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Oral Answers to Questions
(9 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Kevin Hollinrake (Thirsk and Malton) (Con)
1. What plans his Department has to ensure universal provision of fast or superfast broadband.
Kelly Tolhurst (Rochester and Strood) (Con)
4. What plans his Department has to ensure universal provision of fast or superfast broadband.
The Secretary of State for Culture, Media and Sport (Mr John Whittingdale)
By the end of 2017, 95% of homes and businesses in the United Kingdom will have access to superfast broadband. As my right hon. Friend the Prime Minister announced last month, by the end of this Parliament people will have a legal right to request a broadband connection, no matter where they live. We will be consulting on these plans, which will put access to broadband on a similar footing with other basic services early next year.
Kevin Hollinrake
I welcome the universal service obligation to provide 10 megabits of coverage to the whole country by 2020. Point-to-point wireless can provide a solution today up to 30 megabits, but the organisations behind those facilities will not invest because state aid will one day bring fibre to those communities and take away their customers. Can Ministers provide a solution to this important conundrum?
Mr Whittingdale
I commend my hon. Friend on his advocacy for his constituents on the importance of achieving superfast broadband as quickly as possible. The universal service obligation will provide a safety net, but it will take some time to work out the details. In the meantime, we would welcome all the alternative suppliers putting forward their solution. It may well be that different solutions will be appropriate for different places.
Kelly Tolhurst (Rochester and Strood) (Con)
Some parts of my constituency such as central Rochester, the peninsula and the businesses in Chatham historic dockyard have been suffering from poor fibre-optic broadband coverage from BT for too long. Much-needed upgrades were supposed to be in place from December last year, yet we are having to wait until the 2016-17 financial year at the earliest. What can the Minister do to stop broadband companies from dragging their heels so that all residents and businesses can enjoy the services that they ought to have?
Mr Whittingdale
I fully appreciate the wish of my hon. Friend that her constituents should have access to superfast broadband as soon as possible. We are making extremely good progress on phase 2. We have already passed an extra 3.3 million premises, and that will rise to 4 million by early 2016. By the end of phase 2, we expect to have achieved 97% coverage in my hon. Friend’s constituency. We will then work hard on the remaining small number of houses, which will have the possibility of the universal service obligation to rely on.
Albert Owen (Ynys Môn) (Lab)
Those of us who are long and strong advocates of universal service welcome the Government’s U-turn on this matter. Only a few weeks ago, I was told by the Minister for Culture and the Digital Economy that this was not possible, and it was not Government policy. I will be taking part in the consultation, but will there be any new Government money from the UK, the Welsh Government or the European Union?
Mr Whittingdale
I would be extremely surprised if that was what my hon. Friend said, as he has been a leading advocate of the universal service obligation policy, which will benefit all the hon. Gentleman’s constituents, just as it will every other household in the country. The precise details of how the universal service obligation will work are still to be worked out, and that will obviously include how it will be paid for, and we shall be consulting on that over the coming year.
Ms Margaret Ritchie (South Down) (SDLP)
Given the report that was published this week by Ofcom, which illustrated the differences in broadband speed in Northern Ireland and the fact that Northern Ireland has 73% coverage compared with 88% in the rest of the United Kingdom, what action will the Secretary of State and his officials take to address this matter?
Mr Whittingdale
I believe that the Ofcom report showed different possible causes for slower broadband, including, I am told, Christmas fairy lights. That is why it is making available an app to measure the speed of wi-fi. I can tell the hon. Lady that in Northern Ireland we expect that by the end of the superfast broadband project 87% of homes and businesses will be covered. The Northern Ireland Government have received £11.4 million from Broadband Delivery UK for the project.
Jack Lopresti (Filton and Bradley Stoke) (Con)
18 . In some easily accessible areas in my constituency superfast broadband is extremely economically viable; BT has received a huge amount of subsidy since 2010. Does my right hon. Friend agree with me that this is unacceptable and will he meet me to see what we can do to get this right and solve the problem of accessibility?
Mr Whittingdale
We are making good progress, as I have already mentioned. We are optimistic—indeed, confident—that we will achieve the 95% target by the end of 2017. That still leaves some difficult areas. I will, of course, be happy to meet my hon. Friend to discuss what more we can do to ensure that all his constituents can benefit from superfast broadband.
Rob Marris (Wolverhampton South West) (Lab)
What steps is the Secretary of State taking with other Departments to enforce broadband speeds? These questions are about superfast broadband, but what constitutes “superfast” on the ground, as it were, is a matter of great dispute. Many providers say that they provide speeds of “up to” a certain number. What enforcement steps is he taking?
Mr Whittingdale
I have sympathy with the hon. Gentleman’s concern that advertised speeds are not delivered in practice. We talk regularly with Ofcom about that matter. Ofcom is carrying out detailed research and, as I mentioned earlier, making available an application that will allow consumers to test whether they are achieving those speeds. The universal service obligation, to which the question refers, that is coming into place will require all providers to be able to supply at least 10 megabits —the speed that Ofcom currently assesses as necessary for someone to be able to enjoy most normal applications.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Five years after abandoning Labour’s universal service commitment and having delayed his own super-slow crawl-out at least three times without proper consultation with either Ofcom or the industry, the Prime Minister magics a universal service obligation out of thin air. The Minister for Culture and the Digital Economy, with whom I have the deepest sympathy, is forced to pretend that it is part of some strategy that has not been published or even consulted on. The Chancellor, however, is not in on the trick: the comprehensive spending review does not mention the issue once. Does the Minister have any idea of how much the obligation is going to cost—or it just a sop to his Back Benchers whose mailbags are bulging with complaints about broadband?
Mr Whittingdale
That was a good try by the hon. Lady, but in actual fact we have been making extremely good progress. The superfast scheme has now passed an extra 3.3 million homes and we will achieve 95% by the end of 2017. The universal service obligation is to allow those few remaining households who do not benefit to have a legal right to require broadband. As to the costing, we are in discussion with the industry about that and we will consult on it. We look forward to hearing all inputs to the consultation, including the hon. Lady’s.
Paula Sherriff (Dewsbury) (Lab)
2. What steps he is taking to improve access to culture and the arts for more disadvantaged communities .
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
I am grateful to the hon. Lady for this question about the important issue of improving access to culture and the arts for people from disadvantaged communities. I was delighted with the Chancellor’s autumn statement, which did not cut funding for the arts and heritage. That will be welcomed very much by Labour Front Benchers, who were predicting doom and gloom. There are a number of schemes that help disadvantaged people, but I want to work on the issue for my White Paper in the new year.
Paula Sherriff
The Arts Council will have more than £1.5 billion to support the arts over the next three years. GPS Culture has calculated that 43% of that will be invested in London—a spend of £81, compared with just £19.80 per head for the rest of the country. Frankly, people in Dewsbury, Mirfield and the rest of Yorkshire feel let down. Will the Minister take action to rebalance funding between London and the regions to ensure that everyone, including those from disadvantaged communities, gets access to culture and the arts?
Mr Vaizey
My understanding is that tonight in Dewsbury there will be a fantastic free arts event for families at Crow Nest park funded by the Arts Council. The creative people and places fund targets funding outside London. More than half of the multimillion-pound Grants for the Arts programme goes to a quarter of the most deprived areas in England. The Arts Council is doing a lot. We are doing a lot more than was done under the last Labour Government. We have massively increased the funding that goes outside London, which Labour never addressed.
Mr Philip Hollobone (Kettering) (Con)
Last Saturday evening, my family and I attended the Kettering gang show at the Lighthouse theatre in Kettering, organised by the local Kettering scouts. It was a fantastic show. Given that the scouts do so much very good work with boys and girls in disadvantaged communities throughout this country, will the Minister take this opportunity to praise the scout movement for how it encourages young people to get involved in the arts?
Mr Vaizey
I would love to take this opportunity to praise the scout movement and all the volunteers and voluntary organisations that do so much for the arts. Their contribution should not be forgotten; we should not simply look at those organisations that are funded by the Arts Council.
John Nicolson (East Dunbartonshire) (SNP)
On the issue of disadvantaged communities and their languages, the Gaelic language is the most endangered in these islands. Why, therefore, in the autumn statement did the Government withdraw their total direct UK funding of £1 million, and can I ask him to reconsider?
Mr Vaizey
As the hon. Gentleman knows full well, there were two one-off grants in the last Parliament to support that important work, and those contributions have made a valuable difference, but they were not annual grants stretching way back into the past. They were two one-off grants strongly supported by the then Chief Secretary.
Nigel Huddleston (Mid Worcestershire) (Con)
Does the Minister agree that the £40 million commitment from the Discover England fund will also help to promote arts and culture across Britain?
Mr Vaizey
Yes, I do, and it is extremely important that that fund is co-ordinated with the arts and heritage funding that the Chancellor has kept stable for the next five years. If we combine the funding for arts, heritage and tourism, we can generate some meaningful interventions across the UK.
Michael Dugher (Barnsley East) (Lab)
The Government’s official annual figures, “Taking Part”, published in July, show a marked decline in the percentage of young children participating in key activities including dance, music, theatre, drama, arts and crafts. In 2010, on average, more than 50% of five to 10-year-olds took part in those activities: it is now just 30%. Is it not the case that under this Government access to arts and culture has undeniably gone backwards, and it is disproportionately disadvantaged communities and working-class kids who lose out the most?
Mr Vaizey
Our museums have never received more visitors and our arts organisations are thriving. Rather than criticising the arts, this is the hon. Gentleman’s opportunity to apologise for the appalling scare- mongering he undertook last month, claiming that the arts would be cut by 30%. He should apologise now at the Dispatch Box.
Michael Dugher
It is an odd request to be asked to apologise for the Government’s figures, but I am more than happy to highlight their poor performance. I shall give him some more figures—not scaremongering, but real figures. Recent research by Ipsos MORI revealed that 70% of children of non-graduate parents spend fewer than three hours a week on cultural activity. That compares with 80% of children of graduate parents who spend more than three hours. Last week’s spending review, which the Minister mentions so much, means that the Department for Culture, Media and Sport will face a 5% real-terms cut, and the central grant for local government is being cut by a massive 56%—a £6.1 billion reduction by 2019-20, which is not exactly a cause for a circuit of honour. What assessment has the DCMS made of the impact of local government cuts made by the Government on libraries, museums, galleries and theatres that all rely on local councils?
Mr Vaizey
I take the issue of access to arts by all our communities very seriously, which is why I support all the schemes that the Arts Council is undertaking. But again, the hon. Gentleman can make a difference. He does not have to feel powerless on the Opposition Benches: he can ring up Labour Lancashire now and ask why it is withdrawing all its funding from all its museums.
Antoinette Sandbach (Eddisbury) (Con)
3. What assessment his Department has made of the rate of take-up of broadband grant vouchers by small and medium-sized businesses.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
I am grateful for the chance to address this important issue, and I am delighted that more than 50,000 firms in the UK have taken advantage of our broadband connection vouchers, as well more than 1,000 public buildings.
Antoinette Sandbach
My constituents in Eddisbury will have connections below the Cheshire average for superfast broadband. What steps can be taken to ensure that Connecting Cheshire will prioritise better superfast broadband access for rural businesses and residents in Eddisbury?
Mr Vaizey
My hon. Friend is a fantastic advocate for broadband and for her constituency. I am very pleased that almost half of her constituency will benefit from our superfast broadband roll-out—almost 15,000 homes in her constituency have already been passed, but by the time the project is finished more than 30,000 will have been passed.
Neil Carmichael (Stroud) (Con)
There will not be many successful business parks where the highway stops short of the park and people have to get out of their cars and walk the rest of the way. Can we apply the same logic to another important highway—broadband—and make sure that business parks are properly connected so that small businesses can thrive and prosper?
Lucy Allan (Telford) (Con)
5. When he plans for a broadband universal service obligation to be in place.
The Secretary of State for Culture, Media and Sport (Mr John Whittingdale)
As the Prime Minister announced, people will, by the end of this Parliament, have a legal right to request a broadband connection, no matter where they live, from a designated provider, at a minimum speed, up to a reasonable cost threshold. We will consult on those plans in early 2016.
Lucy Allan
I thank the Secretary of State for meeting me and being so patient about my many queries on this issue. Telford residents in the Trench Lock and Lightmoor new-build areas, and residents of historic Ironbridge, tell me that they struggle daily with inadequate broadband. When can they expect the same, increased connectivity as other people across the UK?
Mr Whittingdale
The Telford and Wrekin project is set to deliver superfast broadband access to 98% of homes and businesses by the end of phase 2 in 2017. My hon. Friend is absolutely right to press us to ensure that the few remaining constituents of hers who do not have such access obtain it. From this month, they will have a right to a basic broadband service of 2 megabits per second, and will be able to take advantage of the universal service obligation when it comes into effect.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
16. I welcome the Secretary of State’s statement, but will he assure me that the pace of the roll-out will be increased so that businesses in my constituency, such as Excel Group in Wareham, can have fibre access?
Mr Whittingdale
We will achieve the 95% target by the end of 2017, when the contractual arrangements we have achieved will enable us to invest more in going beyond that. We will be putting in place the universal service obligation, which will benefit my hon. Friend’s constituents and those of all other Members.
Mr David Nuttall (Bury North) (Con)
It is all very well having the universal service obligation, and I urge that it be introduced as quickly as possible, but the key question is the definition of “affordable” or “reasonable”. Will the Secretary of State confirm that when it is introduced my constituents will be able to afford what the providers offer?
Mr Whittingdale
The universal service obligation is a safety net to benefit those few remaining people who have been unable to access superfast broadband. We are consulting on the precise details, including the costing, and we are discussing with industry how that will be met. I assure my hon. Friend that it is intended that it should be affordable to his constituents and those of all other Members.
Henry Smith (Crawley) (Con)
6. What recent discussions he has had with football authorities on the voluntary and community work of supporters associations.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
I have regular discussions with the football authorities on a variety of issues, including the work of supporters associations. The expert working group set up by Government has been looking at building on supporter engagement. I have received a copy of its report, which will go to the football authorities for approval by their boards.
Henry Smith
Will my hon. Friend join me in paying tribute to Crawley Town supporters alliance for its charity work through the Crawley Kicks project for young people, and for raising funds for Chestnut Tree House children’s hospice in Sussex?
Tracey Crouch
I share a TV region with my hon. Friend, so I also follow the ups and downs of his club. It is nice to be able to congratulate Crawley Town supporters alliance on their admirable community work. Supporters groups up and down the country make a hugely valuable contribution to their communities, as well as raising funds for their club. Football clubs are stronger when working with, and in the best interests of, their supporters.
Ian Lavery (Wansbeck) (Lab)
The Northern league was founded in 1889 and is the second oldest football league in the country. It could not have survived without the dedication and commitment of supporters and volunteers. A shining example of that is Mr Mike Amos, the chairman of the Northern league, who is retiring this year after 20 years. Like many other volunteers in non-league football across the country, he has done a fantastic job. Will the Minister join me in thanking the likes of Mr Amos for their dedication and commitment, and wish him and his family the very best for the future?
Tracey Crouch
Football is nothing without its fans, its volunteers and the communities that it works in. It is important that we celebrate and honour those who dedicate their lives in a variety of different ways to football, so I join the hon. Gentleman in congratulating Mr Amos on all that he has done to serve the Northern league.
Damian Collins (Folkestone and Hythe) (Con)
Will the Minister say when the report from the expert working group will be published? We were hoping that it would be published at the end of last month. While the arrests in Zurich this morning highlight the problems in the governance of world football, there are still many concerns about the governance of football in this country, too.
Tracey Crouch
I can certainly give an indication about when I expect the report. If anything, I owe the hon. Member for Eltham (Clive Efford) an apology, because in my response to this question last time, I said that it would be published before his Bill comes before the House tomorrow. I have received a copy of the report. It has been done by football for football, so it is only right that the football authorities that need to look through it are given the opportunity to do so. I expect that to be done within the next three weeks and that the report will be published in January.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
7. When the Government plan to publish their new sports strategy.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
I plan to publish the new cross-departmental strategy for sport and physical activity before Christmas.
Ruth Smeeth
The Department’s own “Taking Part” figures show that children’s participation has dropped under this Government. The number of five to 15-year-olds playing competitive sport outside school has dropped 19%. Given that my city, the great city of Stoke-on-Trent, has been awarded European City of Sport for next year, when are the Government going to give us some detail, stop talking and start delivering so that my constituents can get the most out of next year?
Tracey Crouch
The hon. Lady has to wait only a very short time to see what the Government will be doing to deliver a brand-new policy on sport. Making sure that children participate in sport at a very early age is incredibly important. We know that if children develop the habit of sport at a very early age, it is something that they will continue. If she can bear with us for a few more days, I hope that she will get the answer to her question in more detail.
Paul Maynard (Blackpool North and Cleveleys) (Con)
I know that the Minister is very keen on increasing participation in sport. Is she aware of the work of Wheels for All, a Lancashire charity which allows cycling for those with a disability? It is concerned that its activity levels are not being included in the Government’s activity survey because it does not count as sporting. There is too much focus on elite paralympic sport and not enough on activity levels that benefit the disabled community.
Tracey Crouch
My hon. Friend makes a really good point. The previous sports strategy relied on only two crude measurements around participation and medals. As I have indicated during previous discussions in the House, the new sports strategy will look beyond those two measures to see what social value sport brings to the community. That of course will mean that nobody should be prevented from participating in sport or any kind of physical activity.
Jim Shannon (Strangford) (DUP)
Any new strategy should involve the participation of more ladies and girls but must also address obesity, particularly at primary school level. Can the Minister say what discussions she has had with our Health Minister to address that issue?
Tracey Crouch
I can reassure the hon. Gentleman that I regularly meet Ministers across all Departments, but especially Health and Education Ministers. The new sports strategy is cross-departmental and will deal with many different issues. We will ensure that it aligns carefully with what the Department of Health is doing in the long term to combat obesity and childhood obesity.
Mr Laurence Robertson (Tewkesbury) (Con)
9. What progress he has made in reforming the horserace betting levy. [R]
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
May I first draw the House’s attention to the written statement in the name of the Secretary of State for Culture, Media and Sport that was laid in Parliament this morning and confirms that the 55th levy has now been set? Despite this, the Government remain committed to replacing the current levy system to create a level playing field for British-based and offshore gambling operators. Work is continuing and we will make a further announcement in due course.
Mr Robertson
I am grateful for that response. One of the proposals put to the Minister by the sport of racing is for a racing right. Will she say what work the Government have done in considering the proposal, whether she needs further detail from the industry and what timescale we are talking about?
Tracey Crouch
The previous Government undertook three consultations and we are committed to replacing the outdated levy. Work is continuing and more detailed policy design is under way. We will make a further announcement in due course.
George Kerevan (East Lothian) (SNP)
There is growing concern in the five racecourses in Scotland, including Musselburgh in my constituency, regarding the delay in introducing the new horseracing right. May I press the Minister for some form of timetable so that the racecourse industry knows where it is?
Tracey Crouch
Reform of the levy is an incredibly detailed piece of work and we want to ensure we get it right. It is important for everybody involved that we ensure that racing, a huge economic contributor to the UK economy, continues to be strong. We therefore want to ensure we do things appropriately.
Philip Davies (Shipley) (Con)
I should make people aware of my entry in the Register of Members’ Financial Interests. The total prize money fund for horseracing in the UK is £130 million, and, in one form or another, bookmakers hand to racing almost £200 million—nearly 50% more than the total prize money. Is it not fair to say that bookmakers pay a fair price for the racing product, and was it not irresponsible of the racing industry to turn down the extra millions of pounds on offer to it in the recent levy negotiations?
Tracey Crouch
I thank my hon. Friend for that question. I know he takes a keen interest in this matter. I assure him that discussions on the levy, including the voluntary contribution, took place, as the Secretary of State’s written statement today makes clear. There is an issue with offshore remote gamblers not contributing from the statutory perspective, and that requires reform. We are therefore looking at it in close detail.
Clive Efford (Eltham) (Lab)
It is two years since Labour forced the Government to commit to introducing a racing right to ensure that racing gets a fair return on all forms of betting based in the UK. It is estimated that the industry is missing out on £30 million a year. I press the Minister again: when can we expect a conclusion to the discussions on the horseracing right, and what discussions has she had with the industry about a sports betting right for all sports, which the last Labour Government initiated, that can be reinvested in grassroots sport?
Tracey Crouch
I have already answered the question about the timeframe. We must look at this in detail and an economic evaluation is taking place. The Government have no plans to introduce a sports betting right. The new model for horseracing will replace an existing arrangement for transferring funds from betting to horseracing.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
10. What steps the Government have taken to improve mobile phone reception and broadband service in rural areas.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
I am thrilled with the progress we are making on broadband and mobile coverage. [Laughter.] Labour Front Benchers like to mock me, but I want to tell you, Mr Speaker, about the International Telecommunication Union, which states that the UK has risen from 10th to fourth in the broadband rankings, overtaking Sweden, overtaking Holland, overtaking Hong Kong and overtaking Finland. The broadband European scorecard, published this week, showed that once again we are at the top of the EU big five. That is progress.
Daniel Kawczynski
Yes, progress indeed—but I am interested in Shropshire, which I represent and where issues remain outstanding. I very much hope that the Minister will give me some assurances about the work to improve coverage in Shropshire and to reform the electronic communications code.
Mr Vaizey
Broadband roll-out in Shropshire is now exceeding the number of Michelin stars. Almost 12,000 homes in my hon. Friend’s constituency have been passed by our broadband programme, and we will get to 92% of his constituency. We will reform the electronic communications code to make broadband roll-out go even faster, especially when we introduce our universal service obligation.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
15. A report published by Ofcom in August found that 24% of Scotland’s landmass had no mobile signal, and the highlands and islands continue to be the worst areas for 3G coverage in the UK. The 4G mobile option took no account of Scottish Government proposals to set coverage requirements for each local authority. What steps is the Minister taking to ensure connectivity across all parts of the UK with 5G licences? Does he agree that 5G may be part of a solution to provide superfast broadband in rural areas?
Mr Vaizey
I have to say that 5G is some way off, but I am pleased that we are investing in the research. The hon. Gentleman may be looking at our plans to clear the 700 MHz spectrum, which will provide even better mobile coverage, but I know that he will rise with me to applaud the licence deal that we did with the mobile operators to get 90% geographical coverage around the UK by the end of 2027, with his interests firmly in our hearts.
Glyn Davies (Montgomeryshire) (Con)
11. What plans he has to promote and strengthen the Welsh language.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
Well, what can I say, except that we are committed to the Welsh language? We are committed to providing Government services in the Welsh language, and we are firmly committed to S4C.
Glyn Davies
Does my hon. Friend agree that S4C plays a key role in promoting the Welsh language in Wales? Does he understand that the widespread disappointment that people in Wales feel about the DCMS contribution was significantly reduced in the autumn statement?
Mr Vaizey
I am afraid that my glass is half full on this one. We secured £83 million of funding for S4C in 2012-13, and that funding remained broadly stable for the lifetime of that Parliament. Even now, if we take into account the contribution made by BBC News, S4C will receive a guaranteed income of some £90 million a year. That is guaranteed income, which any other media company—obviously, apart from the BBC—would cry out for.
Ian C. Lucas (Wrexham) (Lab)
But S4C is the only Welsh language channel. It is a national treasure for the United Kingdom. If the Government really have a commitment to the Welsh language, they need to stop cutting the income of the only Welsh language TV channel that we have. Will the Minister please reconsider?
Mr Vaizey
S4C was brought in by a Conservative Government. S4C has been supported by Conservative Government. S4C will continue to be supported by a Conservative Government; but unfortunately, we have had to make difficult decisions about funding across all areas of Government spending, because of the catastrophic mess left by the Labour Government.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
In its general election manifesto, the Conservative party promised to safeguard the funding of S4C; yet last week, the comprehensive spending review outlined a further cut of 26% in the UK Government’s support for S4C. Is the Minister aware of his Welsh history and what happened the last time the Tories broke their promise in relation to S4C? Will he now consider the need to ensure that S4C is adequately resourced?
Mr Vaizey
As I keep repeating, S4C is adequately funded. It is extremely generously funded. It is generously supported by the BBC. It will continue to receive a generous grant from my Department. It is more generously funded than any other media organisation in terms of the number of viewers that it receives.
Jason McCartney (Colne Valley) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Culture, Media and Sport (Mr John Whittingdale)
Since the last Culture, Media and Sport questions, Adele’s new album “25” has enjoyed record-breaking chart success, the latest Bond film continues to do excellent business, we concluded our hosting of a tremendous rugby World cup and, of course, Great Britain has won the Davis cup, but we have seen the ability of sport to bring people together in an incredibly powerful and moving way at the England-France game at Wembley. The positive impact of the many areas sponsored by my Department on our economy, culture and general wellbeing were recognised and reflected in the spending review.
Jason McCartney
Will the Secretary of State join me in congratulating rugby league star Kevin Sinfield on being shortlisted for the BBC sports personality of the year award? Following the autumn statement, will he say how the Government are supporting the sport of rugby league and, in particular, the bid for the rugby league World cup in 2021?
Mr Whittingdale
I would, of course, like to congratulate all 12 contenders for the sports personality of the year award. However, hon. Members might be aware that there are some fans of Leeds Rhinos in the Department, one of whom is not sitting a million miles away from me, and I am sure that she will be very vocal in supporting Kevin Sinfield. However, with regard to the rugby league World cup, when we hosted the competition two years ago, it drew more than 450,000 fans and generated an estimated £9.6 million. Officials are due to meet the rugby league next week to discuss its proposed 2021 rugby league World cup bid.
Marion Fellows (Motherwell and Wishaw) (SNP)
T6. The Immigration Bill seems to make it harder and harder for people in the creative industries, like all others, to work with people across the globe. Has the Secretary of State considered the benefits to our creative industries of a new short-term visa, and will he speak to the Home Secretary about the possibility?
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
The hon. Lady raises an important topic. We have a close relationship with the Home Office and keep in close contact with it in on this important issue. Working with organisations such as Tech City UK, we have reformed immigration rules to allow people with the right kind of high-level skills to enter the country and work in our creative industries, and we will continue to work with the Home Office on the issue.
Lucy Allan (Telford) (Con)
T2. The Minister will be delighted to know that last night, Telford Town Park was announced as the UK’s best park. Will she join me in congratulating all those involved, particularly in Hollinswood and Randlay Parish Council, Friends of Telford Town Park and Telford and Wrekin Council, for the important work that they do?
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
This is excellent news for the people of Telford, and I congratulate everyone involved on winning the best park award. Urban parks are vital in providing opportunities for people to get active in the fresh air, and it is important that we protect them for the benefit of local communities.
Peter Grant (Glenrothes) (SNP)
T3. As we come to within two days of Small Business Saturday, the Secretary of State will be aware that Channel 4 currently works with more than 350 production companies, including a large number of small and medium-sized businesses. Can he assure us that in the event of any privatisation of Channel 4, the livelihood of those important small businesses will not be threatened by the desire to centralise and rationalise to save money?
Mr Whittingdale
I share the hon. Gentleman’s admiration of Channel 4’s work in supporting our creative industries. I am concerned to ensure that Channel 4 continues to have a sustainable and viable future and deliver its remit. With regard to the possible ownership structures, no decisions have been taken, but we are examining a number of different options, including the one put forward by Channel 4 management. Whatever decision we reach will be designed to ensure that Channel 4 continues to make a considerable contribution to our creative economy.
David Rutley (Macclesfield) (Con)
T4. I am grateful for the work that is currently being undertaken to review the case for greater integration of outdoor recreation in the current sport strategy. What steps are being taken to promote outdoor recreation, to further boost domestic and international tourist activity in rural areas in Macclesfield and across the country?
Tracey Crouch
Outdoor activity is a hugely important part of the tourism offer in rural areas across the whole UK, and the total annual tourism spending attributed to leisure activities is phenomenal. It is of course a key strand of the new strategy, and as tourism Minister I can say that it links in nicely with some of our other activities.
Mr Douglas Carswell (Clacton) (UKIP)
T9. There is mounting evidence that the BBC and its licence fee are inhibiting local newspapers’ ability to develop online. If the Secretary of State is to water down his previous antipathy to the licence fee, will he at least prevent it from being used in a way that hurts non-licence fee-funded local media?
Mr Whittingdale
I share the hon. Gentleman’s concern about local newspapers, which play a vital role in local democracy. I welcome the fact that discussions have been taking place between local media groups and the BBC to determine what the BBC might do to assist local newspapers. I understand that very good progress has been made, and I hope that the BBC will therefore be able to play its part in recognising the contribution that local newspapers make to news provision and giving them some recompense for that.
Scott Mann (North Cornwall) (Con)
T5. With the highly successful Westminster gaming event having taken place earlier this month, does my hon. Friend the Minister agree that computer programming and gaming are viable career options for many young people in our rural communities?
Mr Vaizey
I certainly agree with my hon. Friend, who makes an excellent point about not only the fantastic broadband roll-out in Cornwall, but the south-west’s fantastic games economy, regarding which we can talk about companies such as the Engine Room, Auroch Digital and Opposable Games. As a strong supporter of games and a successful roller-out of broadband, I wholeheartedly agree with both elements of his question.
Mr David Hanson (Delyn) (Lab)
I cannot let the Minister get away with his comments about S4C. In May, the Conservatives’ manifesto said that they would safeguard the funding of S4C. How does the Chancellor’s statement last week safeguard the funding of S4C along the lines of that manifesto commitment?
Amanda Milling (Cannock Chase) (Con)
T7. In September, a new memorial to the miners who lost their lives in the local pits was unveiled in Rugeley. On Saturday night, one of the four statutes was severely damaged by a driver who crashed into it and fled the scene. Will my right hon. Friend the Secretary of State join me in condemning the action of this callous individual and tell me whether any Government support is available for the repair, maintenance and renewal of local memorials?
Mr Whittingdale
I entirely share my hon. Friend’s feelings. I was concerned to hear about the damage to the memorial to the miners who lost their lives, especially as it came so soon after more than 2,000 people lined the town’s streets for its unveiling in September. I am sure that the whole House will join my hon. Friend in condemning the actions of the person responsible. I can tell her that my Department administers the memorial grant scheme. If a registered charity is responsible for the care of the memorial, it will be able to benefit from a refund of VAT paid on repair work.
Diana Johnson (Kingston upon Hull North) (Lab)
If the Government are really serious about opening up culture and the arts to disadvantaged communities, will the Secretary of State explain to my constituents why £150 million was announced for London museums in the comprehensive spending review and there is £100 million for a new arts complex in Battersea, yet Hull, which is the 2017 UK city of culture, is getting a share of £1 million allocated by the Chancellor? How does that work?
Mr Vaizey
I have been to Hull twice now to find out what is going on, and it is fantastic to see the improvements—[Interruption.] Labour Front Benchers can mock what is going on there, but the people of Hull will see those Members laughing at their efforts to produce a great capital of culture.
The hon. Lady does not mention the £78 million for the Factory in Manchester. She does not point out that the intention of the £150 million to get storage out of Blythe house is to get objects away from London and out to the regions. I welcome Hull, even if Labour condemns it as the capital of culture.
Mr Speaker
The Minister is an exceptionally excited fellow this morning. I do not know what he or the hon. Member for Wolverhampton South West (Rob Marris) had for breakfast, but I shall probably take care to avoid it.
Paul Maynard (Blackpool North and Cleveleys) (Con)
T8. The Minister will be aware of the campaign by the Public Monuments and Sculpture Association to safeguard sculpture in the outdoor realm either from removal or from being sold off. This is a worthwhile cause, so what can the Government do to safeguard and support public sculpture?
Mr Vaizey
I feel strongly about this issue, Mr Speaker, but I shall try not to get too excited about it. I was pleased to secure the future of the Henry Moore sculpture on Abingdon Green, as well as to campaign to keep a Henry Moore sculpture from being sold by Tower Hamlets and to prevent a Hepworth sculpture from being sold by a shopping centre, so I will support any public campaign that keeps a sculpture where it is meant to be.
Several hon. Members rose—
Greg Mulholland (Leeds North West) (LD)
I, too, am delighted by the nomination for BBC sports personality of the year of Leeds Rhinos legend, Kevin Sinfield, who is now of Yorkshire Carnegie, and I am equally delighted by the nomination for Otley cycling world champion, Lizzie Armitstead. Given the popularity of cycling, will the Department and the Government get behind making the Tour de Yorkshire a four-day event so that we can build on its huge success last year?
Mr Whittingdale
As I said earlier, I congratulate all those who have received nominations for BBC sports personality of the year. It is a testament to how many successful sportsmen and women we have in this country that this year’s line-up is so strong. I am strongly aware of that cycling tournament in the north and we will certainly consider that.
Martyn Day (Linlithgow and East Falkirk) (SNP)
1. If he will bring forward proposals to reform the sitting hours of the House.
Will Quince (Colchester) (Con)
6. What assessment he has made of the potential benefits to the House of Commons of it sitting at 9:30am on Tuesdays and Wednesdays.
The Deputy Leader of the House of Commons (Dr Thérèse Coffey)
Sitting hours are decided on by the House. They are regularly reviewed by the Procedure Committee and decisions are made by hon. Members based on the options recommended following consideration of the relevant evidence. I say to hon. Members who want change that although this matter was decided on in the last Parliament, there is no reason why they cannot make representations to the Procedure Committee for further consideration.
Martyn Day
Our staff have to be here at unreasonable, family-unfriendly hours. May I ask the Deputy Leader of the House what we are doing to ensure their health and wellbeing, and to be a considerate employer?
Dr Coffey
I do not speak on behalf of the Commission, but it is my understanding that the House is a very proactive employer in managing health and safety, and appropriate conditions for staff. Of course, we are employers of our own staff directly, and it is for us, as their managers, to ensure that they have appropriate conditions.
Will Quince
I thank my hon. Friend for those remarks, and I will take that advice. Does she agree, however, that starting at 9.30 on Tuesdays and Wednesdays would not only make the House more family-friendly, but allow some Members to see their family and children of an evening?
Dr Coffey
My hon. Friend makes a valuable point. These matters were debated extensively, and I think it is fair to say that there are probably 650 different opinions on what constitutes something family-friendly. Nevertheless, one of the important things that Standing Orders of the House do is ensure that all hon. Members have the chance to come to Question Time. He will recognise that the sitting hours of the Chamber are not necessarily the sitting hours of Committees and other such meetings. All these things need to be brought into the round.
Greg Mulholland (Leeds North West) (LD)
We need to remember the need for schools to come and visit on Tuesday mornings before we make rash decisions based on the interests of MPs based in the south-east.
Does the hon. Lady agree that some of the coverage about the possibility of moving private Members’ Bills from Friday to Tuesday was absolutely ludicrous? Frankly the busiest and hardest-working day for most constituency MPs is Friday, when we are in our constituencies. We should be able to do that every week, and therefore look at dealing with private Members’ Bills on Tuesday evening.
Philip Davies (Shipley) (Con)
For debates on assisted dying and the European Union Referendum Bill, more than 300 people appeared here on Fridays. If people want to turn up on a Friday, and the issue is important enough, they are perfectly capable of doing so. Does my hon. Friend agree that, if people want a 9-to-5 job, there are plenty of them available, and they should apply for one rather than be a Member of Parliament?
Dr Coffey
I should say that “9 to 5” is one of my favourite songs by the great Dolly. My hon. Friend is an advocate of many causes on Fridays, and I think he makes a fair point about hon. Members picking issues of significant interest that have attracted Members to stay here. Daylight saving is one example, as is assisted suicide, which has been mentioned, and there are other such matters on which hon. Members will find time to be here. It is for hon. Members to decide how they wish to fulfil their role, including in relation to the introduction of private Members’ Bills.
Andrew Bridgen (North West Leicestershire) (Con)
2. What progress has been made on preparations for the first divisions of the House which will follow the new Standing Orders on English Votes on English Laws
The Deputy Leader of the House of Commons (Dr Thérèse Coffey)
Preparations for the first Divisions under the new Standing Orders have been under way for some time. The House authorities and the Government have worked together to put in place arrangements for the Divisions, including the use of tablets to assist in the recording of double majority votes. Hon. Members who were here in the last Parliament will have seen the use of iPads as a test ground for that.
Andrew Bridgen
I thank my hon. Friend for that answer. Will she confirm that, going forward, every MP from every part of the UK will still be able to debate and vote on every piece of legislation in the Commons, and make it clear that the accusation that this will create two tiers of MP is simply not true?
Dr Coffey
I agree with my hon. Friend that every Member in this House will continue to debate on Second Reading, during various elements of Committee and Report stages, and on Third Reading. It is simply the policy that we have successfully introduced that, when it comes to matters that are devolved and that affect England or England and Wales only, it is crucial that measures have the explicit consent of the MPs from those nations involved.
Ian C. Lucas (Wrexham) (Lab)
If we are to have English votes for English laws, why, on non-devolved matters that particularly affect Wales, such as the future of S4C, can we not have Welsh votes for Welsh laws, with double majority votes for MPs from Wales?
Dr Coffey
We were very careful, in our proposals, to ensure that every Member could continue to debate and vote on matters, even if they affected only England. We are still the United Kingdom Parliament, and the Welsh Assembly was established to deal with devolved matters. The hon. Gentleman recognises that, as do we.
Mr Peter Bone (Wellingborough) (Con)
3. If he will bring forward proposals for Prime Minister’s questions to take place on Tuesdays and Thursdays in each week.
The Leader of the House of Commons (Chris Grayling)
I sense a new campaign from my hon. Friend, but I am afraid there are no plans to change the current arrangements.
Mr Bone
I take that as a nod and a wink to start a campaign—I appreciate the Leader of the House’s subtlety. We should go back to having two sessions of Prime Minister’s questions. This week, PMQs was lost, quite rightly, but if we had two sessions, the Prime Minister would at least have been here once, and he is the servant of the House, not a President. Will he encourage me a bit more to start that campaign?
Chris Grayling
I fear not. The practical problem is that, if Prime Minister’s questions take place on a Tuesday and Thursday, it would be difficult for the Prime Minister to represent Britain internationally. On the whole, I think that the full session on a Wednesday strikes the right balance. I regard yesterday’s decision to postpone questions for the week as something that would happen only in exceptional circumstances. In my view, we should stick with the current arrangements.
Pete Wishart (Perth and North Perthshire) (SNP)
Has the Leader of the House had an opportunity to consider my suggestion to limit to 10 minutes the exchange between the Prime Minister and the Leader of the Opposition, with no limit on the number of questions that could be asked in that time. Recently, that exchange has been taking up almost half the time available for PMQs—so that we can hear from Mary from Manchester or Olivia from Oldham. Will he look at this proposal and see whether we can get more Back Benchers in?
Chris Grayling
I have some sympathy with the hon. Gentleman, but I fear it is for the Chair to decide when to accelerate proceedings.
Diana Johnson (Kingston upon Hull North) (Lab)
4. For what reason it is his policy for the House to retain a November recess.
The Leader of the House of Commons (Chris Grayling)
We give careful consideration to how we manage the recesses across the year, but ultimately it is a decision for the House. My colleague the Chief Whip and I are always happy to consider the calendar across the year. We have a November recess because it was originally the time of the Queen’s Speech, and there were always two or three days either side for Members to spend time in their constituencies.
Diana Johnson
I appreciate that, but that is the point: it was previously the date of the Queen’s Speech, but that now takes place in May. I am still confused, therefore, as to why the Government feel that November is an appropriate time for this recess, especially given that it does not fit with school half terms—if that is what the Leader of the House was thinking: that people could spend time with their families.
Chris Grayling
The November recess is not particularly designed to be family time; it is for Members to spend time on important constituency work. Those who seek to take part in the important business that sometimes takes place here on a Friday will know that it is not always easy to find weekdays to spend in the constituency. It is sensible, therefore, to set aside a few days across the year primarily for constituency work.
Melanie Onn (Great Grimsby) (Lab)
Will the Leader of the House explain why the Government have not yet given the dates for the Easter recess, and can he guarantee that they will co-ordinate it with the school holiday and not make the same mistake they did with the November recess? Announcing the date would enable Committees to organise their hearings and MPs would be able to plan their time in their constituencies?
Chris Grayling
We will always do our best to give as much notice as possible, but our prime responsibility, as business managers, has to be to ensure that the Government’s business can be delivered across the Session. We will seek to strike the right balance and provide that information as soon as we practically can.
Mr Philip Hollobone (Kettering) (Con)
5. If he will ensure that debate time for Back-Bench business is safeguarded.
The Deputy Leader of the House of Commons (Dr Thérèse Coffey)
The introduction of the Backbench Business Committee, as part of the Wright reforms, was a great innovation in the last Parliament. It is for the Committee to schedule business on the days allocated to it in each Session and for the Speaker, Deputy Speaker or Chair of the debate to manage them when they take place.
Mr Hollobone
The Leader of the House has protected Back-Bench business very recently with a scheduled time limit for the debate. What is the policy of the Deputy Leader of the House on doing this? May I encourage her to do it far more often so that Members know when a debate is likely to finish?
Dr Thérèse Coffey
I am not exactly sure of the procedure that my hon. Friend refers to. It is usually at the discretion of the Chair of the Backbench Business Committee to indicate the likely times of debates on each topic if the Committee chooses to split up its days. The concept of injury time for all business was considered by the Procedure Committee in the last Parliament, but the Committee agreed with the then Leader of the House that rendering uncertain the time of conclusion of debates in the House would be undesirable.
Antoinette Sandbach (Eddisbury) (Con)
7. What assessment he has made of whether oral questions to the Leader of the House is an effective use of parliamentary time.
The Leader of the House of Commons (Chris Grayling)
The oral questions rota is regularly reviewed to ensure that the Government and other answering bodies can be adequately scrutinised, reflecting any machinery of government changes and the quantitative evidence of Members questioning.
Antoinette Sandbach
I am grateful for my right hon. Friend’s answer, but there are many important issues that need to be raised. Will he consider whether oral questions to the Leader of the House are the best use of time?
Chris Grayling
I am very tempted by the idea of merging questions to the Leader of the House with business questions, as we seem to cover a lot of the same ground. There are areas of activity where there is a case for allowing more time for scrutiny in the House. I intend to give careful consideration to the matter in the coming weeks. There may well be a case for change.
Tom Pursglove (Corby) (Con)
Has the Leader of the House made any assessment of whether we ought to have more time to put questions to him, given that today, for example, not all Members’ questions on the Order Paper will be reached.
Chris Grayling
I am very much in favour of all Members having the opportunity. It is a matter of ensuring that we make the best use of parliamentary time and have adequate time for scrutiny. If one listens to the topics covered in this short session today, it is not entirely clear to me why we could not take those as part of business questions and make this 15-minute slot available for another topic, such as Scotland or International Development, where there might be a case for an extended session.
Martin Vickers (Cleethorpes) (Con)
8. What steps he has taken to assist the work of the Joint Committee on the Palace of Westminster (Restoration and Renewal).
The Leader of the House of Commons (Chris Grayling)
As a member of both the Joint Committee on the Palace of Westminster and the House of Commons Commission, I have been working closely with fellow members of those Committees to ensure that colleagues in both Houses will be able to consider the recommendations of the Joint Committee in the new year.
Martin Vickers
Will my right hon. Friend ensure that the Committee does all it can to contain the costs, while ensuring that the House continues to meet within the confines of the Palace?
Chris Grayling
I agree with my hon. Friend. We have a duty to ensure that we deliver an effective home for our democracy, protect a world heritage site and do that at a cost that is right for the taxpayer. My aim is to avoid a period of change which creates disruption for our colleagues and high cost for the taxpayer, so we are working to find the best balanced solution for all Members.
John Nicolson (East Dunbartonshire) (SNP)
9. Whether officials of the House have discussed with HM Treasury the potential costs of restoration and renewal of the Palace of Westminster.
Tom Brake (Carshalton and Wallington)
Officials have kept the Treasury informed about the methodology adopted by the independent options appraisal and have taken advice from the Treasury on the treatment of major projects, such as the restoration and renewal of the Palace, in terms of the Treasury’s Green Book business case guidance. It would be premature to discuss the cost of specific options until the Joint Committee on the Palace of Westminster has concluded its work.
John Nicolson
Given that the project will be paid for by the taxpayer, have there been discussions about how the House will liaise with the Treasury about keeping costs under control and how best to provide ongoing scrutiny for Members?
Tom Brake
Clearly, there will be such discussions, given that restoration and renewal will be a costly project. If the hon. Gentleman has strong views, I encourage him to submit evidence to the Joint Committee, which will take evidence until 22 January. I am sure the Committee will want to take his concerns on board.
Patrick Grady (Glasgow North) (SNP)
10. What progress the Government are making on reforming the estimates process.
The Leader of the House of Commons (Chris Grayling)
This matter is currently being considered by the Procedure Committee, and I am sure that the hon. Gentleman will wish to communicate his views to its members.
Patrick Grady
We were told during the debates on English votes for English laws that there would be opportunities to debate and amend provisions relating to Barnett consequentials during the estimates process. Given that the Chancellor has cut the Scottish Government’s revenue budget by 5.7% over the next four years, when in the estimates process will we have an opportunity to debate, amend and vote on that?
Chris Grayling
The House can of course vote on the estimates each year. However, if the hon. Gentleman is looking to have an extended debate, it is within the gift of this House to change its procedures in order to ensure that he has the ability to contribute and vote in the way he wishes.
Overseas Territories Joint Ministerial Council
(9 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mark Durkan (Foyle) (SDLP)
(Urgent Question): To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the meeting of the Overseas Territories Joint Ministerial Council.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (James Duddridge)
I thank the hon. Member for Foyle (Mark Durkan) for his urgent question, which gives me an opportunity to talk about the excellent work of the Overseas Territories Joint Ministerial Council. The meeting formally concluded late last night, but in reality it will carry on today with a number of bilateral meetings across Whitehall, including with me.
