BBC and the weather provider. The police and the military will continue to rely on the Met Office for advice, while the public may receive different information. My right hon. Friend cited international examples that raise serious questions about this approach. Is the Minister concerned about that and has he discussed it with the BBC?
Many in the Conservative party believe that the BBC needs to be clipped, either because of misplaced ideas that it crowds out competitors or because of perceived bias. I find it difficult to divorce this decision and this debate from the wider context of the charter renewal process and the sustained attack that the BBC is coming under from the Government and their friends. The BBC is under immense pressure at the moment to prove to the Government and the wider public that it is efficient and good value for money. Obviously we are all in favour of value for money, but what matters is how we define value and over what period of time. Even if we accept that there is no risk to the national interest—which I have yet to be convinced of, although I will listen closely to the Minister—I am not persuaded that the cheapest option is always the best.
Chi Onwurah
As I think I was saying before democracy interrupted me, my right hon. Friend the Member for Exeter explained that the BBC’s decision is not the end for the Met Office—far from it: it does much more than weather forecasts. However, the decision raises questions about the strategic relationship of the BBC and the weather forecaster. Has the Minister discussed that with the BBC, and does he have concerns about it?
I am intrigued by the timing of the decision. Is it right to award a 10-year contract when the charter renewal process is about to decide on the entire future of the BBC and its purpose? Should not such important decisions be made after we know the outcome of the process? I understand that the contract does not expire until next year. Is it too late to review the decision and the process? Will there be increased transparency about the criteria for the decision that has been made?
What if, as part of the open consultation the Minister is running with the British public, we decide that the purpose of the BBC is indeed to provide integrated weather warnings at critical times? In its briefings to Members, the BBC has said that the decision to go to open tender was a legal one—something that it had to do. I support open tendering, of course. We need competitive procurement to prevent contracts from being handed out to the same old cronies and to enable new and innovative companies to have access to the £242 billion of public procurement cash available from the public sector, but what discussions have the Government had with the BBC regarding other aspects of the contract, such as social value?
I am sure the Minister is aware that recent European Union law exempts some services from procurement laws, and other laws allow organisations to make allowances in certain circumstances—for instance, where there is a question of social value. The Public Contracts Regulations 2015 came into force in February and expand on exemptions for co-operation between entities in the public sector, which I would have thought was exactly the case here. What is the Minister’s interpretation of that exemption? Has he taken any advice on the rules in this case? If so, can he share it with the House today or deposit it in the Library, or ideally both?
One charge often levelled by Members of this House and others is that we are too strict on ourselves in this country when interpreting and obeying EU laws and can err on the side of extreme caution, so will the Minister bring his considerable resources to bear and see whether this 93-year-old relationship does not have to be sacrificed? We have yet to decide what the BBC is for or what outcomes we want. The BBC is a great British institution. It is public sector, it is successful and it is loved. Of course it needs to evolve with the times and with technology, but it also needs the support and championing of this Government.
I could say exactly the same about the Met Office. My right hon. Friend the Member for Exeter and the hon. Member for Torbay described in detail how successful and appreciated the Met Office is, and it, too, needs to evolve with the times and with technology. The Met Office also deserves the support and championing of this Government. I will listen with interest to the Minister, as always, but it seems strange that these two great British institutions should not be natural allies and partners.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
I am delighted to serve under your chairmanship once again, Mr Streeter. I thank the right hon. Member for Exeter (Mr Bradshaw) for securing this important debate. He and I have a close mutual interest in the weather on the weekend of 7 and 8 November. As he may be aware, I am lucky enough to be president of Didcot Town football club, who for the first time in their history have reached round 1 of the FA cup. I am delighted that their first opponents, because they are bound to win, will be Exeter City on that weekend. I hope he will join me in the lavish corporate box at Didcot Town, having cycled from his Exeter constituency on what I hope will be a fine and sunny day, but who can tell? Maybe the Met Office can.
The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) spoke about her and me appearing together for the third time, but she left out the hon. Member for East Dunbartonshire (John Nicolson), who is also part of the group. Looking at the three of us, I call to mind the great words of the bard:
“When shall we three meet again
In thunder, lightning, or in rain?”
I cannot answer the first part of that question, but when I do know I will ask the Met Office to answer the second part.
We are lucky to have the Met Office, but it does not provide the weather for every television channel. As the hon. Gentleman pointed out, MeteoServices provides the weather for Channel 4, and it has a distinctive approach. The weatherman for Channel 4, Mr Liam Dutton, achieved notoriety for faultlessly pronouncing the longest place name in Wales, which, as I do not need to remind hon. Members, is Llanfairpwllgwyngyll- gogerychwyrndrobwllllantysiliogogogoch—I have almost certainly mispronounced it, but I may be the first hon. Member to read it into Hansard.
The right hon. Member for Exeter made it clear that he is proud of the Met Office, as we all are of the UK’s national meteorological service. The Met Office is an internationally renowned organisation based in his constituency, and it provides highly skilled jobs and international connections. It is a massive asset for the south-west, which is why I am pleased to see my hon. Friend the Member for Torbay (Kevin Foster) here. No doubt you have your own interest as a south-west Member of Parliament, Mr Streeter. Everyone in this House knows how committed the Chancellor is to science and a knowledge-driven economy. The Met Office is a fantastic example of that, which is why we have invested a significant sum in its new supercomputer; I will return to that towards the end of my remarks.
The right hon. Member for Exeter has corresponded with me, tabled parliamentary questions and secured this debate because he is interested in the BBC’s decision not to shortlist the Met Office in its procurement process for weather forecasting services. That procurement process is still under way, but it has come to light that the Met Office is not on the shortlist. The current contract with the Met Office is therefore due to end in autumn 2016. That is a commercial decision for the BBC to take, and it is interesting that when we disagree with decisions made by the BBC—not me personally or as a Minister—we feel free to comment. I live in a world in which people are constantly telling me to keep my hands off the BBC, but I have no intention of interfering with its commercial decisions. It is true, as the hon. Member for Newcastle upon Tyne Central mentioned, that the BBC is undergoing a charter review, and we are obviously considering a range of options for its future, but it is important that we keep in mind its editorial independence and its freedom to make sensible commercial decisions. The BBC has a duty, and has always had a duty, to conduct its business in a way that delivers value for money for licence fee payers.
On the wider question of what kind of weather service the BBC will provide in the future, it is of course crucial that consistent information is available, particularly on severe weather, and that those warnings reach the people most likely to be affected. I reassure the right hon. Member for Exeter that in the next few months all parties concerned will continue to work with the BBC to ensure that Met Office severe weather warnings are clearly and consistently communicated to the public, because the Met Office will continue to provide the official UK forecast, official guidance and warnings as the single authoritative voice during high-impact weather events, such as storms, gales and flooding. We expect the BBC to continue carrying the Met Office’s national severe weather warnings—that applies to all broadcasters, regardless of who provides their day-to-day weather forecasting—and to ensure that those severe weather warnings are consistent with any wider forecast issued at the same time. Indeed, the BBC has made it clear that it will continue to use the Met Office severe weather warnings.
As part of that new approach, the Met Office is developing a new public weather media service, which will be made freely available to all broadcasters and will ensure that Met Office severe weather warnings reach the maximum audience effectively and efficiently. The public weather media service is due to be ready by July 2016, before the current contract expires, so that it can be incorporated into whatever new service the BBC chooses to contract.
The Met Office public weather service is a critical component of the UK’s resilience infrastructure. It provides the public with the information that they need to make decisions and protect themselves and their property from high-impact weather. An important part of the service is public weather advisers—Met Office experts who provide advice and guidance to local emergency planners and responders and who are greatly valued by all who work in that area.
The public will continue to benefit from Met Office expertise through a wide range of other channels, including other national and regional TV, radio and print media outlets and the Met Office’s website, mobile app and social media channels. It is important to clarify that the civil contingencies secretariat, the Department for Business, Innovation and Skills and the Met Office are working together on the public weather media service.
Mr Bradshaw
I am pleased to hear that the civil contingencies secretariat, BIS and others are working with the Met Office on that. I do not know whether the Minister slightly misunderstood my point about consistency. It is not about the consistency of severe weather warnings, which the BBC has agreed to continue broadcasting from the Met Office; it is about consistency between those and the general weather forecasting that the BBC might purchase from a different provider.
TV viewers and radio listeners could receive different information in general weather forecasts from the information issued by the Met Office, or the information provided by the Met Office to Government. The Minister says that such inconsistency will be addressed. We have heard the BBC give that assurance before, but it has not explained how it will resolve that potential inconsistency.
Mr Vaizey
As I thought I was explaining but will try to make clearer, my understanding was that the public weather service will be freely available to all media outlets. The work that the civil contingencies secretariat, BIS and the Met Office are undertaking now will ensure that when that service goes live in the summer of next year, it will be able to be incorporated into the BBC’s more general weather. In effect, the public weather service is about severe weather warnings—gales, storms and flooding, as I said earlier—and it must be incorporated within the routine weather forecast: for example, whether it will rain tomorrow in East Dunbartonshire, or be cloudy or sunny. I am confident that that work will ensure that those two effectively separate parts of weather forecasting will be consistent and incorporated, not only by the BBC but by other broadcasters.
I will take this opportunity to address some of the other points raised by the right hon. Gentleman. It is not the case that Ministers were informed by the BBC of its decision. The Met Office informed the Department for Business, Innovation and Skills after learning that it was not on the shortlist for procurement, but I do not take any umbrage at the BBC’s not having informed us. As I said, it is a commercial decision for the BBC.
Are we getting value for money? Are we effectively paying twice for the service? It is important to understand that the Met Office was not giving general weather service free of charge to the BBC; the BBC was paying for it. Procurement is under way for the weather service that the BBC will use in future. That is commercially confidential, but I do not see how it can be argued that we are paying twice, given that the BBC is currently paying for a weather service from the Met Office and will pay for a weather service from another provider next year.
I know that there will be concerns, particularly from a constituency perspective, as the right hon. Gentleman rightly mentioned. As far as I understand it, the Met Office contract with the BBC is a small fraction of its total turnover, and I am not aware of any knock-on effect in terms of redundancies or job losses.
Chi Onwurah
To clarify, the point about not paying twice is that the British public pay the Met Office to produce a weather service, and now it will pay the BBC to pay somebody else to produce a weather service. The British public might be paying for two different weather forecasts, for the same weather.
Mr Vaizey
Clarity is clearly not my strong point this afternoon. As I said earlier, the BBC’s contract with the Met Office is a commercial contract, paid for out of the licence fee. The BBC will continue to pay for a commercial contract, whether or not we agree with whoever eventually wins that procurement—whether or not we morally agree, as it were, that it is the right company. It may well be a foreign company, although it could well be a British company. That is one thing, but the fact is that we are not paying twice for the service. The licence fee pays for a weather service provided by the BBC that happens to be provided by the Met Office. It is not provided for free. As far as I am aware—again, it is a commercial procurement process—at no point did the Met Office offer to provide that service free to the BBC.
Kevin Foster
I thank the Minister for the response that he has given so far. On the comment that he just made about the BBC being a small percentage of the overall Met Office contract, will he confirm, to help deal with perceptions in south Devon, that he is satisfied that the Met Office will still be a viable and effective organisation going forward?
Mr Vaizey
My hon. Friend’s question is helpful, because it allows me to segue into the wider part of my speech. I want to talk about the wider work of the Met Office, because it is a more than viable organisation. As I said in my opening remarks, it is a widely respected international organisation with a turnover of around £200 million, and it is highly successful. For example, regardless of whether the BBC continues to use the Met Office, its website is one of the most used websites in the UK Government family. It delivers weather information and critical weather warnings via a huge range of digital channels. The mobile app has been downloaded more than 12 million times, and there are 430 million user sessions every year. Some 900,000 people follow Met Office social media accounts.
The Met Office provides a huge range of services, not just to Government but to business. Its day-to-day forecasts and weather warnings are the most high-profile, but it also works with, for example, the Environment Agency on flood forecasting. It will continue to provide shipping forecasts, mountain weather forecasts and services to the aviation industry. It provides air quality and volcanic ash monitoring, which is not such an esoteric service when we remember what happened with the ash cloud a few years ago. The Met Office’s work touches almost every aspect of our lives, in many ways of which we are unaware. It may interest hon. Members to know that just last week, the Met Office won the most prestigious award at the “top 50 companies for customer services” awards.
The Met Office is not only known for weather forecasting; it is home to the Hadley centre for climate science and services, one of the most famous research institutes in the world. It remains an important part of Margaret Thatcher’s legacy; she was the Prime Minister who opened the centre in 1990, and this year it celebrates its 25th anniversary. As we head towards the crucial negotiations at the United Nations conference on climate change in Paris in November, the UK, thanks to the Met Office’s brilliant work, is in a much stronger position to influence and secure the outcome we need as a result of that expertise and world-leading knowledge.
While I am discussing the international climate change conference in Paris, I should say that it is important to stress the global role played by the Met Office. It is one of only two world area forecast centres delivering forecasts globally, and it is recognised by the World Meteorological Organisation as the national meteorological service with the most accurate prediction model in the world. It is internationally respected for its unified weather and climate model, the accuracy of its weather prediction, its research, and its support for developing countries. It helps to save lives and it delivers improvements, such as helping to establish local meteorological services.
I will give just one example of the Met Office’s work. During Hurricane Patricia, which has recently battered Mexico, the Met Office has been, and it will continue to be, the source that the Foreign and Commonwealth Office uses to provide weather advice to citizens in the affected area. So we as a Government are immensely proud of the Met Office, its international standing and the international recognition it brings, but most importantly we are proud of the difference that it makes to people’s lives every day.
That is why, as I mentioned in my opening remarks, the Chancellor is backing the Met Office through investment in a new high-performance computing facility. Last year, he announced plans to invest £97 million in a new supercomputer, which will cement the UK’s position as a world leader in weather and climate prediction. The supercomputer’s sophisticated forecasts are anticipated to deliver £2 billion worth of socioeconomic benefits to the UK by enabling better advance preparation and contingency plans to protect people’s homes and businesses. I am told that the installation programme is progressing very well; indeed, it is five weeks ahead of schedule. Also, the Met Office recently released its new five-year science strategy, which aims to deliver science with impact, maximising the benefit to society of its weather and climate expertise, and making the most of the UK Government’s investment in its high-performance computing.
It is a credit to the Met Office and to all the highly skilled staff who work there, obviously including those who work in the constituency of the right hon. Member for Exeter, that it is recognised as a world-class institution that all of us are rightly proud of. Having protected the country for more than 150 years, the Met Office is a trusted voice for the British public, businesses and emergency responders when it is needed most.
Mr Bradshaw
I am very gratified that the Minister is extolling the virtues of the Met Office; indeed, he almost seems to be making a better case than I did for the BBC continuing its relationship with the Met Office. Before he closes, may I invite him at least to assure hon. Members and I that he will go away from this debate and just talk to his colleagues in the Ministry of Defence, the Cabinet Office group responsible for civil contingencies, and the Department for Business, Innovation and Skills, to ensure that they are aware—if they are not already aware—of some of their officials’ concerns, so that Ministers can help to encourage the process that he referred to earlier, of addressing and resolving some of these genuine concerns about resilience and national security?
Mr Vaizey
I absolutely give the right hon. Gentleman that assurance; I will ensure that the points he has made in this debate are taken seriously and that we absolutely clarify for him exactly what the public weather media service will provide, although the answer may not completely satisfy him. I will also seek assurances from the civil contingencies secretariat and BIS officials that they are content with the arrangements, as it were, whereby the BBC is in effect contracting with another provider for what I would call its commercial weather service, which provides the day-to-day weather service that we all watch at the end of a news bulletin, whether that is a national or local news bulletin, as opposed to the more important severe weather warning work that the Met Office does.
Chi Onwurah
As the Minister is so successfully clarifying points, may I point out that my question to him was about the legal basis that is necessary for there to be an open tender, given that EU procurement regulations now exempt collaborations between two public sector entities?
Mr Vaizey
I will certainly consider the point that the hon. Lady makes. It may well be that the contract was de minimis anyway in terms of those procurement rules, and it may well be that the savings the BBC thinks it can make by procuring weather services from another supplier mean that even the social aspects were not of the utmost concern to them. Nevertheless, I, or perhaps even the BBC itself, will write to the hon. Lady to address her point.
This has been a very useful debate. Although it has been disappointing in some respects, in that I was unable to pull a rabbit out of the hat and put the Met Office back in play with the BBC, it is right that we respect the BBC’s independence in this area. We cannot always say whether the BBC’s decisions are right or wrong, and it must be a particular frustration for someone working at the BBC or even leading it to be constantly second-guessed. I second-guessed the BBC on the closure of 6 Music and with hindsight I think I have been proved right; that was a service to save. Many people are now second-guessing the BBC on its moving BBC3 from terrestrial television to the internet. Equally, it is perhaps a testament to the standing of both the Met Office and the BBC that a parliamentary debate should be called to consider the BBC’s decision not to procure its weather services from the Met Office.
In a sense, I will conclude in the way that I started, by saying that my final congratulations must go to the Met Office on accurately predicting the weather for all the Rugby World cup matches. Unfortunately, that did not help the northern hemisphere teams, but I look forward to an accurate prediction of the weather for Didcot Town versus Exeter, and I put on the record now my own prediction that Didcot will win 2-0.
Mr Gary Streeter (in the Chair)
Would the right hon. Member for Exeter like to say a few words by way of winding up?
Mr Bradshaw
indicated dissent.
Question put and agreed to.
Resolved,
That this House has considered the BBC’s relationship with the Met Office.
British Property Owners (Cyprus)
(8 years, 6 months ago)
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Andrew Gwynne (Denton and Reddish) (Lab)
I beg to move,
That this House has considered the matter of British property owners in Cyprus.
It is a pleasure to see you in the Chair, Mr Gray.
I am grateful for the chance to raise this issue in Westminster Hall. I am not the first Member to take it up on behalf of their constituents and I begin by praising the work of the all-party group on the defence of the interests of British property owners in Cyprus. Under the chairmanship of the hon. Member for Stone (Sir William Cash), the group has done great work in raising the concerns of people caught up in property and banking problems in Cyprus. It has also provided a framework through which they can pursue justice and fairness in relation to their properties.
I have been contacted by a number of people in my constituency about the mis-selling of Swiss franc mortgages by Alpha Bank in Cyprus, and about the poor advice they had received from solicitors purporting to act on their behalf. Briefly, the background to this issue is that between 2003 and 2010 Cypriot banks advised buyers to take out a mortgage in Swiss francs, because the interest rates were lower and the currency was considered stable. However, when the value of the Swiss franc soared against the euro in the aftermath of the financial crisis, buyers found that their mortgage repayments had doubled.
Buyers have complained that banks often failed to explain the potential risks or that currency fluctuations could cause repayments to rise, which has resulted in property owners being left with unfinished and unsaleable apartments, huge loan obligations and negative equity following the collapse of the Cypriot property market, which saw property values in some areas plummet by as much as 70%.
In one case brought to me by a constituent, the developer went into liquidation before the property being built for my constituent and his wife had been completed, taking 85% of their mortgage fund and leaving them insufficient money to finish the remaining work. My constituent says that his solicitor and Alpha Bank allowed that to happen by permitting the developer himself to sign written confirmation that the various stages of work had been completed.
My constituent and his wife had to begin making mortgage repayments at a time when they did not have the land in their name and the property was not finished. Effectively, therefore, they were paying a mortgage on a property and land that was not legally theirs. When they explained to Alpha Bank that they were in a desperate situation, they were simply told that if they did not make their mortgage payments the bank would seek possession of their home here in the United Kingdom. Similarly, another constituent with the same Swiss franc mortgage with Alpha Bank spoke of what he believed to be collusion between the bank, the solicitor and the developer, leaving him threatened with bankruptcy.
I am sure that those examples will be depressingly familiar to anyone who has had dealings with people caught up in the fiasco.
Sir William Cash (Stone) (Con)
I am chairman of the all-party group on the defence of the interests of British property owners in Cyprus. The hon. Gentleman is a member of the group. Is he aware that we will have a meeting of those affected at 11 am on 12 November, at which the high commissioner for Cyprus, Mr Euripides Evriviades, will be present? There is also a Bill before the Cyprus Parliament, but I am sure that the hon. Gentleman will deal with that shortly, so I will not go into any more detail.
Andrew Gwynne
I am grateful for the hon. Gentleman’s intervention. He is absolutely right, and I commend him for his work in leading the all-party group. It is my intention to be at that meeting but, if parliamentary duties do not permit me, a representative from my office will attend. I am aware of the situation in Cyprus to which the hon. Gentleman refers.
There have also been allegations of Cypriot solicitors using invalid powers of attorney. The case I want to focus on, on behalf of one of my constituents, is an example of that, and it also highlights that constituent’s concern about his legal representation while seeking to obtain redress.
Joan Ryan (Enfield North) (Lab)
I congratulate my hon. Friend on securing the debate. Before he moves on to that specific case, I want to say that I have had conversations with a number of leading politicians in Cyprus and have found them to be sympathetic, and understanding of some of the problems he refers to. When the Minister responds, will he let us know whether he has had conversations on the matter with members of the Parliament in Cyprus?
Andrew Gwynne
My right hon. Friend is absolutely right to ask that question, and I expect and hope that the Minister in his concluding remarks will be able to answer it. It is important that whatever pressure can be brought on the Cypriot authorities by Her Majesty’s Government in the United Kingdom, is brought, and that Ministers do all they can to raise the issue with their Cypriot counterparts.
Sir William Cash
May I quickly add that the Minister for Europe has been immensely helpful? He has been to two, or perhaps even three, of the meetings I have convened for the purpose. I pay tribute to him for his active interest in the matter.
Andrew Gwynne
The hon. Gentleman is absolutely right to highlight the work that the Minister has done, and will continue to do, in respect of the injustices that many of our constituents face. I look forward to the Minister’s reply.
My constituent does not want to be publicly named, so I will refer to him as Mr T. C. In 2007, Mr T. C. and his brother-in-law wanted to purchase a retirement property in Cyprus through a UK company called ROPUK. They met with the company’s representatives, who showed them impressive brochures and projections, and they decided to go ahead with the purchase. They paid a £25,000 deposit and understood that when the property was built they would go to Cyprus to have an inspection and then sign a mortgage agreement. They were advised by ROPUK’s representative that a Swiss franc mortgage would be best, but they did not sign up to any agreement except to give a Cypriot solicitor power of attorney in any transactions to which they agreed.
In 2010, when the property was due for completion, Mr T. C. visited Cyprus to monitor the progress of the build. He found that it was not even half finished; it is still in the same state today. He believes that the power of attorney was not executed in accordance with common or Cypriot law, rendering it illegal and anything signed using the power of attorney invalid.
My constituent and his brother-in-law first heard of Alpha Bank when it started to pursue them for payments. They had not signed a mortgage agreement themselves, but one was signed by a third party without their knowledge or consent, and they have never even seen the agreement with the bank, despite repeated requests. They believe that the bank released all the money from their fraudulently obtained mortgage to fund something that is simply not there.
The payments from the mythical mortgage should have been gradually disbursed as the build progressed, according to the progress certificates issued by the project’s architect. The bank’s surveyor should have been inspecting the development and issuing a report back to the bank, a copy of which should have been passed to the Cypriot solicitor, who was supposed to be acting in my constituent’s best interests, to verify build stage against the drawdown of moneys.
Sir William Cash
If the Bill to which I referred becomes law, it will give the Republic of Cyprus land registry the authority to exempt, eliminate, transfer and cancel mortgages and encumbrances depending on the case and under certain conditions. I do not have time to go into all the details, but I want to get that into Hansard.
Andrew Gwynne
I am grateful for that intervention. It is important that that is placed on the record.
I return to the case. None of what I just mentioned was ever done, which is why, years after the supposed completion, Mr T. C. and his brother-in-law still have absolutely nothing. They now owe the bank in the region of £257,000 plus interest—the original price they were quoted was about £140,000 minus their deposit—and they were issued a writ informing them that their case would be heard in the courts of justice in London in June 2014. They received the writ less than a week before the case was due to be heard and had no time to appoint a solicitor.