The Joint Ministerial Council is the highest political forum established under the 2012 overseas territories White Paper. It brings together Ministers, elected leaders and representatives from the overseas territories for the purpose of providing leadership and shared vision across the territories.
At this year’s meeting we discussed a large range of subjects, including child safeguarding, economic development, financial services transparency, climate change, sustainable energy, education and skills and the challenges of providing healthcare in small jurisdictions. We also discussed sports participation by the overseas territories, pension arrangements with the Department for Work and Pensions, governance and security. We had a very full communiqué establishing how we would work together over the coming year. It has been very successful and I look forward to further meetings later today, following up on some of the commitments made last night.
Mark Durkan
Thank you, Mr Speaker, for granting this urgent question, which I have asked from my perspective as an officer of the all-party group on anti-corruption. I welcome what the Minister has said about what he regards as the success of the council meeting, and I hope that we can see evidence of that in relation to key issues, such as child safeguarding and climate change.
However, in relation to financial services transparency, which is what most concerns us, how satisfied is the Minister that there really has been significant progress on, for example, the signal stance that the Prime Minister has taken against corruption and the strong indications that were made about the criteria set down by the Treasury on the requirements for real transparency and proper registers of beneficial ownership of companies in the overseas territories, because they provide the shelter for all the tax scams and shams? This is not just populist tax jealousy; these scams and shams scandalise legitimate businesses and rob developing countries of key moneys. It is not a victimless crime.
Are the overseas territories co-operating? As I understand it, only Montserrat has agreed to the standards that are sought. Where are the other overseas territories on that? In the ongoing bilateral meetings today, will we really see moves from others? Is it true that the Cayman Islands have flatly refused and are making no moves on these matters?
When will we hear from the Treasury, if not from the Foreign and Commonwealth Office, on how detailed the commitments are going to be on meeting the requirements that it has set down for real transparency, because other businesses and professionals need to see them? Organisations that are working on behalf of global tax justice, such as Oxfam, Christian Aid, ActionAid and Global Witness have concerns and want to support the Government’s efforts. When will we know more?
James Duddridge
An enormous amount of progress has been made over the past few years in relation to financial services transparency, particularly openness on tax. I think the hon. Gentleman wants to probe me more on beneficial ownership and the transparency around company ownership. I will quote from the joint communiqué that was issued overnight and is found on the Foreign Office website. When further bilateral meetings are held, the Government usually issue a written statement the following week, as we intend to do when we have had the benefit of the additional post-JMC bilateral meetings.
The communiqué was written by all members of the overseas territories, signed up to by all members, and agreed to by the UK Government. The members
“agreed to hold beneficial ownership information in our respective jurisdictions via central registers”.
There is a lot more text, but I will end with the final sentence:
“We agreed that addressing this issue would be given the highest priority and that progress on implementation would be kept under continuous and close review.”
I have had several meetings today, it will be high on my agenda over the coming months, and we will make progress. However, some of the detail is quite technical. I think that some of the hon. Gentleman’s views of this issue are a snapshot of the situation in the middle of the JMC. There is often quite extensive, and sometimes quite robust, discussion, but late last night we got to a shared understanding that moves us further forward.
Crispin Blunt (Reigate) (Con)
The Minister will know that three quarters of the jurisdictions of the Commonwealth continue to criminalise same-sex sexual activity. Happily, that is not the case in the overseas territories, where the only discrimination is in Bermuda and the Cayman Islands, which have different ages of consent. Only Gibraltar and the Pitcairn Islands recognise same-sex unions and facilities for same-sex adoption. What discussions has the Minister had with our overseas territories about their continuing to improve their position in respect of anti-discrimination measures towards their lesbian, gay, bisexual and transgender citizens?
James Duddridge
I thank the Chair of the Foreign Affairs Committee for raising this issue. Progress has been made. He mentions the Cayman Islands, and only this week their Premier reported to their parliament on their recognising equal marriage, which is a great step forward. Small territories have legislative constraints on time, and it may take them longer to get all the legislation through that they would want. However, this is a priority for a number of territories, and we will do all we can to support them in bringing forward modern legislation that we would like to see around the world so that everybody, regardless of their sexuality, is treated equally.
Catherine West (Hornsey and Wood Green) (Lab)
Only last week, Mr Speaker, you told the House that we should be doing more to celebrate the progress being made by the overseas territories on transparency of the affairs of companies based in those territories. I will welcome progress where progress is made. The hon. Member for Foyle (Mark Durkan) mentioned Montserrat in particular, which should be commended for introducing a public register for its small financial sector. It is also commendable that the overseas territories have been leading the way with the commitment to automatic exchange of information.
However, we all know that there is much more room for improvement. Most developing countries remain outside these new commitments to exchange information, and there is much more that the UK and the territories can do to help bring them in. A clear commitment to providing information to developing countries on a temporary, non-reciprocal basis would help, as would producing statistics on the source of assets in our financial institutions. That would genuinely be something to celebrate. All the world’s major financial centres have agreed to the same standards as the overseas territories on information exchange, as the G20 has made clear. It is the new global standard, and we should expect nothing less.
On company ownership transparency, we will celebrate when the UK Government commit to supporting Montserrat in making access to its register free, online and in open data format, and when we see such public registers implemented across the rest of the overseas territories. Anguilla, Turks and Caicos Islands, Bermuda, the Cayman Islands, the British Virgin Islands: none is inclined to change its position at all, despite even the Prime Minister watering down his demands. Instead of demanding public registers, as the Prime Minister once advocated, the Department devised three tests for the territories’ regimes to meet: first, access to company ownership information without restriction; secondly, an ability quickly to identify all companies that a particular person has a stake in; and thirdly, a requirement that neither the companies nor their owners are tipped off. All those are good things, but they are the minimum that should be done. The Government are responsible for good governance in the territories, not for a minimal standard of governance. There is a real lack of ambition on this crucial question.
As the events of this year’s council have shown, there is some disappointment. The Financial Times reported this week that the Cayman Islands have flatly refused the UK’s request to give law enforcement agencies access to beneficial ownership information, arguing that such a basic measure as allowing investigators to trace the proceeds of corruption poses a “competitive disadvantage”. The Prime Minister has called on the territories to act since 2013. Surely it is now clear that his Government need to redouble their efforts to bring standards up to scratch.
In fiscally difficult times at home, the overseas territories, as leaders in international finance, should have world-leading standards, not be world leaders in enabling corruption and tax evasion. My party made a manifesto commitment to require the overseas territories to produce publicly available registers of the real owners of companies based there. When will the Government match our, and indeed the general public’s, ambition in this regard?
Mr Speaker
Order. I thank the hon. Lady for her contribution, but before the Minister answers, let me just say to the House—I hope, for the last time—that from now on I am minded to insist on the time limits for these exchanges. The first point is that the hon. Lady was supposed to take two minutes, but she took over three. She is by no means the only offender, and I recognise her sincerity and commitment, but she was over her limit. It is as simple as that.
The second point is that, where there is an urgent question or a ministerial statement, the shadow Minister is not supposed to come in to deliver a speech, but to give the briefest reception to the statement by the Minister and then ask a series of pithy questions. It is not a speech in a debate, but a series of questions.
As I say, I recognise that the hon. Lady is new to the House, though a very capable individual indeed, but in future we will have to observe the time limits and the appropriate format. I give notice that if those are breached, I will simply cut the question off. I do not intend any discourtesy, but if we have rules, we must stick to them.
James Duddridge
In relation to Montserrat, I do not know what discussions the hon. Lady has had with Premier Don Romeo, but one of the reasons why it was easy for Montserrat to comply with some of our earlier requests was the lack, sadly, of a financial services industry, which is still developing there. There are many enormous challenges in Montserrat, but quite frankly, financial services is not one of them. It is easy to be fleet of foot when an extensive industry is not already in place.
There is much more of a challenge for the British Virgin Islands, the Cayman Islands and Bermuda, where we are focusing our attention. It is wholly untrue to say that the position at the end of the Joint Ministerial Council was one of obstruction by the Cayman Islands or, indeed, any other territory. I will have further discussions with the Cayman Islands today, but they and everyone else signed up to the following language:
“We discussed the details of how these systems”—
the central systems—
“should be implemented, including through technical dialogue between the Overseas Territories and UK law enforcement authorities on further developing a timely, safe and secure information exchange process to increase our collective effectiveness for the purposes of law enforcement.”
Some of the technical detail is quite tricky—there are different systems in different jurisdictions—but there is an ongoing and close dialogue with the National Crime Agency about how we can achieve such things.
A number of comments have been made that I would say are not misleading but perhaps slightly out of date. Once hon. Members have had time to digest the communiqué, they may wish to find an opportunity to discuss the subject again in more detail so that we can have a robust exchange, consider how we can make further improvements and get a shared understanding, because we all want the same thing.
Mark Field (Cities of London and Westminster) (Con)
I congratulate the Minister on the Joint Ministerial Council and wish him all the very best in the bilateral discussions he will have over the next 24 hours. I want to reflect on what the hon. Member for Hornsey and Wood Green (Catherine West) said. I hope she recognises that there has been and will continue to be progress. It is fair to say that, although we must insist on co-operation with tax authorities and law enforcement agencies, there is a distinction between secrecy, of which we do not approve, and the demand for privacy by those who use banking services not just in the overseas territories, but in the UK. That line should also be respected in dealing with these matters.
James Duddridge
I know that my right hon. Friend follows these issues carefully. We have had a number of discussions about this very subject, including late last night after the Syria vote. Privacy is important, but it should not be used to disguise corrupt practices, international terrorist moneys or the avoidance of taxation. It is very much a balancing act. The UK is on the side of greater transparency. The Prime Minister has led that charge internationally and will do so over the next year, including at a big global conference on corruption early in the new year.
Patrick Grady (Glasgow North) (SNP)
The Minister and I were at the same Africa all-party group this morning, where the importance of domestic resource mobilisation for development was discussed. Of course, it is almost impossible for African Governments to mobilise domestic resource when multinational companies hide their profits through offshore tax havens.
How has the JMC paved the way for the anti-corruption summit that the UK Government will host next year? What discussions took place in preparation for that summit, and how many overseas territories are expected to attend it? Generally, how are we getting our own house in order and those of our overseas territories before we start demanding the same of others?
James Duddridge
The Prime Minister and the UK are leading the way, and we are ahead of the G20 standards. The issue is not the tardiness of the overseas territories, but our concern that they go beyond what is required by the G20. Effectively, there is an arbitrage problem, in that the business will carry on being done, be it corrupt business or the movement of terrorist moneys, but will simply be done in a different jurisdiction. We do not want to move corrupt moneys, corrupt practices and tax evasion and avoidance; we want to eliminate them and to do so everywhere. It is therefore important that all international partners move forward at the same pace. The UK has taken the lead and the overseas territories are increasingly stepping up to the mark and delivering.
Mr Nigel Evans (Ribble Valley) (Con)
The overseas territories are some of the most beautiful places on earth, and I have been blessed to visit some of them over my 23 years as a Member of Parliament. I am encouraged by what the Minister said about the advances in LGBT rights in the overseas territories. Perhaps in his discussions with representatives of the overseas territories, he might drop it into their ears that not only is this a matter of equality and human rights, but, given that the pink pound is rather strong, they may be able to open their doors to hundreds of thousands more LGBT visitors from the United Kingdom.
Mr Speaker
The hon. Gentleman is most certainly a notable globetrotter. That is well recognised throughout the House.
James Duddridge
To clarify, Mr Speaker was talking about my hon. Friend the Member for Ribble Valley (Mr Evans), rather than me.
I certainly support the moves that my hon. Friend describes. This is not just an issue of equality. A number of the territories are incredibly beautiful places and a lot of money comes into them through tourism. Even more money could come in through tourism. There needs to be greater diversity of income and a move away from financial services. Attracting everybody, regardless of their sexuality, is good for business, as well as being the right thing to do.
Tom Brake (Carshalton and Wallington) (LD)
The UK Government have made a commitment to consult on the best way to stop the UK property market becoming a safe haven for corrupt money. Has that been discussed with the overseas territories, and what progress is being made on it?
James Duddridge
That matter has been discussed. We discussed specific examples of individuals arrested in the United Kingdom. When we have looked at their assets, we have found that they were renting property, but that, on closer examination, they owned the property through offshore companies. We want to open up beneficial ownership so that we can interrogate the actual position and seize assets in a timely manner. In a number of cases, assets can be sold or transferred quite quickly, so that they are out of the reach and jurisdiction of the UK Government. One reason we place so much emphasis on financial services transparency is so that our law enforcement agencies can get their hands on assets as quickly as possible before they are moved somewhere else around the world.
Mark Garnier (Wyre Forest) (Con)
To what extent is the Joint Ministerial Council driven by the Foreign Office? Will the Minister advise the House how the Foreign and Commonwealth Office works with Departments such as the Treasury to tackle issues such as money laundering and tax evasion, which the hon. Member for Foyle (Mark Durkan) raised?
James Duddridge
The Foreign Office leads on collating the Government response on overseas territories, although in all candour, over the two days probably 70% or 80% of sessions were led by other Departments, rather than the Foreign Office. We had heavy participation from the Department for International Development, and others spoke on specific issues. My hon. Friend the Under-Secretary of State for Culture, Media and Sport made a contribution, as did a Health Minister. The Department for Education was represented, leveraging in its understanding of child abuse. The Department for Work and Pensions spoke on pensions, and the Minister for the Armed Forces and the Solicitor General—both of whom are in the Chamber today—showed great interest in the overseas territories and have been supportive in developing our relationship with them. It is very much an effort by Her Majesty’s Government, rather than just the Foreign Office.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his statement. He mentioned child abuse and child safety, and we are aware that paedophile rings operate not only in the overseas territories but across the whole world. We need to have an exchange of information, and joint police forces working together. Will the Minister tell the House what was discussed in relation to that matter?
James Duddridge
A vast number of initiatives were discussed, and the hon. Gentleman is right to say that increasingly international rings are smuggling children across jurisdictions and borders, and procuring individuals for sex. Increasingly, the internet is used, and a much more co-ordinated approach is required. That was discussed in some detail at the JMC, and leaders of all the overseas territories outlined what they had done in-territory. There was a commitment to pull those actions together and to learn from best practice.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
The Foreign Affairs Committee met leaders of the British overseas territories this week, and they raised various issue that we will write to the Minister about. One thing that struck me is that they were hoping for a new relationship in the way that governors are appointed, and they would like more input in that. I believe that modernising the whole system is a perfectly sensible proposal, and I would be interested in the Minister’s views.
James Duddridge
I thank the FAC for meeting leaders of the overseas territories, and I have already had a chat with other Committee members about what was discussed. The appointment of governors is a matter for the Foreign Office. Ministers do not get directly involved in decisions on who should be governor, but we do get involved in the process. I had a meeting about the governor in Bermuda, and I made a number of promises to the Premier, Michael Dunkley, about how we would take seriously his desires to get the right type of candidate to replace our current excellent governor who so ably hosted me in August.
Mr Peter Bone (Wellingborough) (Con)
I congratulate the hon. Member for Foyle (Mark Durkan) on this urgent question. Clearly, we do not talk about the overseas territories enough, and the shadow Minister wanted to raise a lot of issues. Does the Minister agree that at least once a year in Government time we should have a formal debate about our overseas territories with the Minister responding, so that we can discuss all the matters raised today?
James Duddridge
I am disappointed that my hon. Friend thinks I am so naive as to be tripped up by such a question, but our colleagues will be listening. [Interruption.] It has been pointed out to me—as if I did not already know—that perhaps that could be a subject for the Backbench Business Committee.
Nigel Mills (Amber Valley) (Con)
Does the Minister agree that our overseas territories should be taking the lead in preventing the flow of corrupt criminal and terrorist money, rather than waiting for everybody else to do it at the same time? Will he set out a timetable for when the overseas territories will have in place the registers and access rights that we need?
James Duddridge
As it differs from territory to territory, I will struggle to give my hon. Friend an absolute date by which that will be done. I am reviewing what we are doing this year, and that is one checkpoint. Another checkpoint will be the end of February, which sits halfway between the beginning of the new year and the Prime Minister’s conference on corruption. I expect significant progress to be made during that time. A lot of that progress, however, will be what is committed rather than what is done. We will need to commit to a precise timescale. I think that timescale will vary quite significantly from territory to territory depending on how they hold their data—in paper or electronic format and whether that is in a central place—and whether they need to change legislation to bring all the information together once they have agreed in principle to do so.
I should be able to give my hon. Friend a better answer early next year once we have gone through the process. The timescales should be challenging not only in reaching agreement on what should be done but, as he says, in terms of what is done.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
As the Minister knows, the Chancellor announced in the March Budget that the waters around the Pitcairn Islands would be a marine protected area, something in which Plymouth Marine Laboratory, the university and the Marine Biological Association take a great deal of interest. Will my hon. Friend explain how this process is moving forward, so that other overseas territories are able to consider becoming marine conservations areas, too?
James Duddridge
Marine biodiversity around overseas territories is enormous. In fact, a large percentage of global biodiversity, on both land and sea, is in and around the overseas territories. The Pitcairn Islands provide a strong example of how a marine protection area can work. There are similar investigations on Ascension Island. We are working collaboratively with other territories to consider how this scheme might be extended. It was in the Conservative party manifesto to extend a blue belt across the overseas territories. In reality, I think that will mean a different type of solution for some islands, but this issue is discussed every time we meet and every time we meet we make further progress in protecting biodiversity.
Chris Green (Bolton West) (Con)
Will the Minister update the House on child safeguarding opportunities in the Falkland Islands?
James Duddridge
The hon. Gentleman is clearly very well informed. The Falkland Islands are leading the way on child safeguarding issues, specifically co-ordination. We aspire to having the same standards everywhere that are the best internationally. It is sometimes difficult, however, for an island of 4,000 people to have exactly the same arrangements as an island of our size or a smaller island. The Falkland Islands, with the permission of the rest of the Joint Ministerial Council, are co-ordinating work on behalf of all the overseas territories to learn not only from their excellent experience but to ensure that best practice and resources are shared on this important subject, which was the first item on the JMC’s agenda. It was the only time during the JMC that we had multiple Ministers and Departments at the meeting. It was incredibly important and I congratulate the Falkland Islands on leading the way.
Henry Smith (Crawley) (Con)
I congratulate the Government on setting up the overseas territories’ Joint Ministerial Council. I also congratulate the Government on introducing a feasibility study into the resettlement of the British Indian Ocean Territory. Will my hon. Friend update the House on when a decision on the resettlement of the Chagos islanders might be known, so that they can join the overseas territories family?
James Duddridge
I thank my hon. Friend for that question. He is a great advocate on this subject on behalf of his constituents and the people who used to inhabit the islands. As he knows, an extensive KPMG report has been published. Following that report, there was a consultation, the results of which have not yet been produced. It would be wrong for any Minister at the Dispatch Box to draw too many conclusions without having seen the full facts. I am, however, more than happy to meet him privately to discuss the process, and I am more than happy to be totally transparent in the House when the report comes out and to answer questions on this subject in any way that the House desires.
Business of the House
(9 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Chris Bryant (Rhondda) (Lab)
Will the Leader of the House give us the business for next week? Before he does so, will he just straighten his tie?
The Leader of the House of Commons (Chris Grayling)
The business for next week is as follows:
Monday 7 December—Remaining stages of the Cities and Local Government Devolution Bill [Lords].
Tuesday 8 December—Consideration of Lords Amendments to the European Union Referendum Bill, followed by debate on a motion relating to cross-border co-operation to tackle serious and organised crime: the Prüm agreement.
Wednesday 9 December—Opposition day (12th allotted day). There will be a debate on mental health, followed by a debate on the effect of the autumn statement measures on women. Both debates will arise on an Opposition motion.
Thursday 10 December—Debate on a motion on the Transatlantic Trade and Investment Partnership, followed by a general debate on international human rights day. The subjects for these debates were determined by the Backbench Business Committee.
Friday 11 December—The House will not be sitting.
The provisional business for the week commencing 14 December will include:
Monday 14 December—Consideration in Committee and remaining stages of the European Union (Approvals) Bill [Lords], followed by motion to approve European documents relating to migration, followed by, if necessary, consideration of Lords Amendments.
I should also like to inform the House that the business in Westminster Hall for Thursday 10 December will be:
Thursday 10 December—General debate on the protection of ancient woodland and trees.
Chris Bryant
You sat in that chair yesterday, Mr Speaker, from 11.30 am to 10.54 pm, as I am sure you are aware. By my accounting, that is 11 hours and 24 minutes, or 684 minutes without a break. That is quite a test of endurance, and some of us are wondering whether, like Davros in “Doctor Who” you have secretly had some kind of feeding and filtration system fitted into the chair or some hidden tubes. Or perhaps it is down to drugs. Now that the pharmaceutical giants Pfizer and Allergan, the owners of Viagra and Botox, have come together, perhaps they have invented a new drug, with which you have been impregnated, Mr Speaker, which means that you can keep a stiff upper lip all day.
Over the last few days, a great deal of abuse has been hurled at Members for their views on whether or not we should support extending airstrikes to Syria. Some Members have been called murderers, others peaceniks and terrorist sympathisers. I hope the Leader of the House would agree that, although all MPs expect a certain degree of hurly-burly in political life, it is a fundamental principle that all Members are sent not as delegates but as representatives with the full power to exercise their judgment and their conscience to speak and vote without fear or favour, and that no MP should ever be intimidated.
I think we would all agree that, sadly, some of the abuse has been beyond the pale. Several Members have had their offices barricaded. One Member had her house surrounded, while many have had photos of dead babies pushed through their front door at home. Today I gather that some Members have received photos of severed heads. MPs have broad shoulders—of course we do—but may I ask the Leader to review the arrangements regarding the security of Members’ homes and offices? This is not just about Members; it is about their families and, indeed, their staff, as several Members have pointed out. In particular, will he look at whether the responsibility for funding these matters should now be taken away from the Independent Parliamentary Standards Authority and restored to the House authorities?
I express the thanks, I hope, of the whole House for the way the police and staff of the Serjeant at Arms dealt with the legitimate demonstrations in Parliament Square yesterday evening. It is important for people to be able to demonstrate, but MPs and the public should be able to go about their business. Most importantly of all, I am sure we all wish the men and women of our armed forces a successful and safe return.
Yesterday we lost Cabinet Office questions, so will the Leader clarify what has happened to them? Will they be next Wednesday, as I presume, and will International Development questions then be shunted on to the week after and so forth? When will the deadlines for these various questions now be?
I have asked the Leader of the House twice about the recess dates for next year, and he has done 50 shades of grayling about it. On Tuesday morning, he told the United Kingdom Overseas Territories Association that it was all to do with getting Government legislation through before Easter. May I remind him that the House does not meet for the convenience of the Government? The Government are accountable to the House, and it would be good to know the recess dates as soon as possible, not least so that Committees can make the dates of their sittings available to the public.
The Leader of the House has just said that we shall be considering Lords amendments to the European Referendum Bill next Tuesday. How much time will he be providing for that debate? The most important of the amendments involves the decision to allow 16 and 17-year-olds to vote. The Government regularly say that this is the most important decision that the country will face in a generation, so why on earth do they want to exclude from the vote the very generation who will be most affected by it? After all, at 16, people can have consensual sex, move out of the family home, rent accommodation, refuse consent to medical treatment, join the armed forces, drive a moped and drink alcohol. Even the three Crown dependencies already allow votes at 16.
Why on earth not just give in now and allow 16 and 17-year-olds the vote, so that returning officers can get on with signing them up as soon as possible? Apart from anything else, the only way the Government will get the Bill on to the statute book this year is by caving in now. Their lordships voted in favour of the amendment by 293 to 211, and I bet they will vote the same way all over again. I predicted the tax credits U-turn several Thursdays ago, I predicted the junior doctors U-turn, and I hereby predict the votes at 16 U-turn.
Will the Prime Minister update us on his so-called renegotiation of the UK’s membership of the EU? As I understand it, he wants everything to be signed off at the December meeting of the European Council. The Council meets on 17 and 18 December, but the House rises on 17 December, so how on earth does the Leader of the House expect us to be able to question the Prime Minister on the outcome of the meeting? This is meant to be one of the most important renegotiations of our membership that we will have seen.
Some of us think that the Prime Minister is playing Russian roulette with our economic and political destiny. Hounded by his Eurosceptic Pavlovian dogs on the Back Benches, he keeps on doing the wrong thing. Last year the Government opted out of the Prüm convention on the stepping up of cross-border co-operation, particularly in relation to combating terrorism, cross-border crime and illegal migration. We are now the only EU country to be excluded from the convention. Labour said that that was a ludicrous decision last year, but now the Home Office has finally woken up and said that there is a
“clear and compelling case for signing up to the Prüm agreements.”
Too right, but this kind of hokey-cokey seriously undermines our national security, which surely depends on our being an active member of the European Union. By sharing information with our close European allies and partners, we can prevent dangerous crimes and bring criminals swiftly to justice.
The Prime Minister’s weakness in failing to stand up to his Back Benchers has reduced our security, but only now, after Paris, are the Government finally recognising that fact. How much time will we be given for the debate on cross-border co-operation, which will also take place on Tuesday?
As you will have seen, Mr Speaker, Tyson Fury won the world heavyweight boxing title last weekend, and has now been nominated for the title of BBC sports personality of the year. I hope that he does not win. You may also have seen his comments.
“There are only three things”,
he has said,
“that need to be accomplished before the devil comes home: one of them is homosexuality being legal in countries, one of them is abortion and the other one’s paedophilia.”
Leaving aside the bizarre, rather heterodox theology, that equates homosexuality with paedophilia. As I hope the Leader of the House agrees, that is profoundly offensive, and it is the kind of language that leads more young people to commit suicide. I gather that Mr Fury has subsequently said that some of his best friends are gay, so may I suggest that we invite him to Parliament some time in the near future? I am quite happy to go head to head with him.
Chris Grayling
I very much agree with the comments of the shadow Leader of the House on the events of this week. I also pay tribute to him for his brave stance yesterday. A couple of weeks ago I mentioned the issue of the security of Members of Parliament and the need to protect them against criminal activity. We are all subject to legitimate public scrutiny, but it will never be acceptable for Members’ personal safety to be put in jeopardy or for them to be the victims of activities that a court would judge illegal.
In the House, Mr Speaker, we never discuss the security arrangements for Members, but suffice it to say that you and I would both agree that it is and will continue to be a priority for the House of Commons Commission and the House authorities to do everything we possibly can to protect the right of Members to express their views in a free and unfettered way, and to protect them when they do so. I also echo the hon. Gentleman’s words of thanks to the police, and not just the police who were on duty yesterday but all of those who provide protection to Members of this House, whether in this place or in their constituencies.
Following yesterday’s debate, in which Members on both sides said that they would expect regular updates on the situation in Syria, I should like to inform the House that the Government intend to provide a proper update statement before the Christmas recess. I am sure that the whole House will join me in sending our good wishes to the British air crew involved in action overnight.
Members might like to note that the first measure covered by our English votes for English laws procedures passed through this House uneventfully on Tuesday evening. I should like to offer my thanks to the Clerk and to all the Officers of the House who have been involved in making the preparations for the new systems.
I am sure that the shadow Leader of the House and all hon. Members will want to join me in sending our congratulations to the Prime Minister on the 10th anniversary this weekend of his election as Conservative party leader. Leading your party for a decade is a considerable achievement. It is one that others might perhaps aspire to achieve, but at the moment they look unlikely to do so.
It is also the anniversary this week of the stand that Rosa Parks took on a bus in the United States to secure race equality in that society. I am sure we all agree that the changes to our societies since then, and the ongoing work to stamp out race discrimination, are not only necessary but something we should all be proud of and committed to.
The hon. Gentleman asked me what was going to happen to the Question Time sessions. You will remember, Mr Speaker, that I addressed that issue in my business statement on Tuesday, when I indicated that questions would simply move back a week. The Prime Minister’ questions session—the sift for that session has already taken place—will simply take place next Wednesday; the same will be the case for Cabinet Office questions.
The hon. Gentleman raised the question of the European Union Referendum Bill debate. There will be a proper debate on the issue of votes for 16 and 17-year-olds. It will be a separate issue, and the House will vote on it. If this House, as the elected House, again expresses its will that 16 and 17-year-olds should not at this moment be given the vote, it is my sincere hope that that view will be accepted in the other place.
The hon. Gentleman asked a question about the EU Council, and used the words, “as I understand it”. I am afraid he cannot simply go by what he reads in the papers. There are a lot of rumours and counter-rumours around at the moment, but when the Prime Minister is ready to make a statement, he will make it to the House and explain what is happening.
The hon. Gentleman also talked about the House deciding on various matters. The House decided a year, or a year and a half ago not to opt back into a number of measures. The Government are bringing forward a proposal on Tuesday to debate the Prüm directive and the House will be able to decide on that matter. It is absolutely right and proper that that should be the case.
On the question of Tyson Fury, homophobia is not acceptable in sport. We should work hard to encourage more people in sport to be open and accepting of gay people in sport. It is right and proper that that change happens. I agree with the sentiments that the hon. Gentleman expressed, and as a Formula 1 fan, my vote is for Lewis Hamilton.
Amanda Milling (Cannock Chase) (Con)
On Small Business Saturday, I will be announcing the winners of Cannock Chase’s local shop and market stall competition. Will my right hon. Friend join me in wishing good luck to all the nominees? May we have a debate in Government time on the contribution of independent shops and market traders to our local economies?
Chris Grayling
I think Small Business Saturday is a fantastic innovation, and I wish all the businesses in my hon. Friend’s constituency well for the awards this weekend. If I may, I will pay tribute to Home Instead Senior Care, which was the winner of the Epsom and Ewell business award last week. I have also been asked by the Deputy Leader and by my Parliamentary Private Secretary to make reference to Fishers Home Hardware in Suffolk and Boulangerie Joie de Vie in Finchley and Golders Green and to wish them well. While we are on the subject of fishers, perhaps we might send our good wishes to the fishermen and fisherwomen of this country.
Pete Wishart (Perth and North Perthshire) (SNP)
I thank the Leader of the House for announcing next week’s business. May I also congratulate you, Mr Speaker, on your Herculean effort yesterday? It is not for nothing that you have gained the title of “Golden Bladder” for the way you chaired yesterday’s proceedings, and I think the whole House is very grateful for the very kind and well-managed way you structured yesterday’s debate. But please, Leader of the House, let us never have another debate like this ever again in the House. Such was the demand to speak in yesterday’s debate that about 50 Members never got the opportunity to contribute, and many of those who did were confined to just a few minutes at the end of the day.
We live in a new type of representative democracy where MPs are lobbied and communicated with by means that were never anticipated, certainly when I was a new Member of Parliament. Constituents expect to see their MPs in this House expressing their opinions, particularly on massively important issues of state such as yesterday’s, and I am disappointed that the Leader of the House could not commit to the request from all around the House and the country to have a proper structured debate that would have allowed everybody who needed to contribute to the debate to get in. Let us hope we never have that again. I hope the Leader of the House will agree that if we have further debates as important as this, he will find the necessary adequate time so every Member gets an opportunity to contribute on behalf of their constituents, who have the legitimate right to hear from their MPs.
One of the consequences of shoehorning that two-day debate into one day is the impact on departmental questions; the Leader of the House was right. I listened very carefully to what is going to happen on this. What that means for us on the SNP Benches is that we will not now have Scotland Office questions until next year. It will be two months since the last Scotland Office questions. We have a live Scotland Bill now; we have huge questions to be asked.
There is also the question of the impact of military action on Scotland; 97% of Scottish Members of Parliament did not vote for military action last night and 72% of Scots oppose military action. We hear all this stuff about the family of nations and the pooling and sharing, but Scotland has rejected this military action. I know that matters not a jot to this Government—it is of no consequence to them—but it is massively important for us, and we will not have an opportunity to ask our Department about issues such as this until next year.
The ink was barely dry on the voting Clerks’ ledgers when the jets were in the air last night with their deadly cargo. Can the Leader of the House say more about what he will do to keep the House updated? We particularly want to hear about what is going to happen to the refugees, because all this is going to do is increase the demand for this country to deal with refugees; if we are bombing that nation, it is a natural consequence that there will be more refugees in the coming year. So we want to hear more about the Government’s plans on that.
This week has been characterised by finding targets, friendly fire and civil war, but that is enough about the Labour party. Every Government need an effective Opposition, and especially a callous, Conservative Government such as this one. If the Labour party cannot get its act together and cannot agree on matters as important as going to war or Trident, will it get out of the way and let the Scottish National party in there, because somebody needs to hold this Government to account for what they are doing?
Chris Grayling
I am afraid, as is often the case, the hon. Gentleman and I do not agree. Yesterday, we heard some very impassioned and powerful speeches—some speeches that will be memorable in the history of this place. They were made on all sides of the House and by Members on both sides of the argument. I think the debate we had yesterday showed this House at its best. We heard from 104 Members after what had been, over a period of a week and a bit, about 20 hours of debate, discussion and questions in this House. I think yesterday this House got it right. I also think it got the decision right, although I accept we do not agree on that. We heard impassioned speeches from the hon. Gentleman’s Benches, the official Opposition Benches and from our Benches. I think that is what people expect in their democracy.
The hon. Gentleman asked about holding the Government to account. As I said earlier, it is very important that we provide regular updates to this House. There will be a statement before the Christmas recess to update the House. It is right and proper that that is the case.
I have thought long and hard about the issue of Scotland questions. The hon. Gentleman asked how the Government will be held to account over the decisions taken yesterday. The answer is that there will be a statement in this House on precisely those issues, so that United Kingdom Members can ask questions about a decision taken across the United Kingdom.
I have also thought carefully about the structure of question time sittings. It would have been possible to swap them around. In my judgment, the question time sitting that might have been delayed until after Christmas was that of the Department for International Development. However, given the hon. Gentleman’s comments about refugees, I think it is right and proper that this House has the opportunity to question the Secretary of State for International Development on the work we are now doing on Syria, as part of a holistic strategy, to make sure that we provide proper support for refugees and prepare for what we hope will be a period of reconstruction and redevelopment in that country as soon as we can possibly achieve a lasting peace.
I accept that this House took big and challenging decisions yesterday. We as an Administration will now seek to make sure that this House is informed properly and appropriately and that it has the chance to question properly and appropriately. Given the passions expressed from the SNP Benches yesterday, I am sure the hon. Gentleman will understand my view that it is a greater priority to have a statement on what is happening in Syria and International Development questions before Christmas. He has plenty of opportunities to ask questions about Scotland matters and he will carry on doing so, including the moment we come back in the new year.
Dr Andrew Murrison (South West Wiltshire) (Con)
The shadow Leader of the House was absolutely right to condemn the vile behaviour of a minority in respect of colleagues, including himself, acting according to their conscience. However, his argument was not advanced by his reference to Conservative Eurosceptics as dogs, however Pavlovian.
Many of our constituents’ most anguished pleas to us relate to the cancellation, very often at short notice, of hospital procedures and operations. That seems to me to be on the increase. May we have a debate in Government time on the provision of step-down care in our national health service and, in particular, the disappearance in many parts of the country of our excellent community hospitals?
Chris Grayling
Of course, the state of our local health service is a continuing matter of concern for our constituents and for all of us as individual constituency Members. As individuals, we will always be champions of those local facilities. Although emergencies happen and are sometimes unavoidable, I say to the health service that I have always believed that, unless there are unforeseen circumstances, cancelling operations should be done only in extremis, because of the disruption it causes to individuals. My hon. Friend has been a powerful advocate for community hospitals in his own county and I am certain he will continue to take advantage of the opportunities this House provides for him to make sure that he is a champion for the health service in Wiltshire.
Ian Mearns (Gateshead) (Lab)
The Backbench Business Committee would like early confirmation, if possible, that we will be allocated the last day before the Christmas recess on Thursday 17 December. We have been given notice that that is likely, but it has not yet been confirmed. The hon. Member for Kettering (Mr Hollobone) is a member of the Committee and has pointed out that, on occasion, the time allocated for Back-Bench business has been severely squeezed by statements and urgent questions. On Monday two weeks ago, we were given three hours of protected time, which was a very welcome departure. I think that is what the hon. Gentleman was referring to: the allocation of three hours of protected time for a particular debate. I say to the Leader of the House that we would like to see more of that, if at all possible.
Chris Grayling
I am happy to look at that suggestion. I think it was discussed in the last Parliament and that the hon. Gentleman’s predecessor felt that it was not necessary, but I am happy to discuss with him whether we need to protect the business. In some respects, the allocation of time is a mixed responsibility—it depends on how many urgent questions there are—but I accept his point. Perhaps we can have a conversation about it.
Mark Pritchard (The Wrekin) (Con)
May we have a debate on a review of section 60AA of the Criminal Justice and Public Order Act 1994 on the wearing of masks and face coverings on demonstrations? Surely, on public demonstrations on public land, the police should not have to apply for a special order to remove them. If people really have the courage of their convictions —whether they be members of the National Front, Occupy or the Stop the War coalition—statutory legislation should allow for the removal of all masks and face coverings on public demonstrations.
Chris Grayling
I have a lot of sympathy with what my hon. Friend says and the Home Office should certainly give that careful consideration. These coverings are used to intimidate and in our society there is room for legitimate process and not for intimidation. We should look very carefully at whether anything that allows protesters to intimidate rather than protest should be permitted.
Alex Cunningham (Stockton North) (Lab)
The Leader of the House will be aware of the bizarre decision by the Chancellor to axe the £1 billion funding for the first two carbon capture and storage projects in the UK. He might also be aware that Teesside’s ambition is to create the first industrial CCS project, with the potential to create thousands of jobs in an area that the Leader of the House will know has been devastated by job losses in the steel, mining and construction industries as well as Her Majesty’s Revenue and Customs. May we have a debate to discuss the implications of the Chancellor’s decision, described by the industry as disastrous?
Chris Grayling
We had to take some difficult decisions in the spending review. We have not ruled out carbon capture for the future, but we have to take practical decisions based on value for money for the taxpayer. The hon. Gentleman knows that that is our duty in government and it is the duty of all Governments in office. We will continue to look carefully at carbon capture technology and I hope that a time will come when it is a sound and viable approach, but none the less the Government have taken a difficult decision. I simply remind him that in the northern half of the country the economy has been growing faster than in the southern half. The best way of securing jobs for the future in his constituency and the surrounding area is to continue that growth and get investment in there.
Bob Blackman (Harrow East) (Con)
On Remembrance Sunday, an organisation projected on to the House of Commons a swastika with the message “Modi not welcome”. We know it happened, because the organisation put out a statement saying that it had done that. We have photographic evidence and witness statements from those who saw and took photos of those responsible. We know that the message was completely wrong, Mr Speaker, because you made Narendra Modi most welcome on his historic visit to Parliament. May we have a statement on what measures we will take not only to combat this incident but future more serious incidents?
Chris Grayling
For any organisation to link the swastika to Prime Minister Modi in a demonstration in this country is unreservedly unacceptable. We have close relations with India and I would condemn any such action. I am also aware of the incident to which my hon. Friend refers. It is not yet clear that that was an actual incident as opposed to a creative use of computer technology to create the sense that it took place. If he has information that suggests that it did, I think that you, Mr Speaker, and I would be very glad to see it.
Clive Efford (Eltham) (Lab)
May we have a debate on cuts to the police? The Metropolitan police is making clerical staff redundant and filling those posts with warranted officers. That flies in the face of the Government’s policy of making police more visible to the public; I assume that the Met will adopt a policy of moving desks closer to windows to fulfil that requirement. May we have a debate on that, as it is seriously depleting the number of officers available in our communities?
Chris Grayling
I think the hon. Gentleman is a couple of weeks late. If he listened to the autumn statement, he will have heard that we are not cutting police budgets. It is a matter for the Mayor and the Metropolitan Police Commissioner to decide how to spend their budgets most effectively in the interests of the citizens of London and I will not seek to tell them how to do so. We have not cut their budgets; we have actually protected them.
Jason McCartney (Colne Valley) (Con)
There was an incredibly well-attended debate in Westminster Hall this week about temporary post office closures and my own village post office in Honley has been closed temporarily, supposedly, for up to six weeks now. May we have a statement on these temporary closures, which many communities fear might end up being long term? They are much-needed assets in rural and deprived communities.
Chris Grayling
I can understand the concern, because there have certainly been occasions when temporary closures have led to permanent closures. I can well understand the anxiety. I suggest to my hon. Friend that when Ministers from the Department for Business, Innovation and Skills are before the House on Tuesday week, he might want to raise that question with them. We all want to protect local services in our constituencies, even though on some occasions change, sadly, is unavoidable.
Joan Ryan (Enfield North) (Lab)
Later today, I will host the inaugural meeting of the all-party group for Alevis, Alevism being a philosophy, a religion and a social and cultural identity. Sadly, neither Alevis nor their religion are recognised in Turkey, their country of origin. May we have a debate in Government time on the positive contribution that more than 300,000 Alevis living in this country make to this country as well as about the situation under which they live in Turkey?
Chris Grayling
One of the fundamentals that characterises our society is the desire to defend the interests of religious minorities. We are a liberal democracy that believes in freedom of speech, freedom of expression and freedom of worship. I commend the right hon. Lady for the work that she is doing, and I am sure she will seek to use one of the occasions available to her in this House to provide a greater platform for the work she is doing with that all-party group and for the communities she is seeking to represent.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
As my right hon. Friend knows, I have been campaigning to save the hedgehog, whose numbers have declined by more than a third over the past 10 years. Whereas hedgehogs are not a fully protected species, badgers, whose numbers have risen significantly, are. May we have a debate or a statement on protected species so that we can explore the need to have greater flexibility in this?
Chris Grayling
I commend my hon. Friend for the work he is doing. He is only too well aware, as I am, of the decline in hedgehog numbers in this country. It is only if our society works together to try to rectify that situation will we provide an opportunity for those numbers to be restored. A variety of different challenges face us, and I wish to pay tribute to The Times for launching a campaign in defence of our hedgehogs, encouraging all of us to make holes in our garden fences to create a superhighway for hedgehogs. Although I do have such a hole in my garden fence, sadly, I do not have any hedgehogs in my garden at the moment—I hope they will arrive.
Mr Speaker
While we are on the subject of protected species, I should point out to the House that the right hon. Member for Mid Sussex (Sir Nicholas Soames), who is sadly not in his place at this time, was for a considerable period, as he has often pointed out to the House, president of the Rare Breeds Survival Trust. Colleagues may wish to reflect upon the appropriateness of the right hon. Gentleman holding that particular post.
Jim Shannon (Strangford) (DUP)
In the past week, we have had much discussion about a tax on sugar products and the Government’s intentions in that area. Many of us feel that there should also be a tax on fatty foods. Will the Leader of the House consider, and agree to a debate in this House on the issue of, ensuring that any such tax is used directly for the health service?
Chris Grayling
Of course we did have a debate last Monday on the issue of the sugar tax, following a petition. That is an example of how we are using the petitions system to debate matters of public concern. I must say that I have some doubts about an approach such as the hon. Gentleman outlines. As people say, all things are good in moderation but not in excess. We are much better off explaining to people what is good for them and what is not, and then allowing them to take their own decisions—otherwise, we just become a nanny state.
Philip Davies (Shipley) (Con)
May we have a debate on fixed-term recalls? When people are convicted of serious offences and are released from prison before their term is up, most of the public would expect that if they then reoffend or break their licence conditions, they are returned to prison to serve the rest of their sentence in full. Currently, however, these people go back to prison for only 28 days. Last year, that applied to 546 offenders who had committed offences including murder, manslaughter, attempted homicide, wounding and assault. May we have a debate on this so that we can actually make sure these people go back to prison for the remainder of their sentence, rather than for a derisory 28 days?
Chris Grayling
As my hon. Friend knows, as Justice Secretary I legislated to provide additional powers to manage those who are on remand, and I am very much of his view that we need to be willing to respond effectively and strongly when such situations arise. My right hon. Friend the Lord Chancellor will of course be in this House on Tuesday, and I am sure my hon. Friend will take advantage of that opportunity to make the point very firmly to him, too.
Alan Brown (Kilmarnock and Loudoun) (SNP)
We have heard the earlier comments from the Leader of the House and the Foreign Secretary yesterday, who used the cliché that yesterday was great for democracy as people saw it in action. As my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) said, however, only 104 MPs were taken and half as many again had put their name forward. I was one of the frustrated Back Benchers who sat there getting up and down all day. My constituents expect me to be able to put my views on the record in this House, and they are also disappointed when I do not get to do that. They could also make the decision as to whether the Prime Minister’s comments about “terrorist sympathisers” were a slur on my voting record. Will the Leader of the House therefore reconsider the future arrangements for such important debates?
Chris Grayling
I do not think that anybody was in any doubt about the views of the hon. Gentleman or those of his colleagues. Many Members of the Scottish National party made their points very articulately yesterday, even though I did not agree with them. Over the past few days, there have been many, many opportunities to question the Prime Minister and raise these matters in debate. My view is that this House handled the matter in the right way, and that it took the right decision, although I appreciate that he and I will not agree on that.
Antoinette Sandbach (Eddisbury) (Con)
The Leader of the House will be aware that the reservoir of bovine TB has the potential to devastate dairy herds in my constituency. Given the worldwide shortage of the vaccine and the Welsh Government’s withdrawal of their vaccine programme against badgers, could we have a debate in Government time on the impact of that wildlife reservoir?
Chris Grayling
That is a very real issue for the agricultural communities in this country. I read those reports with concern as well. It is absolutely right and proper that we take measures to protect our farming industry, as it is crucial to this country. I will ensure that my hon. Friend’s concerns are passed to my right hon. Friend the Secretary of State, who will be in the House shortly before the Christmas recess and will be able to address matters in greater detail then.
Mr Douglas Carswell (Clacton) (UKIP)
Yesterday, this House voted for a military response against ISIS extremists in Syria. Will the Government find time to debate the possibility of a sanction-based response against the vile, barbaric Saudi regime, which has, for too long, promoted and exported a similar extremist creed?