The case was heard at the courts of justice in front of Master Easton. He asked Alpha Bank’s solicitors, Stephenson Harwood, to shelve the European enforcement order pending ongoing legal discussions in Cyprus, but they refused. A European enforcement order was rubber-stamped subject to a second hearing in September. By that time, Mr T. C. and his brother-in-law had appointed Cubism Law to represent them and their case was led by Duncan McNair, who they understood to be an expert in the field.
His representation in the UK forms the second part of the concerns that Mr T. C. raised with me. He and his brother-in-law paid Cubism Law £2,000 up front to represent them. A barrister attended court, but they say that they were simply told that the European enforcement order had been ratified and that a charge had been placed on their UK properties. They then had to defend the European enforcement order in Cyprus, where they believed they would get less justice than they would here.
Prior to the first hearing and before becoming subject to the European enforcement order, Mr T. C. transferred the house he and his wife owned into her name, to protect her share of their UK property, which was their only substantial asset. His wife was not party to the property purchase in Cyprus. Following the second hearing, Mr McNair commented that the judge had not been impressed by the action Mr T. C. had taken. My constituent says that he asked for advice on whether he should change the title deeds back into his name and that all he was told by his solicitor was that he should let them work for their money, by which he understood him to mean Alpha Bank’s British solicitors, Stephenson Harwood. Mr T. C. says that they always made it clear to their solicitor that their priority was to get the European enforcement order overturned and for no further action to be taken until that was achieved.
Mr T. C. says that over the next few weeks much correspondence was exchanged between the two firms, but that that did not prevent Stephenson Harwood from continuing to threaten seizure of the properties. However, it did result in Cubism Law making regular demands for funds, which my constituents deemed unnecessary. At that stage, they became concerned about the costs that were racking up, and the date for the Cyprus hearing was still weeks away. Through Cubism Law, they had paid for solicitors in Cyprus to represent them at the hearing, which was subsequently postponed three times.
Mr T.C. asked his solicitor what the strategy was for their situation, as the costs were spiralling and all they had asked at that stage was for him to defend the European enforcement order in Cyprus. Mr T.C. says that they also informed Cubism Law on 28 October 2014 that they did not wish to incur any further costs, but that specific request was ignored and the costs continued to mount. Most of the costs related to correspondence between Stephenson Harwood and Cubism Law over the transfer of the title deeds. Mr T.C. states that if his solicitor had advised him immediately to transfer the title deeds back to his name, he would have done so. He was eventually advised to do that and for him the question remains as to why he was not asked to do that earlier.
During the time leading up to the hearing dates, Mr T.C. says that he and his brother-in-law were constantly subjected to requests from their solicitor—usually late at night by email—giving them deadlines for payments with what they perceived to be veiled threats of them “prejudicing their case”, or inferring that they would not be represented in this country or in Cyprus in the future. By that stage, their costs had increased to more than £12,000, which was approaching the 5% settlement offer Alpha Bank had alluded to for incomplete properties such as theirs. On 10 November 2014 they sent an email to their solicitor again instructing him not to incur any further costs and mentioning the 5% settlement offer. That request was again ignored and their solicitor entered into discussions with a barrister, for which they were charged.
Mr T.C. says that they have yet to be informed what the basis of those costs were and what the discussions were trying to achieve. He adds that at no point had they indicated that they wished to start proceedings against the bank, as Mr McNair had advised that they could not sue the bank if the European enforcement order was not overturned.
Sir William Cash
Listening to the hon. Gentleman, I wonder whether his constituents have taken the matter up with the Law Society and the Solicitors Regulation Authority.
Andrew Gwynne
Not only have my constituents done that, but I have done so as their MP. The response we got back was less than satisfactory. I am still taking that up with the various authorities, but my constituents feel that one form of redress is to place on public record the real injustice that they feel they have endured over the past few years.
Mr T.C. said that when he pointed out that the solicitor had stated it was not possible to sue the bank without the European enforcement order having been overturned, the solicitor changed his statement and said it would be possible, but with difficulty. The new date for the hearing in Cyprus was set for early January 2015, but that was postponed until late January, and the case was finally heard in February 2015.
Jim Shannon (Strangford) (DUP)
People from my constituency have had problems similar to those of the hon. Gentleman’s constituents; the problems do not relate just to Cyprus, but to Turkey, too. The majority of them are law-abiding citizens who want to get some property to use, in most cases as a holiday home, but they find the legal system difficult. The hon. Gentleman is outlining the problems of his constituents. Does he feel, as I do, that the British consulate could have given better or more advice on what was best to do in a foreign country where they do not speak the language and are unaware of the legalities?
Andrew Gwynne
There is a lot that could have been done differently, and I have some sympathy with what the hon. Gentleman says. That is based on my experience not only with this case, but with several cases that my constituency office has been dealing with. No doubt other Members’ offices are dealing with similar cases, too. I again commend the work of the all-party group and the Minister in trying to bring some kind of resolution to these matters. We are where we are, and it is a far from ideal situation for many of our constituents.
As I said, the case was finally heard in February 2015. In January, Mr T.C.’s brother-in-law was out of the country dealing with a family matter and he told Cubism Law that he had insufficient funds at that time to settle up his latest bill, but would settle at the end of January or early February when Mr T.C. returned to the UK and after the European enforcement order court case in Cyprus was settled. Mr T.C. says Mr McNair replied saying he no longer represented them and again implied that they may not be represented in Cyprus. However, the Cypriot solicitors later assured them that they would be represented.
The European enforcement order was overturned with reservation at the hearing. Mr T.C. feels incredibly let down by the representation he received and believes a lot of the costs were avoidable and totally unnecessary. He has complained through the firm’s complaints procedures and received what he and his brother-in-law considered to be a derisory offer of redress, which they refused, as they did a subsequent offer.
As I said in response to the hon. Member for Stone (Sir William Cash), the matter has been referred to the authorities, including the Law Society and the ombudsman. Mr T.C. feels that he has suffered real injustice in respect of both the property purchase and how his case has subsequently been handled. I appreciate that the Minister can do little to answer my constituent’s specific concerns, but I would be grateful if he could update Members on the progress being made in general on the matter and on what the Government are doing to support Mr T.C. and all constituents caught up in this sorry situation.
The Minister for Europe (Mr David Lidington)
It is, as always, a pleasure to serve under your chairmanship, Mr Gray. Let me start by congratulating the hon. Member for Denton and Reddish (Andrew Gwynne) on securing this debate and paying tribute to the work of the all-party group under the chairmanship of my hon. Friend the Member for Stone (Sir William Cash).
From the large number of items of correspondence that I get from Members from all parts of the House on property disputes, I am certainly aware of the kind of problems that the hon. Member for Denton and Reddish described and of the traumatic impact that property disputes often have not only on the finances, but on the mental wellbeing of the people we represent. Officials in our consular directorate in London are in regular contact with our high commission in Nicosia. Together they brief me and the Foreign Secretary on the scale of the property problems in Cyprus and the impact they are having on individuals.
While today’s debate has focused on the difficulties in Cyprus and the case of the hon. Gentleman’s constituent in particular, it is a sad reality that property disputes are common in other parts of the world. I have to be frank with the House: the ability of our consular staff overseas to help in individual cases is very limited. That is partly because millions of British citizens live overseas and many thousands of others visit foreign countries every year. It is simply not possible for the Foreign Office to become involved in private legal disputes to which British citizens overseas are party, whether they are related to property, commercial interests or family disputes.
Another issue is that property laws are the competence of individual sovereign states. We have no more authority to intervene in matters concerning Cypriot domestic legislation than the Governments of Cyprus, Spain, Greece, Turkey or Bulgaria—or any other nation where there are numerous property disputes—do to intervene in United Kingdom domestic legislation. Our position on property disputes is consistent with the approach taken by the US, Canadian, Australian and New Zealand diplomatic services. We will, however, do two things. We will continue to try to provide as accurate and up-to-date information as we can to our citizens about the risks involved in buying property overseas and about what they might do to manage those risks, and we will continue to lobby hard the Cypriot and other Governments to try to persuade them to address some of the generic problems that these distressing individual cases highlight.
Sir William Cash
Again, I just want to put something on the record. The Bill to which I referred, which was passed on 3 September in the Parliament of the Republic of Cyprus, is not yet available in English. I know the high commissioner has requested it, but it is taking some time. We are now almost in November. I am told that until it is provided, the general information—for the sake of those who read transcripts—can be found on the website of Nigel Howarth of Cyprus Property News. However, the Bill does not apply to mortgages that were dealt with in Swiss francs.
Mr Lidington
What my hon. Friend says is right. I want to refer to that Bill later, but we continue to urge the Cypriot authorities to publish an English-language version of the new law as soon as possible and to make available any guidance that might need to be issued in association with the statute itself. I am sure that the forthcoming meeting of the all-party group with the high commissioner for Cyprus to the United Kingdom will provide a further opportunity for such persuasion to be offered.
We publish information on the high commission’s gov.uk website and, more generally, the FCO publishes a guide entitled “Support for British Nationals Abroad”, which also provides general advice for British citizens who are thinking about buying a property in another country. Last month our consular officials attended “A Place in the Sun”, an exhibition in Birmingham, to talk directly to people considering going to live abroad. The purpose of these initiatives is to help to ensure that our citizens are better informed of the risks and challenges before they take the plunge. For example, we always urge people to take proper professional advice, including legal advice, before buying property.
In some cases, such as the one that the hon. Member for Denton and Reddish has described, part of the problem seems to derive from an alleged failure of the legal adviser to provide advice of a sufficiently high standard. In other cases, sadly, we have come across British citizens who have simply not taken adequate legal advice in the first place. Of course, there are others who, on the face of things, would seem to have been the victims of deliberate misrepresentation. Every case is different, which is why it is difficult to provide a template that will apply equally to every individual case.
Jim Shannon
I congratulate the hon. Member for Denton and Reddish (Andrew Gwynne) on securing this debate. Those who take legal advice perhaps anticipate that it will be correct, but sometimes it turns out not to be. Is it possible for the British consulate, in whatever country they are in, to have a list of legal minds—solicitors and barristers—who would have enough knowledge to be able to give advice to people?
Mr Lidington
We do keep and make available lists of solicitors and other legal advisers in all the countries where we have posts, and we usually know whether the practices have people who speak English. What we cannot do is give an assurance about the quality of the legal advice. We can say that somebody has been duly qualified to practise law in a particular jurisdiction, but it would simply not be possible for our consular staff to grade the relative performance of solicitors in a foreign country.
There are cases—if I may address one of the points raised by the hon. Member for Denton and Reddish—where the British courts have declined to enforce a European enforcement order because they have found, after scrutiny, that the documents had not been satisfactorily completed. Again, looking at the detail of a particular case is of key importance. Other options—this is all on the website—include contacting the various property action groups to share experience, contacting the Competition and Consumer Protection Service, the CCPS, in Cyprus, or considering financial arbitration, which has worked in some cases, although it is not suitable for all.
Although we have not been able to intervene in individual disputes, our high commission continues to be active. In March 2014, we organised a familiarisation visit to London for members of the Cypriot land registry to share our experience in e-applications, insolvency, alternative dispute resolution and complaint handling. The purpose of that is to try to make it possible for the Cypriot land registry to modernise and speed up its procedures, because one of the chief complaints is that it takes people a very long time to obtain the relevant deeds and documents.
The Cypriot land registry has now computerised its land information system in relation to the existence of encumbrances, and the Foreign Ministry in Nicosia has confirmed that land officers must now inform buyers in writing of any outstanding encumbrances on the property. Our high commission part-sponsored an alternative dispute resolution forum conference in October last year, and it organised two visits for the Cypriot financial ombudsman to this country to learn best practice from his UK counterpart. We continue to be active in helping with public sector reform, particularly with the Ministry of Justice and local government, which we believe will ultimately have a beneficial impact on the way in which property issues are dealt with.
We also lobby the politicians. During the past year—in 2014 and 2015—our high commissioner, Ric Todd, has raised the issue of non-performing loans with the Cypriot Finance Minister and property-related issues with the Attorney General. Both my right hon. Friend the Foreign Secretary and I have raised property issues experienced by British nationals with the Cypriot Government. I did so with Foreign Minister Kasoulides on 12 March this year, and the Foreign Secretary raised property issues again with him when he visited Cyprus on 17 July.
We have seen an effect. There is now a definite will on the part of the Cypriot Government to try to find ways to tackle property issues. As my hon. Friend the Member for Stone said, on 3 September this year the Cypriot Parliament passed a Bill that will help many British nationals and others affected by these issues. The impact of the Bill will be that purchasers who have met their contractual obligations should now be able to obtain their title deeds, although purchasers who have failed to comply with their contractual obligations will not be able to make use of the new law. Our high commission will of course continue to work with the authorities, and they and Ministers will continue to raise property issues whenever the opportunity arises.
The new legislation does not cover the issue of Swiss franc mortgages, which is an entirely separate issue and one that we advise is a private legal matter. We know that some purchasers have managed to renegotiate their mortgage terms. Some have taken legal action in the UK and other claims have been made to the Central Bank of Cyprus and to the Competition and Consumer Protection Service in Cyprus. Last month, Cypriot MPs asked their central bank to review how Swiss franc mortgages were sold, but it is not yet clear how the central bank proposes to take this forward. Our high commission will monitor developments.
Although there has been progress, we recognise the impact that property disputes have had on many families in Cyprus and the United Kingdom, and that many of the families risk losing their life savings. Those affected should continue to pursue their cases through the Cypriot and, if appropriate, UK courts, although we accept that this can be challenging and that good legal advice does not come cheap. In parallel, we remain committed to lobbying at high level to encourage the Cypriot Government to take effective action to resolve existing problems and to reform the property sector to prevent such problems from occurring in future.
Question put and agreed to.
Resolved,
That this House has considered the matter of British property owners in Cyprus.
Young Jobseekers
(8 years, 6 months ago)
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Chloe Smith (Norwich North) (Con)
I beg to move,
That this House has considered young jobseekers and the Department for Work and Pensions.
I want to lead a positive and constructive debate using recent research into the role of the Department for Work and Pensions, specifically jobcentres, in supporting young people to find long-term employment. I will draw on my own experience of working closely with the Norwich jobcentre in a regional project and also direct Members’ attention to the work of the all-party group on youth employment, which I chair. I will welcome interventions and, as we have plenty of time, speeches from other Members; I ask only that others join me in focusing constructively on young people’s employment and looking in a positive way at how the hard-working officials in the jobcentre can best support those who need help.
You will be pleased to learn, Mr Gray, that this debate has allowed for the trial of a digital debate. The idea for digital debates linked to debates in Westminster Hall came from the Speaker’s Commission on Digital Democracy, which argued:
“We believe the public want the opportunity to have their say in House of Commons debates; we also believe that this will provide a useful resource for MPs and help to enhance those debates. We therefore recommend a unique experiment: the use of regular digital public discussion forums to inform debates held in Westminster Hall.”
It gave me great pleasure last night to take 97 questions and comments from the public over Twitter to inform this debate and raise its profile. I place on record my thanks to everyone who got involved. Between us, we reached nearly a million Twitter accounts, which is an achievement in itself.
I note a few comments made in that debate. A theme that ran through many of the points made was that everyone should not be treated the same: there should be personalised treatment for young jobseekers at the jobcentre. A second theme was that if we expect commitment from jobseekers, we should also demand it from staff, who should be punctual and treat jobseekers with respect. Someone asked whether the Government have plans for jobcentre resources specifically for young people. I have mentioned that early in the debate so that the Minister can prepare his answer. The theme of mentoring also came up. I took the opportunity in last night’s debate to place on record the resources available through the Chartered Institute of Personnel and Development’s Steps Ahead programme, which in East Anglia alone has more than 90 mentors ready to help young people at no cost to them.
Having given a flavour of the digital debate, I will lay out the problem: more young people are in need of work than older people, as shown clearly by the official employment rates. The Office for National Statistics concludes:
“The unemployment rate for those aged from 16 to 24 has been consistently higher than that for older age groups.”
For the past three months on record—covering this summer, June to August—the unemployment rate for 16 to 24-year-olds was 14.8%. That is lower than it was in spring and lower than at the same time last year, which is to be welcomed, but it is far higher than the rate among over-25s, which is 3.9%. To be clear, that is the ONS rate, which is different from the claimant count.
Heather Wheeler (South Derbyshire) (Con)
I congratulate my hon. Friend on securing this debate. She is giving some very interesting figures. Perhaps South Derbyshire is bucking the trend, because in May 2010 our youth unemployment figure was 565, and in September it was 100, which is less than 1% of the national total. Perhaps people might like to come to South Derbyshire and see what we do to get young people employed.
Chloe Smith
I welcome my hon. Friend’s positive example. South Derbyshire certainly has a very assiduous MP to go with those figures. It is indeed the case that youth unemployment is coming down. We should celebrate and look at the examples of what has worked locally. That is one of the themes I want to establish in this debate.
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate the hon. Lady on securing this debate. Will she comment on the quality of jobs young people get, and their training and salary levels?
Chloe Smith
I do not think that the hon. Gentleman will hold me too far to account if I leave it to the Minister to cover some of those points that are, after all, national. I suspect that the hon. Gentleman is arguing that they ought to be a matter for Government. The great majority of the private sector jobs created over the past few years have been full-time. Myths abound as to the extent of zero-hours contracts. We gave that argument a good going-over in the general election campaign—I am sure that the hon. Gentleman did as much as I did. There are myths around about the quality of jobs that young people can look forward to as they leave education and look for opportunities. It is deeply disrespectful to young people to set up a negative argument that they can look forward only to a zero- hours contract. It is deeply negative and we ought to avoid it.
Mr Stewart Jackson (Peterborough) (Con)
I congratulate my hon. Friend on securing this important debate and on chairing the all-party group, of which I have the pleasure of being a member. A key complaint from employers is about the work-readiness of young people. Does my hon. Friend concur that the National Citizen Service is one of the best initiatives we have, particularly in the east of England, in helping young people to grow in confidence and work-readiness?
Chloe Smith
Yes, I do. Indeed, I note that the NCS is holding an event in Parliament today at which its leaders are on hand to explain an important point that we ought to celebrate in this debate: young people can lead young people to face these challenges. We should look for examples of that and give praise where it has worked, and we should seek more ways for young people to be in a position to lead their peers. I want to put that proposition forward, because it came over strongly in last night’s digital debate. It is another way of looking constructively at what has worked up and down the country.
Mr Andrew Smith (Oxford East) (Lab)
I join others in congratulating the hon. Lady on securing the debate. Does she agree that the quality of information and advice available to young people still leaves a great deal to be desired? Indeed, schools having the prime responsibility to provide careers advice has not been an unqualified success. The statutory guidance to schools says that they should work with Jobcentre Plus to provide a smooth pathway from school into employment. In the hon. Lady’s experience of working with Jobcentre Plus, is that happening?
Chloe Smith
It is happening in parts of the country. One of the points I want to make today is that we see good practice in some parts of the country. I hold up the jobcentre with which I work in Norwich as an example of that. I also note forthcoming initiatives, which I am sure the Minister will cover in his response, whereby jobcentres will be asked to work more closely with young people in schools. That is to be welcomed.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
Will my hon. Friend give way?
Chloe Smith
One moment. First, I refer the right hon. Member for Oxford East (Mr Smith) to the work of the all-party group, because at our next meeting, on 18 November, we will be looking at careers education. I now give way to one of the officers of said group.
Michael Tomlinson
I join colleagues in congratulating my hon. Friend on securing this debate. In Mid Dorset and North Poole, the figures are still too high. Of the claimant count of 314, 67 are aged 18 to 24. That is better than it has been, but it is still too high. On the point made by the right hon. Member for Oxford East, does my hon. Friend agree that we can start careers advice from an earlier age—even as young as primary school—as we heard in the all-party group’s evidence session?
Chloe Smith
Indeed, I do agree with that—my hon. Friend is absolutely right—and it need not be onerous. It can be as simple as asking role models to explain to young people what they do and why a young person might want to aspire to do the same. I am sure Members will now allow me to make a little more progress in setting out my argument.
It is worth putting the national figures into context and looking at our European neighbours. It is a matter for celebration that Britain has more young people in work than the nations around us in Europe. Across Europe, one in five young people are out of work. In Spain and Greece, one in two young people are lacking work. We also see the countries leading the field, Germany and Austria, with rates of 7% and 10% respectively.
One young jobseeker in last night’s digital debate made the point that young jobseekers are people, not statistics, so, in Britain, what do all the large numbers mean in terms of real people? They mean that 3.92 million 16 to 24-year-old people are in work, including some 900,000 full-time students with part-time jobs. There are, in contrast, 683,000 unemployed young people, including about 200,000 full-time students looking for part-time work. I am including the student figures not to begin a debate about the classification of the figures— I suspect that would take more than an hour—but because I want to draw out the key figure of 683,000: between 600,000 and 700,000 young people are looking for a chance in Britain today. If that is the problem, the question is, how best can we help them find that opportunity?
Victoria Borwick (Kensington) (Con)
I absolutely concur with my hon. Friend. On that point, do you believe that jobcentres, which do good work in my constituency and others, should be encouraged to promote apprenticeships as a way of tackling the issues and figures that you have raised?
Mr James Gray (in the Chair)
The hon. Member for Norwich North (Chloe Smith) has raised them; I have not.
Victoria Borwick
You are quite right, Mr Gray. I am sorry.
In London, we have created 220,000 apprenticeships since 2010, which have introduced people into a world of work. Perhaps in due course the Minister will comment on apprenticeships.
Chloe Smith
I am grateful to my hon. Friend for giving that example. Apprenticeships provide many opportunities for young people.
This was the subject of the debate last night. One young person, whom I will faithfully report, said the rate paid is too low. Perhaps that is a topic for a long debate another day. None the less, there are many opportunities out there for earning while learning, and that package can be very attractive to young people who are looking to take their first steps and find their first opportunities.
Richard Graham (Gloucester) (Con)
Like others, I congratulate my hon. Friend on being a leading light in helping young people to find worthwhile employment. She is right to focus on apprenticeships. The increase in the level of apprenticeships in Gloucester almost directly mirrors the drop in youth unemployment from 1,000 to 250 over the past five years. I suspect—my hon. Friend might want to comment on this—that the employment figures for Europe will show a similar correlation in the countries that encourage apprenticeships, such as Germany and us, and those that do not. Will my hon. Friend say something about the fact that, although there are minimum rates for employing apprentices, there is no maximum rate? Many of us who have our own apprentices pay significantly over the minimum rate.
Chloe Smith
I am grateful for that point, which stands by itself so I shall welcome it and move on to the need for a strong economy.
The single best way to get young people into opportunities is for there to be lots of opportunities to start with. The Government have overseen significant private sector job growth, and the economy continues to grow. More jobs have been created in Britain recently than in the rest of Europe put together, and that is undeniably good news for a generation of young jobseekers who can look to a brighter future.
We need to connect young people to those opportunities—here comes the meat of the debate. A local example illustrates my point. I founded and run a project called Norwich for Jobs. In 2013, I looked at our local unemployment figures for those aged 18 to 24, and I knew that 2,000 unemployed young people was too many. Drawing together a team that could do something about it, we set about halving that number. In fact, we smashed the target we set ourselves in less than two years. So far, we have helped nearly 2,000 young people into work. About 600 still claim jobseeker’s allowance, and we want to encourage employers to give them opportunities now.
We did that by encouraging local employers to create opportunities; connecting young people with those jobs, with the jobcentre at the heart of the process; and focusing the community on a common goal. We are taking on a new challenge after having met our first target, and we are now using the power of that local network to help those claiming employment and support allowance—in other words, young people who want work but have a health condition or a disability. I strongly support the Government’s clarion call to be disability confident, and I call today on Norwich employers to consider what more they can do.
We are turning that one city project into a regional movement. The Norfolk and Suffolk youth pledge, led by the New Anglia local enterprise partnership, is a further strong example of the kind of collaboration that stands the best chance of helping young jobseekers. The pledge is that every young person in Norfolk and Suffolk will get the personal support they need to get an apprenticeship, training, work experience or a job within three months of leaving education or employment. The New Anglia skills board and Jobcentre Plus have been working closely with the two county councils, and indeed with me and others—I am on the board of the project—to develop the project. We are building on the successful roll-out of the MyGo service—the first of its kind in the UK—which was launched in Ipswich in 2014 and the project I outlined in Norwich. I am proud of that project, and hope it stands as an example to other hon. Members of what they can convene in their areas. Research by the Found Generation holds up MyGo, a youth employment centre that was the starting point of the Ipswich project, as a very powerful project.