Chris Grayling
I know that the hon. Gentleman feels strongly about that matter, but what I say to him is that this country has had a long partnership with Saudi Arabia under Governments of both persuasions. We have both worked collaboratively with the Saudis, and also worked with them to try to improve their society. I think we have the right balance.
Mr Nigel Evans (Ribble Valley) (Con)
May I pay tribute to you, Mr Speaker, for your Olympic gold-winning performance yesterday? When I was Deputy Speaker, I once had to sit in the Chair for six hours, and half way through I had to put out a call of emergency to the Chairman of Ways and Means to replace me for a couple of minutes. How you did it, I will never know, and I pay tribute to you.
Tourism is vital to the Ribble Valley. It is great that London attracts more visitors than any other city on Earth, but we want to get those visitors out of London and into places such as the Ribble Valley. I understand that Visit England is to be subsumed into Visit Britain, which means that there will not be a special voice for England alone. Wales, Scotland and Northern Ireland all have their own voices. May we have a statement from a Minister as soon as possible so that we can absolutely ensure that England will have a distinct voice for tourism?
Chris Grayling
My hon. Friend represents one of the most beautiful parts of England. I know it well, as my family came from close to there, and I used to spend many weekends walking in the Ribble Valley as a child. I will ensure that his concerns are drawn to the attention of the Under-Secretary of State for Sport, Tourism and Heritage. We know that she is a very active supporter of the tourist industry in both England and the whole of the United Kingdom. She will not be taking decisions lightly, and will certainly not want to take decisions that adversely affect his constituency and discourage people from visiting it.
Paula Sherriff (Dewsbury) (Lab)
May we have a debate on the practices of big businesses? Marks & Spencer, for example, continues to charge a significant premium on products such as flowers in hospital shops and has failed to follow the requests to remove guilt lanes packed with unhealthy snacks by its tills. Now, it has refused to meet me to discuss its appalling treatment of British workers who staff its major UK depot and are kept on insecure contracts. It is exploiting loopholes in EU law to pay new staff less than others who are doing the same work. Does the Leader of the House agree that it is unacceptable for a brand that trades on its British ideals to treat its staff and customers in such an irresponsible manner?
Chris Grayling
I have not looked at those details in Marks & Spencer, but every company today benefits from being a responsible employer and a responsible organisation. The hon. Lady has made her point very articulately.
Glyn Davies (Montgomeryshire) (Con)
Will the Leader of the House schedule a debate in this Chamber on the protection, status and promotion of the Welsh language? Every Department here has a statutory duty to comply with Welsh language legislation. The Department for Culture, Media and Sport has a statutory duty to enshrine the Public Bodies Act 2011 to ensure that there is sufficient finance. Britain must not lose this beautiful culture, or treasure, that is “yr iaith Gymraeg”, and we need a debate to ensure that that does not happen.
Chris Grayling
I know that every Department takes this issue very seriously—in my time in two Departments, we were always careful to provide proper information to Welsh language speakers in Wales. I absolutely agree that to protect the diversity and culture of the UK as a whole we must protect the Welsh language, as well as the culture and traditional languages in areas now represented by the SNP. We have a duty to protect the diversity of the entire UK.
Stewart Malcolm McDonald (Glasgow South) (SNP)
May I, too, pay tribute to your Herculean efforts yesterday, Mr Speaker? I honestly do not know how you got through it.
I took part in Prime Minister’s questions last week, I questioned him after the statement last Thursday and I took part in the Back-Bench business debate on Monday, and each time I raised the issue of protecting the ancient minorities in Syria and that part of the world. History shows that our plan must include protection for minorities with a history of fleeing military invasions, but that is the big hole in the Government’s plans. I do not wish to go over the arguments again, but will the Leader of the House schedule a debate on how we can protect the many religious, linguistic and other minorities in that part of the world?
Chris Grayling
In a sense, the hon. Gentleman is making the case for our side yesterday. How on earth could we have protected the Yazidi community, for example, from what might otherwise have been genocide other than by sending in air support for the Kurds, who were seeking to defend the area and rescue people from Mount Sinjar? We have talked extensively about the need to protect Syrian citizens, and we will make a statement before Christmas to update the House, but I do not understand how we can help and rescue these people, particularly the Yazidis on Mount Sinjar, without military support, to which his party is opposed.
Tom Pursglove (Corby) (Con)
Many Members were disappointed that, owing to how private Members’ Bills are handled, we were not able to vote on the Compulsory Emergency First Aid Education (State-funded Secondary Schools) Bill. Regardless of the rights and wrongs of individual Bills, it would be useful to have a full debate in the House on reform of the private Members’ Bills system.
Chris Grayling
First and foremost, this is a matter for the Procedure Committee, and I would not dare to intrude on the work of my hon. Friend the Member for Broxbourne (Mr Walker), who is the Chairman of the Committee, and his colleagues. May I suggest, therefore, that my hon. Friend speaks to the Chairman, who has raised this issue with me and is considering it.
Tom Brake (Carshalton and Wallington) (LD)
I welcome the Government’s intention to make quarterly reports on Syria, but will the Leader of the House confirm that they will be oral statements from the Foreign Secretary? Will they focus, in particular, on progress that the Gulf states, Saudi Arabia and Turkey are making in their diplomatic initiatives and willingness to tackle extremism? In addition, the Prime Minister said yesterday he was happy to reconsider the issue of orphans. Has he had time to consider that matter, and has the Leader of the House had a request from him to come to the House to tell us what his deliberations have led to?
Chris Grayling
We have indicated our intention to provide quarterly reports, but I would like us to do more than that, which is why I told the House this morning that I thought it appropriate to have a further statement before Christmas giving an update on matters raised yesterday, including the military action and humanitarian issues. There will also be International Development questions before Christmas. I absolutely intend there to be opportunities to put these questions to the Government.
Andrew Bridgen (North West Leicestershire) (Con)
As colleagues will know, there was unfortunately an extremely tragic incident in my constituency recently. The matter is now sub judice. I know the Government take the issue of online grooming extremely seriously—my right hon. Friend the Prime Minister has led on it—but may we have a further debate on how social media are used as a vehicle for sexual grooming and what further measures we can take to protect vulnerable young teenagers from sexual predators?
Chris Grayling
I think we are all aware of the horrible crime that took place in my hon. Friend’s constituency and would all want to send our good wishes and condolences to the family of the victim. He is right that the case is sub judice, which means we cannot discuss the details, but suffice it to say that Ministers will have noted what happened and will want to learn lessons. The Justice Secretary, who is ultimately responsible for criminal justice legislation, will be in the House on Tuesday and will, I am sure, listen carefully to any ideas my hon. Friend wants to put to him.
Diana Johnson (Kingston upon Hull North) (Lab)
I first raised with the Leader of the House on 17 September the issue of the national wind college which was going to be based in the Humber. In the comprehensive spending review statement last week, five colleges were announced, but not one for the Humber area specialising in wind energy. May we have a debate in Government time on the commitment to renewable energy, particularly offshore wind energy, and why, if the Government are serious about the northern powerhouse, Hull and the Humber seem to have been missed out yet again?
Chris Grayling
I am not sure that there is any intention in Government to miss out Hull and the Humber. It is of course the heart of the wind turbine industry in the United Kingdom, and a very successful part of the local economy. I will obviously pass the hon. Lady’s concerns to the Treasury. Having visited more than one of the local centres of education in the Hull and Humber area in the past few years, I think it is already well served by some excellent professionals who are very good at delivering skills to young people.
Mr Peter Bone (Wellingborough) (Con)
On both sides of the House there was disappointment that some Members were not able to speak in the very important debate yesterday, and disappointment also at the very restricted time limit that had to be imposed. I hear what the Scottish National party says about it and what the Labour party says about it. They had an option yesterday to vote against the business motion and for extended time, and we could have removed the moment of interruption, which would have solved the problem. The only problem with removing the moment of interruption, Mr Speaker, might have been your bladder. Will the Leader of the House make a statement next week to the effect that when we consider major issues that the whole country is concerned about, we do not put a time limit on those debates?
Chris Grayling
Of course, we thought long and hard about that. We believed that the time set aside—10 and a half hours yesterday as part of about 20 hours of debate and questions over nine days—seven business days in the House— was the right balance. It was open to any Member, to the Labour party, to the Scottish National party and to Back Benchers to table an amendment to the business motion if they disagreed with us. Nobody chose to do so.
Nic Dakin (Scunthorpe) (Lab)
Last week I drew the attention of the Leader of the House to the Business Secretary’s commitment to report on the three working groups that he set up at the steel summit and the actions that they are going to take urgently to support the steel industry in this country. The Leader of the House helpfully said that he would take that up with his right hon. Friend. We are running out of time. I have heard nothing. I hope we still have the opportunity for the Business Secretary to come to the House and report on progress.
Chris Grayling
My office did indeed pass on that request. The Business Secretary will be here on Tuesday week in any case, and I will ask him to make sure that he is able to address the points and provide an update before we break for Christmas on what I know is a very serious matter for the hon. Gentleman, his constituents and the whole region.
Mark Pawsey (Rugby) (Con)
In its recent report, Public Health England stated that e-cigarettes are 95% safer than smoking, pose no identifiable risk to bystanders and should not be treated in the same way as tobacco products, yet in many public and work places, including here in the Palace of Westminster, users of e-cigarettes, who are in almost every case people who have given up using tobacco, are obliged to vape in the same space as smokers, where they are exposed to all the harm caused by tobacco smoke. The country looks to Parliament to set a lead, so may we have a debate on the policy regarding the use of e-cigarettes across the parliamentary estate?
Chris Grayling
This is a matter that has been considered by the Administration Committee. A decision was taken, rightly or wrongly, to put in place the current policy as my hon. Friend describes it. I suggest that he writes to our hon. Friend the Member for Mole Valley (Sir Paul Beresford), who chairs that Committee, to make those points. This is a matter for individual employers to decide. It is a matter of some debate and controversy, but I have no doubt that if he writes to the Chair of that Committee, his views will be carefully considered.
Patrick Grady (Glasgow North) (SNP)
The Leader of the House has stressed the importance of International Development questions a couple of times this morning, so will he give further consideration to the point I put to him in the Procedure Committee? I suggested that every now and then we move International Development questions, and other departmental questions, from the slot immediately before Prime Minister’s questions so that they have a little longer and can take place in a slightly more considered atmosphere—perhaps the convivial atmosphere of a Thursday morning—instead of being drowned out immediately before Prime Minister’s questions, as often happens.
Chris Grayling
The hon. Gentleman might not have heard me earlier, but in the 15 minutes of questions to the Leader of the House earlier this morning I asked whether it was really necessary to have that separate Question Time, and whether those questions could be merged with business questions to allow that slot to be used to extend the time available for other questions. [Interruption.] I have a lot of sympathy with what he suggests.
Mr David Nuttall (Bury North) (Con)
May we have a short debate on the whole issue of the rota for oral questions? That would give Members an opportunity to suggest changes, such as the one we have just heard and the possibility of separating the questions to the Church Commissioners, the Public Accounts Commission and the Electoral Commission. Currently Members are unable to question more than one of those bodies at the same time, and there might be other bodies that we ought to be questioning in that way.
Chris Grayling
Those are important points that I am happy to consider carefully, because we need to use the time available in the best possible way. The hon. Member for Rhondda (Chris Bryant) kindly said from a sedentary position that he wants to hear from me every day, but I suspect it might not be me he wants to hear from every day.
Jo Stevens (Cardiff Central) (Lab)
Earlier this week the Welsh Labour Government’s groundbreaking law on presumed consent for organ donation came into effect. Given that more than 10,000 people across the UK are waiting for an organ transplant, may we please have a debate in Government time on presumed consent so that England can follow Wales’s lead?
Chris Grayling
The hon. Lady makes an important point, and one that is well worth consideration. It sounds to me like something that the Backbench Business Committee could bring to the House. That debate would give the Government an indication of the balance of opinion in the House. We would want to understand the views of Members, and perhaps that is the best way of doing it.
Chris Green (Bolton West) (Con)
Ladybridge football club in my constituency has recently been awarded a £56,000 grant by the Premier League and Football Association’s facilities fund to install new floodlighting. I am sure that the whole House will want to congratulate the club on the award. May we have a debate on the importance of sports funding, including the Football Foundation, and on what more the Government can do to support sports in our schools?
Chris Grayling
That is one reason we have sought to ensure that funding for sport is available and protected in our spending plans. I pay tribute to the Football Foundation and to individual premier league clubs for the work they are doing. I will take the liberty, as a Manchester United supporter, of praising the work of the Manchester United Foundation, and indeed the many other premier league club foundations which do great work to promote grassroots sport, often among those who might otherwise be disengaged from society. My hon. Friend makes an important point. I wish the club in his constituency well. I also wish the rather larger club in his constituency well in sorting out its current problems.
Bill Esterson (Sefton Central) (Lab)
On Saturday I shall be visiting some of the excellent small businesses in my constituency, including Red Star Brewery in Formby, Roxiie’s Treasures in Crosby and Maghull Tyre & Exhaust in Maghull. Will the Leader of the House join me in congratulating those responsible for the success of Small Business Saturday over the past few years, including the Federation of Small Businesses, the small business Saturday team and, of course, my hon. Friend the Member for Streatham (Mr Umunna), who was instrumental, with others, in bringing the concept to this country? May we have the debate that the hon. Member for Cannock Chase (Amanda Milling) requested at the start of business questions so that we can discuss the importance of supporting small businesses all year round, not just on one day of the year?
Chris Grayling
The Government are always working to support and encourage small businesses, whether by changing procurement rules or, where possible, by removing red tape, but I also think that the work done by Members on both sides of the House, and not just on Small Business Saturday but across the year, to help and support businesses in their constituencies is absolutely right. The hon. Gentleman will know, as indeed we all do, that the job of running a small business is pretty tough: it is often a seven-day-a-week job, and often with 12 or 18-hour days. It is immensely valuable to our society that we have people who are willing to commit that level of effort to run small businesses in our communities. They hold our communities together. We will celebrate them this Saturday. I commend all Members for the work they will be doing, this weekend and throughout the year, to support small businesses in their constituencies.
Points of Order
Crispin Blunt (Reigate) (Con)
On a point of order, Mr Speaker, of which I have given notice to the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Bournemouth East (Mr Ellwood), who, on 3 November, following publication of the second report by the Foreign Affairs Committee, tweeted:
“Read the FAC report on UK involvement in Syria: role of ctte is to scrutinise current government policy—not set conditions on any future policy.”
Standing Order No. 152 says that Select Committees are
“appointed to examine the expenditure, administration and policy of…government departments”.
How they do that is up to them. The Liaison Committee said in its second report of the Session 2012-13 on Select Committee effectiveness that
“select committees should influence policy and have an impact on Government departments”.
It also said:
“The extent of this influence and impact is the primary measure of the effectiveness of select committees.”
Furthermore, on 5 November the Minister answered an urgent question on human rights in Egypt and expressed the hope that I was speaking as an individual and not as the Chairman of the Foreign Affairs Committee. Chairs are plainly unable to secure the opinion of their Committee in response to an urgent question, but they do have a mandate, as a Chair elected by the whole House, and it seemed at least a discourtesy to that mandate for a Minister to try to diminish that authority. Through the Foreign Secretary’s Parliamentary Private Secretary, I drew the Minister’s attention to Standing Order No. 152 and sought a private assurance from him that he now understood the position of Select Committees and their Chairs. Despite repeated requests to receive that private assurance, it has not been forthcoming, and I regret that I now need to seek your clarification that my understanding of Standing Orders and the appropriate courtesy for the Minister in the Chamber is indeed correct.
Mr Speaker
I am grateful to the hon. Gentleman for giving me notice of this point of order. First, I can confirm that it is entirely a matter for Select Committees to interpret the terms of reference set by the House and to decide for themselves what subjects of inquiry to pursue. I would suggest that it is both inappropriate and unwise for Ministers to comment on such matters. To put it bluntly, they should stick to their last. They have responsibilities, and it is to the execution of those responsibilities that they should dedicate themselves. They need not, and should not, stray beyond that.
Secondly, I can confirm that the Liaison Committee has recommended that Select Committees should seek to influence Government policy, and indeed the House has endorsed that recommendation. I would go further and say that it is a matter of some concern if there are Ministers who are unaware of that important fact. I hope that from now on they will not be.
Thirdly, I can confirm that the Chairs of departmental Select Committees, including, obviously, the hon. Gentleman, have been directly elected by the House, and that gives them a particular status and authority. Of course, on many occasions they will want to speak in a personal capacity and not in that role. Once again, we do not need Ministers telling Select Committee Chairmen what they should or should not be doing. In terms of what is orderly conduct in the House, Ministers, like everybody else, can leave that to the Chair.
May I take this opportunity to thank the hon. Gentleman for the valuable contribution that his Committee and its report on the extension of offensive British military operations to Syria have made to discussions in the House in the past few weeks? I believe, and I hope I can say this without fear of contradiction, that Members in all parts of the House, whatever their views on that matter, have found the Committee’s exposition of the issues very helpful indeed.
Bill Esterson (Sefton Central) (Lab)
On a point of order, Mr Speaker. You have been very supportive of those of us who have raised the plight of children in care and care leavers. As I think you know, I chair the all-party group on looked-after children and care leavers. It meets about every six weeks, and it invariably books the Boothroyd room because of the high level of interest and the fact that 90 young people, with additional adults in support, travel to its meetings from all over the country. There is invariably standing room only.
I have been advised that the room booking for next week’s meeting has been taken by the Liaison Committee. I understand the process by which these things happen, but no other room in the House can accommodate such large numbers. As you know, Mr Speaker, this is an incredibly important area. I am sure that supporting these young people is a matter of great importance to all Members. What advice can you give me and the all-party group’s secretariat on how to address this problem? Otherwise it will be very difficult for the young people and those supporting them to attend next week’s meeting.
Mr Speaker
I am very grateful to the hon. Gentleman for his point of order. Simply as a matter of fact, I should say to him that Committees always take precedence in the allocation of such rooms, so there is nothing untoward or indeed unusual about that, although I recognise the very considerable inconvenience and potential dilemma caused to the hon. Gentleman and his colleagues, as well as to those planning to attend such a meeting.
I can tell the hon. Gentleman that the Administration Committee is reviewing the room booking system. Given what he has told the House, I strongly encourage him to make representations to the Administration Committee—perhaps directly to its Chair—to try to progress matters. A conversation with the hon. Member for Mole Valley (Sir Paul Beresford) might be useful, in addition to any written evidence that the hon. Gentleman may propose to submit.
So far as concerns the question of whether a room can be found for next week, the hon. Gentleman had probably better have private discussions if he needs a room. We will see whether anything can be done if such a need remains.
If there are no further points of order, we will now proceed to the main business.
Charities (Protection and Social Investment) Bill [Lords]
(9 years ago)
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Mr Speaker
Before I ask the Minister to move the Second Reading of the Bill, I need to say the following. I remind the House that I have certified the Charities (Protection and Social Investment) Bill under Standing Order No 83J in relation to England and Wales. I further remind the House that this does not affect proceedings in the debate on Second Reading, or indeed in Committee or on Report. After Report, I will consider the Bill again for certification if it has been amended, and the relevant Legislative Grand Committee will be asked to consent to certified provisions.
The Minister for the Cabinet Office and Paymaster General (Matthew Hancock)
I beg to move, That the Bill be now read a Second time.
Every hon. Member will know of a charity or charities doing extraordinary work in their constituency, as will you, Mr Speaker. Many have served or will serve as patrons or trustees. They may even have subjected themselves to ritual humiliation to raise money and awareness. I have dressed up as a sumo wrestler, carried a pedometer for a week and even lost two stone to race a charger around the Newmarket July course. Charities channel the best of our instincts against the worst that life can inflict, whether that is sickness of mind and body, entrenched poverty or natural disaster.
So often, charities lead the way for us in Government to follow. Long before there was an Education Act, an NHS or a welfare state, charities that knew people could not wait had set up hospitals, schools and almshouses. Today, their compassion and kindness are matched by ideas and innovation. When Paula and Robert Maguire posted their first ice bucket challenge video, they expected to raise about £500 for the Motor Neurone Disease Association, but the campaign went viral, many of us joined in and they ended up raising £7 million. Let us look at Bristol Together, a social enterprise that buys and refurbishes properties and employs ex-offenders to carry out the work: that social investment is transforming lives.
The Government are committed to a flourishing civil society. We have protected the budget of the Office for Civil Society, we are expanding the brilliant National Citizen Service and we are rolling out more locally designed social impact bonds. Along with those opportunities, there are challenges. Perhaps more than any other kind of enterprise, charities trade on their reputation. Scandals of poor governance or unscrupulous fundraising undermine public trust, tarnishing the vast majority of charities that are well run and seek only to do good.
Sir Edward Garnier (Harborough) (Con)
I could not agree more with the opening remarks of my right hon. Friend in describing, to use an awful expression, the charitable landscape. I am a patron of Unlock and a trustee of the Prison Reform Trust. Both organisations have concerns, which I hope he can allay, that this much needed legislation might make it more difficult for them—bearing in mind that the subjects that interest them are prisons, prison reform and the condition of prisoners—to have among their trustees people with criminal convictions. The point is obvious, but I am sure that he can deal with it.
Matthew Hancock
My right hon. and learned Friend. If he would like to raise it any further, I could continue. I commend the two charities of which he is a trustee for their work. While protecting charities through the Bill, we will of course seek to support the good work that excellent charities do. The Bill proposes extra restrictions for those with unspent convictions. However, the Charity Commission will be able to waive those restrictions and, as with almost all the extra powers of the Charity Commission, it will be possible to appeal to the charity tribunal. I hope that he is reassured by the safeguards that are in the Bill, and that we can work with him to ensure that they are applied properly to charities that work in the important area he mentions.
Sir Edward Garnier
My right hon. Friend has been extremely clear and helpful. May I make him an offer? I know of his success at Newmarket racecourse. There is a very good racecourse, Leicester racecourse, in my constituency. If he would ever like to run there, he should let me know.
Matthew Hancock
I very am grateful for that unexpected invitation. I am dearly tempted. I hope that Unlock and the Prison Reform Trust will work with us to ensure that the Bill passes in a form that supports the important work that they do.
On the broader question of supporting the reputation of charities, by one measure trust in the sector is at a seven-year low. It is in all our interests that we have a strong, confident and thriving charitable sector.
The purpose of the Bill is twofold: first to tackle the challenges and then to unlock new opportunities. The main provisions of the Bill fall into three main areas: first, strengthening the Charity Commission’s powers, including over trustee disqualification; secondly, the regulation of charity fundraising; and, thirdly, the new social investment power for charities.
Let me turn to the Charity Commission’s powers. The purpose of the Charity Commission is to ensure that each of the 164,000 charities in England and Wales pursues its charitable objectives. Set up in 1853, it has done a century and a half of good work, but two years ago the National Audit Office and the Public Accounts Committee found that it was failing in its core duty. In particular, they found that it was not doing enough to tackle the abuse of charitable status. The NAO made a series of recommendations to improve the commission’s effectiveness.
The coalition Government published proposals for new powers based on those recommendations. Following a public consultation, the draft Protection of Charities Bill was published. Pre-legislative scrutiny and the Bill’s passage through the House of Lords have resulted in further refinement. I thank all the Members, peers and others who have improved the Bill that is before the House today. These measures are just one part of a wider programme of reform, aimed at turning the Charity Commission into a tough, clear and proactive regulator.
Mr Jenkin
It pains me to point out that my right hon. Friend has left out the significant post-legislative scrutiny of the Charities Act 2006 that was conducted by my Committee, the Public Administration Committee, in the last Parliament, which was the prime precursor of this Bill. I also sat on the Joint Committee that performed the pre-legislative scrutiny of the Bill.
Will he say something about recent controversies, for example those around charitable fundraising? The Select Committee is very frustrated that we are conducting significant inquiries that the regulator, the Charity Commission, should be conducting, but it does not necessarily have the power to hold its hearings in public in a way that would demonstrate its regulatory role.
Matthew Hancock
I was going to come on to the work of my hon. Friend and his Select Committee in making sure that the Bill is in the best possible shape. I am very grateful for the work that he did at the end of the last Parliament, after the National Audit Office report, to make sure that when we had a Bill, it gave the commission the necessary powers.
We believe that the Charity Commission has the power to convene meetings in public. However, I recognise that there is a question over whether it does so. During the passage of the Bill, we will look at that point in more detail. We are prepared to accept amendments, if they are necessary to bring clarity on the point that my hon. Friend raises.
Dr Andrew Murrison (South West Wiltshire) (Con)
I agree with my right hon. Friend that pre-legislative and legislative scrutiny are extraordinarily important in this place. Will he observe, for the record, how much legislative scrutiny is being performed by Her Majesty’s official Opposition, since there are precisely no Opposition Back-Bench Members in the House?
Matthew Hancock
I hope that this Bill can unite both sides of the House. I welcome the hon. Member for Redcar (Anna Turley) to her place. My hon. Friend has made his point very clearly and it will appear on the record, but I do not want to get into an unnecessary dispute with the Opposition, given that I hope we will have all-party support for this important Bill which will strengthen the role of the Charity Commission and, ultimately, be in the best interests of charities throughout the land.
As I said, we want to provide a tough, clear and proactive regulator. Under the strong and capable leadership of William Shawcross and Paula Sussex, there has been a direct focus on tackling abuse and mismanagement. However, an effective regulator needs to have teeth. As the NAO reported, the commission needs our help to address the “gaps and deficiencies” in its legal powers. The Bill will close those gaps in the commission’s capabilities, as well as tackling a number of damaging loopholes in charity law.
Let me briefly outline the five new powers that the Bill confers. These powers will help to protect the public, the staff and the people our charities serve from those who would seek to exploit them. First, the Bill will extend the automatic disqualification criteria. Currently, the focus of the law is on barring people who have misappropriated charitable assets, but the criteria are far too narrow. We will extend them, as my right hon. and learned Friend the Member for Harborough (Sir Edward Garnier) said, to include people with unspent convictions for money laundering, bribery, perjury or misconduct in public office, those on the sex offenders register, and those convicted for terrorism offences, including individuals subject to an asset-freezing designation.
Secondly, the Charity Commission will be given new powers to disqualify in instances where an individual has behaved in a way that makes them unfit to be a charity trustee, acting on a case-by-case basis and using its judgment and discretion. That new power is essential to empower the Charity Commission to tackle those who would bring charities into disrepute, and I hope that it will be used with care and decisiveness.
Thirdly, the Bill gives the Charity Commission a new official warning power in response to low-level misconduct. That will allow a more proportionate approach for less serious cases. Fourthly, the Bill grants a new power that allows the Charity Commission to direct the winding up of a charity following a statutory inquiry. That would apply if the commission proves that a charity is not operating, or that its purposes could be promoted more effectively by ceasing to operate, and that to do so would be in the public interest. We expect that power to be used in limited circumstances, and it is subject to several safeguards.
Fifthly, the Bill closes a loophole that allows offending trustees to resign before they are removed by the commission, and then act as a trustee for a different charity without fear of repercussion. That will ensure that trustees are no longer able to escape accountability if they abuse their position of trust. As with all the commission’s existing powers, all five of those proposals would be subject to the general duty to have regard to best practice. With the exception of the official warnings power, all the commission’s new powers are subject to a right of appeal to the charity tribunal.
All five measures that I have outlined are essential to protecting the interests and reputation of the vast majority of charities that are run by people of great integrity. The Charity Commission was closely involved in developing the powers, and it fully supports them. In addition, independent research for the Charity Commission found that 92% of charities supported new, tougher powers for the regulator.
We also intend to remove clause 9, which was added on Report in the Lords. We have serious concerns about the unintended consequences of that clause, as it attempts to encompass complex case law into a single statutory provision. It would also impose a major new regulatory responsibility on the commission. Clause 9 was not proposed because of concerns about charities in general, but in a narrow attempt by the other place to undermine the Government’s manifesto commitment to extend the right to buy. It is regrettable that a Bill with widespread support was used in that way, and we cannot allow that to stand. I urge the House to reject that anomalous clause and consider the matter elsewhere.
The challenge of regulating charity fundraising has already been mentioned. We can be incredibly proud that we are one of the most generous countries in the world when it comes to charitable giving, but although people are happy to give, they do not want to be bullied or harassed into doing so. A voluntary donation must be voluntary. Earlier this year we heard about the tragic case of Olive Cooke, Britain’s longest-serving poppy seller. For years, she was targeted with hundreds of cold calls and requests for money. More than 70 charities bought her details or swapped them with other charities, and in one month alone she apparently received 267 charity letters. Sadly, since then more cases of unscrupulous fundraising practices have come to light, and we must act.
We began by asking Sir Stuart Etherington to review the regulation of fundraising over the summer, backed by a cross-party panel of peers, and I thank them for their work. Sir Stuart recommended a new, tougher framework of self-regulation, and we are working with charities to deliver that. Lord Grade of Yarmouth will chair the new independent body at the heart of that framework. It will be paid for by large fundraising charities, and it will be able to adjudicate against any organisation that is undertaking charity fundraising. The body will be accompanied by a fundraising preference service—similar to the telephone preference service—which will give the public greater control over their consent to receive charity fundraising requests.
Next, we will prohibit contractors from raising funds for a charity unless the fundraising agreement between them explains how the contractor will protect people from undue pressure, and sets out how compliance will be monitored by the charity. It will require large charities to include a section in their trustees’ annual report on the fundraising undertaken by them or on their behalf. That will include an explanation of how they protect the public in general, and vulnerable people in particular, from undue pressures and other poor practices.
Mr Jenkin
The Public Administration and Constitutional Affairs Committee—or PACAC, as we call ourselves—is concluding an inquiry into charitable fundraising, alongside our other inquiry into Kids Company. I will not pre-empt the outcome of those two inquiries, but we are concentrating our inquiries on the conduct of trustees in these matters, and their responsibility to oversee and support charitable organisations so that they reflect their values in their operations as much as in their objectives. We are making recommendations on that because it might be insufficient to rely on processes and structures to ensure that things are ethically and properly run.
Matthew Hancock
I welcome that review, and I hope that during the passage of the Bill we can consider—and where appropriate take on board—any recommendations to improve it. I am glad that the work of that Committee is taking place concurrently, and I hope that recommendations will come forward in time for them to be considered for the Bill.
Dr Murrison
How can we make more explicit the amount of money spent on management overheads, and in particular the £80 to £120 per direct debit set up that goes to chugging agencies? That must be made crystal clear to people. That is, on average, the amount for the first year of any direct debit set up in favour of a charity. At the moment, people are not clear how much of their generosity is being expended on management overall and on that practice in particular.
Matthew Hancock
I am a great fan of transparency and a supporter of transparency across Government. We should consider carefully whether further transparency should be applied to charities, and how that is best delivered. I have no doubt that transparency begins at home for charities, and best practice is for them to be widely transparent about their operations. There is a question about whether we should do more in law, and balanced arguments in both directions. I hope we can consider that during the passage of the Bill.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
Do any of the new powers that the Bill gives the Charity Commission deal with charities that depart from their original charitable ambitions and disproportionately become political funding and campaigning organisations?
Matthew Hancock
We took action towards the end of the previous Parliament to ensure that the legal framework for charities and other organisations means that they do not cross over into direct partisan political work. A review is under way into how the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 has worked. There are questions about whether that needs to go further, but the best place to deal with such issues is in the review and during scrutiny of the Bill. I understand my hon. Friend’s concerns, and it is important that our review fully considers the impact of the 2014 Act.
We regard the Etherington package, including the fundraising preference service and a move to opt-in for further contact, as the minimum necessary to rebuild public trust. We propose that regulation of fundraising happens on a self-regulatory basis, but that self-regulation must implement the review’s recommendations in full. Some people have rightly asked what will happen if self-regulation fails. We want it to work, but we are also clear that practices must change. In Committee, we intend to bring forward amendments that will strengthen the Government’s reserve powers to intervene if the self-regulation recommended by Sir Stuart fails. Predatory fundraising targeted at vulnerable people is wrong. It has shaken public confidence in charities and we are determined to stamp it out.
Alongside tackling those challenges, the Bill aims to open up new opportunities.
Mr Jenkin
I am terribly sorry for intervening again, and most grateful to the Minister for being so generous in giving way. I regret that I cannot stay to take part in the debate. The House will need to know that my Committee will produce its reports in January, in good time for the conclusion of the passage of the Bill. Before he leaves the matter of fundraising, will he bear in mind the concern of many people about some charities that raise a substantial part of their income from foreign sources? Security services are concerned that organisations posing as charities might be receiving funds from abroad for nefarious purposes. Will he consider introducing measures to the Bill at a later stage to deal with that matter? I know that that is something that also concerns the Charity Commission.
Matthew Hancock
The Chairman of the Select Committee need not apologise. He can intervene on me as many times as he likes and I will always seek to take his interventions. I know that that must happen, otherwise he will seek to get me in front of him in some other way. On my hon. Friend’s substantive point, that concern has been raised with us. We want to consider the matter in more detail as the Bill passes through the House.
The Bill seeks to open up opportunities for charities to do more to fulfil their mission by providing a new power of social investment. Social investment seeks a positive social impact and a financial return, trying to make money go further. It is a huge and growing chance for UK charities to make more of their assets in a field where the UK is already the world leader. In 2014, the Law Commission conducted a review of charities’ social investment powers. It found a lack of clarity around charities’ social investment powers and duties, and concluded that that could be deterring some charities from getting involved in this exciting new field.
UK charities currently hold assets of over £80 billion, but they have made social investments of about only £100 million. We think that with the right support that market could double in the next few years. The Bill will ensure that more charities have a chance to take full advantage of social investment should they so wish. It removes the existing uncertainty by providing a specific new power to make social investments. It also sets out trustees’ duties to ensure that all social investments are made in the best interests of the charity. That will allow charities to make investments with the dual aim of fulfilling their mission and achieving a financial return. It is the way of the future and it is happening here in Britain. We want to support it to go further.
The work charities do transcends politics and unites hon. Members on both sides of the House. We want all charities to enjoy the very highest levels of public trust and esteem, and the generosity that brings. By delivering a more effective regulator, by tackling unscrupulous fundraising and by unleashing the power of social investment, the Bill will strengthen that trust and allow charities to do more with that generosity. I commend the Bill to the House.
Anna Turley (Redcar) (Lab/Co-op)
It is a privilege to respond to the Bill on Second Reading as shadow Civil Society Minister. I thank the Minister and his colleagues for bringing the Bill before us, and for the open and co-operative way in which they have sought to engage with us. It is much appreciated. I thank all the civil servants involved in drafting the Bill, and all the charities and organisations that have contributed to its development and to our understanding. I also thank noble Lords, who used their customary wisdom and experience to refine and improve the Bill in its passage through the other place.
This is a good and important Bill, and we on the Labour Benches welcome it. There is, of course, some room for improvement, and I will come on to that in my speech, but its objectives are to be welcomed. We all know the vital role that charities play in building a strong and flourishing civic society. Thousands of people around the country give up their time every day to work as trustees and volunteers. Thousands more depend on the vital services they provide. As the Minister said, charities change and save lives. They support the poorest and the most vulnerable. They pick up the pieces of social and economic failures. They heal, they tend the sick, they bring dignity in old age and they give children the best start in life. We owe it to all of them to provide a secure and robust regulatory environment that inspires confidence and allows the sector to flourish.
The sector has had a difficult year. The regulation of the sector has come under increasing scrutiny and we have seen high-profile cases that have been deeply concerning. We have seen poor governance, financial mismanagement and, as the Minister set out, concerning fundraising methods. These cases are extremely rare, but they are deeply disappointing to the rest of the charitable sector. It is important that we support and encourage confidence in the wider sector by clamping down on any abuse. That is why we welcome the Bill.
It has been good to see the sector itself step up to the plate to tackle so many of these concerns. It is vital that we play our part in supporting the sector in that process by giving it the legislative and regulatory environment it needs. It is also vital that we get the right balance: a strong and sound regulatory environment that ensures trust but allows charities the freedom to be innovative, enterprising and, crucially, effective in delivering their social aims and objectives.
We welcome the core aims of the Bill. We support providing stronger protection for charities in England and Wales from individuals who are unfit to be charity trustees. That is vital to ensure good governance and prevent abuse. We support the measures to equip the Charity Commission with new and strengthened powers to tackle abuse more effectively and efficiently. To ensure confidence in the sector, it needs to be able to respond quickly and decisively to any concerns raised. Further clarifications are required, however, and we will work with the Minister to resolve them in Committee.
I want to put on record at this point my pleasure in hearing the Minister say the Government will use the Committee stage to look again at fundraising: at whether self-regulation is sufficient and what steps we can take if it fails. We look forward to working with him on that.
We welcome the aim to give charities a new power to make social investments; some are already doing that, but it is important we give charities the reassurance to enable them to do so. We know that one in three British consumers will pay more for products with a positive social or environmental outcome. It is important that we enable the charitable sector to encourage that.
There are some areas, however, where we believe the Bill can be improved. We will look to work with the Government during the progress of the Bill in Committee to do so. We will be seeking to discuss the following points.
First, on the freedom to speak and engage in political discourse, we continue to oppose the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014. We intend to use the passage of the Bill to highlight and defend the right of charities by law to campaign and speak out on issues in line with their objectives. So often, it is charities that end up picking up the pieces of our policy failures. It is vital that we give them the right to campaign on their issues, and to challenge and hold us to account. That is a key part of a strong, healthy democratic and civic society.
Secondly, on clause 9 and the disposal of assets, the clause sets out that
“The Charity Commission shall ensure that independent charities are not compelled to use or dispose of their assets in a way which is inconsistent with their charitable purposes.”
We will continue to defend clause 9, so as to give housing associations the statutory backing to ensure they can make their decisions in the best interests of their tenants, and not be bullied by a Government determined to sell off and run down affordable housing. We think it is absolutely right that charities have the freedom to dispose of their assets in the way that they see fit.
Thirdly, on the protection of children and vulnerable adults, the Bill provides an opportunity to better protect children and vulnerable people. We are grateful that the Government accepted proposals in the other place to include people on the sex offenders register as among those who will be debarred from being trustees, but we believe there are other measures we can look at to strengthen that area. We will bring them forward in Committee.
Finally, on clarifying some of the powers of the Charity Commission, the Bill seeks to strengthen the powers of the Charity Commission. We believe there should be a strong, well supported regulator of charities that acts fairly and has the appropriate powers. Ultimately, the regulator must preserve public trust and confidence in charities. However, some provisions in the Bill could threaten charities’ independence. For example, there are no objections in principle to giving the Charity Commission the power to give warnings to a charity, but the current drafting raises some concerns within the sector.
For example, the commission can issue a warning if it thinks there has been a breach of duty or trust or other misconduct or mismanagement. It is possible that the commission could issue a warning about an issue of relatively low concern. Also, a disagreement between the trustees and the commission could arise about whether the warning was justified. It is therefore important to attach safeguards to the issuing of a warning, and failure to comply with it should not in itself have significant consequences that could be disastrous for charities. I hope that we can continue to discuss the matter further in Committee. In addition, the commission should give adequate notice of its intention to issue a statutory warning.
These are issues that should be discussed in Committee because clearer guidelines should exist on the number of days and other protective remedial powers. Given the implications a warning would have for the charity in question, we should also consider a right of appeal to the charity tribunal. I look forward to working with Ministers on those issues as we go through Committee.
In summary, we believe all these areas can be discussed and looked at in more detail as we take the Bill forward in Committee. This is an important Bill. It has some room for improvement, but offers a great deal to build trust and confidence in the charitable sector, which is why the Opposition will support it. I look forward to working with Ministers in Committee.
Fiona Bruce (Congleton) (Con)
I rise to support the rationale behind the Bill, which is of great importance to many members of the public. Its purposes are indeed to protect the public from unscrupulous fundraisers and to stop individuals who run charities abusing them. I agree that action should be taken in such cases, and I agree that the Charity Commission should have appropriate powers where misconduct is proven to have occurred.
I am pleased to note that the National Council for Voluntary Organisations has said that
“it is widely acknowledged that deliberate wrongdoing in charities is extremely rare”,
and it is important to remember that when we debate this Bill. There are many millions of people across the country who devote themselves and give selflessly of their time to charities. It is very important that we do nothing that in any way inhibits them from engaging and contributing to this important part of our civic society.
Having highlighted that motivation, I now want to highlight some of my concerns about the Bill, particularly about some of the new powers it contains. I hope that expressing my concerns is helpful and that they can be explored further in Committee. I speak with particular reference to the new measures in clauses 3 and 11, and the wide-ranging wording of the powers, which I fear could severely curb civic engagement, possibly deterring responsible people from wanting to be appointed as an officer to a charity.
I have more than 30 years’ experience of working in private practice on charity law, and the representation of charities was a particular part of that practice. I know that it has become increasingly difficult over those years to get individuals to step up to the plate, to coin a term, and to agree to an appointment in a charity. That often proves to be one of the challenges that new charities face, particularly—and interestingly—when it comes to the appointment of a treasurer.
I come to this debate, as I say, with over three decades of practical experience of working in this field. I want to ensure that we encourage and do not deter the very responsible people that the Bill is designed to support.
I note that clause 11 provides for new powers to suspend and disqualify. It has an extensive list of reasons within it, but I note that these could in future be varied by Ministers through the laying of new regulations—subject to those regulations being consulted on. We all know, however, that with the best will in the world among the Government, consultations can often reach only a few members of the public. There is the further problem of the regulations being scrutinised only by a few Members in Committee. That is why I am concerned about the excessive powers that will be granted if the Bill is passed, which if extended could come to embrace actions that might not have been fully scrutinised or intended by Members. I enter that caveat about the extension of disqualifications merely by Ministers laying new regulations.
The Bill gives immense power to the Charity Commission. Indeed, in its policy paper of May 2015, the Charity Commission acknowledged that it was gaining “a significant new power” to disqualify people from serving as trustees or senior managers of charities. I am concerned about the wording. The Charity Commission is able under clause 1(1) to issue a warning,
“to a charity trustee or trustee for a charity who it considers has committed…misconduct or mismanagement”.
Clearly, “who it considers” is a very wide-ranging phrase. I note that clause 1(2) allows the Charity Commission to issue a warning that it can “publish”. Yes, the charity or person subject to that warning can respond, but the publication might already have occurred, so I am concerned about the damage to the reputation of the charity in general and the individual. I am worried if there is an opportunity to publish without an opportunity to respond, and I would be grateful if Minister corrected me if I am wrong on that point.
Let me deal with some of the conditions for disqualification. The Charity Commission interprets unfitness to be a trustee to mean failure of honesty and integrity, competence or credibility, the latter being defined as undermining the confidence of the public. That is what I want to highlight in the next part of my speech—how the Charity Commission could take steps to act and issue a warning solely on the one criterion of conduct that might damage public trust and undermine public confidence.
The Charity Commission says that it will use an evidence base relating to the knowledge it gains from the surveys it takes into public trust. I am rather concerned about that. Does it mean that the Charity Commission could carry out a poll, asking people with certain views whether they think the public would be more or less likely to trust an individual or charity? What if those views were very much in the minority or if the views were greatly opposed to current Government policy—views on foreign policy, for example?
That is quite a broad-ranging power, and so far as I can see there are no requirements for any independent review from the Government before the warning is issued. It seems to be based on an individual undertaking some activity or saying something that might be contrary to the views held by the majority of the public who respond to a survey. When the Bill refers to “any conduct”, does that include conduct that someone might have undertaken several years before becoming a trustee? We all know—including many of us in the House—that views can change over time. Many of us might have expressed views some years ago that have changed. How is an individual going to be protected from action taken against them, on the basis of this Bill, which could have far-reaching repercussions?
This is not a merely theoretical issue. Let me highlight how serious a problem this is. I remind Members of the challenges faced by the Plymouth Brethren in the last Parliament. Their charitable registration was threatened because of the interpretation of the words “public benefit” within the Charities Act 2006. We are fortunate now to have William Shawcross as chairman of the Charity Commission. He is an excellent head, a man who possesses wisdom and expresses his opinions, conducts his deliberations and makes his decisions very carefully and with great common sense. Following his appointment, I felt that an appropriate approach was being taken to the plight in which the Plymouth Brethren found themselves when their charitable status was challenged. The case was to go to a tribunal, the Plymouth Brethren had to engage lawyers, and more than 300 churches were affected.
The Plymouth Brethren are a long-established denomination that exists throughout the country, but the challenge that they faced was very serious. They had to spend hundreds of thousands of pounds on legal advice. As I have said before, it was to their the credit that in the past they had done an enormous amount of voluntary work without shouting about it, but now they had to start producing documentation, and indeed they produced some excellent booklets citing the work that they had done to the public benefit. They continue to do that work, one example being disaster relief.
Some major debates were held about the case in the House. More than 40 Members of Parliament attended a debate in Westminster Hall to speak up for the Plymouth Brethren and to say that the Charity Commission’s action should never have been taken, because it had been based on a subjective interpretation of the words “public benefit”. Ultimately, as we know, the commission withdrew its action, and the charitable status of the Plymouth Brethren—and many other charities that had been standing by and waiting for the decision—was secured. However, we do not want a rerun of that case.
Some may claim that minority views undermine public confidence, but where would the suffragettes have been had all this been happening years ago? Our society contains a wide range of views and beliefs, which are often held with passion and principle. Disagreement is common, as we saw in the House only yesterday; indeed, it is a characteristic of a free society. However—and social media can be very cruel in this regard—many people despise or reject others entirely on the basis of their sincerely held but different, or minority, views. Charities are often formed for the purpose of protecting minorities, and it is important for us to ensure that genuine people with genuinely held minority views are protected from what I am sure would be the unintended consequences of the Bill.