How best can we help young people? I said that we should grow the economy and make connections. We should also share good ideas, which is why I have talked about those examples. I mentioned the all-party group on youth employment, and I welcome the members who are here today, including my hon. Friends the Members for Mid Dorset and North Poole (Michael Tomlinson) and for Bolton West (Chris Green). I welcome their presence, because we aim to share good practice. Our primary objectives are to promote youth employment in all its forms and the role of young people in the economy, to ensure that young people’s voices are heard, to highlight the need for good-quality opportunities and to share best practice.
We should value good-quality research and learn from it what we can do better. I will draw on two reports. YMCA England, of which I am a parliamentary patron—I am also patron of the Norfolk organisation—produced a constructive and practical research report, which I have in front of me, entitled “Safety Net or Springboard?” Its purpose
“was to examine how the social security systems could be transformed to better enable young people to find employment and fulfil their potential.
High levels of youth unemployment are not a new problem in the UK. While the global recession saw a significant jump in the number of young people facing unemployment, in reality, the upward trend started long before the financial crisis, as far back as 2004.
Given that numerous governments have tried a range of schemes to battle this problem with only mixed success, this research sought to give young people a voice in shaping any new approach offered, including the introduction of a Youth Obligation, a back-to-work scheme announced by the Government as part of the Summer Budget 2015.
Through a series of focus groups, young people from YMCA identified six areas they believed job centres could improve to increase their prospects of finding employment:…Understanding young people’s circumstances…Listening to young people’s aspirations…Supporting young people to look for work…Getting young people the right skills and qualifications…Securing young people with meaningful work experience”
and
“Retaining support for young people transitioning into employment.”
The evidence in the report is based on a series of focus groups that took place this summer across England in areas that many hon. Members here come from: north Tyneside, Birkenhead, Grimsby, Derby, Birmingham, Bedford, Dartford, Westminster, Horsham, Exeter and my own constituency of Norwich. The YMCA found that:
“The overwhelming feelings expressed by the young people participating in the research were ones of frustration and dismay towards job centres and the support they currently provide in helping to find employment. More than nine in 10 of individuals taking part in the focus groups believed the support they were currently or previously receiving from their job centre was not helping them find employment. Through the research, YMCA sought to understand why this alienation exists between young people and job centres and to identify what measures they felt were necessary to transform the job centre and the wider social security system from a safety net to a springboard into employment.”
I want to be absolutely clear that I have the highest respect for Jobcentre Plus staff. As my local examples demonstrate, I work closely with the team in Norwich and East Anglia, which is led by the excellent district manager Julia Nix. I see their dedication, innovation and hard work day in and day out.
Gareth Johnson (Dartford) (Con)
I have read the report that my hon. Friend is talking about. She rightly said that it referred to some work in Dartford, but there were a number of things that surprised me about it. First, it said that Dartford is in London; it is not. It was also somewhat critical of some of its experiences there. That has never been my experience of the jobcentre in Dartford; I have always found the staff to be incredibly professional. I would argue in their defence that the proof of the pudding is in the eating, and that since 2010 youth unemployment in Dartford has fallen by some 71%.
Chloe Smith
I welcome my hon. Friend’s contribution. He makes the same point as I do. The best officials in the jobcentre are highly respected and are known for their work in the community. Their passion shines out and they embody the values of public service at every opportunity. They also take a hands-on approach, which is perhaps over and above the duties of a civil servant. They could well be expected to do their work from behind a desk, but the best officials do not do that. They go out and work hard in the community to get results. I welcome hearing my hon. Friend’s local example.
It is in that spirit that I mention the YMCA research today, because civil servants of the calibre of which we speak will want to do even better. The report states that
“many young people are continuing to be prescribed the same generic support, regardless of their circumstances and aspirations. This is creating a significant discordance between how young people view the service being provided and what governments believe they offer. While examples of good practice do exist, the research illustrates that these are few and far between”.
Let’s share the good ideas and let’s do better. The YMCA research proposes that the new youth obligation be matched with an obligation on jobcentres. It argues that the obligation should commit jobcentres to providing each young person accessing its services with a more detailed initial assessment with a closer focus on their personal circumstances and aspirations, a specialist youth work coach, more comprehensive sign-on sessions, more regular opportunities, better training and work experience, and options to discuss how available funding may be used to let them participate in training. The report also suggests that people should be able to participate in training for more than 16 hours a week without their benefit claims being affected.
I want to quote some of the young people in the research. Charlotte of Norwich says:
“I want the job centre to be a bit more understanding.”
Jordan of north Tyneside says:
“The job centre needs to stop treating everyone the same.”
Marcio of Bedford says:
“The job centre needs to really listen to young people to see what we want.”
Other voices in the report tell us why we must collaborate locally to bring about the chances that young people need. Another young person from Norwich says:
“Everyone is looking for experienced workers, but how are we going to be experienced workers when no one is giving out experience?”
Another from Norwich seeks more “volunteering placements”. I suspect that organisations listening to today’s debate may want to continue the digital debate and explain exactly what they can offer in terms of volunteering opportunities for young people up and down the country.
I would also recommend that Members take a look at the work of the Found Generation, as mentioned earlier. It is another extremely practical group that asks young people for their own solutions to the problem of young unemployment. In July 2014, it published “Practical Solutions to UK Youth Unemployment”, a report asking for four things. First, it asks that we expand
“the use of public sector procurement to create jobs for young people”,
which I note that the Minister for the Cabinet Office is now doing. Secondly, we are asked to back
“a national ‘kitemark’ to recognise ‘youth friendly’ employers”
and I note that at least one organisation, Youth Employment UK—the secretariat of the all-party parliamentary group that I chair—is already doing so. Indeed, hon. Members can qualify for the award, as I have. I am a recognised youth-friendly MP.
Chloe Smith
Thank you. Thirdly, the report argues for
“the creation of more local partnerships—including representation for young people—to co-ordinate”
the work that needs to be done. I hope that my examples make that clear. Finally, the report argues for the creation of
“a cross-government youth employment unit or agency in the UK Government, headed by a Minister for Youth Employment”.
I am aware that such a scheme exists in the Scottish Government, so perhaps Scottish Members can outline a few points around that. Will the Minister give an update on what the Government’s earn-or-learn taskforce is doing? The Found Generation’s manifesto for youth employment at the 2015 general election echoed many of the themes that I drew out from the earlier research. We are looking for a more specialist, personalised, sustainable and empowered approach that puts young people at its heart.
In conclusion, I hope that I have highlighted some valuable research and that I have taken the opportunity to put young people’s experiences at the heart of the debate. It gives them a chance to be heard in Parliament. I have argued at every step of my parliamentary career that more young people should be able to take their rightful place in this House. I ask the Minister to respond by giving us an update on the Government’s taskforce, explaining his intentions for the youth obligation, and outlining what he will do to help hard-working jobcentre staff do their best to help young people into work.
Several hon. Members rose—
Mr James Gray (in the Chair)
Order. I intend to call the first of the three wind-ups at 5.25 pm. I have about six people trying to catch my eye, so, while there is no official time limit, it would be helpful if Members could keep their speeches to five minutes or less.
Angela Crawley (Lanark and Hamilton East) (SNP)
It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Norwich North (Chloe Smith) on securing such an important debate.
For any young person who is able to work to be out of a job is tragic. It is tragic for the individual who finds themselves unable to get on in life. It is tragic for their family who have to support and motivate them. It is tragic for the country, which misses out on young people’s huge talent and potential. Young people across this country are incredibly talented, hard-working and ambitious. Above all, as I said, they have great potential. They are our future. Youth unemployment is not a new problem. The economic crisis has certainly made life harder for young people starting out, but we parliamentarians must not make excuses. It is our duty to tackle unemployment across these islands. Our constituents would expect no less.
I want to be clear that we will not reduce youth unemployment by sending jobseekers to boot camp, by sanctioning young jobseekers’ benefits and certainly not by forcing young people to knock on the doors of food banks. Imagine a young person under 25 who is unable to remain in their family home or to access housing benefit and has few opportunities. What is to become of them? Who will give that young person a chance? I would love to believe that every young person who walks into a jobcentre has the best experience, is listened to and appreciated, but they are not. That is a fact. I urge the Minister to consider the other options. A different approach is available. We must believe in our young people and their ability to learn and support them through their studies to provide them with real opportunities and real life chances. We must not burden them with huge debts.
Picture a young person in Scotland who is considering college or university. The cost of her education is not a barrier. The fact that she will be entitled to a bursary enables her to access her studies, and her parents can worry less about the debt. Her prospects are better. Her horizons are broadened. Her employment chances are increased. That is how we should approach the higher education system. It should be based on a person’s ability to learn, not their ability to pay, opening the door for young people to create real chances and real opportunities for themselves. Educational aspirations should be determined not by wealth, but by ability to learn and to achieve real and meaningful employment. That is why I am delighted to be part of the Scottish National party and a Scottish Government that put education at the centre of young people’s learning and life chances, something which I hope all parties across these islands would consider more seriously.
Contrast that with a young person in England who will be faced with £9,000 of debt each year to achieve their potential, to achieve their education and to achieve a chance to move on in life. Their prospects will be decreased, their access to education limited and their ability to learn essentially removed.
Michael Tomlinson
Do the figures not show that more people from poorer backgrounds have gone to university and further education despite what the hon. Lady has been saying about the increase in fees? Our measures have increased opportunities, not decreased them. What does she say about that?
Angela Crawley
I agree, but when considering whether economic development throughout Scotland is crippling the life chances of young people, we should contrast some of the constituencies represented in this Chamber with some of the constituencies in Scotland, where young people’s life chances are far more limited. I invite the hon. Gentleman to my constituency to see for himself that many young people do not achieve the same potential as some of their counterparts in his constituency. That is a simple fact.
Higher education, however, is not for everyone, and education is not the only answer—I accept that—but the minimum wage for an apprentice is now £2.73 per hour. How can we seriously expect a young person to take on an apprenticeship when that is a pitiful amount to pay any intern or apprentice? Giving young people the opportunity to achieve their potential requires serious amounts of money and serious amounts of potential investment in their futures, so that amount is paltry; it does not give young people a chance to move on in their lives.
Inequality in apprenticeships is present throughout the UK, in particular when it comes to gender. The Scottish Government are therefore taking gender seriously and ensuring that more young women enter modern apprenticeships. Young people must see the full range of options available to them, not only in traditional jobs, which have been seen as jobs for men, but in other jobs available to women. We must broaden the horizons of our young people and ensure that all young people can achieve their full potential. I ask the Minister to consider all the options available. Let us create real opportunities for young people to learn, to grow, to flourish and to achieve their full potential. That is the best way to ensure that they get off jobseeker’s allowance and achieve employment.
Pauline Latham (Mid Derbyshire) (Con)
It is a pleasure to serve under your chairmanship again, Mr Gray. I recognise that time is short, so I will confine my remarks to one or two things about my constituency.
In 2010 in my constituency youth unemployment stood at 6.1%; the total number of young people unemployed was 350. According to the most recent figures, released in September, that number is down to 70, which is just 1% of 18 to 24-year-olds in my constituency—so 280 young people have found work and are enjoying the benefits that come with it.
Good though the jobcentres are, other people are helping the effort in Mid Derbyshire and, in constituencies such as mine, the big society is working. I will highlight the work of one organisation in particular, the Drop Inn, which does a lot of work with young people. It offers accredited training, skills workshops, and support and mentoring for the many hurdles that young people are faced with as they grow up. It was set up by a woman who realised many years ago that many young people have nothing to do in the area, or they feel that, and she wanted to get them off the streets and to give them some sort of training.
The Drop Inn helps young people feel part of the community through volunteer schemes and outreach programmes, linking young people with others in the area and keeping them creative through music and multi-media sessions. It does all that for free, relying on volunteers and trainers to put on the sessions. A testament to the organisation is that many volunteers have been through the Drop Inn programmes themselves. Only last week I heard about two young people who had put on a successful music night, raising awareness and funds for the Drop Inn.
Organisations such as the Drop Inn directly tackle youth unemployment. They give young people the confidence needed to pursue the interests and skills that make them attractive to employers. I am lucky to have such a good organisation in my constituency. I hope that the Minister will join me in recognising the work of such community initiatives in tackling unemployment among young people. Without them, the success in Mid Derbyshire would not be as good as it is.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
I echo the congratulations to the hon. Member for Norwich North (Chloe Smith) on securing the debate.
Youth, the state of being young that is between childhood and adulthood, used to be relatively carefree. In some senses it is now extending—something I say as a mum, as well as an MP—with more and more pressures on us, and people of middle age such as me seem to be on an eternal quest for youth.
In my constituency the good news is that 226 young people are now claiming JSA, which is 49 fewer than last year. The figure seems to be going down—that is a reduction of 18%—although, as we have been cautioned, we do not know how many of the jobs are zero hours or casual and the like. Those “young people” are 18 to 24-year-olds, but there are often different measures of what we mean by young.
We have two Jobcentre Pluses, one in Acton and one in Ealing Broadway, but what I wanted to flag up is the fact of conditional welfare arrangements, or ones that require people to behave in a certain way and involve the application of sanctions or penalties if they cannot. From the figures that I have seen, such benefit sanctions are disproportionately affecting young people under 25—another different measure of youth—although that might include the homeless and the vulnerable. In the past year two reports have come out, one from the Joseph Rowntree Foundation and one from Crisis, with everything pointing in the same direction.
Young people account for the largest proportion of JSA claimants who are sanctioned, with two thirds of all sanctions applied to claimants under the age of 35—another different measure. We do not know the precise reasons—perhaps young people have more erratic lifestyles—but they need to be looked into and I will be interested in the Minister’s comments, because such a situation might lead to a vicious cycle. Those sanctioned might stop seeking support, hardship might result, people might fall out of the system altogether and, if they have dependent children, the sanctions might affect those third parties as well. It may be a case of unintended consequences, who knows, but it needs looking at, in case that group is suffering some kind of direct or indirect discrimination in the benefit system, leaving them more vulnerable to sanctioning, even if they are equally as compliant as others. That work needs to be done, because there is a concern, especially when the group faces challenges such as high rents and so on in a constituency such as mine.
According to the same YMCA report that the hon. Member for Norwich North cited, “Safety Net or Springboard?”, more and more conditions and expectations are being placed on young people applying for benefits. She also mentioned that young people want more personalised and meaningful support; they do not want to be simply a number. There seems to be a disconnect between people’s daily lives and the way in which jobcentres operate.
In my constituency we have an organisation called MyBigCareer, run by the energetic Deborah Streatfield. She is also campaigning for more mandatory careers advice at school, which I know exists, but it is sometimes only a link to a website, whereas her campaign is specifically for more one-to-one, personalised, sit-down advice. Will the Minister comment on that? My right hon. Friend the Member for Oxford East (Mr Smith) raised similar issues.
Everything needs to be put into a context. Since the previous Administration, employment and support allowance has gone, student grants have been abolished and housing benefit is no longer available to 18 to 21-year-olds. We have also heard that the so-called national living wage will not apply to the youngest workers. We do not want some sort of inter-generational conflict as a result. I found a blog that stated:
“UK Boomers slash benefits to young & force them to load up on debt while guaranteeing pensioners ever rising incomes.”
We do not want mistrust between generations, because young people are our future. I worry that some of the logical consequences of Government policy might lead there.
Dr Huq
I am about to finish, so I would rather not, if that is okay.
The Prince’s Trust—we are talking about Prince Charles, the heir to the throne—youth index uses a measure of 16 to 25, another different definition of what counts as young. One fifth of the respondents for the index said that they regularly fall apart emotionally and that they suffer from anxiety. It found all those mental health issues, so we do not want to be stoking things up.
There is much to agree with in the YMCA report. If we pick up any modern humorous dictionary of quotations, we will find many phrases about young people and youthful folly, such as, “You are only young once.” One such quote is from Oscar Wilde, who said:
“Youth is wasted on the young.”
We do not want to be in a situation where youth is wasted.
Mr James Gray (in the Chair)
Order. Can I say that if hon. Members want to be called to speak, it is quite helpful if they stand up?
Mr James Gray (in the Chair)
Victoria Borwick, I was planning to call you because you wrote to the Speaker to indicate that you wished to speak.
Victoria Borwick
No, I made my point in an intervention. Thank you, Mr Gray.
Mr James Gray (in the Chair)
Mr Green and Ms Solloway, neither of you wrote to the Speaker; nor, indeed, had you been standing up. However, in a spirit of openness and cheerfulness, I call Chris Green.
Chris Green (Bolton West) (Con)
Thank you, Mr Gray. It is an honour to serve under your chairmanship this afternoon. I offer my congratulations to my hon. Friend the Member for Norwich North (Chloe Smith) on securing the debate on this important issue and on her work as chair of the all-party group on youth employment.
As the House will be aware, between June and August the employment rate was 73.6%, which is the highest since records began in 1971. In that same period, 3.92 million 16 to 24-year-olds were in work. That figure is up 66,000 in the past year.
There are many ways to get that all-important first job and gain the vital experience that can lead on to an exciting and rewarding career. While many young people find work through word of mouth, online adverts or speculative applications, we must recognise the important role of the local jobcentre, which is often the vital link between someone seeking their first job and potential employers.
The jobcentre’s role is especially important for those who do not have the necessary support from family or friends that so many of us rely on. However, we do have to acknowledge that, in some cases, jobcentres are not sufficiently flexible to meet the needs of people who rely on their services. We must recognise that the support some people need extends beyond the point of getting and starting a job. Those initial few days and weeks in that first job can be incredibly daunting and that is when support from the jobcentre can be needed most. We need to ensure that the support jobcentres offer is more flexible to enable ongoing support from a work coach outside of normal working hours to reflect the needs of new employees.
I am pleased with the Government’s youth obligation plans to require unemployed 18 to 21-year-olds to take an apprenticeship or do daily community work if they have not been in employment, education or training for six months. The proposals place emphasis on work and other experience, encouraging young people to develop in the discipline and routine of work and to add as many activities as possible to their CVs to improve their future prospects.
Looking back at my work history—I have not had the typical route into politics—I remember an early piece of advice that certainly served me well, though I am sure others here may not quite agree with it. It was, “Just get a job—any job. It doesn’t matter what, because you just need the experience.” I followed that advice and took a variety of low-paid temporary jobs that led to me working as a vehicle mechanic, in a picture frame factory and a bookies, then doing bar work and on to a career as an engineer in the mass spectrometry industry for nearly 20 years.
Each job I had provided a stepping stone and that much needed employer reference for the next job. Without that early experience, I would never have had an enjoyable career in industry and I would not be where I am now. It is vital that, regardless of circumstances and aspiration, young jobseekers receive good guidance from careers advisors in schools and jobcentres so that they are not excluded from today’s competitive labour market.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
Has the hon. Gentleman considered the importance of support and guidance at school and mentoring afterwards not just for young people looking for jobs, but for those who want to start small businesses but may not have had that encouragement in the past?
Chris Green
I agree. I think most people in the Chamber would agree that further development is required in schools and in other ways to get young people that first experience so that they can develop the business that they have always dreamt about starting.
Richard Graham
My hon. Friend has given a striking example of a can-do spirit and attitude. In a sense, I think that divides the House between those on the Government side who want to see employers providing those opportunities for young people to show that they can succeed as he has and those on the Opposition side who often lean towards giving the young more benefits, because they are not capable of working or whatever. Does he agree that the key to getting more young people into work is seeing opportunities provided in precisely the way the Government have done with apprenticeships?
Chris Green
Apprenticeships are a key way to get experience and it is really important that there is a whole range of ways to get into apprenticeships and guidance for that.
I am delighted that the Government are continuing to support young people moving into work, allocating £1 billion to the youth contract and ensuring that apprenticeships for under-25s incur no national insurance costs for employers. In my constituency, youth unemployment was at 8% in May 2010. Fast-forward five years and it was at 3.9%. Further, since 2010, Bolton West has had an increase of more than 4,000 apprenticeships.
This week, I am interviewing for an apprentice for my own constituency office. Apprenticeships are a vital way to give young people a chance to earn a salary while getting real work experience. A great deal has been done, but there is still much more to do in the future.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in the debate. I congratulate the hon. Member for Norwich North (Chloe Smith) on presenting her case in such a full and confident way. For the record, those of us on the Opposition side of the House are equally confident in our young people and we want to see them do well. That is a fact: the hon. Member for Gloucester (Richard Graham) should be careful with his comments, because many of us feel quite aggrieved by them.
Many of the innocent victims of unemployment are young people, who are feeling the pinch just as much as anyone else. These austere times are difficult for our young people, so we have to help them. That is what we are about. We are all committed to that—on the Opposition side as well as on the Government side of the House. Young people need sustained help.
While the economy continues to recover, some of our young people are not yet feeling the benefits. The debate is about young jobseekers and the Department for Work and Pensions, so we are highlighting the issues of those not currently getting the help that they need.
I am conscious that the Minister has responsibility for England and Wales—not for Northern Ireland, because this is a devolved matter—but I want to make a few comments. In Northern Ireland, the unemployment rate for April to June was estimated at 6.5%, yet 20% of young people were unemployed. Those are the facts for us in many parts of Northern Ireland. We have seen a decrease in the number of unemployed young people, but a large proportion of them are long-term unemployed, if I can say that about young people—if that is not an Irishism—and need an extra bit of help and assistance. I think the hon. Member for Norwich North made that point as well.
I am concerned about young people growing up in a nation where a fifth of them are out of work. We are trying to address that through further education courses that will prepare them for work. Of course, we can blame the economic conditions and say that the economy is rebalancing, but a fifth of young people are unemployed compared with just over 6% of people nationally. In Strangford, I have seen a decrease in unemployment, with the figure at about 4% now. The economy and other things are changing, so let us help those who need it.
We can point to examples in Europe and beyond of similar statistics. We can and do struggle with the global economy; there are some things that even the Minister cannot do, no matter how talented he may be, because of things that happen outside Great Britain that affect us at home. In my constituency, some of the growth industries include agrifood, construction, which is starting to turn again with houses being built, pharmaceuticals, insurance and light engineering. We have to address the issues affecting young people, however. Just the other day, I was given figures showing that a large number of young people are looking to leave Northern Ireland because the jobs there do not have the wage structure and prospects they would wish for. Opportunities further away are more attractive.
I am also concerned about young Protestant males—this was mentioned in a debate in another forum that I was at today—and those who do not achieve the educational standards they need; we must help them to get jobs. I suspect that that is a problem not just in Northern Ireland but in other parts of the United Kingdom—other Members will speak to that when appropriate. However, 20 years on from the first ceasefires we are still behind.
Today’s news about the deceleration of the British economy, led by a downturn in the manufacturing sector, is causing concern. We seem to be losing our manufacturing sector across the whole United Kingdom. That concerns both those of us on the Opposition Benches and Government Members, as it should. Output in the manufacturing sector has fallen by some 0.9%, meaning fewer quality careers in that sector and consequently diminishing opportunities for our young jobseekers. I am not sure how the Minister can address that issue, but I would like to hear some ideas. The Government are going to roll out their new earn or learn scheme. Will he comment on that new initiative?
The Department for Employment and Learning in Northern Ireland has announced some 300 new places in education to prepare for jobs in engineering. We need good partnership between business, manufacturing and so on; those partnerships can lead to a strong economy—that is the change we are seeing. We need new apprenticeships as well, and we need those jobs for young men and young girls on an equal basis. Things are changing, but there is still much to be done. Let us continue to encourage our young people—that is what this debate has done—to strive for better. In turn, they will be able to have confidence in a safe future.
Amanda Solloway (Derby North) (Con)
I, too, congratulate my hon. Friend the Member for Norwich North (Chloe Smith) on securing this important debate. I also thank the YMCA for putting together this interesting and informative report. For many years, I have had close ties with the YMCA in my home city of Derby, and acted as a mentor in its initial pilot scheme. I know the value that that has added. I know from first-hand experience what fantastic work the YMCA does, as well as the challenges it faces when helping young people—not just in Derby, but across the country.