Let me return to the subject of faith groups. Many religions in this country espouse views that are rejected by the majority, and a number of those views are very strongly rejected. Creationism, for instance, cannot be taught in schools as a scientific fact, but one would hope that it can still be expounded in RE lessons as a belief. If a charity’s work involved the promotion of creationism as a belief, would that be considered likely to undermine public confidence? There are many other examples—for example, different views on sexual ethics.
I am not, in this context, talking about minorities. A few weeks ago I spoke to a Church of England vicar—and it should be borne in mind that the Church of England is our state Church—who said that he had gone into a school and spoken about a particular view from a biblical perspective, and had gained the distinct impression that he should not come back and talk about the issue again. We must protect people with sincerely held but minority beliefs from the chilling effect that legislation can have on free speech in our society.
Let me now say something about the connection between the new powers in the Bill and the Government’s counter-extremism strategy. I understand that the Government are seeking to ensure that charities are not abused for extremist purposes. The problem is, however, that there does not currently appear to be a clear definition of extremism. That problem affects the Bill, and I think that it could have a very negative impact. The Government’s information document on the counter-extremism strategy defines extremism as
“the vocal or active opposition to our fundamental values, including democracy, the rule of law, individual liberty and the mutual respect and tolerance of different faiths and beliefs.”
That sounds fine, but previous definitions contained two or three additional words that now appear to be missing. They referred to
“mutual respect for and tolerance of those with different faiths and beliefs”.
That was one of our fundamental British values, alongside democracy, the rule of law and individual liberty: mutual respect and tolerance of people who held different faiths and beliefs.
In March, I said in the House:
“It is entirely right that we should respect other people, including those with other beliefs, and to respect their right to hold those beliefs”.
I added, however, that we should be careful not to conflate that
“with a requirement to respect all other beliefs, which is quite a different thing altogether.”—[Official Report, 12 March 2015; Vol. 594, c. 496.]
That is the problem with the current definition of extremism. If I say that I respect scientologists but I do not respect scientology, I mean that I respect those who hold different beliefs, but I do not respect the belief of scientology. Does that make me an extremist? We must be very careful about the way in which we define extremism, and in that connection it is interesting to note that the Government have yet to provide a statutory definition of non-violent extremism.
We all value free speech very highly in the House. A free society is based on disagreement and mutual respect, and I believe that that is strengthened, not compromised, when I respect my fellow citizens without necessarily respecting their beliefs. I mentioned the suffragettes earlier, but the issue of slavery is another example. The wording of the current definition is deeply troubling, and we need to clarify it, because otherwise we could end up contributing to the marginalisation that feeds extremism. Open dialogue with those who hold different views is essential if we are to understand each other’s views, reduce prejudice, and promote community cohesion.
The role that faith groups play in community cohesion through their involvement in the voluntary sector is staggering. Research carried out earlier in the year established that they contribute about £3 billion to social action in their communities, and that is just in monetary terms. In my view, the social cohesion that they provide is unquantifiable. Thousands of churches have run, or helped to run, charity projects for decades. It concerns me greatly that the removal—or the mere deterrence—of those who hold faith-related views that, in our present society, might not be popular, and certainly could not be considered mainstream, could deprive the charitable sector of valuable experience and expertise for decades.
Having had more than 30 years of experience in legal practice and of working with the charitable sector, I know that people are increasingly worried about falling foul of legislation and, as a result, are not becoming charity trustees. Will the Minister look again at the powers relating to disqualification? It is interesting that he used the term “self-regulation”. I would not like to become self-disqualified. I am concerned because the powers are so wide, and we need to ensure that the thousands of experienced servant-hearted volunteers involved in the charitable sector are not deterred from being involved in our civic society. I know that that is not the Government’s intention, and I would be grateful if they looked at these concerns. I am sure that that would be an unintended consequence, but we cannot afford any further marginalisation and exclusion of people from a sector in which they play such a vital role.
Tommy Sheppard (Edinburgh East) (SNP)
I rise in my capacity as the Scottish National party’s spokesperson on the Cabinet Office to make a brief contribution to the debate. You will note on the Benches behind me the absence of Scottish Members of Parliament. Please do not take that to indicate a lack of interest; it is merely an acknowledgement of the fact that the provisions in the Bill do not apply to Scotland and that our constituents will not be encumbered by them. That said, we have a few observations to make on the measures.
This is a certified Bill, but you will note that there is no willingness on the part of Scottish Members to take part in the debate anyway, so perhaps this could serve as an illustration of whether or not it was really necessary to burden the House with the amendments to Standing Orders relating to English votes for English laws. I want to make an effort to be constructive and to help the Government, so if you wish to speed up the passage of this legislation, I can assure you that we will not seek to make any further contribution to, or have any further influence on, the matter under discussion. You could therefore dispense with the legislative consent stage, should that become necessary.
There is a different system in Scotland, obviously, and I pay tribute to the Office of the Scottish Charity Regulator—OSCR—which has, since 2005, provided support for 23,500 charities of all shapes and sizes in Scotland. I want to pay particular tribute to OSCR’s trustees. I have some personal experience in this area, because I served for seven years as a trustee of the Edinburgh Festival Fringe Society, which is one of the larger such organisations in Scotland. It has benefited greatly from the support it has received from OSCR. That said, even though we have a different system, we live on the same island and the regulations that apply in England and Wales set some of the context in which we operate in Scotland, so we have an interest in the legislation relating to England and Wales that is passed in this House.
Susan Elan Jones (Clwyd South) (Lab)
May I make a quick point? Not many people will be aware—I myself was not until about six months ago—that every charity in Scotland is registered with the regulatory body, whereas in England and Wales many of the smaller charities are not. I think that that is of relevance to the wider debate, and I wonder whether the hon. Gentleman has a view on the matter.
Tommy Sheppard
All I can tell you is that it works well in Scotland, and we tend to take the approach “if it ain’t broke, don’t fix it”.
I will make a couple of points on specific aspects of the Bill in a moment, but first I want to welcome the Minister’s general support for the role of charities in our society throughout the country. It is important to recognise, however, that the people involved in charitable organisations are not just there as service providers who deliver things. They are also a valuable source of information and opinion, which can inform many of our social policies, and despite the Minister’s support, the Government may have some bridges to mend with the charitable sector in some areas of social policy. In particular, more than 60 disability organisations and charities have been critical of the Government’s changes to disability benefits. Let us contrast that with the situation in Scotland, where the leading children’s charities have actually praised the Scottish Government for amending some of the regulations.
Turning to the Bill, there are some clauses in which you are bringing the situation into line with that in Scotland. Clause 2 relates to the time limit on the suspension of trustees and clause 8 relates to property. These provisions already apply in Scotland in more or less the same way. I note that in clause 10, which covers the criteria for the disqualification of trustees, you are going a lot further than we have done in Scotland. Our approach would be to let you get on with that and see how it works out—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I gently point out to the hon. Gentleman that he has frequently used the word “you”. Actually, that was quite appropriate in the first part of his speech, because he was in a way addressing the Chair. However, when he is referring to the Government, it is better to say “the Government”, or “the Minister”, rather than “you”, because I will not take the blame.
Tommy Sheppard
I stand corrected, Madam Deputy Speaker. Sometimes I use the word “you” in its Scottish vernacular to imply “one”, but I will try to refer to the Government in the third person.
There are some clauses in which you are bringing the situation into line, and some in which you go further, and it is our intention to wait and see what happens. A review is under way in Scotland, which has in part come about because of the discussions that are taking place in England and Wales.
Our main concern relates to the regulations on the ability of charities to raise money. The Scottish Council for Voluntary Organisations has expressed concern that the high-profile cases in English charities relating to the misuse of funds, and the inappropriate ways of raising funds, will have an effect on charities in Scotland, even though they are not part of the same regulatory framework; they could effectively be tarred with the same brush.
We see no great need to change the funding regulations at the moment. Our charitable fundraising arrangements are essentially self-regulatory, and we would like that to continue. However, a discussion involving the charitable sector is under way in Scotland and we are determined that, whatever happens, we will arrive at an appropriate agreement, in which the charitable sector will be involved. It is a matter of debate whether we continue with self-regulation or whether we see the Government becoming more directly involved. The Ministers here have taken the view that this Government should be more directly involved, and that they wish this House to be the ultimate place to which the regulatory system is accountable. We shall watch the situation with interest, and we wish you very well in your endeavours to improve the regulation of charities in England and Wales.
Maggie Throup (Erewash) (Con)
I am delighted to be able to speak today on this very important Bill, which I believe will protect and strengthen the governance of our charities. Our charities play an extremely important role across our nation, and I believe we are stronger for the extensive work that they carry out. We would be so much poorer as a nation if we did not have our amazing charities. It is the hundreds of thousands of generous volunteers who really make a difference, and 41% of people have reported taking part in volunteering in the last year. That is a massive 21 million people across the UK.
Only three weeks ago, every member of my staff took a day’s holiday and spent it volunteering across the constituency as part of my inaugural Erewash volunteering day. One of my staff volunteered at the homelessness charity, the Canaan Trust—which I will talk more about later—and then went on to help with street collections for Children in Need. Another volunteered at a church food bank, then helped to serve a two-course lunch at the Pavilion luncheon club organised by Community Concern Erewash. She also helped to wash up afterwards, which I thought was very noble of her! A third member of my staff helped at the local hospice and joined the Treetops garden club. The club is very proud that one of its team has just been awarded Hospice UK’s volunteer gardener of the year award.
My senior caseworker spent the day at Direct Help and Advice, based in Ilkeston, which has just been awarded Big Lottery funding. And of course I did some volunteering too. I visited a local church to find out more about its outreach community projects. One of these involved chair-based exercises, which are a lot more energetic than they sound. But that project offered more than just exercise; it offered a chat over a cup of tea at the end of the session, and therefore provided social inclusion as well. My whole team really enjoyed the day, and we have decided to make it an annual event. We are already looking forward to next year’s Erewash volunteering day and to working with even more local charities.
Wendy Morton (Aldridge-Brownhills) (Con)
Does my hon. Friend agree that volunteering and charitable giving are not just about giving, because when we volunteer and give we also gain a great deal from it, often from the experience of getting to know different people?
Maggie Throup
My hon. Friend is completely right, and we both experienced that in our time volunteering in Rwanda as part of the social action there. We thought we were going there to give, but we learned and benefited a great deal from that experience. Whether overseas or in my own constituency, I feel very humble every time I go to see a charity.
During our day spent volunteering, my staff and I met all the charity volunteers, the staff and the trustees. Trustees play a very important role in a charity—in the past, I have been a trustee of two charities. Before being appointed as a trustee, on both occasions I went through a selection process and was put under scrutiny. This is only right, as trustees hold very responsible roles. Sadly, we have heard some bad news stories recently of instances when trustees may not have been quite as scrupulous as they should have been. This should not happen, as it reflects very badly, and undeservedly, on every charity across the board, even those not involved. That is why I support this Bill and its aim to strengthen governance and give more powers to the Charity Commission to remove inappropriate trustees. As my hon. Friend the Member for Congleton (Fiona Bruce) pointed out, regulatory abuse in charities is rare, but it is vital that measures are in place to ensure that the public, and indeed the many charity volunteers, do not lose confidence when such incidents happen.
Another aspect of the Bill is to protect members of the public from unscrupulous and unrelenting fundraisers. Once again, there have been some very disturbing stories in the media recently, which simply end up reflecting badly on every charity, even though so many are not involved in such procedures.
Kevin Foster (Torbay) (Con)
Does my hon. Friend agree that “chugging”, as it is called, also puts people off donating, particularly when they hear about the sorts of fees these people receive for the donations they collect from the public?
Maggie Throup
I completely agree. When we see these people on the streets, we tend to avoid them. I think it affects the local shopkeepers as well, as people get a bit fearful of what they are going to find on their high streets.
It has another effect, too. In their later years, my parents stopped donating to charities when the donations were in any way traceable. This was because after making one donation, they got phone call after phone call trying to persuade them to set up a direct debit. My parents were subjected to just a fraction of the pressure that Olive Cooke suffered, which ended in such a tragedy. With 44% of adults reportedly giving money to charitable causes every month, it is very important that donors feel they can make their donations freely and know that their donations are being spent wisely. This Bill ensures both things.
Of course, our small local charities do not employ third-party professional fundraisers, but have to use their ingenuity to raise their funds. Members will have heard me talk before about the fundraising events organised by my local hospice, Treetops, which provides amazing care in the community. I have awarded prizes at its dog show, which raised money, and taken part in its sponsored bike ride taking in all its charity shops across Derbyshire—and I did that on a tandem. There is always something happening somewhere in Erewash; there is always a charity event going on somewhere.
Only last Saturday I popped along to the Christmas fair organised by the League of Friends of Ilkeston Community Hospital. When I got there I was delighted not just to see Father Christmas but to find that Ilkeston Rotary had a stall there, as I knew from last Christmas that it would be selling locally made Christmas cakes which are very tasty, and which have saved me trying to find the time, rather belatedly, to make one. At the Long Eaton Christmas lights switch-on last Thursday, I was able to win on the Scout’s tombola—every ticket was a winner—and buy some handmade Christmas tree decorations from the Women’s Institute stall. All these make fantastic contributions to my local area, and it is much richer as a result.
I said earlier that I would come back to the Canaan Trust, a Long Eaton-based charity providing much more than just a bed for homeless young men. The social investment part of this Bill will provide the ideal vehicle for this charity, should it wish to provide low-rent accommodation for those young men once they get their lives back on track, and help them move on even further with their lives. As my right hon. Friend the Minister said, social investment is the way of the future, and I am delighted that it forms part of this Bill.
I believe this Bill provides a suitable means of protecting our many charities from unscrupulous behaviour, so maintaining the confidence of the public, the confidence of the many donors, and the confidence of the amazing volunteers as well as those who are employed by the charities. I will want to ensure in Committee that our small local charities will not be penalised in any way as a result of these changes, but I do like the way the Bill provides a mechanism to enable charities to develop social investments that can be of great benefit to those they serve.
I am delighted to have been able to speak in support of this Bill, with my reservation about its potential impact on small charities such as those I have talked about today, and to outline its benefits to the constituents of Erewash.
Susan Elan Jones (Clwyd South) (Lab)
It is a great pleasure to take part in the debate on this Bill. I want to make a few points. I think many people welcome the fact that the Government are taking action to prevent individuals who are unfit to become charity trustees from doing so and are tackling abuse and mismanagement of charities more effectively. However, I have a few questions over some details.
There is widespread agreement across the voluntary sector and among the general public—this very much recognises what the hon. Member for Erewash (Maggie Throup) said—about the problem with predatory fundraising when it is done in an unethical way. It is good that the sector itself is coming forward with the idea of a fundraising preference service. That will be very important.
It is worth bearing in mind, however, that across England and Wales there are 943,000 trustees, and we in this House bear some responsibility for making sure we do not scare them to death with regulation. The bulk of charities in this country are not like Kids Company, which appears to have got away with a remarkable amount. We are talking about people who give up their time to serve on management committees, often when they do not have much time to give up. We do not always do that well in the diversity of trustees. I think the average age is 57, and only about one in 200 is between the ages of 16 and 24, so I would be reluctant to do anything that scares off too many people. However, there is a case for returning to the proposal suggested a few years ago by Lord Hodgson for time limits—for larger charities only; it would be ridiculous for the village hall committee and many smaller management groups. I hope that can be considered during the Bill’s passage.
I have a couple of other small points. Members have already suggested that clause 1 gives the commission an absolute discretion to publish an official warning to a wider audience. However, charities depend heavily on funding and reputational matters, so if there is no real right to appeal against a warning and no minimum notice period, that needs to be looked at.
The issue with clause 11, which centres on the power to disqualify from being a trustee, relates to clarity. We agree in principle that, if there is genuine abuse, it is important that such a power can be used. On clear cases, there is a question about whether the amount of discretion available is too wide; many of us agree that that needs to be defined much more clearly. The hon. Member for Congleton (Fiona Bruce) raised the issue of past behaviour in her extensive speech.
I welcome the Bill. It is part of the consideration of how charities develop in the modern world, but we have to be careful. It is so easy for us to add new regulations that frighten charities, especially smaller charities, from doing their work. Often, charities start off very small. For example, Your Space in Black Park in my constituency started off very small, but it has now become a state-of-the-art charity working with children and young people with autism. Such things often begin from little acorns, but we must not smother the little acorns with too many regulations. I am not sure whether it is possible to smother little acorns, but if it is possible I do not think we should do it.
Although I broadly welcome the Bill, we need to look at some of those details. In the last Parliament, the Government made changes following the Committee stage of the Small Charitable Donations Act 2012. I hope we can debate at a later stage the issues I have raised.
Wendy Morton (Aldridge-Brownhills) (Con)
It is a pleasure and a privilege to take part in this debate. Charities do fantastic work, both nationally and locally, across the breadth of the country. We have heard some fantastic and inspirational examples from my hon. Friends the Members for Erewash (Maggie Throup) and for Congleton (Fiona Bruce), who is no longer in her place, of the work that goes on up and down the country.
In the days when I used to run half-marathons, such as the great north run, rather than just run from my office to this Chamber or to the voting Lobby, I was always particularly impressed by the number of charities represented by runners and the generosity and support of the general public. I was often a little disheartened when somebody wearing fancy dress ran passed me at a much quicker speed, but you can’t have it all ways.
The local charities in my constituency include Rosie’s Helping Hands, which was set up by a couple to help them handle the grief of losing a beloved daughter and to deal with it in a very positive way for our local community. They hold numerous events, including a charitable walk, and the money raised goes into helping children and young people in our local community.
We also have many local branches of some of the big national charities. Our local branch of the Royal British Legion does so much, like every other branch in the country, to raise awareness and funds for an incredibly important charity that supports armed forces veterans. In the village of Pelsall it encourages the whole of the local community to knit poppies in advance of Remembrance Sunday. The red poppies were placed over the clock tower, and the way in which the charity brought the community together and raised funds is another example of why the charitable community is so important.
Maggie Throup
Does my hon. Friend agree that this is partly about fundraising and partly about the feel-good factor created in communities?
Wendy Morton
I could not agree more. Even I got out the knitting needles and learned how to knit again. It was a case of knit one, purl one and then drop several, but I did my bit, as did everybody else. The community came together, worked together and had a bit of fun for an incredibly worthwhile cause.
Small charities often play a huge part in our local communities. They provide something over and above, or in addition to, what the Government or the public sector provide. Those small things often make a big difference to the lives of individuals and their families.
Through my involvement with social action projects over the years, I have been extremely fortunate to get to know many charities, both in the UK and overseas. I have also spent time with other Members on projects working with charities in Rwanda.
As some Members will be aware, a private Member’s Bill of mine is going through this place, to help Great Ormond Street Hospital Children’s Charity. I had the great pleasure of visiting the hospital and seeing some of the fantastic work it does in supporting patients. It is involved in building projects and has a chapel, and it does a huge amount of paediatric research. None of that would be possible without the work of the charity and all the people involved in it.
Sadly, the results of high-profile charity crises can damage trust in charities. It is really important that we do all we can to maintain and strengthen that trust, and the Bill demonstrates the importance of having an effective charity regulator.
I support the Bill because it will provide stronger protection for charities in England and Wales. It will also equip the Charity Commission with new and stronger powers to tackle charity abuse more effectively and efficiently.
Kevin Foster
My hon. Friend is making some strong points in support of the Bill. Does she agree that, in order to keep the flow of funds coming in from the public and from donors, it is vital that abuse is not possible and that the public have confidence that there is a mechanism to tackle it?
Wendy Morton
Absolutely. Trust and confidence are critical. That is why I believe that robust but proportionate action should be taken where serious mismanagement occurs. It is about maintaining and strengthening trust in a vital sector and enabling all charities, both large and small, to continue to do their work.
I have one plea, which is that the Bill needs to ensure that smaller charities are not disproportionately affected by any bureaucracy or too much legislation. It does not matter whether a charity is small or large: charities have so much to give to our country, society and communities, and I will do all I can to ensure that they get the support they deserve.
Robert Jenrick (Newark) (Con)
I welcome the Bill, which is a much needed and sensible Government reform. I am delighted that they have introduced it.
Before entering this place, I practised as a solicitor for several years. I practised corporate governance, among other areas, and over the course of the past year, I think we have all come to realise that the governance of charities is in crisis and it is affecting all charities. The large charities are infecting the small charities, which is why it is so important for this House to act.
As has been said by many Members on both sides of the House, we all support the charities in our constituencies, including those we give to and those of which we are trustees. We want them to thrive and we want public confidence in them to increase, because, undoubtedly, public confidence in charities has been knocked this year. As the head of a charity based in my constituency recently told me, charities are different from many other parts of our society. When large businesses get knocked by scandals, the public turn towards the little guys and confidence in them rises. If there is a horsemeat scandal at Tesco, we all go to our local butchers and sales there start to rise. Charities seem to have the inverse situation. If the big charities get hit by scandals, the little guys suffer as well.
It is essential that we protect the thousands of excellent small charities that we, as Members of Parliament, get to know more than most members of society. It is for them that we must ensure that the larger charities, in particular, have the highest quality of governance. That comes down to trustees. It has been a torrid year in many respects for how the large charities have behaved, whether the scandals have been about the high salaries of chief executives and the management teams of big charities, about the question of politicisation or, above all, about the question of the inappropriate use of fundraising on our high streets. Of course, there has been the tragic case of Olive Cooke.
Kevin Foster
My hon. Friend is making a very strong speech. Does he agree that part of it is about the public having confidence about how much of the pound that they donate ends up going to the good work of the good cause, particularly as with some of the larger charities there have been issues about how much ends up going on overheads and administration?
Robert Jenrick
My hon. Friend makes a strong point. I want to come on to how we can ensure proper financial management of our charities. That cuts in both directions: how they govern themselves and what percentage of their organisation and resources is deployed on central management.
Kids Company has seen the last and perhaps most prominent scandal, which has raised all manner of questions about the governance of our most high-profile and largest charities, particularly their capacity to handle their finances appropriately. I do not want to dwell on Kids Company, which is an outlier, but it has done huge damage to other charities. That is why those who have been at the heart of it and those parts of Government that have worked with Kids Company have to take it seriously. It is damaging all our charities throughout the country. The powers in the Bill to bar ineffective and inappropriate trustees from acting as trustees will be tested if there are Kids Company-type scandals in future.
Nigel Huddleston (Mid Worcestershire) (Con)
Is that not at the heart of the matter? The vast majority of people who work with, volunteer for or have leadership positions in charities across the UK generally do the right thing in their day-to-day activities. Through this Bill and other initiatives, we need to try to get the right balance between governance and allowing them to get on with doing the things that they really want to do.
Robert Jenrick
My hon. Friend makes the point perfectly. It is important to remember that the core activities of our charities are rarely questioned. They are usually performed incredibly well and incredibly sensitively and appropriately. The scandals and disappointments tend to come from the way the operation of our charities occurs. That is why it is incredibly important that trustees play their full role in managing, scrutinising and supporting those organisations, as do directors and non-executive directors of our companies.
The role of a trustee has to be at the heart of it all. The new Bill is important in that regard as the power to bar individuals who are not appropriate to be trustees and who bring charities into disrepute is incredibly important. I would be interested to know from the Minister how many trustees he believes that that would apply to in an average year. Will the difference be marginal, or will it be more significant? As for the question of preventing trustees from moving on, after damaging an organisation, to continue in many others, we all know that many people—many good people—are trustees of several charities and so, inevitably, the bad apples are also involved in many charities. We want to ensure that that involvement cannot continue.
The power to issue warnings to charities is important if the Charity Commission considers their actions to amount to misconduct or mismanagement. Of course, that must be done proportionately and the Charity Commission has not always acted proportionately on a range of other issues, including, as we heard from my hon. Friend the Member for Congleton (Fiona Bruce), the issue of the Plymouth Brethren. Had I been in the House at the time, I would certainly have supported that important campaign.
Many involved in the third sector have expressed concern that the Bill gives the commission the benefit of the doubt, but bearing in mind the importance of raising public trust in our charities, particularly the big ones, it is essential that we have a strong regulator with the tools to act. The Bill provides that.
I have some questions and thoughts for the Minister on the role of trustees. First, it is absolutely essential, as Kids Company showed—this seems a simple and obvious point—that a board of trustees contains the right range of expertise. That is stipulated within the guidance of the Charity Commission but, clearly, it does not always happen. In particular, that must include the right range of financial expertise. When charities reach a certain size, like our larger companies, they qualify to be in the FTSE 250. They are huge organisations and require individuals with genuine financial expertise and knowledge of financial controls so that they can scrutinise the organisation and hold it to account.
Fiona Bruce
I hear what my hon. Friend is saying, but my concern is, as the hon. Member for Clwyd South (Susan Elan Jones) mentioned, possible regulations for larger charities. My concern is how that is defined and that one might bring in the smaller charities. Does my hon. Friend not share my concern about the difficulty in attracting officers of charitable organisations, particularly to the role of treasurer, as my experience shows?
Robert Jenrick
I share that concern. We all know through the other organisations in which we are involved how difficult it can be to find good people, particularly younger people, as has been said, to act as trustees. Incidentally, the charitable sector is a lot more diverse than our corporate sector. About 40% of charitable trustees are women, and that figure is not the same in the corporate sector. It is important that we do not put people off from getting involved. It might be that the time has come when “one size fits all” does not work and that our largest charities, which uphold public trust and confidence in charitable giving more generally and which are very large—we are encouraging charities to merge and get larger—should be subject to far greater scrutiny and a different regime from the small ones that we all know in our constituencies and want to thrive.
Fiona Bruce
My hon. Friend is being very generous in giving way. Perhaps for the very small charities there needs to be some sort of Charity Commission kitemarked course that a would-be trustee can go on to ensure that they have the necessary understanding of the role required.
Robert Jenrick
My hon. Friend comes on to a point that I wanted to make. By the Charity Commission’s own reckoning, knowledge of governance rules and best practice is quite limited among our trustees. I do not blame them—they are busy people who are doing this voluntarily and we want to encourage that—but knowledge is quite limited. The awareness and knowledge of some of the guidance—for instance, CC3, which is “The essential trustee” guide—are quite modest. Surveys that the Charity Commission has put out to trustees of larger and small charities suggest that basic functions of being a trustee are not widely known by our trustees.
Anything that the Charity Commission can do to boost awareness without putting off our trustees is essential. I know that the Charity Commission takes that seriously, because I have spoken to it, but it needs to do something to boost that awareness and support trustees in a way that strikes the right balance between not deterring people and ensuring that they know what they are supposed to do. Some of the reports and surveys are quite scary when it comes to how few trustees understand their responsibilities, particularly as regards finance.
Kevin Foster
My hon. Friend is being extremely generous with his time. Does he agree that it is also important that we ensure that anyone who wants to do the best for their community or to support a good cause does not feel excluded from being a charity trustee merely because they do not have formal qualifications? It is important that the Charity Commission helps to build the skills they need, as I would not want to see trusteeship become a graduates-only zone.
Robert Jenrick
That is very important, but I do return to the theme of some of our biggest charities. They are major organisations dealing with hundreds of millions of pounds of not only the public’s money, through charitable donations, but the taxpayer’s money. I am nervous to dwell on the case of Kids Company, but its trustees had very little relevant expertise. One was a celebrity hairdresser—there is nothing wrong with that, but I do not expect that person necessarily to have expertise in running a major multinational business, as Kids Company had become. It is therefore essential that those organisations step up and have appropriate trustees. I would like this Bill and the Government to push our biggest charities to have those individuals.
I know that charities are now required in their annual return to confirm whether or not they have reviewed their financial controls. Clearly, that important lesson has come out of recent scandals, and such a provision is essential. Anything we can do to beef it up, without deterring the little guys, is essential.
Another issue is that, unlike as happens in companies, most trustees do not meet in mixed board meetings with their management, and so the interplay between the two is often limited. Those trustees who take their role most seriously and work hardest at it no doubt get to know the senior management of their organisation, but others do not and often rely, crucially, on the chief executive, who may be, as we have seen in other scandals, an overbearing founder. Such a person may be incredibly charismatic, powerful and knowledgeable about the organisation, but it is difficult to scrutinise them, stretch them and hold them to account. That is important, and our larger charities have started to have mixed board meetings involving executive and non-executive directors— I use the corporate setting there.
I would like the Government to think about the role of overbearing founders, because it is an incredibly important issue. Anyone involved in the charitable sector sees examples where someone who may be a brilliant individual founds a charity and then it gets out of control, as they become extremely difficult to scrutinise and perhaps the time comes when they should step aside or hand over to somebody else. Perhaps it would be appropriate for these individuals to have term limits, as we might have for a chairman of a public company, where they have to go through a rigorous procedure at the end of a certain term in order to be reappointed.
A number of our charities, even the largest ones, are riddled with conflicts of interest. We see trustees having friends and relatives employed in the organisation, and trustees sometimes getting benefits that are not appropriate. I do not think the Bill particularly deals with that issue, but it does a lot of damage and undermines confidence in the charitable sector.
Lastly, I wonder whether the Minister really believes that the Charity Commission has the capacity to regulate the vast number of charities. We have thousands of charities in this country, some of which are extremely complex organisations, as we have seen. Does the Charity Commission have the resources to do that work? I suspect it does not, a view shared by many in the sector. Some of our most experienced chief executives believe the time has come for some form of beefing up of the Charity Commission through self-funding, whereby the big charities, which are the holders of public trust and confidence, might contribute some money towards ensuring that trust in the wider sector is maintained through a Charity Commission that has the funding required to see that happen.
I know that the Minister wants to speak, so in conclusion, trustees are absolutely essential and those of our biggest charities are letting down the entire sector. Scandals such as what happened at Kids Company matter, because they are harming the small charities, which are the lifeblood of charitable giving. As a Member of Parliament, I have taken huge pleasure in getting to know and working with these charities in my constituency, and I know other Members feel the same. Those who hold those positions in the big organisations need to step up and behave as if they are non-executive directors of large and important organisations, which they are.
Louise Haigh (Sheffield, Heeley) (Lab)
This is my first time at the Dispatch Box responding to a Bill, so may I say that it has been a pleasure listening to learned contributions from hon. Members on both sides of the House? I would have liked a few more hon. Friends to be behind me today, but I assure the House that the fact there are not is not a signal of our disinterest but one of our wholehearted support of the Government’s objectives in the Bill.
This has been an important and helpful debate, and I congratulate all Members who have participated in it and everyone who has been involved in getting the Bill to this place, particularly our colleagues in the other place. We have had a small number of contributions, but fortunately this debate has been defined by its quality, not its quantity.
The hon. Member for Congleton (Fiona Bruce), who brings extensive experience in the sector, spoke about the difficulties in encouraging trustees to charities. She also discussed concerns about giving the Charity Commission the power to judge whether a potential trustee had committed misconduct and about powers to publish a warning notice, risking enormous damage to a potential trustee’s reputation.
The hon. Member for Edinburgh East (Tommy Sheppard) spoke about how the Bill cannot be viewed in a vacuum and should be viewed in the context that charities in our communities are increasingly being asked to do more with less, as the cuts, particularly those to our local authorities, bite further.
The hon. Member for Erewash (Maggie Throup) paid tribute to the many volunteers across her own community who respond to vital need, just as they do across all our communities. All of us will have fantastic charities that fill sadly much-needed demand in our constituencies, but I will not put your patience to the test by listing all the ones in my constituency, Madam Deputy Speaker.
My hon. Friend the Member for Clwyd South (Susan Elan Jones) praised the charitable sector for developing the fundraising preference service, demonstrating the willingness of the sector to tackle issues highlighted by the Bill.
The hon. Member for Aldridge-Brownhills (Wendy Morton) spoke passionately about her experience of volunteering, the impact of small charities in her constituency and her own private Member’s Bill on supporting the renowned, fantastic work done by the Great Ormond Street Hospital Children’s Charity.
The hon. Member for Newark (Robert Jenrick), a fellow former corporate governance practitioner, spoke about how we must ensure that small charities do not pay the price for the mistakes of larger, misbehaving charities. He made reference to Kids Company, whose case has had ripple effects across the whole sector. I am glad that that charity has not dominated our debate today, because, as he said, it is an outlier, at best.
Today's debate has provided a platform to debate the much-needed powers that will allow the Charity Commission to regulate the sector better, but first I wish to echo the feelings of Members on both sides of the House by saying that we know the special role charities play in our constituencies and in the country as a whole. As the Minister for the Cabinet Office and Paymaster General rightly said, “the work charities do transcends politics and unites” this House. Britons donate billions of pounds per year, and very often it is those without a great deal donating what they can to the causes close to their heart or to those in need in the community around them.
Charities are also the vehicle by which many of us can try to make a difference for the communities in which we live. Figures vary, but the latest estimate is that nearly three quarters of us of do some form of volunteering for charities at least once a year. To put it simply, the values and ethos of those nearly 1 million trustees who give their time to make our country a kinder and more interesting place are the best of Britain.
We know, therefore, that charities have a great deal of good will and public support. As my hon. Friend the Member for Redcar (Anna Turley) rightly said in opening for our side, they support our vulnerable and our sick and elderly, and give people the chance to change lives. With that in mind, it is vital that charities and their regulator have the appropriate powers to act in the extremely rare event that misconduct occurs.
As we have heard, deliberate wrongdoing in charities is extremely rare, but it is important that the regulator has the power to take robust action where it does occur. We know that the measures in the Bill to prevent trustees who are not fit to hold the position from serving as trustees are widely supported by both the public and charities themselves—this is simply common sense.
We therefore support Government moves to close the loopholes and strengthen the Charity Commission in this important aspect. As Members across the House will know, the Charity Commission already has a wide range of compliance and enabling powers, but there are underlying weaknesses, including a limit on the commission’s ability to prevent and/or tackle abuse in charities. The powers the Charity Commission did have were not powers that we would expect a modern regulator to hold—they did not go far enough—so we welcome the strengthening of its powers.
In securing these new powers, we will enable the Charity Commission to regulate more effectively. We know that it is of the utmost importance that we are able to find the right balance between having good governance that gives people the confidence to support the sector and ensuring that charities have the freedom to be able to do what they do best—being brave in their determination to build a better society, innovating, responding to the challenge of today and tomorrow, and delivering effectively and with value for money.
As we have heard, the vast majority of charities and trustees act in the interest of their beneficiaries, but the poor governance and unscrupulous fundraising activities of a few undermines confidence in the whole sector. We therefore welcome this Bill, and we very much welcome the new social investment powers and powers to disqualify trustees. But we would not be an effective Opposition if we did not point out areas of room for improvement.
We are disappointed that the Government will seek to overrule the other place by removing clause 9, a vital amendment that protects charities from arbitrary rulings requiring them to dispose of their assets in contravention of their charitable purpose. I hope we can revisit that matter in Committee and that we can do so in the same cross-party manner of this debate.
A number of hon. Members have made good points on fundraising, on the very important protection of minority views, which we in this House should hold so dear, and on ensuring the balance between regulation and enabling charities to do good in their communities. I know that the Minister will have been listening closely to this debate. I hope that we can work together on a cross-party basis to improve this Bill at Committee stage. With that, I can assure the House that we are happy to support this Bill on Second Reading.
The Minister for Civil Society (Mr Rob Wilson)
I thank all hon. Members for their excellent contributions to this debate. Clearly, these issues are very important to them and their constituents. May I add my welcome and congratulations to the hon. Member for Sheffield, Heeley (Louise Haigh) on her first outing at the Dispatch Box? I am sure that it is the first of many.
It is clear that the House has great respect and admiration for the good work currently being done by charities throughout the UK. I also know that hon. Members have much experience and expertise of charities in the voluntary sector, which was demonstrated during some of the speeches today.
There is also a strong desire to protect the privileged position that charities hold in the eyes of the public, as was demonstrated in the latest world giving index, which found Britain to be the most generous nation in Europe. We also have a strong, diverse and growing charity sector. Over the period of the last Parliament, the number of registered charities in England and Wales increased by more than 2,000 to 165,000. Their combined income has grown by more than £10 billion, and is now just short of £70 billion a year.
Before I address the remarks that have been made by hon. Members, let me take the time to echo a point that has been made throughout this debate. The vast majority of charities in this country do excellent work and are run by good, honest and generous people. They wish to help those most in need and make the world a better place. I particularly wish to pay tribute to charity trustees, without whose unpaid efforts there would be no charity sector. For their selfless passion and commitment, they have my respect and sincere thanks. However, their good work is threatened by a small minority who seek to abuse charitable status for their own ends. The Bill will help the independent regulator to take robust action against that small minority. By doing so, it will reinforce public trust and confidence and protect the reputation of charities as a whole.
The powers in the Bill have broad support from the charitable sector and the public. The charity commissioner has been involved throughout the process of developing these proposals. The sector has also been subjected to public consultation and pre-legislative scrutiny, both of which helped inform and refine the proposed powers.
Some have argued that the Bill would give the Charity Commission too much power, or that some of the powers are too broad. In response, I say that the Bill seeks to achieve a balance. The new commission powers need to be broad enough to make them useful. If they are too narrow they would be impractical and go unused or would leave loopholes to be exploited by the unscrupulous. Charities also need to know the circumstances in which the commission will use its powers.
Although this Bill achieves the right balance, I wish to draw the attention of hon. Members to a couple of key safeguards. The Charity Commission is subject to a general duty under section 16 of the Charities Act 2011. That means that the commission must be satisfied that the exercise of any of its powers would be in line with the principles of best regulatory practice, including that it is proportionate, accountable, consistent, transparent and targeted only at cases in which action is needed.
Fiona Bruce
I thank the Minister for drawing our attention to that section. It is a pity that it was not invoked when the whole interpretation of public benefit was being debated, and that the Charity Commission did not refer itself back to it then. My concern is that this Bill could be in force before there is a clear definition of non-violent extremism. The Government’s counter-extremism strategy says that this Bill would give the commission powers to disqualify trustees for wide reasons, including past conduct and a variety of other abuses, such as extremism. In the same strategy, there is also reference to non-violent extremism. Will the Minister address that point?
Mr Wilson
I thank my hon. Friend for her contribution this afternoon and her question. She raises some extremely important issues, with which I intend to deal in full. As she has asked, let me just deal with the public benefit and religion issue first. Religious charities play a hugely important role in our public life. Over 25% of registered charities have a religious purpose and are often working in some of the most hard-to-reach communities. The advancement of religion is one of the oldest charitable purposes, and there is no question but that it is under threat. There are more than 25,000 registered religious charities, almost all of which have no difficulty in demonstrating their public benefit.
My hon. Friend mentioned the Plymouth Brethren in her speech. Its case was an exception, and I am pleased that it was resolved in a sensible way, even though it took too long. I will come back to some of the other issues that she raised later in my comments.
All the proposed commission powers in the Bill have a right of appeal, in most cases to the Charity Tribunal, ensuring that there is independent judicial oversight of the exercise of the commission’s powers. There have also been some questions, notably from my right hon. and learned Friend the Member for Harborough (Sir Edward Garnier), about the rehabilitation of offenders.
The Government believe that individuals with serious convictions should not be able to hold the position of charity trustee and have control over charitable funds and fundraising activities until those convictions are spent or a waiver from disqualification is obtained from the commission. The waiver regime exists to enable disqualified individuals who wish to be a charity trustee to apply to the Charity Commission for their disqualification to be overturned.
A waiver application would be considered on a case-by-case basis, and the Charity Commission would take into account the nature and seriousness of the conduct that had resulted in the conviction and consequential disqualification.
A decision by the Charity Commission not to grant a waiver could be appealed to the Charity Tribunal, which would consider the matter afresh. That strikes me as a fair and proportionate system that on the one hand protects charities from individuals who present a known risk, and on the other hand provides for the rehabilitation of offenders and a way back into charity trusteeship on a case-by-case basis.
People have also raised concerns about the official warning power and the fact that there is no right of appeal to the Charity Tribunal. There is a right of appeal, which is judicial review. That is the same position as now, where the commission publishes its operational compliance case reports on non-inquiry cases that have attracted public interest and that highlight important lessons for charity trustees.
The Bill provides for a period of time to allow representations to be made in relation to an official warning, which the commission would be obliged to consider. There is then the option of judicial review. We consider that proportionate.
A right to appeal an official warning to the tribunal would be disproportionate and could tie the commission up in red tape, rendering the power impractical for its intended purpose. The last thing that we want to do is give the Charity Commission powers that it cannot use, and for which it could be criticised for failing to exercise several years hence. The Joint Committee that undertook pre-legislative scrutiny agreed that, with the appropriate safeguards in the provision, judicial review was the appropriate route for appeals.
Let me turn now to fundraising. I was deeply disappointed to see the extent of poor practices by large charities in relation to their fundraising. That matter was widely exposed by the media earlier this year following the sad death of Olive Cooke. Since then, further damaging cases have come to light, and once again the reputation of charities has been put at risk by the actions of a small minority. Public trust and confidence in charities have not been this low since 2007, and charities now rank 12th in the list of most trusted institutions, below supermarkets and television and radio stations. Only 48% of people said they trusted charities.
In response to the fundraising scandals, we acted swiftly to amend the Bill in the other place to reinforce charity trustees’ responsibilities and accountability for the charity’s fundraising. Clause 14 will encourage charities to exercise greater control and oversight of those who fundraise for their organisation. It will ensure that there are proper processes for dealing with vulnerable people and will generally safeguard the public. Large charities will make this commitment public through their annual reports so that anyone can hold them to account for how they interact with them.
I asked Sir Stuart Etherington to conduct an independent review of how fundraising regulation could be improved to safeguard vulnerable people and better respect the public’s wishes about how and whether they are contacted. He was supported by a cross-party panel of peers. I have since accepted the review’s recommendations in full, and I am now encouraging the sector to move quickly and firmly to show that it gets the public’s anger and concern and is committed to making self-regulation work.
I also expect the sector fully to back the new fundraising regulator, both financially and through compliance with its rulings. In the past few weeks, I have announced that Lord Michael Grade has been recruited as the interim chair of the new body and will oversee the set-up and initial phase of operations. I am confident that he is the right man to lead this important task and that the sector will unite behind him to address these urgent issues and restore public trust in fundraising.
The new regulator will also host the fundraising preference service, a tool that will allow people to opt out of receiving fundraising requests and that will stop charities wasting resources on approaching those who do not wish to hear from them. A working group is currently being set up to establish how the service will work in practice. In addition to a simple reset button, there will no doubt be a few more nuanced options should people wish to opt into certain charities only. Crucially, it will provide everyone with a way to get off charity contact lists they no longer wish to be on.
Charities need to demonstrate that fundraising and its self-regulation can work in the best interests of the public. They will have the chance to do so at a summit tomorrow, when the next steps for implementing better self-regulation will be announced. I hope that this will be a constructive and collaborative meeting where charities show their commitment to the new self-regulator and to meeting the public’s expectations. Should they fail to do so, I stand ready to step in to safeguard the public and their trust in charities.
For that purpose, I will seek to add two reserve powers to the Bill: one to compel charities to sign up to the new regulator and a second to mandate the Charity Commission with regulation should the sector fail to rise to the challenge. I also welcome the commission’s revision of its guidance for charity trustees on fundraising, which it has published today. It reminds trustees of their duties and responsibilities in relation to fundraising, including the need to protect their charity’s reputation and that of the wider sector.
The Bill also provides support to social investment. As many will have seen in the autumn statement, the Government have shown a strong commitment to social investment, having invested £80 million to grow social impact bonds in the UK. For charity investors, the power of social investment enables them to increase their mission impact and sustainability by making investments that provide a financial return as well as furthering the purpose of the charity. Although most charities can make social investments under the current law, it can be complex and costly to do so. The new social investment power for charities in clause 15 was recommended and drafted by the Law Commission to overcome that complexity and reduce the costs of investment for charities. It was widely supported on consultation.
The UK is already recognised as a world leader in social investment, an area in which the Government have taken pioneering action. For example, we have set up Big Society Capital and stimulated the use of social impact bonds to deliver services to some of the most disadvantaged in society through initiatives such as social outcomes funds. With the power of social investment conferred on charities by the Bill, we take another step forward in building a sustainable social investment ecosystem.
I now turn briefly to interventions and speeches. My hon. Friend the Member for South West Wiltshire (Dr Murrison) asked about the transparency of direct debit fundraisers. Professional fundraisers are already required to state how much they are paid for asking the public to donate, but I would be happy to discuss the matter further in Committee. I was delighted by the contribution from the hon. Member for Edinburgh East (Tommy Sheppard), who spoke for the SNP and may well have set a precedent under English votes for English law: he said that the SNP would not be taking part in any other stages of the Bill. I hope that that precedent will now stand.
I thank my hon. Friend the Member for Erewash (Maggie Throup) for an uplifting speech and her comments about her inaugural volunteering day. I hope it sets a precedent for other MPs. It is great to see that that will now become an annual event, and I certainly wish it well. I also thank the hon. Member for Clwyd South (Susan Elan Jones) for supporting the fundraising preference service. For the sake of fundraising in the future, it is important that it works. I also thank my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton), who told us the wonderful story about poppy knitting in one of her villages. It demonstrates the value of civil society and the contribution of charities. She is absolutely right that a small kindness can make a big difference.
For several reasons, legislating for a maximum trustee term does not appeal. The evidence is that 50% of charities are carrying at least one trustee vacancy, and we must be mindful that the role is a voluntary one. My hon. Friend the Member for Erewash mentioned the impact on small charities and made an important point about minimising the burden of regulation, as did the hon. Member for Clwyd South. We are keen to minimise the burden of regulation on small charities. For example, the new reporting requirement on fundraising in clause 14 will apply only to charities with incomes over £1 million, and the new fundraising self-regulator will need to consider exemptions for small charities from the fundraising preference service.