The YMCA report has highlighted concerns about levels of youth unemployment when compared to unemployment in other age groups, as well as issues young people face in finding work. Some of the cases in the report show that people have experienced disappointment and frustration. That is concerning, and we need to make sure that all young individuals are aware of the various ways in which they can be helped in finding work. I was particularly touched when reading about Beth in Derby, who said:
“Job centres look down on you and belittle you”.
That should not be the case. I am sure it is not always so, but her comment is worth mentioning.
I am, however, encouraged that the Government have introduced several new schemes aimed at improving job opportunities for young people. It is vital to give young people the skills and experience they require to meet the demands of a particular position, and those schemes provide them with the support they need to achieve their goals, often before they even get to the jobcentre.
In Derby, a scheme introduced by Enterprise for Education, or E4E, links local employers to local schools and helps young people to find careers that are suitable for them, through providing mock interviews and help with CV writing. The scheme ensures that there are work-ready young people entering the job market. Apprenticeships have also proven successful in Derby, with partnerships between local colleges and schools. Companies such as Rolls-Royce and Bombardier are leading the way locally. I am happy to report that the number of young people taking up apprenticeships continues to rise.
The recent announcement of the creation of 40 new apprenticeship places at a construction training academy in Derby is a perfect example, and is testimony to the Government’s commitment to helping young people and addressing long-term youth unemployment. Through such schemes we are providing help and support to ensure that jobcentres are not the only option available.
Education and experience are two key considerations if we are going to improve job opportunities for our younger generation. People gain confidence from knowing that they have the required skills and qualifications and from having a clear picture of the work they want to find, meaning that young people entering their local jobcentre or applying online know that they are ready to work. However, we must take into account the recommendations from the YMCA to ensure that solutions are realistic, applicable and achievable, and that jobcentres focus on the needs and aspirations of those young people.
Neil Gray (Airdrie and Shotts) (SNP)
It is a pleasure to serve under your chairmanship, Mr Gray, and to have the opportunity to sum up on behalf of my party. I congratulate the hon. Member for Norwich North (Chloe Smith) on securing this debate and on what I thought was a fair and balanced speech. I admire her positivity, although her experiences and those of her constituents are not necessarily shared elsewhere.
I share the hon. Lady’s respect for jobcentre staff. I will quote some of the findings of the YMCA that perhaps point to the idea that some of the issues being experienced arise from policy rather than staffing. The YMCA report points out that although hardship payments are available to sanctioned claimants, in practice
“YMCA know that in many cases claimants are not being made aware of the availability of such schemes”.
The YMCA found that young people were not being given adequate information about sanctions, including support on how to avoid being sanctioned, explanations of why they have been sanctioned and practical advice on what to do once they have been. YMCA research on the effects of sanctions on vulnerable young people found that 84% had cut back on food as a result of being sanctioned. That is a troubling statistic.
My hon. Friend the Member for Lanark and Hamilton East (Angela Crawley) made an excellent contribution. Youth unemployment is indeed a tragedy, and we must recognise young people’s potential to contribute to our society and economy. She pointed out the narrow-mindedness of pushing young people towards work through sanctions. We should believe in our young people. She drew on the example of free higher education in Scotland, which provides real opportunities for young people, and made it clear that higher education should be about ability to learn, not ability to pay. I completely agree with that sentiment.
As for the remarks of the hon. Member for Mid Derbyshire (Pauline Latham), I laud the fact that youth unemployment is dropping in some areas, but I am not sure that all those jobs will be in full-time, secure and well-paid work. So many new jobs in recent years have been insecure, low-paid zero-hours contracts. The Government must report on the quality of new jobs. I agree completely with the remarks of the hon. Member for Ealing Central and Acton (Dr Huq) on sanctions; I will say more on that shortly.
The hon. Member for Bolton West (Chris Green) pointed out that jobcentres are not sufficiently flexible to meet the needs of those relying on them for support, which I agree with absolutely. The hon. Member for Strangford (Jim Shannon) made, as ever, a thoughtful contribution. I agree that young people are not feeling the benefit of economic recovery as yet and are not feeling supported. Perhaps that is being worsened by the Welfare Reform and Work Bill being debated on the Floor of the House at the moment. The hon. Member for Derby North (Amanda Solloway) said that jobcentres are not the only route to work, pointing to education and apprenticeships. On that point I again echo the remarks of my hon. Friend the Member for Lanark and Hamilton East.
The debate has been useful and worth while, and in general very positive, but we must point to the facts as they are. The DWP is failing workers and jobseekers with its dangerous welfare reforms and sanctions regimes. The reforms are already going to have a devastating effect on young people in general and will have the combined effect of hitting young jobseekers very hard. An increasing number of young homeless people are being sanctioned. Those who are vulnerable are being asked to comply with unrealistic conditions, resulting in sanctions that only deepen their disadvantage. I draw on the evidence already presented by the Joseph Rowntree Foundation, on the Trussell Trust report on food poverty from June 2014 and on the March 2015 Crisis report on homelessness, which says that the number of JSA sanctions has almost tripled from 2.5 sanctions per hundred claimants per month in the year ending 2001 to seven per hundred per month in the year ending 2014.
In conclusion, it is clear that something is going fundamentally wrong with how the DWP deals with young people seeking work. In my view and in the view of my colleagues, it is time to devolve to Scotland all social security functions and the resources to support that, so that we can plot a different path from the punitive and marginalising approach currently deployed by this Government.
Mr James Gray (in the Chair)
It may be helpful for colleagues to know that the official time for the end of the debate, owing to injury time in a previous debate, is 5.53 pm, although I am told there will probably be a Division in the main Chamber at 5.45 pm.
Nick Thomas-Symonds (Torfaen) (Lab)
It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Norwich North (Chloe Smith) on securing the debate and on her work as chair of the all-party group on youth employment. I particularly congratulate her on the digitally inclusive way in which she has approached the debate, which is to be welcomed. I agree with her comments about the personalisation of services needed at jobcentres and join her in commending Jobcentre Plus staff.
I congratulate the hon. Member for Lanark and Hamilton East (Angela Crawley), who spoke powerfully about the potential of our young people. The hon. Member for Mid Derbyshire (Pauline Latham) spoke very well about the benefits that come from having work. My hon. Friend the Member for Ealing Central and Acton (Dr Huq) spoke extremely well about the problems of zero-hours contracts and, indeed, of benefit sanctions. I suppose we must all hope that Oscar Wilde is wrong and that youth is not wasted on the young. I also congratulate the hon. Member for Bolton West (Chris Green), who spoke very well about the need for flexible support, the hon. Member for Strangford (Jim Shannon), who made a thoughtful contribution on the position of the long-term unemployed, and the hon. Member for Derby North (Amanda Solloway), who drew well on her local knowledge.
I make one comment about the final intervention from the hon. Member for Gloucester (Richard Graham). I reassure him that I stand here as the son of a steelworker, and I totally understand what the can-do spirit is. The former mining community in my constituency, which I grew up in, also totally understands the can-do spirit. I know he is usually constructive, but that last contribution was slightly out of kilter with the usual quality of his contributions.
Richard Graham
I am absolutely delighted to hear that the hon. Gentleman is so committed to a can-do spirit that is focused more on providing opportunities than on regretting reductions in benefits to young people. I hope he will join me in recognising the extraordinary achievements across constituencies in most of the country in reducing youth unemployment. In my constituency, it has gone from 1,000 people, when the Labour party left power, to 250 today. I hope he will recognise that that is the result of a can-do spirit by Government, constituents, businesses and others working together.
Nick Thomas-Symonds
We will always welcome reductions in unemployment. This week, we are talking about the changes to tax credits that are affecting 3.3 million working families and taking away £1,300 a year from them on average. I am sure the hon. Gentleman will agree that that is certainly not a can-do spirit—that is clobbering people who are in work. I certainly do not commend that, and I hope he will join me in condemning it.
Nick Thomas-Symonds
The hon. Gentleman should perhaps listen to his own constituents and the families who are losing out.
The statistics make for sobering reading: 683,000 people between the age of 16 and 24 are still unemployed, and 138,000 of those have been unemployed for more than 12 months. As a percentage, it does not get any better: 14.8% of the economically active population is unemployed. Even if we take into account those in full-time education, the figure is still 13.2%.
Nobody should underestimate the potential problems of youth unemployment for a person’s employability throughout their life. One of the contributors to the speech by the hon. Member for Norwich North made the point that young people want to get experience in order to get a job, but they cannot get a job and so cannot actually get the experience. If someone cannot get a job, there are also issues of not getting into the habit of working, not being able to develop skills and of feeling socially excluded from mainstream society. We have to tackle these issues. To do that, we need quality apprenticeships and quality work placements; in that sense, I commend to the Minister the approach taken by the Government in Wales.
Over the next three years, the Jobs Growth Wales programme will produce nearly 9,000 placements, each of which will be an initial six-month placement paid at or above the national minimum wage. I commend that strong, activist approach to the UK Government, because we really must not fail our generation of young people. If we do, it will be an intergenerational injustice.
The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)
It is an absolute pleasure to serve under the chairmanship of my near neighbour. I congratulate my hon. Friend the Member for Norwich North (Chloe Smith) on securing the debate. I pay tribute to the fantastic work she has done through her Norwich for Jobs project and as chair of the APPG on youth employment. In fact, it would be an undersell to say she is a real champion of young people on a whole range of issues. The number of Members from both sides of the House who have come to support this constructive and proactive debate is a good recognition of that. I am sure her APPG will be packed on 18 November with a whole host of new, eager Members of Parliament wishing to support her. I also congratulate her on the digital debate last night, which I cast my eye over during the multiple votes. Ninety seven engagements and more than 1 million people reached is fantastic. The core messages about a personalised approach, commitment both ways, resources and mentoring are important points that I will pick up on. It is a credit to her that those people chose to engage.
I want to put on record my thanks to my hon. Friends the Members for Dartford (Gareth Johnson) and for South Derbyshire (Heather Wheeler), and the hon. Member for Airdrie and Shotts (Neil Gray), for taking the time to pay credit to the hard work in their respective jobcentre networks. Jobcentre Plus staff right across the country do a huge amount of good work and are often not recognised for it. I was impressed by what my hon. Friend the Member for Mid Derbyshire (Pauline Latham) said about the Drop Inn centre. I want to put on record the appreciation of all Members here for the fantastic work that volunteers at that centre are doing. I am sure many of us have similar organisations in our constituencies, and they all make a big difference to people.
I pay tribute to my hon. Friend the Member for Bolton West (Chris Green), particularly for his point about careers advice, which I recognised. I remember saying at school that I fancied being a Member of Parliament in the future. They laughed and said, “You have no chance.” He also mentioned speculative applications. When I ran my own business for 10 years, the majority of the jobs I offered—predominantly to young people—were on the back of speculative applications, because I was impressed that people had taken the time to do that. The hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) made an important point about Young Enterprise, which I have been a huge supporter of. I was proud to lead the campaign to get financial education into the national curriculum in the previous Parliament. It is one of the key building blocks for young people who want to start up a business and is something I certainly support.
We have made big progress on youth employment. We know that youth unemployment can have significant and long-lasting negative impacts on young people’s life chances. The Government are committed to tackling youth unemployment, and we have a strong record so far. Over the past year, of all the EU countries, only the Netherlands has seen a larger rise than the UK in the number of young people in work. That is something we should celebrate. OECD figures show that 71% of non-students aged 20 to 24 in the UK are in work—the second highest number of the big EU economies, just behind Germany, and above the US and the EU average. Excluding those in full-time education, youth unemployment has fallen by over 200,000 since 2010 and is lower than before the recession, and 85% of all 16 to 24-year-olds are in work or full-time education. The employment rate of young people who have left full-time education has risen to its highest in over 10 years at 73.9%—hon. Members will be pleased to know that that is it for the stats for the remainder of the speech.
We want to go further—we can celebrate where we have got to, but all the speeches have highlighted the need to go further—and I am delighted with the announcement of the youth obligation, which is a positive step that builds on what we have done. As my hon. Friend the Member for Norwich North has said, we have made positive steps but we should go further. From April 2017, we are introducing the new youth obligation to support young people aged 18 to 21 on universal credit who find themselves out of work. Those young people will be given the support, skills and experience to motivate them into work, fulfil their potential and make a contribution to their community by getting on in work without slipping into a life on benefits. I think everybody across the House would support that.