My hon. Friend the Member for Newark (Robert Jenrick) made a strong speech that clearly set out how big charities were causing great concern for some smaller charities. It is certainly our intention to try to protect them. The Opposition raised concerns about campaigning. To be clear, charities cannot engage in party-political campaigning, and where they undertake any other types of campaigning to support their charitable purposes, they must avoid adverse perceptions of their independence and political neutrality. In addition, they must not embark on campaigning to such an extent that it compromises their legal status as a charity. The Charity Commission provides clear guidance, in CC9, about what is permitted. It makes it clear that charity law recognises that non-party political campaigning can be a legitimate activity for charities and sets out the general principles.
A concern was raised about whether the commission should be able to publish official warnings. Charities exist for public benefit and depend on public support, so there should be transparency and publication of official warnings when the regulator considers it necessary to intervene, unless there is a good reason not to publish them. There should always be an opportunity, though, to make representations about the factual accuracy of a statutory warning before it is published, and a process for representations is included in the Bill. Concerns were also raised about the scope of official warnings being too broad. We consider the scope to be right and clear. Under the Bill, a warning can be issued in respect of a breach of a statutory provision, breach of a commission order or direction or breach of a trust or duty.
I will turn briefly to the concerns about extremism raised by my hon. Friend the Member for Congleton (Fiona Bruce). Extremism or the terrorist abuse of charities of any kind is very rare but must be addressed to protect public trust and confidence in charities. Although it may not represent most of the Charity Commission’s compliance work, it represents a serious risk to public trust and confidence. The reforms proposed in the Bill are not specifically focused on counter-terrorism or extremism—they would enable the commission better to tackle all types of abuse of charity—so the Bill does not seek to define extremism, nor should it. Charities and their work can be an important protection against extremism. We have no intention, as I said, of undermining freedom of religion or freedom of speech, and the Bill has been certified as compatible with the European convention on human rights.
Mr Wilson
I am going to finish there as I know that many Members want to get away from the Chamber today.
This Bill is about protecting charities and safeguarding their place in the public’s mind. It is about ensuring that charities will not fundraise in a manner that victimises the most vulnerable in our society, and it is about giving charities a new way to utilise their assets through social investment. Charities rely on the public’s trust and confidence. Abuse, where it happens, must be rooted out. These measures have broad support, as my right hon. Friend the Minister for the Cabinet Office said earlier: 83% of the public and 92% of charities support new powers being introduced for the commission.
Charities play a vital role in our communities and this Bill aims to bolster their position in the public’s trust and help them to continue the good works they have being doing for hundreds of years, continuing our country’s long and rich tradition of charity. On that basis, I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Charities (Protection and Social Investment) Bill [Lords] (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Charities (Protection and Social Investment) Bill [Lords]:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 7 January 2016.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Proceedings on Consideration and up to and including Third Reading
(4) Proceedings on Consideration and proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.
Other proceedings
(7) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed. —(Sarah Newton.)
Question agreed to.
CHARITIES (PROTECTION AND SOCIAL INVESTMENT) BILL [LORDS] (Money)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Charities (Protection and Social Investment) Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided. —(Sarah Newton.)
Question agreed to.
Mental Health: Out-of-Area Placements
(9 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Norman Lamb (North Norfolk) (LD)
It is a great pleasure to be able to raise a very important issue for debate, albeit three hours earlier than expected. It is good to see the Minister for Community and Social Care taking his seat.
I want to raise an issue of profound importance. It is a practice which I think is intolerable but which carries on every week of the year and probably every day of the year: the shunting of people around the country, sometimes a long distance away from home, at a moment of mental health crisis. Typically, someone at a moment of acute crisis would be taken into hospital but there would be no bed available for them, so they would be taken away somewhere else in the country. There are numerous stories of people being taken hundreds of miles away from home on a regular basis.
Such practice would never be tolerated in physical health services. Let us imagine, for example, someone who had had a stroke or with a heart condition being taken by ambulance and being told, “I’m sorry, there’s no room at the local hospital. We’re taking you to Cumbria from Norfolk.” It would be an outrage. It would be regarded as a scandal, so it does not happen—yet it happens every week of the year in mental health. I regard that as discrimination at the heart of our NHS and it is one of the very many examples of how people who suffer from acute mental ill health are disadvantaged by the system.
Incidentally, I make no criticism of any individual Government; this practice always happened, but there has been a rise in the number of instances, which I will come to in a little while. In many ways, someone suffering from mental ill health does not get the same right of access to treatment at a moment of need as someone with a physical health problem. If any of us in the Chamber stopped and thought about it for a moment, we would conclude that we cannot begin to justify that, and that there must be a programme designed to achieve genuine equality of access to support at that moment of need.
Mr Mark Williams (Ceredigion) (LD)
I congratulate my right hon. Friend on securing this debate about an area in which he has done so much work to date. The debate is about out-of-area mental health placements, but does he agree that there is also a huge problem in some of the vast health board areas—in our case in Wales—where rurality is an important factor? For instance, the closure of the Afallon mental health ward in Bronglais hospital in Aberystwyth means that constituents of mine have to travel or be sent 50 miles away—not over the easiest terrain—to the Morlais ward in Carmarthen. There is a huge problem across the country, but there is a great problem in those great geographic areas too. I do not expect my right hon. Friend to comment on the details of the Welsh national health service, but I am sure the problem is replicated in English health areas.
Norman Lamb
I am grateful to my hon. Friend for raising that. He makes an extremely important point. I will come on to address it in more detail later.
There is, for example, evidence of an increased risk of suicide if people are treated a long way from home and family and friends who struggle to visit them. The idea of care close to home is incredibly important in mental health. We should, as far as possible, seek to care for people at home, not take them into hospital unless that is unavoidable. There are times when that is necessary, and as far as possible there should be a place close to home.
Mr Williams
I know that what I am about to ask is not a central point of my right hon. Friend’s debate, but does he agree that one of the unacceptable outcomes has been the increased use of the police and police cells for holding people overnight? That has been the situation in my constituency.
Norman Lamb
That is a shocking practice. I applaud my hon. Friend for the work that he has done on it in his area. The idea of putting someone who is suffering an acute mental illness into a police cell, which is defined in the legislation, unbelievably, as “a place of safety”, is bizarre and ought not to be tolerated. I am pleased that the Government have indicated an intention to legislate, in effect to eradicate the problem completely for under-18s and to make it an exception for adults. We managed to reduce the numbers in England by 50% in the past two years, which was considerable progress, but we need to go much further and bring an end to an unacceptable practice.
It is interesting that where local passion and drive exist, amazing things are possible. In our capital city, London, last year around 20 people in total ended up in a police cell, whereas in Sussex the number was over 400. That demonstrates that with real drive from both police and mental health services, practices can be changed and people’s lives can be made better. My hon. Friend is right to persist with the issue in Wales, just as I have tried to do in England.
Kevin Foster (Torbay) (Con)
I congratulate the right hon. Gentleman on securing the debate and on the work that he has done to bring the issue to the fore. A police cell should be for someone charged with a crime, not for someone who is unwell. Does he agree that to some extent the problem could be overcome with better co-ordination? I had a case in my constituency where a local treatment unit was full so a person was placed in Maidenhead. We then discovered that there was someone from Maidenhead in the local treatment unit in Torbay and arranged a swap.
Norman Lamb
Such a story makes one weep and leaves one feeling that there is a degree of incompetence somewhere. I will come to that point. Much of what I want to see happen can be done by better organisation, rather than by providing more money. I strongly believe that we need more investment in mental health services, but a lot can be done just by organising things much better.
Tom Brake (Carshalton and Wallington) (LD)
Will my right hon. Friend commend the work that South West London and St George’s Mental Health Trust has done with a number of local authorities in the area, including mine? The police work with a nurse, to ensure that if the police are dispatched somewhere where a person has a mental health problem, there is someone who is able to assess them immediately and ensure that they go to a place of safety, as opposed to going to a police cell.
Norman Lamb
Absolutely. My right hon. Friend is talking about something called street triage—I am sure that the Minister is familiar with it—which we introduced in many areas of the country over the past two to three years with a bit of pump-priming grant. Some pioneering areas, such as Leicestershire, just went ahead and introduced it before the national pilots started. The evidence is dramatic. Where we have that collaboration between the police and mental health services, with a nurse embedded in the police team, we achieve amazing results. We completely reduce the number of people being taken in under that legislation, because the nurse can find alternative solutions or provide care at home. Where it is necessary to take somebody to a place of safety, the numbers having to go into police cells falls dramatically. That innovative work was very much part of the crisis care concordat that I pioneered when a Minister, the aim of which was for the first time ever to set standards in mental health crisis care.
Mr Mark Williams
It would be wrong not to acknowledge in my area the Dyfed-Powys police and how the health board has embarked on such an initiative. My right hon. Friend will acknowledge that areas such as mine face the challenge of rurality and making those services available where they are needed. There is still a fear that all too often the need is not met.
Norman Lamb
I agree. My own county of Norfolk, with its widely dispersed rural communities, suffers from the same challenges. Sometimes having a nurse in a car with a couple of police officers does not work in a big rural area. However, we can do other things, like having a nurse embedded in the police operations room so that whenever an issue arises they can speak immediately by telephone or, if necessary, get a resource to the scene. Depending on the geography, there are ways of dealing with those challenges. We need to be much smarter in doing that. I applaud the innovation across the country.
Our whole approach in the crisis care concordat was rather different from the traditional Government approach, which is sort of to impose a straitjacket. The crisis care concordat said, “These are the principles. You come up with your plan for implementing them, working with the police, mental health services and the local authority, in a way that works for your locality.” That generated the most amazing degree of innovation across the country, and real progress has been made. Although I initiated it, I have enormous admiration for the people on the ground who got on and did it. It was inspiring.
Norman Lamb
I will give way, but then I really ought to make some progress.
Tom Brake
I want to return to the point my right hon. Friend started with. We had an issue in Sutton where the mental health facility is based on what had been the Sutton hospital site—it was shut down mainly because Legionnaires’ bacteria were discovered. Patients now have to travel to Springfield hospital. As we see more people being treated at home, which is what we want, and therefore fewer people in acute crisis, how does he deal with the fact that, because hopefully fewer people will need to be treated in specialist centres, there is likely to be a smaller number of them?
Norman Lamb
My right hon. Friend makes a good point. Again, it means that we need to think afresh and innovate. The third sector has been very good at coming up with concepts such as crisis houses, where at quite low cost a facility can be provided in a locality where someone can go at a moment of crisis. They therefore might not need a formal hospital admission, and it might be a much more therapeutic place to be as they get through their crisis. I recently visited the Hertfordshire Partnership NHS Foundation Trust, which, in addition to crisis houses, has host families that someone can go to be with, if that is appropriate, for a week or however long is necessary. That might be exactly what is needed, rather than the cold, clinical environment of a hospital ward. That sort of innovation is what we need in order to ensure that we have services that meet patients’ needs.
I want to share with the House the testimony of a constituent who has experienced an out-of-area placement. It has been anonymised, for obvious reasons, but it is very powerful none the less. It is quite shocking. It reads as follows:
“I was admitted to accident and emergency at Norfolk and Norwich Hospital on a Wednesday afternoon, following a suicide attempt. I regained consciousness the following day, having been transferred to the Acute Medical Unit, and it was quickly decided that I needed to be admitted to a mental health ward.
I had previously been on Glaven Ward at Hellesdon.”
That is the mental health hospital in Norwich. My constituents continues:
“At this point I was very woozy, suffering from a dangerously low mood, and angry that my suicide attempt had failed. I was at grave risk of making another attempt on my life. Throughout the Thursday and Friday efforts were made to find a mental health bed.”
That is what happens in the system.
“My parents were frantically trying to find out what was happening, as they were desperate for me to be looked after locally. For a time we were told that I would be going back to Glaven Ward at Hellesdon, but the news kept changing between there and a unit in London.”
London is between 120 and 130 miles away from Norwich, and further away from my constituent’s home.
“I was expecting to go to Hellesdon on Friday morning, but we were then told later that day that I would be going to south London. During the Friday, I twice walked off the ward and out of the hospital, without my absence being noticed, and went down to the Watton Road”—
which is near the hospital—
“with the intention of walking in front of a bus or a lorry. The main reason I didn’t go through with it was that I did not want the vehicle to swerve into an oncoming car and cause death or injury to someone else.
Meanwhile, my parents resorted to contacting the crisis team, as they could not get any information from the bed team. A member of the crisis team took responsibility for finding out what was happening and he was able to let me and my parents know that I would be transported to south London later that Friday evening.
Finally, after more uncertainty”—
this is really shocking—
“two men arrived to take me to London. At 10 pm, feeling suicidal, frightened and confused, I got into the back of a private ambulance (which was no more than a pretty austere minibus) and was driven away from the Norfolk and Norwich Hospital. Throughout the three-hour drive, I was spoken to just once by one of the two men, and felt more like a prisoner being transported than a patient.”
That is the way our NHS deals with someone who is acutely ill. It is really shocking. It ought not to be accepted. My constituent went on:
“At 1 am, by now completely disorientated, I arrived at the front door of the mental health unit in south London. After lots of knocking at the door, someone answered, and I was handed over with a quick ‘good luck’. I was booked in and shown to my room. I felt isolated and scared. My room was nice, but the unit felt like a prison. The internal doors were like cell doors, and there was a tiny outdoor area, fringed by a high fence with spikes on the top. It was a mixed ward, both in terms of sex and in terms of illness: people with depression and anxiety were alongside those with psychosis, personality disorders and acute problems.”
It is really shocking that a whole load of people with completely different conditions were thrown together like that. It is probably the least therapeutic environment imaginable. That is about containing people, not caring for them, and it ought to be a thing of the past.
Mr Henry Bellingham (North West Norfolk) (Con)
I had a similar case in King’s Lynn, although I cannot go into it because it ended in tragedy, with the individual committing suicide, having previously made an attempt. Does the right hon. Gentleman agree that it is absolutely essential in such cases that there is proper monitoring and supervision of the individual, whose life is obviously at risk during such an episode?
Norman Lamb
It is absolutely critical that that happens —not only monitoring but proper treatment. As I will go on to describe, that is not what happened in this case.
The constituent continues:
“The following morning, I had a meeting with my named nurse. Extraordinarily, it was the only real conversation I had with him until I was discharged back to Norfolk 10 days later.”
That is not therapeutic care—it is neglect. I have asked whether there are any contractual requirements on the private provider who provided that “care” and received a substantial sum of money for it. I have been told that it was understood that there would be therapeutic care but no apparent requirement that that should be undertaken in return for a substantial amount of public money being spent on his care. He goes on:
“The care was unacceptable. It felt as though I was being kept in a holding facility, and my mental health deteriorated, with my suicidal thoughts increasing. In stark contrast to Glaven at Hellesdon, the staff were holed up in an office with a heavy steel door that you couldn’t see into. I was being checked up on every 15 minutes, as I was a suicide risk.
But I rarely had a conversation with a member of staff. My parents came down from Norfolk twice to see me, and were horrified by what they encountered—both the level of care and my deterioration. They were constantly contacting Norfolk and Suffolk mental health trust to try to get me moved back to Hellesdon. The stress made them both ill.”
That shows the impact there is on families as well. He continues:
“Thankfully their persistence paid off, and after 10 days, I was told that I was going to be recalled. I had a brief period of uncertainty, as I didn’t know whether I would be going to Hellesdon, King’s Lynn or Great Yarmouth.
Eventually, I was told it would be Glaven at Hellesdon, and I got into a taxi with a member of staff and was driven from south London to Glaven Ward.
When I arrived there, I cried, mainly through relief. I was greeted with compassion and understanding by the staff, and—after 10 wasted and expensive days—my recovery finally began.”
That experience, sadly, is repeated day in, day out across the NHS. It is a scandal that it continues. One of the things I will put to the Minister when I conclude is that I want his commitment to end this practice, because it is intolerable that it continues in this day and age.
I mentioned cost. An analysis has been done by the national confidential inquiry into suicide and homicide by people with mental illness, which, having looked at 29 providers, says that the cost of out-of-area placements went up from £51.4 million to £65.2 million in 2014-15. That is an extraordinary amount of money to spend on an unacceptable practice, demonstrating that with smarter use of the resources available it should be possible to bring that practice an end.
The national confidential inquiry also found that being treated out of area increases someone’s risk of suicide. The pattern is most apparent in England, where suicides by in-patients and patients recently discharged from hospital have fallen, although suicides following discharge from an out-of-area ward have increased. The annual number of suicides after discharge from a non-local unit has increased from 68 in 2003-07 to 109 in 2008-12. Experts have warned that mental health patients are at the highest risk of taking their own lives in the first two weeks after being discharged from hospital, and these figures confirm that. When we are talking about a risk of people actually losing their lives, surely we have to see the absolute importance of bringing this practice to an end.
I want to refer to a recent report by the Independent Mental Health Services Alliance called “Breaking Down Barriers: Improving patient access and outcomes in mental health”. It says that we must prioritise something that I have argued for consistently—the introduction of comprehensive waiting time standards in mental health so that someone with a mental health problem has exactly the same right of access to treatment as anyone else. It also says that people who end up in an out-of-area placement, sometimes a long way from home, get “lost in the system”; they are almost forgotten about. They are away from the commissioners and the normal provider, and they can sometimes languish in these centres for far too long. That, again, is completely intolerable.
The report also refers to the problem of delayed discharge. It says:
“We have found that between 2013/14 and 2014/15, the average number of days of delayed discharge per month for trusts providing mental health services increased by 22.2 per cent. This indicates that delayed discharges are having an increased impact on patients’ access to appropriate care.”
In other words, if beds are clogged up by people who are ready to leave and go home or to go to another facility, but they cannot because nothing else is arranged for them, then someone else at a moment of crisis cannot get access to a bed and is shunted off, sometimes to a place a long way from home. That is a completely unacceptable practice.
The report refers to children and young people’s mental health services. The Minister will be particularly aware of the acute concern about children being shunted off, often to places hundreds of miles away from home—an intolerable practice. I know that that has happened in the south-west, where there has been a particular shortage of beds for children. A team within NHS England undertook an inquiry that came up with recommendations for eradicating that problem. The taskforce’s report, “Future In Mind”, which we published shortly before the general election, pointed to the absolute need to care for people close to home and to have better crisis support to avoid admissions where possible. Yet the practice continues, and it must be a priority for the Minister to bring it to an end.
One of the things that “Future In Mind” sought to address is the perverse incentive that exists in the system with the awful tiering of care within children’s mental health services. If a child is put into tier 4 from tier 3 because it is judged that they need more acute in-patient care, then the financial responsibility for their care is transferred to NHS England. There is therefore an incentive for local commissioners to push them into the top tier, which is precisely the opposite of what ought to be happening. We ought to be focusing our incentives on preventing deterioration of health, not shunting people into the most acute care, too often away from home. Imagine what it must be like for the parents of, say, a 14-year-old child who is taken to a unit 100 miles or 200 miles away from home. It is really shocking, and I hope that the Government will feel the need to commit to eradicating that practice as quickly as possible.
When the issue came to my attention as a Minister, I asked my officials to provide me with data to find out what was happening around the country. I was confronted by freedom of information requests by campaigning organisations and by news reports of shocking things that were happening in the system, but I had no information on which to base my own judgment. I was told by the officials that they did not collect data on the issue. The Government are operating in a complete fog, and we have to rely on campaigning organisations to make inquiries under the Freedom of Information Act 2000.
Incidentally, I urge the Minister to use what powers of persuasion he has to argue against undermining the Freedom of Information Act. At the moment, a process is under way that runs the risk of doing precisely that. It seems to me that freedom of information is a really important way of holding the Government to account.
I was faced with having no information or data on that practice, so we initiated a process to collect such data. We have now collected those data. They are still in experimental form, but they are better than nothing. The data show that there is extraordinary variation around the country. That brings me back to the point that this is about not just extra money, but good practice. It is about learning from areas of best practice. We now discover that many mental health trusts have no out-of-area placements, but they are funded in broadly the same way as those in areas that have a persistent and unacceptable problem.
There is a three-month delay before the data are published, so the latest data are those from the end of August, but 2,198 people were in out-of-area placements at that time. We are not entirely clear about whether the drift upwards is caused by the collection of more data or by a worsening of the problem. I do not want to draw the wrong conclusion from the numbers, but they certainly do not appear to be going down.
I want to raise with the Minister the issue that the data are incomplete because some private providers refuse to return data. Under their contractual dealings with the NHS, they are obliged to return those data. When I was a Minister, I raised that matter with officials and with the information centre. Surely, it is completely unacceptable. I have no difficulty with a good private provider providing a good service, but they must absolutely play by the same rules as everybody else.
Tom Brake
To return to my right hon. Friend’s earlier point about freedom of information—in fact, there is a case for extending it—is it not right to ensure that private companies doing public work are covered by FOI in exactly the same way? That applies to the health sector, as well as to many other sectors.
Norman Lamb
I agree. There should be a level playing field, which there is not at present. We now have the unacceptable situation that data are incomplete because some private providers refuse to play ball. That leaves one suspicious, because if they do not provide data about how many people are held, it is impossible to hold the system to account or, indeed, to hold such private providers to account. The Minister must find a way to hold those providers to account and to ensure that they return the data they are obliged to provide.
A horrific number of people are still sent a considerable distance away from home. In August, 501 people were sent more than 50 km away from home. Surely that practice is intolerable, given what I have said about the increased risk of suicide, the fact that it does not provide therapeutic care and that it can lead to someone being confined for 10 days at enormous cost to the public purse. It seems to me that this is the most outrageous misuse of public money.
There are areas where that problem is persistently at its greatest. In August, the Devon Partnership NHS Trust had 45 people in out-of-area placements. The caveat is that we do not know precisely where responsibility lies, and whether this is a commissioning or a provider issue. However, that is the local provider, and one would normally expect such people to be in a bed provided by the local provider. The figure of 45 people means that significantly more than one person a day is shunted more than 50 km away from home, which is outrageous.
Mr Bellingham
Has any analysis been done of whether the families have been contacted in such cases? It is incredibly important that one strand of support for these patients is through their families. What percentage of cases involve families being informed, having given permission for the patient to be moved?
Norman Lamb
We do not have that information—the data are very basic—but that matter is crucial. I imagine that communications often fall down when urgent referrals to another location take place.
I would raise another issue about families. If they have to visit a loved one 50 km or 100 km from home, just imagine the cost involved. Members in the Chamber— any of us could be in this situation—can afford to visit a loved one, but many people cannot do so. That is another reason why the situation is intolerable.
Kevin Foster
It is very interesting to hear the right hon. Gentleman’s statistics on my own area of Devon. It is important to get to grips with the issue for the reasons he has mentioned. He raised the point about communications in the example of the expensive round trip from Devon to Maidenhead. In many cases, families may know where their loved one will go, but the reality is they are presented with a choice: “Your loved one needs treatment—this is where it’s going to be. There is not much you can do, other than trying to mitigate all the impacts in the best way you can.”
Norman Lamb
Such a situation leaves the family feeling desperate, guilty that they can do nothing to help their child or loved one, and powerless to do anything. That is similar to the case of Josh Wills, a little boy with autism, who lives in Cornwall. He was placed in a specialist unit in Birmingham, so we can imagine the journey his parents had to make every week. He was there for more than three years, and when I was the Minister, I had to intervene personally to get the commissioners to London to try to sort out the case. Josh is now back in Cornwall, but it took far too long for that to happen. Such cases must put families under intolerable pressure and strain.
I should mention the areas where the problem is at its worst. In the Lancashire Care NHS Foundation Trust, there were 30 cases in August. Again, that is one a day. In the Kent and Medway NHS and Social Care Partnership Trust the figure was 30, in West London Mental Health NHS Trust it was 25 and in Birmingham and Solihull Mental Health NHS Foundation Trust it was 25. Again, there is the caveat that we do not know where the responsibility lies, but we should all accept that the practice is not acceptable and has to be brought to an end.
The data focus on non-specialist beds. There will be cases, just as with physical health problems, where a patient needs specialist input and where a referral to a specialist hospital, such as Papworth in the case of a heart condition, is appropriate. However, non-specialist beds and services should surely be provided closer to home. So we got these data together and they now allow us to hold the system to account. As well as establishing the dataset, we got Monitor and the Trust Development Authority to do, to use the jargon, deep dives into a number of organisations, both good organisations and those with a bad record of out-of-area placements, to get a better understanding of what was going on. When they reported back to me, their conclusion was that this problem ought to be solvable.
That is the important point for the Minister. It is not that this problem is something we would all love to solve but find it impossible to do. It is achievable, but it requires drive, ambition and determination to see it through. If I may, as an ex-Minister, I will offer a bit of advice to the incumbent. It is no good saying that we need to make incremental progress to reduce the numbers. We need to establish the principle that this practice is not acceptable. Someone in a mental health crisis who does not require specialist care should not be sent away from home, full stop. This is not a difficult issue. It should become what in the NHS is known as a “never event”—it should never happen. If we know that there is a link between this practice and an increased risk of suicide, how can we tolerate it?
The Minister has to set the objective of ending this practice. I understand that it will take time. Back in March, I wanted to see it end by the end of this calendar year. I recognise that that is now not achievable, but I set the objective of ending it within 12 months. That is achievable, provided that there is drive, ambition and purpose to make it happen.
A related issue is that of money. I have made it clear that I totally sign up to the importance of doing things differently and making better use of resources to achieve good results for people. However, investment is needed in mental health. In the negotiations in the run-up to the March Budget, my right hon. Friend the Member for Sheffield, Hallam (Mr Clegg) secured £1.25 billion of extra investment in children and young people’s mental health services for the five-year period of this Parliament. In year 1, the amount that ought to have arrived on an equitable division of that £1.25 billion was £250 million. The amount that was made available was £143 million, which means there is a shortfall.
We were told that that was because we were part way through the year, we had had the general election and we needed to make sure that the money was spent effectively. I sort of accepted that explanation, but I have since heard from reliable sources that there was a land grab going on and that money was taken away from children and young people’s mental health services to prop up the finances of acute hospitals, for example. I urge the Government to make good the shortfall in future years.
On 13 October, the Minister helpfully reconfirmed that the full £1.25 billion would be spent in this Parliament. I call on him to repeat that commitment today. It is critical that the extra investment that was confirmed in the Budget in March is stuck to. It is a matter of good faith by the Government and I would like to hear that confirmation. I also think, incidentally, that we should make good the shortfall in year 2 because, just as with the rest of the NHS, frontloading the money to invest in change is the best way to use the resources that are available.
I will move towards the end of my contribution, which has been rather elongated owing to the additional time that is available. I will end by asking specific questions of the Minister. I would be grateful if he addressed each of them directly this afternoon. If he is unable answer any of those questions directly, I would be grateful if he wrote to me as soon as possible and responded to them directly.
First is the issue of principle. Does the Minister accept that this practice is intolerable? I am not talking about specialist beds; I am talking about non-specialist beds where someone at a moment of mental health crisis, or in other circumstances, is shunted around the country—a practice that would never be tolerated in physical health. Secondly, will he commit to ending that practice completely within 12 months, and effectively to make it a “never event”? Thirdly, will he personally drive that change, because I know from experience that that is necessary? He needs to be on the case constantly to ensure that the system responds to that moral imperative.
Fourthly, will he ensure that all providers provide the data that their contracts oblige them to provide to the information centre? Anything short of that is completely unacceptable. The data are still in experimental form, and information centre notes state that they provide a “reference point” for a more accurate measurement in the future. There must therefore be an evolution to get to a point where data around the country are completely accurate, so that providers and commissioners can be held to account. Will the Minister commit to ensuring that the experimental data are turned into final-form data that we can all rely on?
Finally, will the Minister reconfirm his total and absolute commitment to ensuring that £1.25 billion of additional investment is spent on children and young people’s mental health services this Parliament? Will he commit to sticking with the vision that we published in October last year and to introduce comprehensive maximum waiting time standards? I did that work—which led to the publication of that document—in collaboration with the Secretary of State, and he was incredibly helpful in supporting me to get that published. The vision was clear, and it recognised that until we have comprehensive waiting time standards for mental health, just as exist for physical health, we will not get equality of access to treatment. An essential principle in a publicly funded service is that all people must have the same right to receive evidence-based treatment on a timely basis. As I have said, will the Minister write to confirm any specific point that he feels unable to deal with this afternoon?
The Minister for Community and Social Care (Alistair Burt)
We have been fortunate in having rather longer than we normally get for an Adjournment debate, and that has allowed the right hon. Gentleman to speak at greater length about some of the issues affecting the historical imbalance between mental and physical health, with particular emphasis on out-of-area mental health placements. I congratulate him on securing this debate, and I am delighted to respond to it.
I thank other hon. Members who have contributed to this debate, including the hon. Member for Ceredigion (Mr Williams), the right hon. Member for Carshalton and Wallington (Tom Brake), and my hon. Friends the Members for Torbay (Kevin Foster), and for North West Norfolk (Mr Bellingham). My hon. Friend the Member for Halesowen and Rowley Regis (James Morris), who chairs the all-party group on mental health, has dropped in as part of his responsibilities in the House, which I welcome. I also welcome the Whip, my hon. Friend the Member for Truro and Falmouth (Sarah Newton).
Before I come on to respond in more detail, let me make one or two general remarks. The right hon. Gentleman referred right at the beginning to the long-standing nature of some of these problems. These issues have not arisen in the past six months. They have been here—Government in, Government out—for some time. The coalition Government made huge strides in recognising the importance of mental health and drove forward some of the changes that needed to be made. It is certainly clear that part of my responsibilities now is to pick up on that and to build on it.
If I may just make reference to the right hon. Gentleman for a moment, I think his key achievements include: the expansion of psychological therapies; the reduction in the use of police cells for people experiencing a mental health crisis; introducing the first access and waiting time standards; and piloting the sense that there has to be parity of esteem. Those achievements absolutely underpinned what I came in to find in the Department. The intractable nature—or at least intractable up to now—of some of the problems has been graphically illustrated by the right hon. Gentleman’s passionate expression today of some of the things he was not able to do during his time as Minister. They set the baseline for what I hope to do. He asked for a personal commitment to drive forward the changes. Absolutely. The bar has been set quite high.
As the right hon. Gentleman and others have mentioned, what has puzzled me most since being in office is the variability of practice. How is it that in two areas side by side with exactly the same resources there will be one that has a set of procedures in place to ensure that good treatment is provided, while in another that is not the case? It is not always about resources, but management and leadership. I have been puzzled by why there is so much variability.
There is another puzzle that is very pertinent to what we are talking about today and to which the right hon. Gentleman referred: the perverse incentives in the system. Treatment costs are split between local authorities and the NHS. They seem to be based not on what is in the best interests of the patient, but on what suits the budget best. Now, none of us are naive. We all know this goes on. However, his description of the letter from his constituent, which I know about because I responded to him about it this week, illustrates the impact on the individual of decisions that people make for perverse incentive reasons—perhaps relating to budget, if that was one of the reasons. I am interested, as he is, in why there is such variability between areas. Some areas seem to have very few out-of-area places and others do not.
I hope to be able to deal with all the right hon. Gentleman’s questions, but before I do I want to put a few points on the record. The Government’s commitment is clear. We have given the NHS more money than ever before for mental health, with an increase to £11.7 billion last year. We have made it clear that local NHS services must follow our lead by increasing the amount they spend on mental health and making sure beds are always available. In the spending review and autumn statement, we announced an additional £600 million for mental health over the next five years to increase psychological therapies, crisis care and perinatal mental health. This reaffirms our commitment to achieving parity of esteem for mental and physical health.
In perinatal mental health services, for example, I want to ensure that women are able to access the right care at the right time, and close to home. I know that provision of specialist perinatal mental health services varies across the country. Some women have access to excellent care and support, while there are serious gaps in provision in other areas. Women suffering the most severe and complex perinatal mental illnesses need access to specialist in-patient mother and baby units, and good quality community support care in the area where they live. There are currently 15 units in England—I understand that the number fell by a couple from between 2010 and 2015—but NICE estimates there is a UK shortfall of between 60 to 80 mother and baby unit beds. That is why we announced in the March Budget that the Government would invest an additional £75 million over the next five years, £15 million a year, to support women suffering from mental ill health in the perinatal period. NHS England is leading a work programme to ensure that this extra money is spent in the right way at the right time and in the right places. The right hon. Gentleman’s work has made that base. I give him as much assurance as I can that in the areas where he set the work in progress, that work is going to continue; in places where the work is going slowly, it will be challenged; and in places where he was not able to make the progress he wanted to make, I set myself the challenge to do just that. I do not have to worry an awful lot about freedom of information requests because I will get the questions from him and from a number of hon. Friends and colleagues who have grasped how important this issue is.
Let me return to the source of the debate. I greatly appreciate the work that the right hon. Gentleman put in train earlier in the year with NHS England and mental health provider organisations to understand the pressures that lead to people being sent away from home for treatment that should be available locally. This has helped to provide a picture of the scale of the problem and to raise its profile. We know that the principle should always be for care close to home in the least restrictive setting. It is not acceptable for people to be travelling for miles when they are acutely unwell.
I know about the case that the right hon. Gentleman raised because I dealt with it this week, and I agree with him that some of the attitudes expressed by some of those responsible for people’s care are just not good enough. It cannot be acceptable and it cannot have been acceptable to listen too little to those who are in care or who are being cared for when they have made complaints about treatment. I am well aware of the problem—I am occasionally chased on Twitter about it—and I say to one or two of the groups that I am looking carefully at how to deal with it better. Sometimes people feel that they have not been listened to, and I suspect that the sort of example revealed in the right hon. Gentleman’s constituent’s letter might be rather more common than we think. Accordingly, I want to ensure that the inspection and regulation regime really picks things up. I know that there will sometimes be differences in opinion and that things will need to be clarified, but I do worry about the attitudes sometimes expressed, and I want to make sure that the Department has really got hold of ensuring that those sort of complaints are picked up and, whenever possible, really burrowed into to find out what might have gone on.
Norman Lamb
I appreciate the Minister’s reassurance. One of the issues highlighted in my constituent’s case was the fact that he was transported very late at night, arriving at about 1 am, and there was another person from Norfolk in the same unit that same week who was collected at 1 am from the unit to be brought back to Norfolk. This treats people like chattel; it does not treat them as human beings. Is the Minister prepared to highlight to the Care Quality Commission that it should investigate and explore that particular aspect—the transporting of people—because having to travel in a minibus with someone who does not talk to them for three hours, and arriving very late at night is simply outrageous?
Alistair Burt
Of course it is, and I share the right hon. Gentleman’s frustration. I write a lot of letters to colleagues who express concerns and I have to signpost them to the other organisations in the health sector that have responsibility for taking particular decisions. That is quite right, because local decisions ought to be local. Clinical commissioning groups or trusts need to be responsible and accountable for what they are doing. However, I have to tell the right hon. Gentleman that it is occasionally frustrating when I feel that I cannot pick up the phone and make my own inquiry. We cannot run a system in which Ministers arbitrarily pick up cases because they are the ones we know about; there has to be a structured system. When particular things come to light, I am looking at how to use my position and the authority of the Department to make sure that something has been properly gone into—even if it is somebody else’s statutory responsibility. We in this House who remain accountable for things should be able to make sure that those statutory groups, including the CCGs, have really got a grip. I am keen to pursue that.
Mr Bellingham
Does the Minister agree that there is something fundamentally unsatisfactory—and, indeed, wrong—about moving someone late at night unless it is absolutely necessary for medical and clinical reasons?
Alistair Burt
Yes. It seems very puzzling that that should be a regular practice, if it is. That should not be the case. Of course there are all sorts of different pressures on the system, and it would probably not be appropriate to say that it should never happen, but, in principle, people who are in a state of anxiety should be moved with the maximum care, at the time that is of greatest benefit to them and their health needs.
As I was saying, it is not acceptable for people to be travelling for miles when they are acutely unwell. It is also not acceptable for staff to be spending time phoning around to find beds for their patients.
Let me return briefly to the impact of social media. A couple of weeks ago, I read in a tweet from a frustrated doctor—I hope he will pick up on today’s debate—that on that particular day no bed had been available for a woman anywhere in England. Along with the hon. Member for Liverpool, Wavertree (Luciana Berger), who had raised the matter with me, I made inquiries and found that that was not technically true; beds were available. The response from the doctor was, “You may be technically correct, Minister, but it is very difficult to find them”, and the results of my inquiries suggest that that is true. We need to establish a better system of identifying beds that may be available, because that too is part of the problem. People should not be spending time looking for beds. I have an idea about that, which I shall mention later in my speech.
I had to tell the clinician that I did not think that, technically, what he had said was true. However, I recognise that for those who are in the business of finding beds for people, it should not be as difficult as it appears to be, and I want to establish what we can do to help.
We know that the need to place people out of area, away from home, family, friends and networks, is a “warning sign” of a mental health system that is under pressure, and we know that no one wants to spend scarce resources on sending people out of area. However, we cannot look at out-of-area treatments in isolation, because they are part of the mental health acute care pathway as a whole. I welcome the interim report of Nigel Crisp’s commission, which was set up to review the provision of acute in-patient psychiatric care for adults, and I look forward to reading his final report and recommendations early in the new year.
Lord Crisp’s interim report made it clear that—as I am sure the right hon. Member for North Norfolk knows—the situation is more complex than a shortage of beds. We know that there has been a long-term reduction in the number of psychiatric beds in England, but the report suggests that in many areas there would be enough beds if improvements were made to other parts of the system and integrated, community-based services were commissioned. That very point has been made this afternoon in relation to the variability of practice. The report also made it clear that the so-called bed crisis, or admissions crisis, is a problem of discharges and alternatives to admission, and can be dealt with only through changes in services and in the management of the whole system.
As the right hon. Gentleman pointed out, that can be done, as has been demonstrated in a number of local areas. Sheffield, for example, has almost entirely eliminated adult acute out-of-area treatments, and has reduced average bed occupancy to 75% by redesigning the local system, That has included investing in intensive community treatment, and working in partnership with housing. In the right hon. Gentleman’s own constituency, Norfolk and Suffolk NHS Foundation Trust has begun to reduce its historical problem of out-of-area treatments through a combination of investing in more acute adult beds and working with commissioners to develop community and crisis resolution services.
I understand that the independent Mental Health Taskforce has spent some time discussing these issues. I hope that its report, which will be published in the new year, will be an important driver for improving mental health services over the next five years, and will address many of the key issues raised in Lord Crisp’s interim report.
Norman Lamb
Can the Minister confirm the likely publication date of the taskforce’s report? I think he said it would be in the new year, but can he give me his best estimate of a specific date? Also, I would like to acknowledge that the Norfolk and Suffolk NHS Foundation Trust has made real progress. The number of people being sent out of area has come down significantly, and that needs to be recognised.
Alistair Burt
I am grateful for the right hon. Gentleman’s comment about his trust. My understanding is that the taskforce’s report will come through very shortly. I am not sure whether it will be done this month or by the start of next month, but it is imminent.
I appreciated the right hon. Gentleman’s kind remarks about the Secretary of State for Health. The Secretary of State has already agreed an action plan to tackle out-of-area treatments for adult acute in-patient care. Where out-of-area treatments are a problem, local areas will be asked to put in place clear action plans demonstrating how they can reduce out-of-area treatments, in the best interests of patients, during the course of 2016-17. Now I come to one of the right hon. Gentleman’s challenges. Building on this, I intend to go further and put in place a national ambition to address out-of-area treatments. I will do this in consideration of the Crisp commission and the taskforce report, and I will communicate details of this ambition by the end of March 2016—that is, by the start of the next financial year.
I want to wait and see what Lord Crisp and the Mental Health Taskforce say and then consider exactly what the ambition should be. Should it be an ambition for complete elimination? Should it provide a much tighter variation? I want to see those reports before I set the ambition, but I will set it, and the targets, and come back to the right hon. Gentleman and the House before the end of March next year to communicate those decisions. I hope that helps.
I also commend the right hon. Gentleman for recognising the need to improve mental health crisis care and for launching the mental health crisis care concordat, which we have discussed today. This debate has given us an opportunity to talk about variation in practice, the quality of street triage and the fact that we can do different things in different areas. I saw the work being done in Bradford, for example, where the mental health practitioner is located in the control room, as opposed to being on the street. The galvanising of local groups to work together by giving them the responsibility of doing the job has been absolutely vital. The way in which we are reducing the number of people detained in police cells is a clear example of how that process is working.
The Government are equally committed to reducing out-of-area mental health treatment for children and young people. In-patient child and adolescent mental health services—CAMHS—admission is a relative rare event. At any one time, however, there are approximately 1,300 children and young people from England in CAMHS in-patient services. Services themselves are usually subdivided into different specialties, such as eating disorder units or low secure units. That means that it is highly challenging to provide complex care in all areas, and on occasion, some children and young people may need to be referred for specialist treatment at a distance from their home, if that is in the best interests of their care. However, we are committed to ensuring that that is as rare an event as possible, and much progress has already been made.
Norman Lamb
One of the recommendations from the taskforce that NHS England established to look at tier 4 services, at the number of beds required across the system and at the variability of the services was that treatment should always be contained within a region —in other words, that no child who lives in the south-west should ever go out of the south-west for treatment. I cannot remember where the child from Torbay had to go—
Norman Lamb
Indeed. Is the Minister going to stick to that? Is he going to ensure that that is the objective, and will he monitor it to ensure that he meets it?
Alistair Burt
As much as possible, absolutely, yes. There will be occasions when very specialised treatment has to be given, and that will on occasion be outside the area. But apart from that, absolutely. We want to provide care that is appropriate to people in a place that is closest to where they are, as much as possible.
In 2014, NHS England published the tier 4 CAMHS review. This found a relative shortages of beds in some regions, meaning that some children and young people had to travel long distances to access a bed, owing to an uneven distribution around the country. As the right hon. Gentleman knows, there was an immediate response to this: £7 million in additional funding, taking the total number of beds now to 1,440, the highest number there has ever been. In addition, NHS England has introduced new national protocols for referrals and discharge, and a new “live” bed monitoring system to make the best use of existing capacity. I am interested in whether that capacity has reference and relevance to the adult acute beds, and could it make the job of my friend the clinician doctor that bit easier?
But while these measures have helped in the short term, we want to build on this progress still further and ensure long-term, sustainable improvements. In January this year, NHS England commenced a comprehensive review of the procurement and commissioning of inpatient beds. The aim of this is to establish the long-term requirements for inpatient services and ensure quality, sustainable services are commissioned in the right place, based on population need.
It is not enough simply to provide more and more beds. In order to ensure that improvements are sustainable, we need to improve the community-based support we offer to children and young people. This is at the heart of the vision set out in “Future in mind”, and we are determined children and young people have easy access to the right support, from the right service, at the right time and as close to home as possible.
Key to achieving this vision are the local area transformation plans now being put in place. CCGs have been asked to work with NHS specialist commissioning teams responsible for inpatient services in the creation of these plans.
I have two final points. I have been interested in what data are available and what are not, and I answer a number of questions by saying, “The data for these are not collected centrally.” I am looking hard at each and every one of those questions, asking, “Are there occasions when we should be doing more on the data?” There is a lot still to do, but I entirely take the right hon. Gentleman’s point.
On data, we are looking at the limitations. The right hon. Gentleman was right to talk about the problems in getting this dataset right, but, again, I am on to that; it is essential, and I will take the challenge of driving and moving on that data.
On providers, the responsibility seems to come down to CCGs. It is unacceptable that private providers do not submit data. Some more have started submitting since the summer. It is the responsibility of CCGs, who have the contractual levers, and need to use them. That is not good enough; if we need this information, we need this information. I am going to look at whether the CCGs are using those contractual levers, and if not, why not. If they are not, and a sanction can be applied, we will apply the sanction. That information is necessary, and I am going to do this. The right hon. Gentleman is absolutely right on that.
On the principle in respect of determination, I will come back to the right hon. Gentleman by March next year and set out the national ambition. Do I commit to ending the practice completely? I do not know yet, because I want to get the result of the commission. It is right that it should be reduced to an absolute minimum. I want to know technically whether it is possible to eliminate it, or whether that would actually not do the job that is necessary. I want to see what the commission has to say.
Will I drive these changes? Yes, I will. Will all providers provide data? Yes, they will. Will I commit to the £1.25 billion? Yes, I will. I have said that enough times in enough places to make this a very difficult Government commitment to slip away from. It is over the course of the next five years, but I am happy to repeat that.
Norman Lamb
I am grateful to the Minister for his patience in allowing me to intervene again. I am conscious that there is a risk that the shortfall in the first year is made up in 2020 or something like that. Because of the principle of frontloading to invest in change, it would be incredibly helpful if we could get the commitment to make good the shortfall in 2016-17. Can he commit to doing that?
Alistair Burt
There are things I can do and things it is unwise to take a flyer on, standing at the Dispatch Box.
Alistair Burt
I will try, but we need to make sure all the money is used sensibly. There are a lot of pressures on the system, and I am trying to be as bold as I can without being foolishly bold and saying things just for the sake of it. I understand the importance of this £1.25 billion. I have spoken about it a great deal; I want to see it all used. I am not responsible entirely for the timescale, but I understand the right hon. Gentleman’s point and I suspect it will come up in the Opposition day debate we have next year.
I will talk to the Secretary of State about the right hon. Gentleman’s last point about comprehensive maximum waiting times. I will see where we can go further and include it in a comprehensive letter to the right hon. Gentleman.
I hope that this has been helpful. I am delighted that we had extra time to cover the ground. I am pleased to take up the challenge to do some of the things that could not be done in the past few years, and I will do my best to live up to the expectations of the House, as expressed by a number of Members today.
Question put and agreed to.
Capital Markets Union
(9 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
Before we begin, it is important to briefly outline the procedure for Members. First, I will ask a member of the European Scrutiny Committee, who I understand to be the hon. Member for Rochester and Strood, to make a five-minute statement about the decision it made to refer the documents for debate. The Minister will then make a statement, with no interventions, of no more than 10 minutes, and questions to the Minister will follow. The total time for the statement and any questions and answers will be up to an hour. Once the questions have ended, either before or at the hour, the Minister will move the motion and may speak to it, should she wish. The debate will then take place. We have to conclude proceedings by 2 o’clock, and at that stage—if we reach that stage—we will accordingly have a vote or not.
Kelly Tolhurst (Rochester and Strood) (Con)
It might be helpful to the Committee if I take a few minutes to explain the background to the documents and why the European Scrutiny Committee recommended them for debate. In February, the Commission launched a consultation about a proposed capital markets union. In September, it published a communication about an action plan for building the CMU. The Commission detailed a range of some 20 reforms that are a combination of legislative and non-legislative actions across a range of policy areas related to EU capital markets. Those actions aim to make it easier for all businesses, including small and medium-sized enterprises, to get access to funding and to create more investment opportunities for savers and investors.
Since 2007, the capital requirement directives have introduced a supervisory framework in the EU, which reflects the Basel Committee on Banking Supervision rules on capital measurement and capital standards. The latest legislation, known as the capital requirements directive IV, has been in force since July 2013 and transposes into EU law the latest global standards on bank capital adequacy. As part of the CMU project, the Commission seeks the development of a simple, transparent and standardised—or STS—securitisation market to support jobs and growth. It has proposed the first regulation before us today, to update the legal framework for securitisation and to develop the proposed STS regime. The second proposed regulation would amend a CRD IV regulation by recalibrating the prudential requirements for credit institutions and investment firms either issuing or purchasing securitisations.
The European Scrutiny Committee noted the Government’s welcome for the CMU action plan, albeit with reservations about insolvency, private pensions and credit information about SMEs. We suggested that Members could explore those reservations further in this debate. We also noted that the Government strongly welcome the legislative proposals, although they seem to have reservations about some of the detailed text concerning possible binding remediation, the final certification and supervision regime, and the extent of the need for delegated acts.
Additionally, the Government have recently, and belatedly, identified a justice and home affairs issue in the proposed securitisation regulation that might require a UK opt-in to the measure. The Economic Secretary to the Treasury wrote to the Chairman of the European Scrutiny Committee to inform him of that on the evening of 1 December. The European Scrutiny Committee suggests that in this debate Members could further explore the Government’s reservations and the justice and home affairs issue.
The Chair
I now call the Economic Secretary to the Treasury to make an initial statement. I remind Members that there will be no interventions on the statement, but there will be an opportunity for questions subsequently.
The Economic Secretary to the Treasury (Harriett Baldwin)
It is a genuine delight to serve under your chairmanship this morning, Mr Hanson. I welcome this opportunity to discuss with the Committee the European Commission’s action plan on building a capital markets union.
The capital markets action plan has the full support of the UK Government. We think it represents precisely the sort of work that Europe should be undertaking—work designed to improve EU competitiveness and create jobs and growth. The capital markets action plan sets out a range of initiatives that the Commission will pursue during the rest of its mandate. These will help to increase and diversify access to finance for businesses, create opportunities for investors and savers, and knock down barriers to saving and investment across 28 countries.
Lord Hill, the Commissioner with responsibility for financial services, has been clear that creating a capital markets union will be a step-by-step, consultative process and that decisions on the design of reforms will be evidence-based and subject to rigorous economic impact analysis. That will enable us to work with other member states to iron out issues in the detail. If we are to make the European Union more competitive, we need a true single market in capital. Delivery of a capital markets union forms part of the Government’s agenda for a more competitive European Union, and it was included by my right hon. Friend the Prime Minister in his letter to Donald Tusk on the subject of renegotiation.
At this stage, I would like briefly to remind the Committee of the letter I sent earlier this week to my hon. Friend the Member for Stone (Sir William Cash), apologising for the fact that Government support for the draft Council conclusions on the capital markets union action plan was given while the action plan was still subject to this process of parliamentary scrutiny. That was the result of a lapse in due process. I assure hon. Members that we are reviewing our internal procedures in the light of that oversight to ensure that it does not happen again.
Also at the end of September, the European Commission published proposals for a revised regulatory framework for securitisations. The Government strongly welcomed that timely and necessary initiative, which will open up an important funding channel to help European economies, ultimately supporting jobs and growth. Diversity in funding channels is highly desirable, as it increases the resilience of economies to shocks, as well as supporting them to recover more quickly. Securitisations can help to spread risk across the entire financial sector and offer an additional investment opportunity for pension funds and long-term savers. However, securitisations can be a source of instability if not done within a robust regulatory framework, so we will seek to provide for a clear, workable and legally robust framework for market participants as a further necessary precondition for getting these markets going again.
The Government believe that these proposals provide a sound foundation on which to restart safely the European securitisation markets. Based on the joint work by the Bank of England and the European Central Bank, they focus on defining standards of simplicity, transparency and disclosure to allow market participants to understand the risk that they are taking on and to price it appropriately. We are consulting a wide range of market participants and practitioners to inform our contributions in the negotiations, which will once again involve building partnerships to work our way through some of the issues noted by my hon. Friend the Member for Rochester and Strood, including the justice and home affairs issue.
I hope that hon. Members will therefore support today’s motion to note the Government’s support for the capital markets union action plan and the publication of proposals to set out a robust framework for securitisations in the European Union. Together, these proposals will help to provide an additional funding boost to the economy and jobs and growth. I welcome this opportunity to answer questions from the Committee.
The Chair
Hon. Members now have until 12.34 pm at the latest to ask questions, subject to my discretion.
Mark Garnier (Wyre Forest) (Con)
I thank my hon. Friend the Minister for her statement and I welcome the initiatives that are coming with the capital markets union action plan, but I would like her to reassure the Committee on a number of issues. Clearly what we are discussing is a very good thing, but is there any risk that it might expose us to negative factors, such as a financial transaction tax, which we might have to levy as part of a capital markets union across the whole EU? In addition, there are issues such as the location of clearing houses. Other important factors also need to be considered, such as how this issue relates to our proposals to secure our interest outside, not inside the eurozone and what effect the initiative might have on negotiations ahead of the referendum next year.
Harriett Baldwin
Let me take those points in turn. As a distinguished member of the Select Committee on the Treasury, my hon. Friend knows that the UK does not object in principle to financial transaction taxes. The UK has a financial transaction tax on stocks that are bought in the UK. However, the Government are concerned about the application of a financial transaction tax on instruments that could be traded elsewhere in the world, because if it were applied to something that is easily mobile and can be moved quickly to another jurisdiction, that is what would happen. There are no proposals in the capital markets union steps outlined today to harmonise taxation in any way. The Government stand strongly on our belief that taxation is a matter for member states and we continue to argue that case.
On the more general points about renegotiation and the Prime Minister’s letter to Donald Tusk, it is clear that the European Union needs to address the fact that nine countries continue to have their own currencies and 19 have chosen to adopt the euro. There is absolutely no prospect of the UK ever joining the euro, so as part of the renegotiation we need to make it clear across the 28 EU countries that positive initiatives such as this on capital markets must reflect the fact that this is a multi-currency single market for capital. We will fight vigorously against any proposals that threaten that. That is a key part of the renegotiation.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
It is a pleasure, Mr Hanson, to serve under your chairmanship for the first time. My question is on a fairly narrow point. On a number of occasions the Minister has mentioned risk, and some of the documents refer to risk. She will know that there is no unit of measurement for risk. I often think that Governments would be well advised to disaggregate risk into its different components so that they can be clearer about measuring probabilities and chances, and negative outcomes in financial terms, for example. I would like to hear her remarks about whether that would be worth while. I am asking because I was pleased to hear her remark about a rigorous impact assessment. It strikes me that in such an assessment particular care will have to be taken about how risk is measured.
Harriett Baldwin
I welcome the hon. Gentleman’s question about risk and I draw his attention to this incredibly thorough document. With his academic interest in such subjects, he will want to read the academic articles cited in this weighty tome. He will know that there are of course many risks in capital markets. Not only is there market risk, there is credit risk, regulatory risk and, in a multi-currency single market, currency risk. In a previous life, I specialised in this subject, so perhaps he and I could go for a drink some time and talk about leptokurtic distributions and other such esoteric matters, which might not fascinate the rest of the Committee as much as us.
Harriett Baldwin
As far as the proposals before us are concerned, the important point about risk is that, following the crisis in 2007, the market for securitised transactions—which were a source of incredibly un-transparent risk in the financial sector, with incredibly harmful impacts throughout European Union—was so bad that it has now dried up almost completely in the EU. The purpose of moving so rapidly, which the Government support, is to bring back what we would call the good risk of simple transactions to securitise basic lending across the European Union. That is why the speed at which this is moving is welcome. The simplicity and transparency of the securitisations proposed secure the benefit of those good ways of reducing risk on bank balance sheets, freeing up lending that the banks can do in the real economy to support jobs and growth, which is an important function. That is why we think this simple approach to securitisation is a good way of managing the risks, and we are opposed to the kind of complex securitisations and opaque risks that contributed to the crisis.
Harriett Baldwin
I beg to move,
That the Committee takes note of European Union Documents No. 12263/15 and Addenda 1 and 2, a Commission Communication: Action Plan on Building a Capital Markets Union, No. 12601/15 and Addenda 1 and 2, a Commission Proposal for a Regulation laying down common rules on securitisation and creating a European framework for simple, transparent and standardised securitisation and amending Directives 2009/65/EC, 2009/138/EC, 2011/61/EU and Regulations (EC) No. 1060/2009 and (EU) No. 648/2012, and No. 12603/15, a Commission Proposal for a Regulation amending Regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms; also notes that the Government supports the Commission's efforts to ensure that the Capital Markets Union action plan supports jobs and growth, and in particular that the Government welcomes the focus on helping small and medium-sized enterprises (SMEs) get the funding they need to grow and succeed; and further notes that the Government welcomes the Commission's proposals on securitisation, which provide a framework for the revitalisation of securitisation markets in a prudent and sound fashion, in order to improve access to finance across the wider economy and help to deliver on the objectives of Capital Markets Union.
I shall probably fall into the trap of using a three-letter acronym, which is something the Treasury likes to do, and refer to the CMU action plan. At the end of September the European Commission published the action plan, which has the Government’s full support because it represents precisely the sort of work that Europe should be undertaking. Following the wave of regulation put in place in response to the financial crisis, the Commission has now turned its attention, in a welcome way, to generating jobs and growth in the European Union. The capital markets action plan represents the beginning of that process and sets out a range of work streams that the Commission will pursue over the rest of its mandate. They will help to increase and diversify access to finance for business and will create opportunities for Europe’s investors.
European savings levels are quite good, but people lack options to invest their savings in growing firms throughout the single market, because at the moment traditional bank lending to business is stifled and because the many costs of investing money across national borders in the European Union mean that savers have a strong tendency to invest only in their home member state. Importantly, the Commission is not only tackling a problem that we have been advocating should be addressed for some time, but doing so in a way that is firmly rooted in the better regulation agenda for which the Prime Minister and others have been calling. Furthermore, to date there has been no presumption that legislative action is the best course. The Commission has made clear its commitment to consider all options. The action plan fully embodies that approach.
Delivery of a CMU forms part of the Government’s agenda for a more competitive EU. If we are to make Europe more competitive, we need a true single market in capital, because that will break down the barriers that stop flows between member states and will help businesses to access the finance that they need to grow and succeed. As Committee members will have seen from the documents, the action plan is thematic, identifying six key areas for reform: financing for innovation; start-ups and non-listed companies; making it easier for firms to access and use public markets; measures on long-term infrastructure and sustainable investment; fostering retail and institutional investment; leveraging bank capacity; and facilitating cross-border investment. The Commission has also identified a set of priority measures for immediate action, which include today’s proposals on securitisation, revisions to current EU legislation on venture capital and prospectuses, and a call for evidence on the cumulative impact of current EU financial services legislation. These are all priorities that the Government support.
Although the Government have prioritised helping our small and medium-sized firms, we know that such firms can still find it hard to access finance. The CMU will help by giving them access to more investors across the single market by pooling investment resources, helping venture capitalists and angel investors, and making it easier to list on public markets. From our perspective, it is not just our smaller firms that will benefit; breaking down barriers across the single market will help British firms to diversify their investments at a lower cost and to offer our competitive products to savers across the single market.
The European Commission has also published its proposals for a revised regulatory framework for securitisations. The impact of the global financial crisis was severe and has reduced the market for European securitisations, with the end result that that source of funding for the real economy was almost entirely shut down. Some in the industry believe that the EU securitisation market is now slowly dying, with new issuances at only a fraction of the pre-crisis level. Unless market participants are given a clear signal that securitisation markets have a long-term future in the EU, we risk losing the experience and the necessary expertise in such instruments altogether, making it difficult to restart these markets.
As I said earlier in answer to questions, securitisations can also be a source of instability if they are not done within a robust regulatory framework. A vital objective for such a framework is to restore trust in the information provided in respect of these products, which will, of course, help to address the lack of confidence stemming from the many unpleasant surprises that investors experienced with regard mainly to US-originated securitisations, where complex structures made it difficult for investors to judge the risk involved and where issuers were able to hide behind credit rating agencies. If we want to get these markets going again, it is important that an appropriate balance is found between the responsibilities and corresponding incentives for issuers as well as investors.
The Government believe that these proposals provide a sound foundation on which safely to restart European securitisation markets. We also believe that a self-certification approach attesting to the quality of securitisation is needed in order to avoid the moral hazards that we saw in the past. We believe this regime can be made to work, provided that the criteria for securitisation to qualify as simple and transparent are very clear and unambiguous and that there is clarity for all participants, whatever their roles and responsibilities.
The UK’s overriding objective during the negotiations is to get these markets going again in a prudentially sound way. Provided that the overall approach is robust, it is also appropriate to recalibrate the prudential requirements in a more risk-sensitive fashion. We are working closely with the Bank of England to seek an outcome that addresses financial stability concerns but also provides the necessary incentives to encourage simple, transparent securitisation and to discourage less transparent and unduly complex structures. We are consulting a wide range of market participants and practitioners to inform our contributions to the negotiations.
I hope hon. Members will support today’s motion and note
“that the Government supports the Commission’s efforts to ensure that the Capital Markets Union action plan supports jobs and growth, and in particular…helping small and medium-sized enterprises…get the funding they need to grow”.
Richard Burgon (Leeds East) (Lab)
It is a great pleasure to serve on my first European Committee under your chairmanship, Mr Hanson. I am pleased to serve opposite the Minister.
On this occasion, my remarks will be brief, but I note the late arrival of two letters from the Minister to the European Scrutiny Committee and to members of this Committee. I understand that the letters were sent to the European Scrutiny Committee on Monday evening, and I believe that I should have received them yesterday, although I have no record of doing so. I therefore had sight of them only this morning, which means that I have not had time to seek advice. I defer to the member of the European Scrutiny Committee, the hon. Member for Rochester and Strood, and I will raise a few issues that the Minister may be able to respond to. Why were the documents provided so late and what opportunity there is for further consideration of them?
The motion references a number of documents from the European Commission relating to the capital markets union and the action plan to deliver the CMU’s objectives, which the commissioner, Lord Hill, set out on 30 September. There is much technical detail in the paperwork for this debate, but I will make some general points. The CMU is being driven forward at a rapid pace by Commissioner Hill and is part of a process of the economic recovery of the European Union as a whole and a contribution to supporting jobs and growth. The initiative’s intention, as Commissioner Hill and the Minister have said, is to build a single capital market across the European Union.
The central goal of the proposals, as set out by the Minister, is to make it easier for small and medium-sized enterprises to access funding in a period when finance has dried up from banks. Delivering finance where it is needed is, of course, vital for economic activity to deliver the necessary investment for future growth, which Opposition Members set out as our priority at the recent autumn statement. The Opposition naturally wish to support measures that generate finance for investment, and to support jobs and growth, as would be expected. We want accessible finance to be delivered across the economy, particularly for small and medium-sized enterprises to ensure that they deliver the dynamic and innovative economic activity that our economy needs.
I note that we are discussing this in the week of the recent Bank of England stress test results, when, despite the fact that two banks have to take action to boost their capital reserves, the Governor of the Bank of England stated that the post-crisis period is over. We should recognise the wariness and the real concerns with regards to the CMU and the return to securitisation in the wake of the financial crisis.
The Minister has said that this needs to be done in a
“simple, transparent and standardised way”,
but I am sure that she will understand those who urge caution. The recent statement by Finance Watch, supported by a number of non-governmental organisations, states that
“the CMU revives pre-crisis trends without adequately integrating the lessons from the crisis.”
It has expressed concern that there is a risk in the CMU agenda of favouring short-term growth and competitiveness over long-term, sustainable development.
To quote two academics, Daniela Gabor from the University of the West of England and Jakob Vestergaard, from the Danish Institute for International Studies,
“if the CMU is to make a substantial and lasting contribution to investment and job creation in Europe, it must be accompanied by reforms that address systemic risk in securities-based financial systems and enhance pan-European supervision of securitization”.
The Minister said in October that we need to turn our attention from financial services reform
“to reform that boosts our economies, and increases competitiveness.”
Our belief is that, although we wish to boost our economies, we should not consider financial reform to be done and dusted. Indeed, there is the potential for further reform to deliver that boost to our economy. There is a real need to discuss the role of securitisation, particularly as banks have increased their capital and cleaned up their balance sheets and can now lend more, not less. There is no overall shortage of credit supply. Opposition Members—I know that all Members would agree with me—do not wish to see a return to the securitisation that facilitated the US sub-prime mortgage crash, from which the global economic crisis originated. It will be necessary to demonstrate what lessons have been learned as the action plan is developed.
To do that, I hope that the Minister can address a number of points. Will she ensure that the key principles of good securitisation are not watered down through pressure from large, international banks? Will she set out how the CMU will deal with a lack of convergence or consistency in existing supervisory regimes? Do the Government support a new single regulatory or supervisory body for capital markets across Europe?
The Opposition believe that we should be open to a wider range of measures to deliver finance for business and investment, as we recently discussed in the debate on the RBS share sale, including: encouraging increased lending by the private banking sector and using our influence where we have direct interest in banks, such as RBS; the establishment of a dedicated national investment bank; and the development of regional banking. Capital markets might be an area for future development in Europe, but UK business remains largely reliant on bank lending. We need to ensure that we do not take our eye off the issues raised in the Lawrence Tomlinson and Andrew Large reports, or overlook the difficulty businesses have had in accessing bank finance following the economic crisis and the bank bail-outs.
The commissioner has said that securitisation under CMU will
“free up bank lending for the wider economy.”
Will the Minister say how CMU will affect the steps being taken by the Government to ensure that SMEs can access the finance they require from UK banks?
Mark Garnier
Perhaps I can help the hon. Gentleman. Reducing the requirement for large businesses to borrow money from banks by going to the securities markets would leave more capital in the banks that could then be passed down to smaller businesses. That would shift the big requirement on banks’ assets away from big businesses to concentrate on smaller businesses.
Richard Burgon
I welcome that clarification of the Government’s position.
Finance Watch has argued that CMU
“is also likely to undermine important financial reforms processes such as the long-awaited separation of risky capital markets activities from basic banking”.
Will the Minister respond to that concern and set out what impact CMU will have on bank ring-fencing and the separation of retail and investment banking?
CMU is an opportunity for European finance, but we must maintain the goal of having finance act for the UK and European economies and for the general public as a whole. With Europe rising up the agenda, it would certainly help to be able to highlight the positive benefits to the finance sector that EU membership and the CMU will deliver, but many questions about the proposals still need to be addressed. I will seek to increase my discussions of these matters with members of both the European Scrutiny Committee and the Treasury Committee.
We do not wish to raise any controversy about the information the Minister has given. I am grateful for being allowed to address these issues.
Roger Mullin
My remarks are also based on having read next to nothing, since I received very little information in appropriate time to be able to study these matters. I have been helped considerably by the Minister’s opening statement, which was very clear and helpful. I will restrict my comments to matters she mentioned in her speech and some of the things to which the hon. Member for Leeds East referred.
Everyone would welcome any change that allowed for more effective and better competition than has been the case. From that point of view, I have no great objections to the proposals, although it is very early days before we find out whether we will eventually need legislation or other ways to implement the intended changes. Given the Minister’s remarks in her opening statement about concerns regarding the private pensions sector, will she say a little more about that when she sums up? It would also be very helpful indeed if she explained precisely why the Government are not in favour of binding mediation. Again, she indicated that but did not expand on it.
There might be concerns in some quarters about whether CMU is going to help long-term rather than short-term investment. If she could reflect on that and the need to secure longer-term commitment and investment for the benefit of the whole economy, it would be useful.
Finally, I am keen on the idea of creating markets that are more international in nature, enabling the simple saver, for example, to look more widely than the domestic market to save. It would be useful, not least from the Scottish perspective, if the Minister could say a little more about cross-border matters in this area.
Harriett Baldwin
I thank the European Scrutiny Committee for putting forward this important initiative on capital markets union for scrutiny in this debate. I will respond to some of the points made by the hon. Members for Leeds East and for Kirkcaldy and Cowdenbeath. It is important to re-emphasise that the capital markets union initiative is designed purely to have long-term benefits for savers, for small, medium and large businesses and for investors in hon. Members’ constituencies. We must focus on that as the objective of the action plan.
The hon. Member for Kirkcaldy and Cowdenbeath said that he appreciated the simplicity of my opening remarks. I tried deliberately to make them simple, because I know that, even if he gets the materials in time, it can sometimes be hard to see the simplicity in them. However, the concept actually is simple: we want to ensure that a business starting in Leeds East has access to a wider range of funding sources for growth than it does at present. Today, it can go to a small range of banks. As the hon. Member for Kirkcaldy and Cowdenbeath knows, we are trying to expand the range of banks active in the UK. In the five years to 2010, only one new bank started in the UK; in the last Parliament, eight new banks did. In this Parliament, we would like 15 new banks to do so, but we also want businesses in Leeds East and Kirkcaldy to be able to access finances from other sources.
If a venture capitalist in Estonia wants to put money into a high-risk but exciting investment in Kirkcaldy or Leeds East, we want that to be feasible. The capital markets action plan is about trying to make it easier by having common rules, so that a saver in Bulgaria can save through a peer-to-peer lending platform started in the UK. All those kinds of thing will help people, businesses, savers and investors, and that is the vision that can sometimes be obscured behind a lot of acronyms.
I appreciate the support that Members have articulated for the principles we are aiming for. I reiterate my apology to the Committee for the fact that the Government’s support of the action plan is so wholehearted that things have moved more rapidly than anticipated in the sometimes slow-moving corridors of the Commission. Therefore, we inadvertently went faster than we should have done before the scrutiny of this Committee, which we value so much. In addition to apologising for that in a letter to my hon. Friend the Member for Stone, I have personally telephoned him to offer my humble apologies for the fact that, on this occasion, things in Europe went faster than we anticipated. We will try to prevent that from happening again.
The hon. Member for Leeds East also asked about the second letter that we wrote, and the fact that we have now discovered some justice and home affairs issues to do with the file. In their briefing, my officials said that that was entirely their fault, but I am happy to take all the blame myself. I am sure that the Committee, in considering the files initially, would not immediately have thought that such a measure would have justice and home affairs implications, but they arise from the fact that some of the 28 countries of the European Union have a criminal approach to securities fraud that is not necessarily the same as the UK’s. When we did the ministerial write-round, it was brought to our attention that there were some justice and home affairs issues, which is why we have written to the European Scrutiny Committee. We welcome the Committee’s thoughts on whether the UK would be well served by opting in, or whether the UK should exercise its opt-out. The briefings that we have seen do not show a clear impact on the UK one way or the other, so it would be interesting to hear the Committee’s views.
The hon. Member for Leeds East mentioned the Bank of England’s stress test this week, and there are reports from the Financial Policy Committee. I hope he welcomes, as I do, the new rigour in that process. We now have a Financial Policy Committee looking at the potential for the build-up of risks in the system. It looks closely at the characteristics of lending to businesses, to buy-to-let investors, to people who want to buy a home, and so on. There is close scrutiny of what is happening and of the impact on banks’ capital bases were a shock of a particular kind to happen to the world economy. That important improvement to the regulatory system in this country is a result of the changes we made in the last Parliament.
The hon. Gentleman also asked about the UK’s position on supervision. We learned the lesson from the financial crisis that having the supervisor as close to the markets as possible is an important part of a regulatory regime, which is why we have given back that responsibility to the Bank of England. The Bank is closest to the day-to-day goings on in the market, and it can observe problems earlier than anyone else. We believe in subsidiarity on supervision, which is an important principle. We will fight those who think that there should be a pan-EU supervisor, because we think that would create far too much distance from what is actually going on in the real world.
The hon. Gentleman also said that he does not think that there are any credit supply issues; I beg to differ. It is true that we are now seeing improvement in small-business lending, which has reached positive territory, but he will know how difficult it has been for small businesses to access finance over the past five years. He will also know that small-business lending has benefited from a range of policy measures, such as the funding for lending scheme and the British Business Bank’s ENABLE scheme. He will therefore appreciate that, although things look as though they are beginning to improve, it still makes sense for us to consider other ways in which we can improve access to finance and improve competition so that small businesses can secure extra funding in order to grow.
The hon. Gentleman also asked about ring-fencing, and these initiatives will not have any impact on UK legislation. The Financial Services (Banking Reform) Act 2013 is on track to implement ring-fencing in the UK, and he will know that the European Union has not yet come up with an agreed pan-European approach. We are continuing to implement our own approach.
I was also asked about private pensions, and obviously the UK has a much more developed private pension market than some of the other 27 EU countries. There are extensive differences between each country, and we therefore see many obstacles to implementing any kind of cross-border pensions system, particularly with regard to the harmonisation of tax treatment, which is rightfully a member state competence. However, there are some initial suggestions for a potential opt-in to a common approach for people who work in different countries across the European Union over their lifetime. We retain an open mind on that approach, but we would be very resistant to anything that in any way undermines the UK’s approach to its private pensions sector.
The hon. Member for Kirkcaldy and Cowdenbeath asked why we object to binding mediation. We think it would be a real risk to the UK’s sovereignty if things were to be put into binding mediation too soon, so we want that to be a last resort. That is the kind of compromise that we have reached. He asked about long-term investment, and there are other initiatives in the capital markets union action plan on investing in infrastructure and on ensuring that lessons are learned from regimes such as ours in the UK, where insolvency works well, to allow wider infrastructure investment in parts of the EU where significant improvements could be made to insolvency regimes. There are also initiatives on venture capital and simplified prospectuses so that businesses can access capital markets more easily. Those are some of the other examples in this file of the kinds of things that will help long-term investment.
I hope that I have been able to address the many points raised by hon. Members and that the Committee will support the motion noting our support for
“the Commission’s efforts to ensure that the Capital Markets Union action plan supports jobs and growth, and in particular…helping small and medium-sized enterprises…get the funding they need to grow and succeed”.
Question put and agreed to.
School Funding Model
Housing and Planning Bill (Twelfth sitting)
The Chair
I welcome the Committee back after Tuesday’s exertions, from which I hope you have all recovered, to begin detailed consideration of chapter 4.
Clause 74
Mandatory rents for high income social tenants
Dr Roberta Blackman-Woods (City of Durham) (Lab)
I beg to move amendment 199, in clause 74, page 30, line 4, at beginning insert “Subject to subsection 1(A)”.
See amendment 200.
The Chair
With this it will be convenient to discuss amendment 200, in clause 74, page 30, line 6, at end insert—
“(1A) The Secretary of State must not make regulations under subsection (1) which apply—
(a) to people aged over 65,
(b) to people who have a registered disability,
(c) to people on zero hours contracts,
(d) to people with seasonal contracts of employment,
(e) to households where one or more members is in receipt of Employment and Support Allowance,
(f) where a household member is in receipt of care,
(g) where a member of the household is a carer for another household member,
(h) to those living in supported housing, or
(i) to households in receipt of housing benefit.”
The amendment would establish exemptions from the application of high income rents system.
Welcome back to the Chair, Mr Gray. Amendments 199 and 200 bring us to one of the most contentious and difficult parts of the Bill. The Minister will be well aware of how contentious it is because he has had a 38 Degrees campaign against it directed at him. Chapter 4 is rather euphemistically entitled “High income social tenants: mandatory rents”, but the rest of us, using everyday parlance, would understand it as “pay to stay”.
The concept has been with us for quite some time. Interestingly, the coalition Government carried out a consultation exercise in 2012 on whether housing associations and other social landlords in England should be given discretion to charge market or near-market rents to tenants with an income of £60,000 or more a year, arguing that high-income families should not pay social rents, which are typically half the market rent, when they could afford to pay more. The discretionary scheme was subsequently introduced, but there was not a huge response from housing associations. Given the results of that consultation, which I just happen to have in front of me, it is quite extraordinary that the Government went ahead and introduced the discretionary scheme. Only a quarter of respondents actually agreed with the principle of pay to stay; in fact, those who responded thought the policy would create administrative burdens, be excessively costly for landlords, involve difficulties in identifying tenants with high incomes and be difficult for tenants, particularly if they had fluctuating incomes.
People had a lot of sensible, well thought through reasons for saying that there could be an element of discretion somewhere, but that the thresholds should be high and that the existing system of setting rents within a national framework, albeit with some degree of flexibility, was the right approach, while mandatory higher rents at certain thresholds were perhaps not.
Mr Stewart Jackson (Peterborough) (Con)
For the record and for greater clarity, will the hon. Lady confirm the position of Her Majesty’s loyal Opposition on the principle of a £60,000 cap, which was consulted on? That is twice the average income in my constituency. Is she in favour of directing scarce public resources at people on low incomes, or at those who can clearly afford to pay market rent?
Dr Blackman-Woods
I already almost answered the hon. Gentleman in my previous statement, but I will reiterate it in a moment. I remind him that the purpose of the Committee—I am sure you will correct me if I am wrong, Mr Gray—is to scrutinise the Government’s legislation and the consultation document in front of me, not to scrutinise the Opposition’s position. As I outlined a moment ago, our position is very much that the system in place at the moment, with a national framework for rent setting that gives discretion to housing associations and local authorities to charge higher rents should they wish to, and to set rents at a level that makes sense for them, including for tenants with an income of more than £60,000, is the right approach. I hope that answers his point.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
Is this not another example of the Conservative party’s regulatory zeal? Here are institutions in the private sector being told that nanny, in the form of the Minister, knows best.
Dr Blackman-Woods
Indeed. As we will discuss under later amendments, this part of the Bill sets up a whole new bureaucracy and a whole new quango, and greatly adds to the administrative burdens on not only housing associations but local authorities, which is extraordinary given that they are having their budgets cut so substantially.
Chris Philp (Croydon South) (Con)
The hon. Lady says that few housing associations are using the voluntary powers they already possess to set higher rents. Does she not agree with the principle behind the clause, which is that people on higher incomes should either be charged more or find other accommodation, so that this scarce resource—social rented housing—can be concentrated on the people who need it most?
Dr Blackman-Woods
I have answered the hon. Gentleman’s point more than once this morning. I remind him, his hon. Friends and the Minister that the Government consulted on this scheme; they consulted people who know something about running housing associations and local authorities, and only a quarter of the respondents agreed with the principle of very high earners who live in taxpayer-subsidised housing paying higher rents. Government Members have to engage with that point.
Only a few respondents to the consultation agreed with even a discretionary scheme. The consultation, in case Members are not aware, was on higher rents being charged at income levels of £60,000, £80,000 and £100,000, and even at those levels most people thought there should not be a mandatory scheme, but that it should be left to the discretion of social housing providers.
Dr Blackman-Woods
My hon. Friend’s point is completely accurate. Many commentators are very much against the scheme in principle and because it does not make a great deal of sense economically. We understand the context of the clause and this part of the Bill: the Government want to establish a rent regime where people on incomes of, initially, £60,000 or more would pay higher rents. However, the measures in the Bill go further than that.
Kevin Hollinrake (Thirsk and Malton) (Con)
I am confused about the hon. Lady’s personal view. Does she not feel that the public might reasonably expect social housing providers to check if the people living in those taxpayer-funded houses are able to move into full market value homes and therefore reallocate those much needed resources to people who need that support? Does she feel that is a reasonable position?
Dr Blackman-Woods
I am certain that I have already said at least three times this morning that there already is a discretionary scheme in place that allows local authorities and housing associations to do that, and that we think that is the sensible way forward.
If I could come back to what is in the proposed legislation that we are scrutinising—
Dr Blackman-Woods
I will give way to the hon. Gentleman later, once I get through this argument. We are scrutinising this proposed legislation.
Interestingly, there was a consultation that showed no support for a package of measures, but now we have a set of more extreme measures in the Bill. The provisions of chapter 4 give the Secretary of State regulation-making powers to set out a lot of detail: specify the level of rent payable by a high-income tenant; provide that the level of rent may be different in different areas and for tenants with different incomes; require the landlord to have regard to guidance issued by the Secretary of State; define what is meant by a high income and how it will be calculated; give registered providers of social housing the power to require tenants to provide information or evidence of their income, with failure to provide that information perhaps resulting in the landlord charging the tenant a market rent; give registered providers of social housing the power to increase rents in line with regulations; and require local housing authorities to pay any estimated increase in income as a result of rent regulations. I could go on but, basically, huge powers are to be given to the Secretary of State to get directly involved in the operational management of local authority housing departments or housing associations. That does not seem to me a very localist approach or one that shows much confidence in our registered social housing providers.
I will give way to the hon. Gentleman before going on to discuss amendments 199 and 200.
Kevin Hollinrake
The hon. Lady heard evidence from housing associations clearly stating that they were currently not using the opportunity to establish whether people in these houses could afford to move to a full market value home.
Dr Blackman-Woods
The point housing associations were making, I think, was how difficult it was to get some of that information. It is interesting to question why the proposed thresholds are so much lower than the thresholds that were in the original consultation document. Last month the Government introduced a further consultation document on the new thresholds of £40,000 a household in London and £30,000 outside London. Part of the reason for the lower thresholds, I suspect, is that not many people on very high incomes live in social rented housing. Presumably, at some point in our discussions on this part of the Bill, the Minister will explain to us why the Government have consulted on much lower thresholds than were in the original consultation document.
Peter Dowd (Bootle) (Lab)
Is my hon. Friend aware that the Association of Retained Council Housing has said that the unresolved practical difficulties are likely to complicate things further, and that the administrative process will not justify the likely income?
Dr Blackman-Woods
Indeed. That is a succinct critique of the whole scheme in one sentence.
Andrew Griffiths (Burton) (Con)
Can I give the hon. Lady another succinct example? I draw her attention to a report in the Evening Standard from April 2012 about the fact that former Labour Cabinet member Frank Dobson was paying £160 a week to live in a £1 million housing association property. Is he the kind of person the Labour party wants to support these days?
Dr Blackman-Woods
I thought we were seriously scrutinising a piece of legislation. We are looking at the impact of this part of the Bill. We know that the £30,000 threshold that the Government want to introduce is barely more than their new national minimum wage. That is extraordinary.
Dr Blackman-Woods
If the hon. Gentleman is just going to reiterate his previous intervention, I am telling him what I think of it.
Andrew Griffiths
I assure the hon. Lady that I am not. I am interested to hear the Labour party’s position on this matter. If she thinks that £30,000 is too little, can she tell us what is the correct amount at which people should begin to pay a fair rent?
Dr Blackman-Woods
For about the fifth time this morning, there is a discretionary scheme in operation.
Dr Blackman-Woods
Perhaps I will say it again. A discretionary scheme is already in operation, and local authorities and housing associations are able to reflect local circumstances and apply high rents where they deem it appropriate. That is a sensible way forward.
Mr Jackson
I have listened to the hon. Lady’s dulcet Ulster tones all morning, but we have not made much progress. To reach a consensus in our scrutiny of the Bill, we must understand Her Majesty’s Opposition’s benchmark. She prayed in aid evidence from housing associations and said that only a quarter of them backed the proposal, but what is her policy? In principle, would she have supported a cap of £60,000? With all due respect, she has failed to answer that straightforward question for the past 25 minutes.
Dr Blackman-Woods
I am not going to detain the Committee by saying it again. I will move on.
Mr Thomas
I am sure my hon. Friend has seen the Chartered Institute of Housing’s briefing, so she will be aware that those in receipt of the Chancellor’s proposed living wage—say, those on the living wage in Burton or Peterborough—will by 2020 be earning more than the current threshold in the Bill for a high-value social tenant. Therefore, someone on the living wage will have to pay the higher rents. That is surely another sign of the madness of this provision.
Dr Blackman-Woods
To answer my hon. Friend directly, I have been sent the briefing. The point I was making a few moments ago was that the household income threshold of £30,000 outside London seems extraordinary to many people, given that it will capture people on the new minimum wage in a few years’ time. The position that the Government have taken seems extraordinary.
Because of the difficult position that lots of people will find themselves in, amendment 200 would exempt different categories of people from having the mandatory higher rents attached to them. Such rents should not apply to people over the age of 65, to people who have a registered disability, or to people on zero-hours contracts. That is particularly important because a lot of housing associations and local authorities have explained to us that one of the real problems they have with their tenant base is that people are increasingly on zero-hours contracts. They have a fluctuating income from week to week, so it is difficult to assess what their annual income would be.
Indeed, we will have to await regulations from the Secretary of State to find out how income will be taken into account, so we are not even sure at the moment what time period the £30,000 threshold will apply to. If in any one week in a year somebody is to have earned an income level equivalent to £30,000, even though they get that income level only for one week, will that be taken into account? Will they be charged a higher rent for that week? We will come back to that issue as we discuss this part of the Bill.
Similarly, what about people who have seasonal contracts of employment? They might earn all their income within a five or six-month period. Will the income be assessed on the whole year or on the months when they earn that amount? We simply do not know the answers to those questions. Also, will the threshold apply when a member of a household receives employment and support allowance, because of the triggering of housing benefit payments, or is in receipt of care? I am sure all hon. Members have received the written evidence from housing associations that have asked whether care costs will be removed from the overall income before it is assessed for higher rent payments. The answer is that at this point we simply do not know, so will the Minister tell us whether there is any intention to do that?
If one member of a household is a carer for another, will they have to pay the higher rent level, even though they are probably saving the state a lot of money by caring for that person rather than having them put into a residential care facility or getting some other form of care and support? Should the higher level apply to those living in supported housing, and to households already in receipt of housing benefit? If so, this measure will simply increase the level of benefit that they receive. To say that that is a bit mad is probably putting it politely, but it certainly is not sensible policy making to introduce a measure that will increase rent and then put that rent into the public purse.
Mr Thomas
Does my hon. Friend have any information about whether the Government intend to allow an appeals process under the scheme? I can imagine a situation in which a housing association approaches HMRC seeking information about the income of someone on a zero-hours contract, and HMRC simply provides income details for the last 12 months that it has available. However, that person’s income might be substantially less in the current rental year period than in the previous year, due to their zero-hours contract. A housing association would seek to charge a rent, and the tenant might want the right of appeal. Are we still in the dark as to whether such an appeals process will be available?
Dr Blackman-Woods
I hope to discuss that later in our deliberations.
Before I finish talking about amendment 200, it might help the Committee to focus on the real issues if I briefly quote from a letter to a housing association:
“The person for whom I care is now severely disabled and chronically sick. He was diagnosed with a crippling, degenerative illness at the age of 17, but worked all his life…He now requires two carers, so that we can look after him virtually 24/7…He worked very hard despite his medical problems and finished his career as a business unit manager with 204 staff spread over seven locations…He chose to stay in his flat in central London as it was close to his job and, through his hard work, built up a pension, which, in normal circumstances would be adequate. Now, however, because, at his income level, he does not receive help from the council, his pension is mostly spent on his carers and supplies which the NHS is unable to provide. Pay to Stay takes no account of these personal circumstances and does not recognise that, though his gross income will be just about £40k in 2017, more than half of that goes on his carers. I deal with all aspects of his life now, including his finances, and I know that, even though he is no longer able to pay to his carers the ‘going rate’, he is left, after tax, on a four figure income which is at poverty level. This is a problem that is bound to be faced by hundreds of disabled people at this income level.”
This part of the Bill will make people with real difficulties face that set of circumstances. Why does the Minister think that is appropriate? Many other examples have been provided, but I will not go through them—that one case sums up exactly the difficulties posed.
Mr Jackson
I rise to speak against amendments 199 and 200. I am unsure whether the hon. Lady did herself many favours by referencing 38 Degrees in her opening comments. Thankfully, we make decisions about legislation based on the merits of the debate rather than on what cyber-warriors on 38 Degrees might decide is a good campaign.
Dr Blackman-Woods
I hope that the hon. Gentleman recognises that I did not make any comment at all about the nature of the campaign. I merely pointed out to the Committee that the measures in this section of the Bill are so contentious that there is a 38 Degrees campaign against them.
Mr Jackson
I thank the hon. Lady for clarifying that. While we are on the subject of harassment and cyber-bullying, I want to put on the record my admiration for those Labour MPs who did the right thing for their country yesterday, including the hon. Member for Harrow West, although it clearly will not have done his career a lot of good.
The Chair
Order. That remark does not relate at all to our debate this morning. Perhaps the hon. Gentleman can confine his remarks to the Housing and Planning Bill.
Mr Jackson
Thank you, Mr Gray. I shall endeavour to make progress.
The amendment should of course be seen in the wider context of the Government’s commitment to making work pay and the progress towards universal credit, which will achieve that commitment and has a degree of cross-party consensus. The Chancellor’s announcement in the July Budget of a 1% reduction in rents for housing association tenants will also have an impact on many tenants’ disposable income.
Peter Dowd
I was going to raise that point later. If the difference between the two markets is so negligible, what is the point of putting such significant administrative burdens on local authorities, whose budgets have been cut so dramatically—by up to 50%? What is the point of or rationale for the proposal?
Mr Jackson
The hon. Gentleman pre-empts my comments. That point will become clearer as I progress in my remarks. The key point is that there is confusion about whether the Labour party agrees with the principle of the threshold, despite the hon. Member for City of Durham having been challenged about that, I think, five times. If it agreed with the principle that a £60,000 threshold would be right, we could reach some consensus about the right lower figure to put in the Bill. I think that was a reasonable challenge, and she failed to rise to it. She did not answer the question clearly, other than to quote what housing associations thought when Conservative Members had challenged her specifically about what she thought.
If Her Majesty’s Opposition agreed with the principle that people who have the wherewithal should pay a higher market rent to divert scarce resources to people on low incomes, who are the bedrock of the country—blue collar workers who get up in the morning, get their kids ready for school and do the right thing, who live in social housing and need our help—I think we could establish a consensus, which we do not have at the moment.
Peter Dowd
In that case, would the hon. Gentleman agree that Her Majesty’s Revenue and Customs, for example, should inform local authorities directly of the earnings of people living in that accommodation?
Mr Jackson
No. The hon. Gentleman must understand that the amendment is effectively a wrecking amendment to the proposals. Irrespective of whether the cap is £40,000 in London or £30,000, or whether in the normal course of events, as often happens with regulation and guidance, it is eventually changed through secondary legislation, he must know that it is a bit rich to say that there is an onerous bureaucratic burden on housing associations in finding out their tenants’ household income. Incidentally, they did not struggle that much to fight quite rigorous and robust campaigns against the so-called bedroom tax, with all the figures at their disposal, which they shared regularly with the media. However, we are now told that it is too difficult for them to find out about those financial circumstances.
The requirements in the amendment are onerous and extremely bureaucratic. To check and cross-reference with the Department for Work and Pensions database—
Mr Jackson
I am just getting into my flow but, as the hon. Gentleman is agreeable, I will give way to him.
Peter Dowd
Does the hon. Gentleman agree that the bedroom tax had nothing to do with tax per se? It had to do with the bedroom for which the person had to pay—their income was irrelevant.
Mr Jackson
The hon. Gentleman cannot very well pray in aid the autonomy, authority and independence of housing associations in what is a voluntary scheme and then say, “Well, actually, you can’t trust them to check their own tenants, so let’s hand it all over to Her Majesty’s Revenue and Customs.” He cannot have it both ways. If they want to be independent and focus their scarce resources—we all agree on that, so there is a consensus—on the most needy of their tenants who require that assistance, then, frankly, and this is a wider issue, they have to raise their game.
However, if we look at amendment 200, we see that it refers to
“people aged over 65…people on zero hours contracts”.
How can we possibly police people on zero-hours contracts? Things change in respect of people’s working circumstances —each week, each month—and policing that will be very difficult.
Maria Caulfield (Lewes) (Con)
If we do not bring in a pay-to-stay scheme, what message does that send out to low-paid workers? A nurse starts on a salary of £21,000 and in the private rented sector often pays nearly £1,800 a month for market rent. With all the best will in the world, they would never qualify for social housing allocations policy. Is it fair that low-paid workers have to pay private market rents and yet if someone earns more than £30,000 in the social housing sector, they get away with discounted rents?
Mr Jackson
I absolutely agree—hon. Friend puts it in her normal eloquent and astute way. The fact of the matter is that the Labour party is letting itself down.
Mr Jackson
I will not give way for the time being. I have already been very kind to the hon. Gentleman and I will let him in in a minute.
The Labour party was quite courageous when it was last in government. For instance, it started to challenge lifelong tenancies, which was really important. That was about fairness, equity and sharing resources. That was absolutely right and I pay tribute to the right hon. Member for Don Valley (Caroline Flint), who was responsible for that when she was Housing Minister.
However, the principal reason that I oppose the amendment is that it is overly bureaucratic. It does not take into account that, in the vast bulk of local authority areas where there is social housing administered by housing associations, the differential is reasonably low and the number of people who will be impacted is low. Savills says that the figure will be around 6% but I think it is probably even lower than that. Nevertheless, it is a strong message to working people in social housing accommodation that there is an element of social equity and fairness in this process. If someone is working hard and has done well, no one is complaining, but resources are scarce and we all have a duty and responsibility to ensure that the people who need help most get it.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Does the hon. Gentleman share any of my concerns that the policy will change the social mix of areas? One problem on housing estates in my constituency is that they are already residualised—they already contain a large number of vulnerable people with high levels of need. If we move out those who have done well, who get a better job and who save—putting pressure on them to move—will that further residualise those estates?