Crucially, that will be from day one. Young people will participate in an intensive period of support, learning job search and interview techniques and doing structured work preparation. It is important for them to have that support from day one, while they still have that enthusiasm —it is about not allowing them to slip further away from securing meaningful work. After six months, they will be expected to apply for an apprenticeship or a traineeship, to gain work-based skills that employers value, or to go on a work placement to give them the skills they need to get on in work. Once fully implemented, we expect 400,000 young people a year to participate in the youth obligation, which will make a considerable difference to increasing youth employment further.
Many Members, including my hon. Friends the Members for Kensington (Victoria Borwick) and for Gloucester (Richard Graham) in particular, have highlighted the importance of apprenticeships. Again, we would all echo that: they are a valuable route into the world of work, providing experience and vital skills, and are an important part of our approach to youth employment. We have pledged to create a further 3 million new apprenticeships in England in this new Parliament. The jobcentres network will be an important part of helping to signpost, promote and encourage young people to take advantage of that, building on the 2.3 million starts in the last Parliament.
In addition to apprenticeships, we provide a range of employment programmes for young people to support them into work, including traineeships for young people who have not achieved a GCSE grade C or equivalent—so, a pre-apprenticeship—work experience for eligible unemployed young people or sector-based work academies, so each local community, as part of our devolution, can identify opportunities and look to match those as they come forward. On average, around 2,000 young benefit claimants are starting government work experience or the training element of a sector-based work academy every week. The evidence shows that that is making a difference.
The right hon. Member for Oxford East (Mr Smith) spoke about careers advice, which is an important point. We know that key to tackling youth unemployment is early intervention to ensure that young people get the help they need before they leave school, so that they can make a good transition between school and further learning or employment. That is why we are introducing Jobcentre Plus employment adviser support for schools and colleges. Working in partnership with the new Careers & Enterprise Company to build on the support that is already available, Jobcentre Plus employment advisers will provide 12 to 17-year-olds at risk of not being in education, employment or training with the advice they need on the local labour market, employment opportunities and routes into work experience, traineeships and apprenticeships. It is about providing that career path. Those who are heading off to higher education have the UCAS process—they choose their course and there is a clear path. This change is about stepping in for those who will not go down that route. It provides a real focus, and I am delighted to see it being brought forward.
Last month, the Careers & Enterprise Company launched its enterprise adviser network programme to connect employees from firms of all sizes to schools, through a network of enterprise advisers drawn from business volunteers. The hon. Member for Lanark and Hamilton East (Angela Crawley) specifically mentioned a point about inspiring women into different roles. I went to see an organisation called Lady Geek in a school in London. It was looking to incentivise girls in particular to take up courses in information and communications technology, where women have only about 11% of the roles. Unsurprisingly, after a really interactive, fantastic demonstration, about 30 signed up do the GCSE straight away, so they will then go off to have brilliant careers.
My hon. Friend the Member for Mid Dorset and North Poole (Michael Tomlinson) talked about the need to target primary schools. That is the whole point of mentors. Most young people will be inspired at some point, and getting those mentors into all schools across the country to provide that inspiration is vital.
I also echo the comments that my hon. Friend the Member for Peterborough (Mr Jackson) made in praise the National Citizen Service. Of the things that the last Government introduced, I am probably proudest of that. It was introduced personally by the Prime Minister. Every summer, I spend many happy visits joining in and seeing children’s complete transformation into young adults, in terms of their confidence, team skills and public speaking. They are eminently employable at the end of that process, and I am delighted that we have extended its reach further.
My hon. Friend the Member for Norwich North rightly highlighted the work of the YMCA report, and I pay tribute to my hon. Friend the Member for Derby North (Amanda Solloway) for her long-standing work with the YMCA. The YMCA has made some important recommendations, including, first, that each young person should be provided with a specialist youth work coach that remains consistent throughout the length of their claim. We have made changes so that they will have one work coach. That is incredibly important and it will make a difference.
Secondly, the YMCA recommended that each young person should be provided with the ability to participate in education or training lasting for more than 16 hours a week without their claim being affected. In certain circumstances, jobseeker’s allowance or universal credit claimants can participate in training and still keep their benefit—for example, when they are on a sector-based work academy or traineeship. For those on JSA for six months, when their jobcentre adviser or work coach identifies a skills gap that is a barrier to their moving into work, they can attend full-time training for up to eight more weeks. A claimant can also be in training for up to 30 hours a week on universal credit. Again, that will make a huge difference.
Finally, the YMCA recommended that each young person should be provided with the opportunity to receive in-work support from their work coach or a designated mentor when they transition into employment. That is key. As a lot of Members have highlighted, these are often entry-level jobs that do not have the highest pay in some cases. I remember when I was young, my parents would push me—many of us would have been pushed when we were younger—but not everybody has that, so providing support once young people enter work is incredibly important. It is about identifying how they are doing and the challenges they may need to address, or reminding them just how well they are doing and talking to their supervisors and employers and saying, “Look, are there further opportunities to progress?” I think that is really key. We are testing how this will work, but I take a particular interest in it because—as I know from my background, the school I went to and things like that—this is probably the single thing that will make a big difference.
I also pay tribute to the Norwich for Jobs project, which my hon. Friend the Member for Norwich North talked about. It is an exemplary way of building partnerships. I had a Disability Confident event in my constituency last Friday, with hundreds of businesses coming along. Those do not have to be done by an MP; it can be local authorities, local enterprise partnerships or community groups. Businesses are willing to engage; we just need to make sure they know there are opportunities to do so.
In conclusion, this debate has been constructive and positive on all sides. There is a clear commitment to tackling youth unemployment, not only in our Department but across all Departments. To ensure that support for young people is joined-up, the cross-Government Earn or Learn taskforce has been set up, involving seven Departments and chaired by the Minister for the Cabinet Office and Paymaster General. The taskforce is determined to provide a coherent and joined-up landscape of intensive support from all Departments to tackle youth unemployment effectively and ensure that everyone can achieve their potential. I pay tribute again to my hon. Friend the Member for Norwich North for her ongoing work, and I very much hope she will engage in that taskforce. We can learn a huge amount not only from her personal work, but through that direct democracy—the ideas that have been fed in—and together we can make a real difference to young people, which we would all support.
Question put and agreed to.
Resolved,
That this House has considered young jobseekers and the Department for Work and Pensions.
Written Statements
(8 years, 6 months ago)
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Enterprise Bill: Business Impact Target
(8 years, 6 months ago)
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The Minister for Small Business, Industry and Enterprise (Anna Soubry)
My noble Friend the Under-Secretary of State for Business, Innovation and Skills (Baroness Neville-Rolfe) has today made the following statement.
The Enterprise Bill was introduced in this House on 16 September. It is a Bill that brings forward measures to support businesses to set up and grow. One of those measures extends the business impact target (BIT) to include the activities of statutory regulators. We will require those regulators to assess and report on the impact of their regulatory activities on business. It is intended that this measure will help contribute to this Government’s commitment to reduce the regulatory burden on business by £10 billion over the life of this Parliament.
The Enterprise Bill will extend the BIT brought in by the Small Business Enterprise and Employment 2015 Act. This will ensure that statutory and non-statutory national regulators—undertaking regulatory activity that has an impact on business relating to matters reserved to UK Ministers—operate within a system where there is transparent reporting of the costs to business of their regulatory activities underpinned by statute.
The Bill itself does not specify which regulators are being brought into scope of the BIT; that will be set out in secondary legislation following a public consultation in early 2016. The Government are carefully considering the position of each regulator, and final decisions have yet to be made. However to assist the House in considering the clauses before it I am providing an indicative list of the bodies that are currently being considered for inclusion. This list is not definitive and the views of business, regulators and other respondents to the consultation will inform the legislation to be submitted to the House in 2016.
Regulators in scope of business impact target
Statutory (under consideration to be brought into scope under Enterprise Bill)
Architects Registration Board
Assay Offices (Sheffield, Birmingham, London, Edinburgh)
British Hallmarking Council
Care Quality Commission
Charity Commission for England and Wales
Civil Aviation Authority
Coal Authority
Commissioners of Irish Lights (in relation to their regulatory activity in Northern Ireland)
Registrar of Companies (England and Wales), Registrar of Companies (Scotland)
Competition and Markets Authority
Equality and Human Rights Commission
Environment Agency
Financial Conduct Authority
Financial Reporting Council
Food Standards Agency
Forestry Commission
Gambling Commission
Gangmasters Licensing Authority
Groceries Code Adjudicator
Health and Safety Executive
Higher Education Funding Council for England
Historic Buildings and Monuments Commission for England (Historic England)
Homes and Communities Agency
Human Fertilisation and Embryology Authority
Human Tissue Authority
Information Commissioner
Marine Management Organisation
Natural England
Northern Lighthouse Board
Oil and Gas Authority
Office of Communications
Office of the Immigration Services Commissioner
Office for Fair Access
Office for Nuclear Regulation
Office for Standards in Education, Children’s Services and Skills
Office of Qualifications and Examinations Regulation
Office of Rail and Road
Office of the Regulator of Community Interest Companies
Office of Gas and Electricity Markets
Payment Systems Regulator
Pensions Regulator
Security Industry Authority
Sports Grounds Safety Authority
Traffic Commissioners for Great Britain
Trinity House Lighthouse Services
Water Services Regulation Authority
Regulators for further discussion (may be brought into scope under Enterprise Bill)
Professional bodies listed in schedule 3 to the Money Laundering Regulations 2007
Bodies regulated by the Professional Standards Authority for Health and Social Care
Monitor
Farriers Registration Council
Non-statutory (for information only, already in scope under SBEE Act 2015)
Animal and Plant Health Agency
Animals in Science Regulation Unit
Claims Management Regulation Unit
Drinking Water Inspectorate
Driver and Vehicle Standards Agency
DVLA
Employment Agency Standards Inspectorate
Fish Health Inspectorate, CEFAS
Insolvency Service
Intellectual Property Office
Land Registry
Maritime and Coastguard Agency
Medicines and Healthcare Products Regulatory Agency
National Measurement and Regulation Office
Rural Payments Agency
Vehicle Certification Agency
Veterinary Medicines Directorate
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Military Support to Afghanistan
(8 years, 6 months ago)
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The Secretary of State for Defence (Michael Fallon)
In January 2015 following 13 years of combat operations, NATO started its new non-combat train, advise and assist mission in Afghanistan. At the same time, the Afghan National Defence and Security Forces (ANDSF), which the UK and our NATO partners have played a key role in developing, assumed the lead for security in their country.
In their first fighting season since the drawdown of international combat troops, the ANDSF have been tested in parts of the country, but they have also shown themselves to be an increasingly professional, competent and dedicated fighting force.
The UK Government recognised it would take time for the ANDSF to develop into a fully fledged fighting force capable of providing complete security for the people of Afghanistan. We therefore made plans to review our commitment in light of its performance over the year and the overall security situation.
I would like to inform the House that we have now concluded that we should maintain the scale of the UK’s current military mission in the country in 2016, to help build a secure and stable Afghanistan.
The scope and role of the UK mission are unchanged. We will continue to help develop Afghanistan’s future military leaders through our work at the Afghan National Army Officer Academy, to build capacity within the Afghan security ministries, and to provide vital support to NATO operations in Kabul. Around 450 UK personnel will work in close co-ordination with our NATO allies and partners in the delivery of these important tasks.
This decision follows President Obama’s announcement on 15 October that the United States is delaying the drawdown of US troops and will maintain its current force level in Afghanistan through most of next year. Both the US and our own decisions underline NATO’s continued commitment to training and assisting Afghan forces as they grow stronger.
Finally, I wish to record my immense gratitude and admiration for all of our brave men and women who have served, or are currently serving, in Afghanistan. We will never forget the ultimate sacrifice made by each and every one of the 456 members of the armed forces who have died during operations in Afghanistan. Their sacrifice has helped to protect our country and our citizens from the threat of terrorism, as well as giving the people of Afghanistan the chance of a better future.
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