Mr Jackson
No. A mix of shared equity, social rent, starter homes and owner-occupation will happen across the country organically as a result of the process. Let me just give the hon. Gentleman a statistic. In 1970, about one in four people in social housing were in workless households. It was quite normal for people in places such as Barking and Dagenham—people working at Ford—to live in a council house. There was no social stigma. Decent, working people lived in council houses, and if they were lucky they bought their homes. That figure is now much higher: about 50% of people in social housing are in workless households. There has been an element of ghettoisation already. None of us supports that and everyone wants a mix of people. Some people need specialist help, including people who are elderly, people with mental health problems and people who need supported housing. We have to have that variety. The legislation will not do anything other than drive through that variety, depending on each local area.
Mr Thomas
I would have more belief in the hon. Gentleman’s commitment that those high earners should pay more than lower earners if he was not such an enthusiast for cutting the taxes of the very richest people. However, I bring him back to the example that I gave in an earlier intervention. Evidence from the Chartered Institute for Housing shows that everyone who is paid the living wage—the Chancellor’s living wage—by 2020 will be hit by these pay-to-stay regulations. Does that example not trouble him in the slightest?
Mr Jackson
The No.1 rule in politics is never believe your own publicity—I say that to the hon. Gentleman. I am inordinately proud of what the Government have done to take the number of workless families, and the number of children in workless households, to the lowest it has ever been, to cut taxes and to introduce a national living wage. I am enormously proud of that record and of where our party stands for decent working people.
The Chair
Order. Although it is perfectly reasonable to have a discussion along these general lines, Members need to focus their remarks precisely on the amendments.
Mr Jackson
The hon. Member for Harrow West tempted me to be a little bit more voluble than I normally am.
Mr Jackson
I take your admonition in the spirit in which it was given, Mr Gray. I conclude by saying that amendment 199 is a wrecking amendment that would create an enormous bureaucratic burden for housing associations. For that reason, I ask the Committee respectfully to reject it.
Matthew Pennycook
It is a pleasure, Mr Gray, to serve under your chairmanship again. I rise to support the amendment in the name of my hon. Friend the Member for City of Durham. The stated intention of this part of the Bill—to remove an unfair subsidy—is highly questionable. The hon. Member for Thirsk and Malton has called social housing taxpayer-funded housing, but it is erroneous to suggest that social rents are an economic subsidy merely because there is a difference between social rents and market rents. Since the abolition of housing revenue account subsidy and the move to self-financing in April 2012, housing revenue accounts have brought in an overall surplus to the Exchequer. Councils and HRAs can set lower rents because of the subsidy gained in previous years.
Chris Philp
I believe that there is a subsidy, for two reasons. First, many housing association properties were built historically using Government grants. Secondly, many housing association properties were built as a requirement of planning permission and, at the time of construction, were subsidised by the private housing in the same scheme. For those two reasons, I categorically disagree with the hon. Gentleman’s assertion that there is no implied subsidy.
Matthew Pennycook
I disagree with the hon. Gentleman. He is right to say that there was an historical subsidy in the form of construction debt, but that has been paid off in most circumstances. HRAs are self-financing and most have made a profit since 2008. That is not a direct economic subsidy, as the Conservative party would have us believe. There may be other reasons why Conservative Members think that the policy we are discussing is the right one, but I disagree with them. It is bad policy making.
Chris Philp
Will the hon. Gentleman answer my second point about the implied subsidy via the planning system? When planning permission is granted and 20% or 30% of the units in the development are designated as social, they are effectively being subsidised by the private units in the same development. That is a subsidy.
Matthew Pennycook
That is not a public subsidy and the hon. Gentleman misunderstands my point. HRAs are self-financing. We are not talking about the two thirds of tenants in council housing who claim housing benefit, but there are problems in that regard. That is an economic subsidy from Government.
Helen Hayes (Dulwich and West Norwood) (Lab)
I want to make a similar point. The procurement of affordable housing through the planning system is not public subsidy, but the use of the democratic planning system to ensure that development provides what local communities need.
Matthew Pennycook
My hon. Friend makes a very good point, and I agree wholeheartedly. I served as a councillor before being elected to this place, and I give the Government credit for reforming the council house financing system. However, it is misleading and highly questionable to state that the rationale for the policy is an economic subsidy. That point needs to be made for the record. I will, for the reasons that I have stated, support the amendment, because the proposal represents bad policy making. There is a risk that it will lead to increased homelessness and increase the housing benefit bill. There is a risk that it will undermine the social mix on many estates, including those in my constituency.
The Government, incidentally, acknowledged that the discretionary threshold of £60,000 would have an impact on the income mix in areas but said the impact would be minor because of the threshold level. Bringing that threshold down would have a far bigger impact. Knowing the estates in my constituency and the problems they have as I do, I know that the last thing they need is for pressure to be put on people who do well, who aspire to get on and who get a better job to move out of those communities. This is bad policy making. For those reasons, I oppose the measure and support my hon. Friend’s amendment.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
It is a pleasure to serve under your chairmanship, Mr Gray. This has been a wide-ranging debate, and a number of points have been raised that I am confident will be covered when we consider other amendments to the clause. I will therefore keep narrowly to the amendments in question, which seek to include a substantial amount of detail in the Bill on who the policy should and should not apply to. That is unnecessary as we have the power to make regulations for that purpose if they are required.
I assure the hon. Member for City of Durham that we are giving careful thought to how the policy should treat certain benefits, including the state pension, housing benefit, and employment and support allowance. With regard to carers, as I said before, exemptions can be made and we will consider carers carefully. We recognise that, in certain circumstances, exemptions may well be needed, and we are thinking through that process carefully. We will provide more detail as we approach the making of the regulations and will continue to engage with the sector as we develop the policy.
Teresa Pearce (Erith and Thamesmead) (Lab)
When having those deliberations about what should and should not be included in household income, will the Minister consider whether disability living allowance and personal independence payments should be excluded? There are additional costs for people with disabilities. Will he take that on board and consider giving some reassurance that DLA and PIP will not be included in household income?
Mr Thomas
Given that there are a series of amendments to the clause, I do not want to detain the Committee unnecessarily with a clause stand part debate. In order not to do that, will the Minister reflect, while are we discussing exemptions, on whether tenants of housing co-operatives could be part of the exemptions he is looking at?
Mr Jones
The hon. Gentleman has shown a great interest in the tenants of housing association co-operatives throughout the Committee’s deliberations. I refer him to the answer I gave the hon. Member for City of Durham: we are considering carefully what exemptions will be in the regulations. We will certainly consider his comments. On the basis of the assurances I have given, I hope the hon. Lady will withdraw her amendment.
Dr Blackman-Woods
I thank the Minister for his response. The detail of the response indicates to me, and I hope to everyone else, that our proposal, far from being a wrecking amendment, as the hon. Member for Peterborough suggested, raises serious issues on behalf of some of the most vulnerable people in our society.
Dr Blackman-Woods
I will not, because we probably need to wrap up our discussion on these amendments.
We are talking about very vulnerable people who are deeply concerned about what these clauses might mean for them. I draw the Minister’s attention to the articles that are appearing in the press all the time with headlines such as “How ‘pay to stay’ housing will penalise disabled people like my daughter”. There is genuine concern out there, and the sooner the Government give some reassurances to these vulnerable people, the better.
On the basis of what I have heard from the Minister, I will not press the amendments, but I hope the Government can respond quickly to the points that have been made by introducing regulations as quickly as possible to outline who might be exempted. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
I beg to move amendment 198, in clause 74, page 30, line 6, at end insert—
“but only where a registered provider of social housing has failed to set a graduated rent charging scheme related to income level”
The amendment would allow the Secretary of State to impose rent levels only where voluntary agreements based on a graduated system are not already in existence.
The Chair
With this it will be convenient to discuss the following:
Amendment 201, in clause 74, page 30, leave out lines 8 and 9 and insert—
“(a) to be on a graduated scale established by the registered provider of social housing to reflect level of income and affordability in the area,
(b) to follow a scheme that has been subject to full consultation with tenants and agreed by them,”
The amendment would establish that high income rents will be at a more graduated level than market rents and would be established by the social housing provider.
Amendment 202, in clause 74, page 30, leave out lines 8 and 9 and insert—
“(a) to be based on the condition of the property with regard to—
(i) state of repair,
(ii) age,
(iii) degree of modernisation/refurbishment,
(iv) locality,
(b) in accordance with affordable rents in the area.”
The amendment would establish that rent levels will be based on the state of repair and location of the dwelling and will take into account the level of other affordable rents in the area.
Amendment 203, in clause 74, page 30, line 10, at end insert—
“(d) to be increased on a tapered system relating to income and level of rent charged.”
The amendment would introduce a taper scheme into the application of high income rents, to prevent large jumps in the rent level being charged with only modest increases in income.
Amendment 204, in clause 74, page 30, line 10, at end insert—
“(d) to take into account the need to promote socially cohesive communities.”
The amendment would enable local authorities and social housing providers to take into account the need to promote and encourage a degree of diversity in their communities.
Amendment 205, in clause 74, page 30, line 10, at end insert—
“(d) to take into account the need to promote mixed communities.”
The amendment would enable local authorities and social housing providers to take into account the need to promote and encourage a mixture of people with different income levels in their housing stock when setting rent levels.
Amendment 206, in clause 74, page 30, line 10, at end insert—
“(d) take into account local affordability.”
The amendment would establish that rent levels should reflect local affordability.
Dr Blackman-Woods
We now come to a series of amendments on what we might do about the rent charging scheme, which might actually be of interest to the Government Members who were jumping up and down earlier. These are probing amendments, which are intended to elicit more information about how the Government think rents should be set and what degree of prescription the Secretary of State will exercise through regulations on how rents should apply in practice.
Amendment 198 suggests that the clause should apply
“only where a registered provider of social housing has failed to set a graduated rent charging scheme related to income level”.
That goes back to the point about discretion, which we touched on in debating the previous group of amendments. If a housing association or a local authority already operates a scheme with different rent levels for people on different incomes, and if that scheme falls within the national rent setting framework, what is the point in the Government coming along and insisting that those bodies do things very differently? The amendment therefore poses a general question about what the Government think is wrong with the discretionary scheme.
Mr Thomas
It seems likely that the Under-Secretary—the more considered, measured and helpful of the two Ministers we have had at our disposal thus far, although that may change—will respond to the debate. Will my hon. Friend seek to elicit from him a commitment that the detail he may be considering including in the regulations will be made available to the House before Report?
Dr Blackman-Woods
I have written to the Minister to ask whether the regulations can be made available before the Committee finishes its deliberations, and, helpfully, I received a letter from him yesterday. He told me that, unfortunately, he could not provide us with the regulations before we finished our deliberations in Committee. I have not yet thought about how I will respond, and I do not want to take up the Committee’s time by thinking about that. I will respond in due course, because I need a fuller explanation from the Minister as to why the regulations cannot be provided earlier so that we know exactly what we are talking about. As we have said a number of times in the Committee, we are working in the dark, because so little information is available. That is why we tabled these amendments—to see whether we can get a bit more information from the Minister.
Amendment 201 is designed to establish, in a pretty similar way to amendment 198, what the Government think should be taken into consideration in rent level setting, whether they will take local circumstances into account and whether their intention is that the scheme that is eventually applied will have been subject to a consultation exercise involving tenants.
Kevin Hollinrake
How would the hon. Lady ensure that the system was fair? If housing associations in neighbouring parts of the country had different graduated scales, would that not be just too complicated? Clause 74(2)(b) already refers specifically to
“a proportion of the market rate”.
In other words, there will be a taper. The Minister has already given evidence to the Select Committee that there will be a taper. Is there really any need to overcomplicate the Bill in this way?
Dr Blackman-Woods
As I said, these are probing amendments. They are designed to elicit from the Minister exactly how the rent setting scheme will operate in practice. The important point about amendment 201 is that a new rent regime is to be set up for people living in social housing. I want to know whether the Minister thinks it would be appropriate to take some account of local circumstances and, importantly, to subject the scheme to a consultation involving the tenants who will be affected by it and seek their agreement. That is only fair. Tenants would expect, if they are to be subject to a different regime, that their voices would be heard when the scheme is being set up. That is the main purpose of amendment 201.
Amendment 202 is designed to establish whether the Minister intends future rent levels to relate only to income, using fairly arbitrary thresholds. While I am talking about thresholds, I want to correct the point made earlier by the hon. Member for Lewes. The threshold of £30,000 is not the earnings of an individual. It might be an individual, but it is based on the earnings of a household. That is critical. We are not talking about an individual income of £30,000. It could be—
Dr Blackman-Woods
If the hon. Lady will just let me finish the point, I will take her intervention. An individual income could be £15,000, which is way below the average income in all areas of the country. I am merely correcting what she said earlier about the threshold being an individual earnings level of £30,000. It is not; it is a household income level.
Maria Caulfield
My point was that a nurse on a starting salary earns £21,000, and it is not fair that they have to pay private market rents if they are in the private rented sector, yet in social housing, people with a household income of £30,000 are paying a subsidised rent that is much lower. We should be helping key workers such as nurses, policemen and teachers. The system is currently not fair.
Dr Blackman-Woods
Those comments are revealing on so many levels. First, as we have already established this morning, a lot of the housing is not subsidised. If the hon. Lady is suggesting that nurses have to pay rents that are too high in the private rented sector, the problem is the level of rents in the private rented sector. It is an extraordinary view, although it is reflected in the Bill.
Dr Blackman-Woods
May I deal with the intervention by the hon. Member for Lewes first? Then I will move on to the hon. Gentleman’s intervention.
The Chair
Order. Before the hon. Lady replies to that intervention, it might be worth remembering that a short while ago we had a debate on amendment 200, which covered most of this ground. We have now moved on to the next group of amendments, and perhaps the hon. Lady will focus attention on those.
Dr Blackman-Woods
Thank you, Mr Gray. I will try to keep in order, if the hon. Gentleman will forgive me.
The purpose of amendment 202 is to try to find out from the Minister whether future rents will be set totally based income, or whether he sees a role for them being based on the condition of the property as well or instead. That could include the state of repair, the age of the property, the degree of modernisation or refurbishment, and the locality—clearly some areas of the country have higher housing costs than others. We also want to know whether attention will be given to what affordable rent levels are locally. Some housing associations have written to us with real concern about what the new rent charging regime will mean for them and their tenants. We need to understand that level of detail about what the Bill will mean for local authorities, housing associations and the people who will have to live with the new charging regime.
Mr Jackson
The hon. Lady is being overly pessimistic and negative about the clause. The corollary of what she is saying is that good housing associations will take the opportunity to work with the people affected and to tell them about starter homes and Help to Buy, including Help to Buy ISAs. In time, guidance may be issued stating that they have a duty to do that, and the result will be that people will move to such tenures and release housing for people who perhaps need it more.
Dr Blackman-Woods
The hon. Gentleman makes an interesting point. One of the aims underpinning these clauses is to try to push people into owner-occupation or equity share. That seems appropriate and sensible for people who can afford it, perhaps with the right support and the right mortgage product. The problem is that the Government have produced no evidence of how many people will be pushed into that, and they have certainly not produced evidence to indicate that households with an income of £30,000 will be able to afford a property. I would be happy if the Minister returned to the Committee with detailed evidence to underpin some of what the Government seek to do in this part of the Bill. We have not seen that evidence, so we do not know what the full impact will be. We have people coming forward saying, “This is how it will impact on me”, and they say that the impact will be very negative. If Government Members reject that evidence, they must come forward with counter-evidence, but none has been brought forward to date.
If I can move swiftly on to amendment 203—
Dr Blackman-Woods
As we know from the most recent consultation document on pay to stay, the Government have accepted the need for a tapering scheme, but we have no idea whether that is a firm reassurance that a taper will be applied. Many of those who responded to the consultation said that there is a danger that families will fall off the cliff if they exceed the given threshold and there is no taper in place.
The Committee has received extensive written evidence from Tower Hamlets Council, saying how difficult things will be for tenants, particularly in London, where there is a substantial difference in many areas between a social rent and a market rent. A family in London might have a household income of £40,000, which, let us be honest about it, is low for London—it is about half the average wage.
Peter Dowd
On the concerns expressed by the hon. Member for Lewes about subsidies—not that I accept that her principle is about subsidies—does my hon. Friend agree that there seems to be a dislocation between what Government Members say about marginal subsidies for some people and about subsidies of £14.5 billion, according to the Government’s own figures, to train operators, subsidies to defence firms and grants to businesses? If the hon. Lady is so concerned about subsidies, would it not be best to get a grip on those figures first, rather than challenging the ones we are discussing?
Dr Blackman-Woods
My hon. Friend makes an interesting point.
I would direct all members of the Committee to the detailed briefing we received from Tower Hamlets Council. I should have said before that it is just one example of the many briefings we have received demonstrating the impact that these measures will have on housing stock and tenants. It is worth Members reading that evidence, because it shows that many people, in many areas of London, will be plunged immediately into poverty levels of income if the scheme is applied as currently outlined. Indeed, that will happen not only in London but in any area with fairly high market rents, which means most of our cities. It also means some of our more rural areas, because there is such a dearth of social housing that there is real pressure on housing stock, so market rents are quite high. It is important, therefore, that we take time to look at the impact of these measures.
We have also had an important briefing from the Joseph Rowntree Foundation, which says:
“The threshold at which ‘high income’ is reached will be…important.”
It also says that its research shows
“that this proposed threshold may be too blunt to accurately reflect the differing needs of households. Each year, we ask members of the public to help us define a Minimum Income Standard, showing how much money people need, so that they can buy things that members of the public think that everyone in the UK should be able to afford. The results of this exercise for 2015 show that a couple with two children would need to earn at least £20,000 each to achieve a basic standard of living.”
Yet here we have people earning much less than that having a lot more of their income taken up by housing costs. The foundation says that the measure will plunge more people into poverty.
Matthew Pennycook
Does my hon. Friend agree that equivalised resources are a thorny issue that the Government have encountered before with child benefit and the household benefit cap level? A blunt gross household income threshold does not take into account the needs of different-sized families.
Dr Blackman-Woods
I absolutely agree. The Joseph Rowntree Foundation emphases the point about not having a cliff edge and notes that schemes can be carefully tapered. That has happened to a degree with universal credit, so a model that could be applied is already in place. The other point it makes strongly is:
“The threshold for ‘pay-to-stay’ requires sensitive definition, and a taper for rent increases should be included to avoid work disincentives.”
To counter the point made by Conservative Members earlier, there could be huge work disincentives if we do not get the thresholds and tapers correct. Otherwise, if someone were to move from a social rent of £90 a week to a market rent of £200 a week and get only a marginal increase in their income, they would have to think twice about taking on additional hours or a promotion at work. It is therefore important that the detail of the scheme is right.
Kevin Hollinrake
The hon. Lady and the hon. Member for Greenwich and Woolwich mentioned the word “blunt”, but we have already received evidence that the measure will not be a blunt instrument. There will be a taper—provisions in the Bill say that. Is there any point in constantly repeating that same line?
Dr Blackman-Woods
We are trying to get some information from the Minister about the nature of the taper and how it will apply.
Amendment 204 would ensure that the application of measures in the clause will take into account the need to promote socially cohesive communities. A number of people have written to the Committee about that. Those communities are vital for our towns and cities. We all want to live in neighbourhoods with high levels of social inclusion, because that has been shown to improve mental health, lower crime rates and increase resident satisfaction.
We want to ensure that the scheme, once introduced, does not encourage people to move unnecessarily out of the neighbourhood they have lived in all their lives, where they might be contributing to civic life. Interestingly, the Coin Street Secondary Housing Co-operative said in its written evidence:
“We believe that Pay to Stay, in the context of fully-mutual housing co-operatives, would be divisive and contrary to the underlying philosophy of mutuality and shared rights and responsibilities. It would erode the stability and range of skills that underpin the effective functioning of co-operatives.”
Another housing association wrote to us to say:
“We are a happy, functioning, self-reliant community. We epitomise the big society. Pay-To-Stay will cause tensions with some members paying more for exactly the same services.”
It also said that the right to buy “undermines the fundamental principles” of its community. That is a real challenge to the Government.
I want the Minister to say something in his response about socially cohesive and mixed communities, which I will talk about in the context of amendment 205. Many housing associations have written to us with concerns about there no longer being mixed communities, particularly in terms of different income levels, in housing stock, because once people have a market rent applied to them, they will have to move out in many, although not all, circumstances.
Mulberry Housing Co-operative wrote to us, saying, “We have health workers, carers and teachers. They are very important to our local community.” I am sure that it could add nurses to that list, to help the hon. Member for Lewes. It does not want those people to have to move out of the area because their children go to local schools and they have a positive effect on
“the fabric of the wider community.”
It also points out, interestingly, that this is a significant “disincentive to work” and to people’s aspirations.
The Chair
Before I call the next speaker, it may be instructive to note that we have spent an hour and a half dealing with two groups of amendments. On the basis of the amendments that have been tabled, that would imply that we would need a total of 60 Committee sittings, lasting well until the new year, were it not for the programme motion. Therefore, it might benefit the whole Committee to consider the Bill sensibly, and to try to make our deliberations as speedy as possible to avoid missing out a large part of those deliberations. Of course, that is a matter for the Committee and not for me. I merely observe the statistical point.
Helen Hayes
Thank you, Mr Gray. It is a pleasure to serve under your chairmanship. I want to speak to this group of amendments because they cover and address many concerns that have been raised with me by three organisations: Southwark Council, Lambeth Council and the Southwark Group of Tenants Organisations, which represents all of the tenants and residents associations in the London Borough of Southwark. Between them, those organisations have responsibility for and engagement with huge numbers of social tenants. The points that they have to make are worth the Committee hearing and considering.
The organisations have expressed concerns to me about the impact of the pay-to-stay clauses on the erosion of mixed communities, as mentioned by my hon. Friend the Member for City of Durham. In boroughs such as Lambeth and Southwark—and, indeed, in my constituency within those boroughs—some very wealthy communities live cheek by jowl with housing estates. Critical to the success and wellbeing of those communities is the mix that exists at a micro-level in and among our estates.
When I meet some of my most successful, thriving tenants and residents associations, I find that long-term, elderly tenants are supported by newer, younger tenants and homeowners. Hardworking people with professional skills support much more vulnerable tenants who need help and need their neighbours to look out for them. I am concerned that the clause will have a detrimental effect on the mix, which keeps our communities healthy. I want all my communities, irrespective of tenure, to be successful. Having a diverse mix is critical.
I have deep concerns that pay to stay is a tax on aspiration, which will prevent people from taking additional hours at work, or from seeking promotion or a pay rise for fear of facing increased rents or losing their home. It is also a tax on aspiration to the extent that people who manage to increase their level of pay will be prevented from saving for a deposit to achieve their aspirations of home ownership.
Mr Bacon
Does the hon. Lady not agree that an innovative housing association might consider combining pay to stay with an eventual translation of increased rents over a period of time into equity that becomes a deposit, so that a tenant who has been in the same dwelling for a long time can eventually become the owner?
Helen Hayes
That brings me to my next point. As a consequence of pay to stay, some tenants might feel under pressure to consider home ownership when their financial circumstances mean that that is not a sustainable option for them to undertake in the long term.
In my nearly six years as a local councillor, I have seen many examples of tenants who have bought—either under right to buy or more often the second purchases of original right-to-buy properties—at very high levels of mortgage and are then affected by major works bills. That affects the viability of their home ownership and puts them under threat of losing their home.
Many people aspire to home ownership as the right thing to do but we must ensure that it is sustainable.
Mr Bacon
Does the hon. Lady not understand that, in the world that is eventually coming, innovative housing associations will offer a menu to tenants? They could offer them a chance to buy, and for tenants who find it is too much when they have bought, they could offer on a slide rule to go back into tenancy. It is perfectly possible to imagine an innovative housing association, an independent body, coming up with such a formula.
Helen Hayes
I agree with the hon. Gentleman that a menu of options is a good thing. However, the clause will be introduced immediately while the rest of the social housing sector is still gearing up. I am concerned about the immediate impacts of the legislation, in a world where the menu of options he described is not widely available and accessible to the majority of tenants.
Helen Hayes
In the interests of making progress, I prefer not to give way again. I am concerned that, by forcing some tenants into home ownership that may not be sustainable for the long term, the Bill will cause more hardship.
Research undertaken by Savills indicates that 60% of households that cross the proposed pay-to-stay threshold will neither be able to pay market rent nor take advantage of right to buy. They will nevertheless be affected by increased rent, which will stop them from saving and may put them at risk of losing their home.
On a final brief point: it is incumbent on the Government to apply a level of consistency as to who they regard as high earners. I argue that there is a fundamental lack of logic—potentially a fundamental hypocrisy—in designating someone as a high earner in one piece of legislation when they are not recognised as such by Her Majesty’s Revenue and Customs. I ask the Government to consider that point and respond to it.
Mr Jones
Amendments 198 and 201 would lead to wide variation in the treatment of high-income social tenants, depending on where they lived and who their landlord was. That would be complex and confusing for tenants. In contrast, our approach is clear, consistent and based on a set of simple principles. We will bring forward further detail of how the policy will work in practice at later stages of the Bill.
Amendment 201 seeks to add a further requirement to consult tenants and have the local policy agreed with them. It is very unlikely that tenants will ever agree to rent rises but we will ensure that the final design of the policy is subject to engagement with landlord and tenant groups.
The remaining amendments seek to introduce a further range of considerations that should be applied by landlords in the setting of rent. Amendment 202 seeks to allow rents to be determined based on the condition of the property. That is simply not workable. We expect social landlords to meet their obligations to keep properties in a state of good repair and that should have no bearing on the rent levels to be set under this policy.
Amendment 203 seeks to introduce a taper. Again, as the hon. Member for City of Durham knows, we have consulted on that. Amendments 204 and 205 are laudable in aim, but are being delivered through the policies. Affordable housing should, wherever possible, be provided alongside market housing. However, where that affordable housing is occupied by households on higher incomes, it is not in the interest of cohesive communities that they should continue to benefit from reduced rents. Amendment 206 seeks to ensure that rents are set at an affordable level. For that reason, we have consulted on graduated and tapered approaches. I hope that, on that basis, the hon. Lady will withdraw her amendment.
Dr Blackman-Woods
I have heard what the Minister has said, and I am very disappointed. Again, we have identified clearly the Government’s difference of approach with regard not only to what counts as high earning but to what constitutes a market rent. I will give an example of a local set of circumstances. A family living in Durham with household earnings of £30,000 would probably have a market rent of about £150 to £180 a week, but a similar family living in Bristol would have a market rent of £260 or £280 rent a week, or even higher. That is what we are trying to expose. It makes a huge difference to a family’s income. In the latter example, it could mean that that family must rely on housing benefit.
That is exactly the point that we are trying to make to the Minister. Is this sensible policy making? No, it is not. The Government are giving no credence to the state of a property when setting rent, although the clause will push people on to market rents. That seems extraordinary. In the private sector, if a flat or house has been recently refurbished, it will generally be revalued and higher rents will apply, yet the Government seem to be saying that they will not allow housing associations or local authorities to do the same, even though they are requiring that a market rent be applied to the property. It seems an extraordinary thing to do.
I am pleased that the Minister will consult tenants, but I hope he will seriously rethink some of the proposals in the light of the comments made, the unworkability of the scheme and what it could mean for higher housing benefit costs, and that he will return on Report with more information that might help us understand more clearly the logic behind the Government proposals, which I am afraid is sadly missing and not obvious to us at this point. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Ordered, That further consideration be now adjourned. —(Julian Smith.)
Housing and Planning Bill (Thirteenth sitting)
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
Dr Blackman-Woods
I beg to move amendment 207, in clause 74, page 30, leave out line 13.
The amendment would address the rationale for rent levels for similar housing varying from area to area.
I shall be very brief, because we touched on the amendment earlier. The aim is to find out what role the Government think there is for a differential system in relation to income levels and rents locally. We are concerned that failing to take into account specific local effects of the national policy could set working people and families up for disaster.
There is an argument to be made that rents should, to a degree, reflect the local situation. I will give a brief example to show the importance of that. The Borough of Hackney in London is the 11th most deprived authority in the country, but its housing prices are among the most expensive in England. In the past five years, prices have increased by 72%. If it were left to the market, most of the earners living in Hackney would be unable to afford the average rent for the area, which is £1,700 a month. Rents have increased by 27% since 2011. Hackney Council has told the Committee that people on low to moderate incomes will be targeted by the policy—the very same households that would have been targeted by the family tax credit changes, and that will in due course be targeted by the changes to universal credit. That is setting up a near catastrophe for those families in 2017-18. With such examples in mind, will the Minister tell us what role local circumstances will play in setting rent levels?
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
The amendment would remove the explicit ability in regulations to set different rent levels for different areas, allowing us to respond to market conditions if required. Given the amendments that we previously discussed, I should have thought that that was exactly the sort of flexibility the hon. Lady would support. On the basis of our earlier discussions and the fact that the Bill allows for flexibility within regulations, I hope she will withdraw the amendment.
Dr Blackman-Woods
If the regulations do indeed contain that flexibility, that is to be welcomed, but, to repeat what I have said before, we have not seen the regulations, so we do not know that. We tabled the amendment simply to flag up the fact that the regulations would need to include that flexibility. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
I beg to move amendment 211, in clause 74, page 30, line 13, at end insert
“and shall only apply where the costs of implementation are reasonable as determined by local authority or Housing Association Board of Trustees.”
The amendment would establish that the cost of implementing the high income rent regime provides value for money.
The amendment has two purposes. One is to flag up the additional costs that will be heaped on to local authorities and housing associations in administering the scheme. Again, a great number of the people who have written to us have said that they are concerned that, because they do not have many tenants who would be deemed high earners under the Bill, quite a low aggregate amount of money would be available; and that administering the scheme and having to find out all their tenants’ income could far outweigh any financial benefits.
The amendment is an attempt to test the Government on whether they have carried out any assessment of the likely income that would accrue to local authorities and housing associations across each area of the country and how much money they think councils and housing associations would have to spend gathering the data and administering the whole scheme, and being very clear that more money would be raised than would be expended. To my knowledge, that information is not in the public domain and was not in the impact assessment.
We are concerned that the proposed process is simply adding financial burdens on local authorities, whose budgets have been cut year on year in many parts of the country—my own council, for example, has had a 40% cut in its budget, with more cuts to come until 2019. The Local Government Association—it might be worth noting in passing that the LGA is Conservative-run at the moment—has voiced concern about funding cuts that have left its members with a £10 billion black hole. The LGA is concerned that the provisions in this Bill, including the costly the pay-to-stay scheme, will place a further burden on their finances.
Local authorities and housing associations have raised genuine concerns, as have co-operative housing groups, one of which says:
“Administering Pay to Stay would be complex and time-consuming. Given that our co-op is managed by its member/tenants, costly provision would need to be made to employ a professional to do this. A small co-op such as ours would find this difficult to manage.”
The question the amendment puts is this: what assessment has been made of the money that would be raised in each area for each housing association, and what are the estimated costs of the administrative burden being placed on housing associations, local authorities and co-operative housing groups?
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I rise to support the amendment. In doing so, I shall focus on the representations made to me about the plight of small co-operative and community-led housing associations—a point I put to the Under-Secretary of State in a previous intervention.
My hon. Friend the Member for City of Durham is right to say that the focus of concern for housing co-operatives has been on the administrative costs of managing pay to stay and its impact on the functionality of co-operatives. I take at face value the words of the Minister for Housing and Planning on housing associations. On Tuesday, he said:
“The Government trust housing associations to look after their tenants. We believe that they have their tenants’ best interests at heart and that they will use their discretion wisely.”––[Official Report, Housing and Planning Public Bill Committee, 1 December 2015; c.376.]
That was said in the context of other elements of the Bill, but surely it is equally appropriate in the context of pay to stay.
The Under-Secretary of State made it clear that he will consider the issue of housing co-operatives in relation to the regulations, and I very much welcome that. However, I say to him that many co-operatives, particularly those in London, have made contact—for example, Vine Housing Co-operative and Coin Street Community Builders have been in touch with me, and Edward Henry House Co-operative has made representations to us. They say that, because of the cut in rents being delivered in the Welfare Reform and Work Bill, there is no additional funding that they will be able to get to deliver some of the other proposals in this Bill and cover the administrative costs they will face.
The co-operatives are not, in the main, big housing associations with the scale to find efficiency savings naturally, not least because they do not usually have large numbers of staff or other resources. Much of the administration of housing co-ops is done on a voluntary basis, as part of the quid pro quo of being a part-owner of the housing co-operative. If pay to stay is introduced, Ministers will understandably want housing associations to have a series of monitoring arrangements in place. Those monitoring arrangements will inevitably create an additional burden, and at the moment small housing co-ops are struggling to see how they will be able to fund that. They also worry more generally for some of their members, who may face a sharp increase in the cost of staying in the housing co-operative, and therefore housing association, property. Rent arrears could also increase, which would be an additional cost. Because of the small nature of most housing co-ops, that would be difficult for them to bear.
For those reasons, I urge the Under-Secretary to look even more seriously at the potential impact on small housing associations. I will write to him separately outside the Committee, but I hope he will undertake to look at that letter and representations on this provision from housing co-operatives.
Mr Jones
I shall take the final point made by the hon. Member for Harrow West first. I will be happy to receive his representations, along with those from across the sector, on behalf of the smaller housing associations and co-operatives.
On amendment 211, we recognise that landlords will incur a cost in operating the policy and we have consulted on that. We have proposed that local authorities should be able to offset administration costs from additional income, and for housing associations the benefit from operating the system will far outweigh the costs. Regardless, our aim will be to design an approach that is as simple as possible to administer and we will take forward further engagement with landlords on that point.
The amendment is therefore neither necessary nor practical, and I hope the hon. Lady will seek to withdraw it.
Dr Blackman-Woods
Once again, I am quite disappointed by that response. It appears that this legislation is going to lay administrative burdens on local authorities and housing associations, but we do not have an estimate of how extensive those burdens will be. Nor do we have an estimate of the income that will accrue to local authorities and housing associations, not least because we do not know where the threshold is going to apply or what levels of rent will be set.
The point we are trying to make in the amendment is that it is important that the scheme be cost-effective. Otherwise, it will be a complete and utter waste of money, bringing huge chaos to the lives of some tenants. Bearing in mind the seriousness of the issue, I hope the Minister will look at this again and see if there is any evidence that would help us to form a judgment on whether this is a good use of public money. If that information comes into the public domain, we could return to the matter. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
I beg to move amendment 208, in clause 74, page 30, line 13, at end insert—
“(c) and to be subject to a notice period of one year”.
The amendment would provide tenants deemed to have a high income with time to relocate to another property or increase their income further.
The Chair
With this it will be convenient to discuss amendment 209, in clause 74, page 30, line 13, at end insert—
“(c) and shall be subject to transitional protection”.
The amendment would allow tenants deemed to have a high income to be given transitional protection so they are able to prepare family budgets to accommodate higher rent levels.
Dr Blackman-Woods
A theme we have been developing in our deliberations on this part of the Bill is that, if we are not careful about how the scheme is set up, tenants will at short notice have to expend a great deal more of their income on housing costs. That could be a drastic change in a short period of time.
Under amendment 208, tenants deemed to have a high income would be given a notice period of one year to enable them to relocate to another property that might be cheaper, or move into other employment that would increase their income. We think that without a notice period, because tenants will not have budgeted for a huge increase in rent, they will find themselves increasingly in debt, and if we are not careful that indebtedness could lead to families becoming homeless, which I am sure all Committee members would want to prevent.
Especially in London but in other areas where market rents are high as well, families might find themselves unable to live in the area where they have resided for decades if they are forced to pay market rent. If tenants have to move away to find more affordable accommodation, they need time to do so, or they will need time to think through the implications for their family of taking a second job to help pay the rent. They will need to think about what longer commutes mean for childcare, for example. Those are not decisions that can be taken lightly over a week or two, if that is all the notice that they will be given of a huge increase in their rent from social to market rates.
Some councils have raised that point with us. Milton Keynes Council said that it is particularly concerned about the effect of pay to stay in that community:
“In Milton Keynes we estimate that around 1,300 of our tenants will be affected (around 11% of the social rented stock). There is also a perverse disincentive in the pay to stay idea in that hard-working people will now face a hike in their rents, and be forced to move (possibly away from their jobs) when properties to rent and buy are becoming harder to find.”
I gave the Committee the example of Hackney earlier. I will also quote PlaceShapers, just so that we know that we are talking about real people. It is easy for us in Committee to forget that the measures will have an impact on people’s lives, but PlaceShapers gave us some examples. One is of a couple with no children renting a two-bedroom flat. Currently, the rent is £110 a week. Mister earns £25,000 and Missus earns £20,000, giving a household income of £45,000 a year; that is their only income. They pay full rent themselves, as they are not entitled to benefits. Once the rent rises to a market rent for a two-bedroom of £220 a week, they will have to find an additional £110 a week, or £5,500 a year. That is a huge amount of money for a household to find at short notice. We could give other examples.
The amendments are about putting a degree of reasonableness into the scheme. That is also reflected in amendment 209, which seeks to ensure that tenants will be able to receive transitional protection of some sort. We would like to hear from the Minister what degree of transitional protection will be available. Interestingly, Savills has estimated that 60.1% of the 27,108 affected households in London will never be able to afford a market rent or to buy their homes under right to buy. That is a huge number of people. If they will never be able to meet that level, that would suggest that the Government should have estimates of the number of affected households and the amount of money to be raised. Savills says that a large number of people will find that extremely difficult, if not impossible. Because of that we need to have a much better understanding of the transitional arrangements.
Mr Jones
We are aiming to design a policy that is as responsive as possible to the current income of tenants while also protecting work incentives. Providing a rent setting notice period of one year, as amendment 208 does, ignores the realities of what might to happen to household income or other circumstances within that year.
I agree entirely that the policy should be communicated effectively to all tenants and landlords, and we will clearly set out how the process for rent setting will work. It is very likely that guidance will be a feature, as provided for under the powers in the Bill. The policy is not due to be implemented until 1 April 2017 and engagement with landlords and tenants in the run-up to that date will be a key feature of our plans.
Presumably, the transitional protection that is sought under amendment 209 would be consistent with the notice period required under amendment 208—I think the hon. Lady said it would. I say to her that this is not practical for the reasons I have set out. We have consulted regarding gradual increases to rent for tenants above the income threshold. I hope, on that basis, that the hon. Lady will not be too disappointed and will consider withdrawing her amendment.
Dr Blackman-Woods
We tabled the amendments to ensure that families are not suddenly faced with a huge increase in rent, to the extent that they are not able to meet those payments, without being given an opportunity to try to access alternative accommodation or increase their income. It is important that there is a degree of notice and some transitional protection. I would like to press the amendments to a vote.
Question put, That the amendment be made.
Dr Blackman-Woods
I beg to move amendment 210, in clause 74, page 30, line 13, at end insert—
‘(3A) The Secretary of State must make regulations to provide for the external valuation of high income rents”
The amendment would require that the application of a higher income rent should be subject to external valuation.
Another running theme of the Bill is that key elements directly affecting people’s lives are to be decided by the Secretary of State in regulation. We will have no idea until we see the regulations made under clause 74 what the higher rent could entail. We seek to ensure that rents set by the Secretary of State are subject to scrutiny.
This part of the Bill gives the Secretary of State various regulation-making powers and we want to ensure that the level of rent set is subject to a degree of external valuation. We are extremely concerned that tenants will face a huge hike in their rents, and we do not want that to happen with little or no scrutiny and without clear logic. It is vital that the decision to increase someone’s rent is taken carefully and is subject to external valuation, so at the very least the rent is understandable, even if the process is not entirely fair. We would like a clear understanding of how it has been set and the rent level reached, and that there is some external valuation of the basis on which that was done.
We did not manage to elicit any further information from the Minister this morning about how the Secretary of State is to set rents and what he is going to take into account. We want to hear more about that and how the system will be subject to external scrutiny so that the interests of tenants, housing associations and local authorities are protected.
Mr Jones
The level of rent payable by a high-income social tenant will be determined by the regulations under clause 74, as we have discussed at length. Landlords will be expected to set rents on that basis. It is, of course, feasible that mistakes will be made by landlords in setting rents, which is why we intend to make regulations under clause 78 to give tenants the right of appeal. We do not consider that a further external valuation, as proposed by amendment 210, is proportionate. I hope that the hon. Lady will withdraw the amendment.
Dr Blackman-Woods
I really wish I shared the Minister’s faith in the ability of the Secretary of State to set the rent for each housing association and local authority in various circumstances across the country, and to do that without any external valuation, in a fair and reasonable way. This is no comment on the current Secretary of State, who is an extremely competent gentleman, but the provision places an onerous burden upon him. Our amendment would help him to demonstrate that what he is doing is fair, just and reasonable.
It is a very great pity that the Minister has not taken up our offer to make the scheme much more transparent and understandable. We have tried to help—that is all we can do—but the offer of help has been refused. I therefore beg leave to ask to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
I beg to move amendment 212, in clause 74, page 30, line 18, at end insert—
“(6) The provisions in this section shall only apply to new tenancies commenced after 30 April 2017.”
The amendment would provide that the high income rent regime would only apply to new tenancies.
The Chair
With this it will be convenient to discuss amendment 213, in clause 74, page 30, line 18, at end insert—
“(6) All provisions in this clause shall only apply to where the tenant has been provided with a new tenancy agreement.”
The amendment would provide that the high income rent regime would only apply where tenants have been given a new tenancy agreement.
Dr Blackman-Woods
The two amendments deal with a situation we are very concerned about and have talked about a lot—that of tenants who are managing their family budget on the basis of paying a social rent, having made life choices and decisions on their accommodation based on their level of income and the range of housing options available to them. The Government have rejected our amendments that would have given tenants a degree of leeway in relation to the new rents that are coming in and would have enabled them to make other life choices, so we are faced with a situation in which many of the tenants in council or housing association properties will face huge hikes in rent, which could have devastating consequences for them and their families.
If the Government must go ahead with the pay-to-stay measures—it should be obvious to everyone by now that we totally reject the very basis of the scheme—it is only fair to apply them to new tenants, because new tenants will know exactly what they are facing. They will know that when their income gets to a certain level, they will be moved to a market rent. It seems totally unfair to apply the scheme retrospectively to tenants who have already made life choices that are perhaps locked in to particular occupations and job opportunities.
The scheme is totally unjust, particularly if the level of difference between social and market rents is so high that it pushes the family into indebtedness, or ultimately leads to their losing the tenancy altogether. We have not heard anything about that from the Minister or any Government Member. The figures we supplied from the Joseph Rowntree Foundation show that about 40% of families do not have a socially acceptable standard of living at the moment, and a sudden increase in rent will exacerbate that problem. Are the Government going to monitor what happens to the families who suddenly have huge hikes in rent and will they check whether those hikes lead to indebtedness and tenancies ultimately failing?
The examples I gave earlier show how much money families will have to find in a very short time. We are not talking about families on high incomes. As my hon. Friend the Member for Harrow West pointed out earlier, their incomes would not be recognised as high incomes by Her Majesty’s Revenue and Customs. Critically, the Government’s own minimum income level will be the level at which the higher rents kick in, so they are going to affect some of the poorest families in this country. To call these high-income households is a misnomer, to put it very, very mildly; I could go much further than that, but I will not. Bearing in mind the huge impact that the scheme could have on current tenants in the sector, if it has to be introduced, although we do not like it, it should at least be fair, people should know what they are getting into when they take on a social tenancy and it should apply only to new tenants.
Amendment 213 deals with the situation of new tenants in a slightly different way. Tenants have a contract and a tenancy agreement. At the moment, their tenancy agreement says, “We, the housing association, will charge you this much rent because there is a national framework that says how much rent we charge, and this is how it gets amended locally.” Tenants have signed up to an agreement for a social rent. What will happen—presumably in 2017—is that their tenancy agreement will be ripped up in front of their eyes, and in its place they will get a new agreement that says, “I, the Secretary of State, say in regulation that you are going to pay this much rent,” and presumably, if they do not pay that rent and they fall into arrears, they will get evicted. It will also say something about how and when they will be evicted.
That is a huge change to the experience of those tenants. It is incredibly destabilising for families, and it should not be taken lightly. I want to hear from the Minister who will put the new tenancy agreements together. Will it be an agreement between the housing association, the local authority and the tenant, or will it be an agreement between the Secretary of State and the tenant, because the Secretary of State, by regulations, is apparently setting the rent? This is a very serious issue. We need to know how the new scheme will be brought in, what consultation there will be and what the legal underpinning of the new tenancy agreement is, given that those tenants already have a tenancy agreement that will be at odds with the Bill.
Mr Jones
New social tenancies should be granted to those in the most need, and landlords should carefully consider whether a high-income social tenant meets those criteria, but of course there are plenty of high-income social tenants with existing tenancies. Clause 78 gives registered providers of social housing the power to increase the rent payable under an existing tenancy. The amendments would remove that fundamental principle of the policy. I hope, on that basis, that the hon. Lady will withdraw them.
Dr Blackman-Woods
Exactly—that is exactly what we are trying to do with these two amendments. We think that the current scheme is absolutely unjust and will make it really difficult for tenants who have already made life choices and cannot get out of them easily, subject to the perniciousness of these clauses. I gather from the Minister’s response that we are not going to get anywhere, so I beg to ask leave to withdraw the amendment.
Amendment, by leave withdrawn.
Clause 74 ordered to stand part of the Bill.
Clause 75
Meaning of “high income” etc
Dr Blackman-Woods
I beg to move amendment 214, in clause 75, page 30, line 23, at end insert—
‘(1A) For the purposes of this Chapter high income cannot be set at a level lower than median incomes.’
The amendment would provide that the high income level cannot be set a level lower than average/median salaries.
The Chair
With this it will be convenient to discuss the following:
Amendment 216, in clause 75, page 30, line 23, at end insert—
‘(c) be set with reference to average incomes in the area with high incomes being defined by income falling in the top quartile of incomes in the area.’
The amendment would provide that high incomes will reflect the top quartile of income levels.
Amendment 217, in clause 75, page 30, line 23, at end insert—
‘(c) use a definition of high income for this purpose based on at least three times multiple of average income in the area concerned.’
The amendment would provide that high incomes must be at least three times the multiple of average income in the area.
Amendment 215, in clause 75, page 30, line 34, at end insert—
‘(g) relate to incomes of the tenants only.’
The amendment would provide that higher income households will only be determined by the level of income of the tenants and not additional household members.
Dr Blackman-Woods
Members of the Committee already know that we have very grave concerns about how “high income” is being determined. Outside Parliament, or outside a section of Parliament, it is hard to find anyone at all who thinks that the new minimum income set by the Chancellor is in fact a high income. As a result, we have tabled a series of amendments in an attempt to put some sense into the definition of “high income”. Clearly, it makes no sense to most people to have “high income” determined by the minimum level of income in the country—that seems absolutely ludicrous.
Amendment 214 seeks to ensure that “high income” cannot be set at a level that is lower than median incomes and that that should apply for a household. For example, in my constituency, where rents are high, a family in which someone earns £18,000 and someone else turns £12,000—neither is a high income—would be subject to the clauses we are debating, even though the median income in Durham is about £22,000. The family is being deemed to be on high income, even though they do not earn the median level of income locally, never mind nationally. Under the amendment, at least the threshold for somewhere such as Durham would be set at £45,000 per household, or thereabouts—that is still not a terribly high income for a family, but it is much better and fairer than the £30,000 that the Government propose in the Bill.
If the Government do not wish to listen to the Opposition, it is important that they at least listen to some serious commentators who have great concerns about how the scheme will operate in practice. Terrie Alafat, chief executive of the Chartered Institute of Housing, who also gave evidence to the Committee, has said that
“you simply cannot class a household with an income of £30,000 as ‘high income’. A single person with no children might seem relatively well off, but what about a couple who both earn £15,000 and have three children?”
That is another factor to take into account—not only what the median income is, but the household.
How many people must the income support? It is extraordinary that there is nothing to date in the Government scheme to differentiate by family type, as far as we know. The measure seems to punish families with children in particular, which seems an extraordinary thing for a Government to do. Terrie Alafat also pointed out that the new national living wage will bring in, for a family with two earners, £29,952 a year. That is the point that we are making, that the new minimum wage—I refuse to call it a living wage—will leave people at the same level, because with upratings presumably that is higher than the threshold. She added:
“It must be contradictory for a household to be on the statutory minimum wage and also less than £50 away from being classified as a high earner for housing policy purposes.”
Even the Government’s own consultation on “Pay to stay” recognised such thresholds as a problem. There were suggestions, which I will discuss in the debates on later amendments, of where that level should be set.
Dr Blackman-Woods
Absolutely. I draw the Committee’s attention to the written submission from the Home Group, which worked through examples of the effect on its tenants. It thinks that around 11% of its tenants will be affected, and that half of all local authority tenants—a huge number of people—could see really enormous jumps in the amount of rent they will have to pay. The written evidence works through just how serious the jumps in rent charges will be and the potentially devastating consequences for particular families. If the Minister is going to reject everything we put forward to make the scheme a little bit fairer, I urge him to look at what individual housing associations and local authorities are saying, because they are in touch with their tenants and will know the impact of the legislation.
I will not say too much about amendment 216, because it just carries on from amendment 214, but it tries to put some sense into the definition of a high rent with reference to average incomes in the area and with high incomes being defined by the top quartile of incomes in the area. If we were asked what we think is a high income, how many of us would say the statutory minimum wage? Who would? Quite frankly, no one with any sense would say that. We would all say, “Well, perhaps the higher quartile of incomes would seem to be a reasonable starting point.” That would vary slightly throughout the country—for example, in Yorkshire and the Humber the average salary is £23,000, compared with an average salary in London of about £40,000.
As I suggested earlier, we would relate the definition to what is happening to earnings locally, and it would also be understandable. It seems fair that we all understand how income has been assessed and why it has been judged to be a high income, rather than having it judged against the minimum wage, which, as I said before, seems extraordinary. If the Minister wants further evidence, there is yet another excellent submission from a housing association. This time it is from Riverside housing association—
Dr Blackman-Woods
Indeed. Again, with its tenants in mind it worked through exactly what the proposals will mean. It said that the impact of paying to stay
“is likely to be very high and vary significantly across the country. Comparing two local authority areas, Liverpool and Bromley, shows the difference an increase to market rent could mean for our tenants. At present a move to a market rent for a household at the £30,000 threshold living in a 3 bedroom house in Liverpool would result in a weekly increase of £35 (an increase of 38%). However for a similar family (now earning £40,000) living in a Riverside home in Bromley this would mean a staggering increase in weekly rent of £254”—
a 201% increase in their rent.
Riverside continued:
“This would mean that the household would pay around 50% of their gross income on rent, significantly above the accepted affordability threshold of 30% which is usually applied to net income.”
That is a staggering example, but it is just one out of many and would be duplicated again and again across all housing associations in all areas of the country. I use the example to demonstrate once again that the measures will have an impact on the amount of money that real people will have to pay to be housed.
Mr Thomas
Not only will that have an impact on real people, but might it not also have an impact on the taxpayer? My hon. Friend may have seen the modelling by Sovereign Housing Association showing that a typical household of two adults earning £30,000 and two children in a three-bedroom house would be eligible for housing benefit in over half of local authorities. That figure rises to some 96% for residents paying affordable rent. For those paying a market rent, the figure would be 100%. It cannot be right that the taxpayer will have to pick up the mistakes of the policy as currently drafted.
Dr Blackman-Woods
My hon. Friend makes eloquently the point that we made earlier. The lack of a cost-benefit analysis of the scheme is very unhelpful, because we would otherwise have those figures. We would know how much money is likely to be spent on housing benefit, how much it would take to administer the scheme and whether it was worth putting so many families through this extraordinarily damaging series of events.
Amendment 217 seeks to test the Minister on whether there is another way in which we could consider what might be a high income. If it is not to be above the median of rents set locally and if it is not to be in the upper quartile, what about three times the average income for the area? That is another way in which we could determine what would be a high income, but the Government have rejected that particular approach. Again, we have evidence from Mulberry Housing Co-operative:
“Our tenants will be unable to afford the massive increases in rents...This means the rents would have to rise above the household income of the majority, if not all, of our members. To afford this level of rent the household income would have to be in the region of £170,000pa. A household income of £40,000 would trigger rent rises that are impossible to pay for the ordinary workers who make up our Co Op.”
There we have it from the very people who run the co-op. Using the high-income level proposed by the Government, it will be impossible for people on such levels to pay the increased rent. I urge the Minister to reconsider the thresholds.
Finally, I turn to amendment 215. My understanding of the Government’s most recently published consultation is that they intend household income to be assessed only on that of the tenant and not that of other household members. The amendment seeks to discover whether that is wrong or whether the Government have not decided what they are doing. PlaceShapers and its members are concerned that if incomes beyond those of tenants are taken into account, current tenancy agreements will be called into question. It has asked, as have others, that only the income of tenants is taken into account. Otherwise, family units might be broken up, and it might be necessary for parents to ask an older child to move out of the property if they were not able to afford the higher rent.
Example after example has been given to us of the damaging consequences that the measure could have for households. I would be grateful to hear from the Minister whether only tenants’ incomes will be included, or whether a household will include an 18-year-old who has a part-time job stacking shelves in the local supermarket. Will the income of that adult child be taken into account?
Mr Jones
As I said earlier, we were clear at the last Budget that the household income thresholds for the policy will be £30,000 nationally and £40,000 in London. We have also been clear that we will base household income on the income of the two highest earners in the household.
Amendment 214 seeks to introduce a minimum income threshold linked to median national incomes. I note that the latest data from the English housing survey show that the median household income is £26,000—substantially below the prudent threshold we have set. Amendment 215 seeks to ensure that the income thresholds would apply only to tenants, rather than the household. Using household income is the fairest way of defining high-income social tenants, as it ensures that those who contribute financially to a household also contribute financially to a fairer rent. However, we intend to take a proportionate approach by specifying that only the income of the two main breadwinners will be taken into account.
Amendments 216 and 217 seek to introduce variable income thresholds linked to average incomes at a local level, but such an approach would be confusing for tenants and burdensome for landlords to administer. Instead, we have agreed to consult on gradual increases in rent for social tenants as their incomes rise above a clear and simple threshold. On that basis, I hope the hon. Lady will agree to withdraw her amendments.
Dr Blackman-Woods
Again, it is unfortunate that the Minister has not engaged with the points we are raising through the amendments, such as the fact that the level of income the Government judge to be “high” is being set not at the median per person—nor, indeed, above the median per person—but at the level of the statutory minimum wage. I thought the Minister was in danger of making the same mistake that the hon. Member for Lewes made earlier, by assuming we are talking about individual incomes when we are actually talking about household incomes. If it was the median income per person in the household, we would be in a very different situation.
Dr Blackman-Woods
I beg to move amendment 218, in clause 76, page 31, line 1, leave out subsection (3).
The amendment would reduce the scope of regulations made under this section.
I can be very brief about this amendment. As the Committee knows, because we have mentioned it a few times, we are concerned about the powers being given to the Secretary of State to do all sorts of things. We are worried about the scope of the regulations under clause 76(3)(b) that enable the Secretary of State to say exactly what type of information and evidence might be required regarding people’s income, as well as
“the time within which and the manner and form in which the information or evidence is to be provided”.
That is an extraordinary intrusion by the Secretary of State into how housing associations and local authorities run their affairs. We are going to have regulation and the Secretary of State will be able to say, “This is the information that you are going to require. This is the evidence—two payslips, three payslips, four payslips, five payslips.” We do not know. Presumably at some stage we will see the regulations. Alternatively, the Secretary of State might say, “I’m sorry. No, we do not think that payslips are good enough. We want an employer to estimate an annual income. We want an employer to give a statement of exactly how the pattern of earnings accrued to that person throughout the year.”
The Secretary of State is going to tell housing associations and local authorities exactly how to get the income and in what way, whether practical or not, and the time, manner and form in which the information or evidence is to be provided. The possibilities of what this could mean under clause 76(3)(b) are endless. Will it all have to be electronic?
Peter Dowd (Bootle) (Lab)
Does my hon. Friend agree that this seems to be in complete contradiction to the Prime Minister’s view that local authorities should be trusted to get on with the business of the day? To repeat a phrase I have used in the past, it shows an anal retention of the detail of what a form should look like, when it should be sent out and what it should and should not include. Does she agree that it is about time the Government started to chill out?
Dr Blackman-Woods
My hon. Friend introduces a very good phrase that we might use more often in Committee: “chill out”.
Dr Blackman-Woods
No—I am not going down that route.
I would have thought that local authorities and housing associations should be allowed to manage their own affairs in respect of how they collect information about income so that it suits their tenants. The Secretary of State could decide that all information should be supplied and obtained electronically, but a lot of tenants might get weekly payslips, so that would be extremely difficult for them. He might decide that the timeframe should be three months, which could be extremely difficult for those with fluctuating earnings.
This subsection is nonsense, because to make the scheme operate all the Secretary of State has to say is that housing associations and local authorities must determine the income of their tenants and apply higher rents, rather than telling them what kind of information or evidence will be required and the time and form in which they must get it.
Mr Stewart Jackson (Peterborough) (Con)
In my reasonably short time on the Public Accounts Committee—I have not been on it as long as my hon. Friend and esteemed colleague the Member for South Norfolk—one lesson I have learnt is that if data are not collected properly, the efficacy of a proposed policy can never be worked out. My reading of the clause is simply that it will be a template for consistency across housing associations, which will allow each to measure the same thing.
Dr Blackman-Woods
That is an interesting point of view, but it is rather at odds with what we often hear from the Government about localism, letting a thousand flowers bloom and letting local authorities get on with the job of managing things. In fact, it probably runs counter to the whole devolution agenda, so the next time the Secretary of State gets up to expound the many benefits of devolution—I totally concur: all of us want to see more devolution—I might be tempted to remind him that subsection (3) is at odds with the devolution ethos. It is incredibly prescriptive, because not only does it require particular information from local authorities or housing associations, but it requires that in a particular way.
Peter Dowd
If I could push this point, does my hon. Friend agree that the Government are effectively saying to local government, “You are going to fund yourselves via council tax or business rates,” so all the responsibility goes to them, but at the same time the Secretary of State and Minister seem to be telling local government what the colour of their forms should be?
Dr Blackman-Woods
My hon. Friend puts it very well indeed. I will not labour the point further. We are clear that this is an unnecessary intrusion into the operational practices of local authorities and housing associations, and in fact—this is the main reason why we tabled the amendment—it could be unworkable, because the Secretary of State could set a way of collecting data that is impossible for small housing associations. I will be interested to hear how the Minister will defend the inclusion of the clause in the Bill and how he squares it with the devolution agenda.
Mr Jones
The clause allows the Government to make regulations requiring tenants to provide information to landlords in order to administer the policy. Subsection (3) simply provides an assurance to tenants and landlords that we understand we need to be clear on how that will work in practice. To remove it, as the amendment proposes, would only sow confusion. On that basis, I hope the hon. Lady will withdraw her amendment.
Dr Blackman-Woods
It is very interesting that the Minister was not able to square subsection (3) with the devolution agenda. That is what I suspected. What we hear is a degree of micromanagement from the Government. Indeed, we do not know whether they will specify the colour of the form, because that could fall under
“the manner and form in which the information or evidence is to be provided.”
The degree of interference from the Secretary of State seems incredible, but I doubt I will persuade the Minister and his colleagues otherwise this afternoon, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 76 ordered to stand part of the Bill.
Clause 77
HMRC information
Dr Blackman-Woods
I beg to move amendment 219, in clause 77, page 31, line 8, at beginning insert
“Following the adoption of a process agreed with the tenants,”.
The amendment provides that information will not be disclosed to HMRC without a process for doing so being agreed with tenants in advance.
The amendment would ensure that the process that emerges to disclose information from Her Majesty’s Revenue and Customs on a tenant’s income is agreed by the tenant. Such information is incredibly sensitive, so it is important that tenants are fully aware of what information about them is going to be collected. After all, this information is currently not routinely provided to housing associations. Local authorities might get the information through a different route for council tax or council tax benefit purposes, but it is not be collected in the way that the clause outlines.
It is always useful to put oneself in the position of the tenant. Would any of us want HMRC to provide information to a third party without our being aware of what that information was or exactly what it encompassed and what it would be used for? The amendment is very straightforward and reasonable, and would simply require the process for sharing the information to be agreed with tenants. This matter was raised by a series of barristers and lawyers who deal with tenants issues. They say that in addition to tenants being aware of the information on their income that is passed on to another body, the process should be agreed with tenants in advance. They say:
“HMRC should not be given power to disclose information to social landlords without the express prior consent of the tenant in writing.”
Tenants should be very clear about what is going to be passed on and give their consent to the process.
It is probably a really basic human right for a tenant to be able to have their say in the process. It would be interesting to hear from the Government why they think the amendment is not a good idea and the clause is not in breach of the Human Rights Act. All the lawyers who are looking at the clause will probably be really interested to hear the Minister’s response.
Mr Jones
The amendment would go too far by requiring tenants to approve the procedure for information-sharing. We do not believe that tenants are well placed to give a view on the security of such a procedure, nor are we clear how such approval could be obtained without a huge and unnecessary burden being placed on landlords. On that basis, I hope that the hon. Lady will seek to withdraw the amendment.
Dr Blackman-Woods
Let me get this clear. The Minister is saying that a whole public body is going to be set up to transfer information between HMRC and providers of social housing—we will come to that group of amendments in a moment or two. That whole bureaucracy will be set up by the Government in order to make these provisions work, but allowing tenants to sign a bit of paper saying, “I understand the process that’s going to apply in terms of passing this information on. It will be this sort of information; I understand that and am happy about it,” is too much bureaucracy. We are talking about a piece of paper or an email, compared with a whole public body being created. I am not entirely sure of the logic underpinning the Minister’s response.
I again ask the Minister nicely to ponder what we have said about tenants’ right to have some understanding of what is happening to them in the new process and the importance of ensuring they are fully signed up to it. That should be part of any new tenancy agreement that will have to be made as a result of the Bill—another whole lot of bureaucracy created by the measures in the Bill. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
I beg to move amendment 220, in clause 77, page 31, line 15, leave out subsection 2(c).
The amendment would make unnecessary the creation of a public body to transfer information from the HMRC to a local authority or registered provider of social housing.
The Chair
With this it will be convenient to discuss the following:
Amendment 221, in clause 77, page 31, line 18, leave out subsection (2)(d).
The amendment would make unnecessary the creation of a public body to transfer information from the HMRC to a local authority or registered provider of social housing.
Amendment 222, in clause 77, page 31, line 20, leave out subsections (3) to (5).
The amendment would make unnecessary the creation of a public body to transfer information from the HMRC to a local authority or registered provider of social housing.
Dr Blackman-Woods
This group of amendments seeks more information from the Government about what the new public body will look like, because clause 77 does not give us an awful lot of information about it.
We are concerned to ensure there are adequate safeguards for the transfer of information from HMRC to social landlords. We are not clear why a new public body is needed to transfer that information. It will certainly create more bureaucracy. The body will presumably be a quango, although we do not know that. I would have thought that this goes against what the Conservative party has said it wants to do. Housing associations, arm’s length management organisations and local authorities are concerned that this process will add hugely to their administrative burdens and that new operational systems will be needed to keep track of the flow of information.
We know very little about the new body. What is the whole system going to cost? Has anyone carried out a cost-benefit analysis? We seem to know nothing. There is nothing in the impact assessment about the cost of operating this public body. How big will it be? How many people will be employed by it? Where is it going to be? Under what protocols will it operate? How will it be set up? In what timeframe will it be set up?
Mr Richard Bacon (South Norfolk) (Con)
Does the Opposition spokesperson believe that the allocation of social housing to tenants who need it should be based upon their annual income?
Dr Blackman-Woods
Forgive me, Mr Gray, but I thought we were discussing amendments 220, 221 and 222.
Dr Blackman-Woods
These amendments relate to a new public body transferring information from HMRC to providers of social housing. I will endeavour to remain in order by talking about that.
Dr Blackman-Woods
If the hon. Gentleman will excuse me, I will not give way, because I am talking about the transfer of information from HMRC to social landlords. However, if he is asking me about that, I will happily give way.
Dr Blackman-Woods
As I understand it, clause 77 is about the Secretary of State, by regulation, setting up a public body with the function of transferring information between HMRC and a provider of social housing. The purpose of the amendments is to question the Minister about the nature of that public body. That is relevant, because we want to know whether the scheme will be cost-effective. It is interesting that we cannot ask tenants to sign a bit of paper because, from the Government’s point of view, that would be too bureaucratic, but that we can set up a new public body. I do not know what size it will be, how many people it will employ and how exactly it will relate to HMRC and social landlords. It is strange logic to say that establishing a public body, which could be huge, is not too bureaucratic, but getting tenants to sign a bit of paper is.
Peter Dowd
In 2007, the then shadow Cabinet agreed to a document entitled “Freeing to Compete”. One of the things it said was:
“Before imposing traditional ‘heavy’ regulation, government should always consider whether the ends could be achieved by less burdensome means, such as through competition, incentive schemes, or self-regulation.”
Does my hon. Friend think that this measure goes with the spirit of that quote?
Dr Blackman-Woods
Absolutely not. Lots of housing associations and local authorities have written to us to say that they are concerned about how the new public body will operate and how onerous interacting with it will be. One said:
“Administrating Pay-To-Stay…will be a near impossible demand upon our self-managed community. Inevitably we would need to look at outsourcing much of this work which will further add to the demise of”
their community.
“It will also be a drain on”
their resources. The point they are making is that they are concerned that the new public body, which will probably be very bureaucratic, will set up a lot of new systems with which social landlords will have to interact and which could put onerous burdens on housing associations and local authorities.
Helen Hayes (Dulwich and West Norwood) (Lab)
Does my hon. Friend agree that there are several other concerns about how the new public body will be regulated? Will the regulation fall within the remit of the Homes and Communities Agency or the Financial Conduct Authority? If the new body makes mistakes that have the potential to affect tenants’ tax return obligations and so on, how will they be rectified and dealt with in a timely manner? Will that be an additional burden on the public sector?
Dr Blackman-Woods
My hon. Friend makes a very important point. The subject of our next amendment is how the system will be regulated and subject to external oversight. I will not stray on to that amendment now, because I want to hear what the Minister has to say about the issues raised by amendments 220 to 222.
Mr Jones
We can envisage situations in which it would be helpful for a single body to act as an intermediary between HMRC and landlords. Flexibility has been provided in the Bill for that reason, and we are continuing to develop our thinking following the consultation. The same limits and sanctions will apply to such a body as to the landlord. On that basis, I hope the hon. Lady will withdraw the amendment.
Dr Blackman-Woods
I think the Minister’s response presupposes what clause 77(3) actually means. It states:
“The Secretary of State may by regulations...give a public body the function mentioned in subsection (2)(c)”.
From what the Minister has said, I am not clear whether the Government intend to set up a new public body or not, but perhaps he will intervene and clarify that.
Dr Blackman-Woods
That is an interesting concept. It is so interesting that I am tempted to withdraw my amendment, so that we can come back and have a much fuller discussion about what a flexible public body looks like and what the flexibility encompasses. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 77 ordered to stand part of the Bill.
Clause 78
Power to increase rents and procedure for changing rents
Dr Blackman-Woods
I beg to move amendment 223, in clause 78, page 32, line 11, at end insert—
“(c) should be subject to an external review system.”
The amendment would establish that the high income social tenants mandatory rents regime system should be subject to an external review system.
This amendment, as was anticipated by my hon. Friend the Member for Dulwich and West Norwood, seeks to question the Minister about what oversight will be in place to ensure proper regulation of the transfer of information between HMRC and registered social housing providers. That is very important for all the people who have to use the scheme. Given that the Government seem to have rejected the idea of tenants having a role in agreeing information about them being used in this way, it seems even more important that there is an external review system that gives the tenant some confidence about how sensitive information about their income is to be used, and about who has access to that information. If the information is about earnings that fluctuate hugely, the system should be able to accommodate the detailed level of information from the tenants that will be provided.
I appreciate that, following our previous discussion, we are now in the world of a very flexible public body, but, flexible or not, we want reassurances from the Minister that there will be effective regulation and a review system. An interesting point that we have not come to yet concerns what happens if the public body passes on information and, somewhere in this process between social landlords’ tenants and HMRC, information goes missing or is misapplied, or the calculation is wrong. After all, all of us in this room must deal on a daily or weekly basis with problems that emerge in terms of tax credits, child benefit and a whole range of benefits. Things go missing or go wrong and it is sometimes difficult to get to speak to the person who can sort out the problem.
If a person’s income is deemed to be £35,000 a year, because a piece of paper has been counted twice, but their income is only £25,000 a year, how is the tenant able to address that mistake? Nothing in the legislation lets us know what the body will be like. How accessible will it be? What systems will it operate under? How will it be subject to external review? How will the decisions that are ultimately made on account of the information coming from that body be applied?
Mr Jones
Parliament is the right place to scrutinise legislation and there is no place for an external review of regulations made under clause 78, as proposed by the amendment. We will produce further detail on the regulations at later stages of the Bill’s consideration and we will continue to engage with the sector. On that basis, I hope that the hon. Lady will withdraw her amendment.
Dr Blackman-Woods
I am partially reassured by that. Dialogue is important, not only with housing associations and the local authorities, but with tenants, so that they have confidence. We have made it clear that we do not want the system to be in operation, but if it will be, we need to ensure important safeguards for tenants and housing associations. If the Minister is saying that he will talk to housing associations, local authorities and tenants about how to get such safeguard systems in place, and if at some stage that information could be communicated to the Committee, that will be helpful. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 78 ordered to stand part of the Bill.
Clause 79
Payment by local authority of increased income to Secretary of State
Dr Blackman-Woods
I beg to move amendment 225, in clause 79, page 32, line 15, leave out subsection (1).
The amendment would provide that local authorities should not make payments to the Secretary of State in respect of any estimated increase in rental income.
The Chair
With this it will be convenient to discuss the following:
Amendment 224, in clause 79, page 32, line 16, leave out “estimated”.
The amendment would establish that payments to the Secretary of State would not be made on an estimates of income receipts.
Amendment 227, in clause 79, page 32, line 24, leave out subsection (5).
The amendment would ensure that it would not be possible for payments to be made to the Secretary of State based on assumptions rather than the actuality.
Amendment 228, in clause 79, page 32, line 28, at end insert—
“and such payments will only be applied after replacement costs of the dwelling on a like for like basis, of the same tenure, in the same locality have been deducted by the local authority or registered provider of social housing.”
The amendment would provide that no payment will be made to the Secretary of State until the cost of replacing a similar type of dwelling in the same area and of the same tenure and in the same locality has been deducted from the payment.
Dr Blackman-Woods
The clause is really problematic, in particular because subsection (1) is absolutely extraordinary:
“Rent regulations may require a local housing authority to make a payment or payments to the Secretary of State in respect of any estimated increase in rental income because of the regulations.”
Given our earlier discussions, we know that, as yet, the Government have made no estimate of the amount of day-to-day income. They are not able to furnish us with any estimates of the income to be raised or the expenditure necessary to make the scheme function, but under the terms of clause 79(1) somehow, on some basis that we do not know at the moment, there will be an estimate of rental income. Presumably, local housing authorities will then make a payment to the Secretary of State in respect of any estimated increase. That is extremely worrying, to put it mildly.
Teresa Pearce (Erith and Thamesmead) (Lab)
Does my hon. Friend recall, as I do, that the Minister said earlier that the cost of the scheme will be offset by the income to be derived? Does this clause mean that local housing authorities will not get to keep the income?
Dr Blackman-Woods
My hon. Friend makes an interesting point, which I hope we will discuss when we come to subsequent amendments in the group because all of them are about trying to get information from the Minister about how the scheme will work in practice for local authorities. In particular, the councils are coming forward to us to say that they are extremely concerned about the making of some arbitrary estimate—and we must understand that that is what it is, at the moment, because the Government have not given us any information on how it will be arrived at.
Milton Keynes Council, for example, has written:
“We are concerned that the Bill seeks to establish a process for taking a sum of money from councils based on a national estimate that will unlikely reflect actual local conditions. Councils, like housing associations, should be able to retain the additional income generated from these rents to build new homes.”
That is exactly the point that my hon. Friend the Member for Erith and Thamesmead was making. The council added:
“This would have far greater benefits for local communities than the money going to the Treasury.”
Matthew Pennycook (Greenwich and Woolwich) (Lab)
My hon. Friend is making an important point. Does she agree with me about the earlier point made by the hon. Member for South Norfolk? It might be a good one, in the sense that housing associations may be able to use their funds to do more innovative things to meet housing need, but that option will not be available to local authorities because they are being treated differently.
Dr Blackman-Woods
Indeed. We may be able to bring some cheer to the hon. Member for Lewes by mentioning that if local authorities could keep the income and if there was a proper assessment of it, rather than some arbitrary estimate, they could indeed use the money to invest in new, innovative housing. They could invest in sites for self-build. In fact, they could do all sorts of imaginative, innovative things to create more affordable housing in their area. That would not override the negative aspects of the pay-to-stay scheme, but it might at least provide a benefit that would accrue to local authorities.
At the moment authorities are faced with the arbitrary application of a levy based on an estimate of increased rental income, whether they receive that increased rental income or not. Yet another tax on local authorities is being added to all the increased taxes on them in the Bill. We have no idea of how the estimated increased income will be assessed, what local authorities will do, and where they are supposed to take the money from if the estimate is far higher than the sum they obtain from higher rents.
It is the Minister’s Bill and he must explain to us. The question is straightforward. If it is estimated that local authority A will generate an additional £60,000 of income through the measure—because I do not imagine that the amounts will be anywhere near as high as the Government think—and it actually manages to generate only £20,000, because its tenants do not have high incomes, where is the £40,000 to come from? Who is to pay for it? Will it be local council tax payers? Will it be taken from schemes that support care services, or from education services?
It is essential, before we proceed to later clauses, that we understand from the Minister exactly where the money will come from. If there is a shortfall how will it be made up? Has he given any thought to the fact that perhaps registered social landlords and local authorities should be treated in the same way? If the Government are serious about increasing the number of affordable—meaning genuinely affordable, not when affordable is defined as 80% of market rents—homes in this country, the Minister should allow local authorities to keep any receipts and to invest in the many exciting products that we could discuss but will not because we would be straying from the amendment.
Dr Blackman-Woods
The summary of responses in the consultation paper states:
“Around half of respondents thought additional rental income should be reinvested in social housing, either improving existing stock or providing additional affordable housing within the local area”.
Although several authorities said that the money likely to accrue from the scheme, if properly operated, and go to social housing providers or local authorities would be much lower than the Government have estimated, it should at least be used to provide new social housing in the area. It should not simply go into Treasury coffers to be used for purposes that we know not, because there is nothing in the legislation that tells us.
It would be useful to know where the Government think the money will go, because we have to remember that it will come from people who, because of where the Government have set the threshold, are on minimum income. The changes will plunge many tenants into debt, possibly homelessness, and yet we do not know what will happen to the money that comes from local authorities. That does not seem a satisfactory state of affairs. If the Government want us to take the legislation seriously, we need much more information about what will happen to the receipts.
As we said when discussing amendment 224, it is critical that the levy is not based on an estimate, because that is totally unfair. If the Government insist on a levy, it has to be based on actual income and not some arbitrary figure plucked from the air, which would amount to nothing more than a tax on local authorities.
Amendment 227 seeks to ensure that any money that goes to the Secretary of State, although we do not like that particular transfer, will be based on the actuality, not assumptions. Amendment 228 would introduce a new dimension into the levy discussion. If a situation is reached where, because of a tenant’s income, a property effectively moves out of the social rented sector and into a complete market tenancy, that means one fewer social rented property in the area. Will the Minister consider having the replacement costs of the dwelling taken out before any transfer of money is made to the Secretary of State?
Not only should that money go towards a replacement, but it should be a replacement of the same tenure in the same locality, provided by either the local authority or the social housing provider. That is an attempt to prevent a diminution of the social rented stock, because we know that so many bits of the Bill are about reducing the number of homes available for social rent throughout the country. Many of our amendments have been aimed at trying to restrict the reduction. If the Government, through these measures, are taking properties out of the social rented sector, it is only fair that they should enable those local authorities that wish to do so to have the resources to replace those dwellings locally.
Mr Thomas
We know from the way in which the Second Reading debate and, indeed, debates in Committee have proceeded that the Government are not remotely interested in helping those on low or middle incomes who, although they may aspire to own their own home, cannot afford to do so at the moment. Surely the Government being willing to help local councils to build more homes for social rent with the resources raised under pay to stay might be one way in which they could ameliorate some of that deserved criticism.
Dr Blackman-Woods
Absolutely; my hon. Friend makes an excellent point. If the Government were genuinely committed to increasing the number of affordable housing units in this country and increasing housing supply across all tenures, they would take the opportunity to use this income to provide additional housing, rather than squirreling it away in the Treasury—we know not where; we know not for what purpose.
Matthew Pennycook
We do know where, in the sense that the Government are very clear in the impact assessment that one outcome that they want is a contribution to deficit reduction. I can understand that, because they are not making a great job of it. I can understand why they would want to squirrel the money away, but does my hon. Friend not agree that, given the level of housing need and the housing crisis, it is important that all the funds, if they are to be taken away, should be directed at meeting housing need, not filling the coffers in the Treasury?
Dr Blackman-Woods
Thank you, Mr Gray. Indeed, the point I was making was that it would be excellent if there were at least one positive outcome from this clause. It is a really dreadful clause and one that we would like to see removed, but at least it could have the outcome of some replacement social housing.
The Chair
I call Roberta Blackman-Woods to respond, focusing entirely on the amendments.
Dr Blackman-Woods
I was on amendment 228. We want to ensure that from the proceeds of this particularly awful scheme, we at least get a positive outcome, a benefit in the form of some additional social housing. I look forward to hearing what the Minister has to say.
Helen Hayes
I support the remarks of my hon. Friend the Member for City of Durham about this extraordinary clause. It is extraordinary in its anti-localist and centralising nature. How can a local authority possibly be expected to estimate the employment fortunes of its tenants, which is in effect what the clause asks for? Is the local authority to conduct an annual appraisal of its tenants? Is it to ask them how things are going at work? Is it to ask them about their aspirations and the likelihood of their getting a pay increase?
Two things about the measure are problematic. First, it requires councils to make estimates based on information that they do not have and cannot possibly control. Secondly, there is no justification for why these payments should be made by local authorities to the Government in any event. The money should be used to deliver new homes and, if not to deliver new homes, to invest in the services that councils provide to their existing tenants and residents.
The Government resolutely refuse to regulate the private rented sector to moderate rents at all, but they will intervene in the rent setting of councils and housing associations. That is despite the advice of David Orr at the National Housing Federation, with which they have entered into the voluntary deal, that it is entirely inappropriate for the Government to engage in the process of setting housing association or local authority rents. The Government propose to require advance payments from councils. How will the measure in any way help to solve the housing crisis? How is it in any way of benefit to residents? How is it in any way compatible with localism?
Peter Dowd
It is a pleasure to serve under your chairmanship again, Mr Gray. As I looked across the room and saw the hon. Member for Thirsk and Malton, I was reminded of Dick Turpin—I am not sure whether he actually trod the roads in your area, Mr Gray—and of the fact that the proposals we are debating are of Dick Turpin proportions. They will steal money from local authorities. The difference between the Government and Dick Turpin is that at least he had the decency to wear a mask.
I would not trust the Government to come up with any estimates. The Office for Budget Responsibility, which is supposed to be independent, gets it wrong all the time. The Chancellor manages, using smoke and mirrors, to change the figures as he goes along. We cannot trust the Government’s formula for such estimates in the first place.
If the Government decide to pinch this money from local authorities, which are already significantly under the cosh, where will they get it from? Will they get it from the reserves that they think local government is awash with? They have no inclination to understand that problem. They have already made massive cuts of 50% or 60% to local government, which have affected its spending power, but they still intend to take even more cash off local authorities. That will have the effect of cutting services.
We also have to think about the practicalities. What about the period of reconciliation? What happens if local government has coughed up too much money? Does it get that money back? When will it get that money back, and over what period? Interestingly, I notice that subsection (4) states:
“The regulations may provide for interest to be charged in the event of late payment.”
The question arises of whether that will be reciprocal. If local authorities cough up too much money, will they be paid interest on that?
Local government is struggling financially, and the clause will only add to its burdens. Importantly, it will add uncertainty to local government finance, and that is not fair or reasonable. The Government are fond of saying that they do not want to outsource their responsibilities, but by taking this money from local authorities, they are outsourcing to local government their responsibility for making cuts. It is getting to the point where the Government talk about allowing local authorities to pay the money back in instalments, but on what basis? What is the formula? How will the estimate be arrived at? There is absolutely nothing about that.
Peter Dowd
I wish he would. Of course, we need to take advice from the Prime Minister, in his campaign against austerity, about what he thinks about local government having more money pinched off them by his Government.
The proposal is not fair or reasonable. It will put additional stresses on local government; more important, it will put stress on the services that local government provides by asking it to pay up money without knowing how much it will have to pay, the basis on which the estimate will be made, whether it will get the money back off the Government if it pays too much, whether it will get any interest payments or when the reconciliation of the figures will take place. The proposal is an absolute mess, and the Government should think again.
Mr Jones
Budget 2015 clearly spelled out the key features of the policy that the Government are implementing, including that any extra income received by local authorities will need to be returned to the Exchequer. Clause 79 is vital to the successful operation of the policy in that regard, as it allows the Government to set out the process for how the money will be returned.
Amendment 225 would remove subsection (1) and therefore the ability to require a local authority to pay increased rental income to Government. I am aware of the views that external rental income should be retained by local authorities, although that is not the approach that we will take, as the money has been clearly identified as a contribution towards the national deficit reduction programme. We have of course proposed allowing local authorities to retain a proportion of the money received to cover administration of the scheme. We are considering consulting on the responses on this question, but we are still minded to make this allowance a feature of policy.
Amendments 224 and 227 would amend subsection (1) and remove subsection (5) respectively. The effect would be that payments to Government could not be on the basis of an estimated increase in rental income, or of a calculation that may be based on assumptions. I recognise that both amendments seek to ensure that local authorities are only passing on actual increases in income, rather than an estimated or notional amount. I am also well aware of local authorities’ strong preference for an approach based on actual increases in rental income. I hope that I can reassure Opposition Members that the preference of Government is also to base payments on actual increases. However, we are still considering the approach for determining the amount to be payable to Government. On that basis, I would not want at this time to restrict the flexibility provided by the provision. However, we will of course take into account the case made by Opposition Members for an approach based on actual payments.
Amendment 228 would amend subsection (6) so that a payment would be required only once a sum equal to the cost of replacing a similar type of property in the same area and of the same tenure had been deducted. I do not believe that such a provision is necessary as there is no reduction in the number of council properties as a result of the policy. The property remains a council property and the only thing that changes is the rent payable when it is occupied by a tenant whose income is above the threshold.
Given my explanations and reassurances, I hope that the hon. Lady will withdraw the amendment.
Dr Blackman-Woods
I thank the Minister for that response, particularly with respect to amendments 224 and 227. Opposition Members are very reassured, and I think it will go a long way towards alleviating concern if authorities know that it is an actual base and that the levy will be based on actual income and not estimated income. However, we feel that although the house or home—the housing unit—is not removed from council stock, it is one less property available locally for social rent. We would like to use as many opportunities as possible to get more council housing built, and on that basis, I would like to press amendment 228 to a Division.
The Chair
We will, of course, come to amendment 228 at the appropriate moment in our considerations. For now, is the hon. Lady seeking to withdraw amendment 225?
Dr Blackman-Woods
I am sorry. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
I beg to move amendment 226, in clause 79, page 32, line 23, at end insert “without reasonable cause”.
The amendment would provide that local authorities or registered providers of social housing are able to make late payments in certain circumstances.
The amendment would amend clause 79(4), where it says:
“The regulations may provide for interest to be charged in the event of late payment.”
We would like some reassurance from the Minister. The amendment adds the words “without reasonable cause” because we think there could be a whole set of circumstances outwith the responsibility of the relevant local authority in which a payment to the Secretary of State is delayed. The local authority might be awaiting transfer of information from HMRC or information about tenants, or it might not be clear where tenants are if they have moved out of a property. Something might happen locally—a flood, for example—that disrupts the lives of lots of tenants, so that it is difficult to assess incomes.
Mr Jones
As previously stated, clause 79 sets out the methodology for how money will be returned as a result of the operation of this policy, including detail of the mechanism for calculating receipts payable to the Exchequer. The clause reflects similar provisions that are applicable to other existing financial programmes and maintains a consistent approach to the treatment of receipts, including provision for the identification and calculation of any interest charged for late payment.
Amendment 226 would amend subsection (4) so that regulations might provide for interest to be payable only where payment is late without reasonable cause. We believe the current wording provides the necessary flexibility for that, without the need for amendment, but we are minded to follow principles in existing receipts programmes and in wider dealings between local authorities and other public bodies. I hope therefore that the hon. Lady will agree to withdraw her amendment.
Dr Blackman-Woods
It might have been more helpful if the Under-Secretary had given us some examples from current custom and practice about how late payments operate, so that we can be absolutely clear the Government are prepared to accept certain circumstances in which late payments would not be subject to interest charges. Without that detail, we are simply left to speculate as to what those circumstances might be. If the Minister could follow up his comments by pointing the Opposition in the direction of where we might find that information, that would be extremely helpful. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 228, in clause 79, page 32, line 28, at end insert—
“and such payments will only be applied after replacement costs of the dwelling on a like for like basis, of the same tenure, in the same locality have been deducted by the local authority or registered provider of social housing.”—(Dr Blackman-Woods.)
The amendment would provide that no payment will be made to the Secretary of State until the cost of replacing a similar type of dwelling in the same area and of the same tenure and in the same locality has been deducted from the payment.
Question put, That the amendment be made.
Mr Thomas
A stand part debate on the clause is an opportunity for us to explore in a little more detail why there is a disparity between local authorities and housing associations over who gets to keep any additional income raised under the pay-to-stay policy. In essence, as the clause is drafted, housing associations get to keep any additional resources under pay to stay, but local authorities have to return them to the Chancellor.
The question for Government Members to reflect on is why, say, South Norfolk Council should be treated differently from housing associations that operate in the South Norfolk area? Why should housing associations in Harrow retain some additional resources under pay to stay and yet Harrow Council will not be able to do so? I hope we will hear from the Committee’s answer to Robespierre.
Mr Bacon
I was going to quote Mao Tse Tung earlier, but I gather that it is a sensitive point in the Labour party at the moment—although the hon. Member for City of Durham, who is not in her place, referred to a thousand flowers blooming, so she has already quoted him. Just to reassure the hon. Gentleman, the Housing and Planning Minister will be in my constituency tomorrow to visit a self-build project and separately I will see the leader of South Norfolk Council tomorrow evening at a Christmas drinks party. Therefore I—and the Minister, I am sure—will take the trouble to allay his concerns.
Mr Thomas
I am always tempted to agree with the hon. Gentleman, who I have always thought should be on his party’s Front Bench—that would be only an improvement on what we see before us today. However, I am slightly surprised that he did not commit to ensuring that the Minister not only visits that self-build project as he should—one hopes that it is a housing co-operative—but sits down with the leader of South Norfolk Council to explain why he intends to discriminate against South Norfolk Council as opposed to South Norfolk’s housing associations. It seems to be a bizarre and arbitrary distinction to make.
Mr Bacon
First, I assure the hon. Gentleman that South Norfolk Council does not feel discriminated against, because the leader of the council is so dynamic that he has found alternative routes provided by this visionary Government to set up independent commercial entities under the general power of competence. Secondly, I reassure the hon. Gentleman that Ministers tell me that they met the leader of South Norfolk Council yesterday.
Mr Thomas
Now that is good news. I hope that the details and minutes of that conversation will be published, because I was struck by the concern of the Local Government Association, sadly at the moment run by the Conservative party, and by its strong opposition to and concern about the distinction between housing associations, which will be able to receive the additional proceeds that might be generated under pay to stay, and local authorities, which will not be able to receive them.
I do not know whether the leader of South Norfolk Council is an active player in the Local Government Association and we do not know whether the leader of the LGA took the opportunity yesterday to bend the ear of the Minister on—
The Chair
Order. Before any intervention, perhaps we should focus on the topic before us, rather on an amusing and amicable exchange.
Mr Thomas
I am very grateful for your protection, Mr Gray, from the hon. Member for South Norfolk.
My second key point is that the failure to allow local authorities to keep any of the additional rent raised further undermines the housing revenue account self-financing settlement, which was supposed to free up local government housing from central Government control, and further reduces the chance of local authorities being able to contribute new house building to address our national crisis. That settlement will be further put at risk by the rent cuts being pushed through in the Welfare Reform and Work Bill and by the forced sell-off of homes that we have discussed already.
I say gently to Government Members that I will have to be blown away by the oratory of the Minister not to want to press the matter.
Matthew Pennycook
My hon. Friend is making a good point about the clause that speaks to wider concerns with the Bill. On Second Reading, the right hon. Member for Arundel and South Downs (Nick Herbert) put it well when he said that many measures in the Bill, including this clause, cut against the grain of the Government’s laudable commitment to localism.
Mr Thomas
My hon. Friend makes an important point, which further illustrates the need for the Minister to be particularly convincing in his response.
Question put and agreed to.
Clause 79 accordingly ordered to stand part of the Bill.
Clauses 80 to 83 ordered to stand part of the Bill.
The Chair
In accordance with the programme order of 10 November, as amended on 19 November, we now come to amendment 93 to clause 92.
Clause 92
Designation of neighbourhood areas
Mr Thomas
I am extremely grateful for your assistance, Mr Gray. In the spirit of moving swiftly through the passage of the legislation, I take the opportunity to move the amendment formally.
Amendment proposed: 199, in clause 74, page 30, line 4, at beginning insert “Subject to subsection 1(A)”.—(Mr Thomas.)
See amendment 200.
The Minister for Housing and Planning (Brandon Lewis)
I appreciate the ethos and the manner with which the hon. Gentleman has moved the amendment. It is one of the most succinct, direct and brilliant speeches that he has made in the past few weeks, and the first one that I have been almost tempted to agree with. Before we get to that point, however, I must say, on the amendment, that communities can already use neighbourhood planning to allocate land for housing development, including land put forward by housing co-operatives, which I know he champions, and has done consistently and superbly throughout this Committee. We all support housing co-operatives.
Mr Thomas
I am grateful to the Minister for the positive attitude with which he has clearly considered my amendment. It was certainly tabled before we had the opportunity for the helpful debate on housing co-ops and the applicability of the self-build and custom build provisions. There was a slight caveat in his willingness to recognise that housing co-ops are potential examples of self-building and custom house building. I say gently to him that some further clarity, perhaps by way of guidance to the parent bodies of the UK co-op housing movement, might be helpful by indicating what types of housing co-operative are covered in what circumstances by the self-build and custom build provisions.
Brandon Lewis
In the spirit of helpfulness, the hon. Gentleman makes a fair point, and I will consider how we can do something positive in that way.
Mr Thomas
That is the Christmas spirit kicking in, and I am grateful to the Minister for it. There is a parent body for the housing co-op movement. If he is willing to suggest to the relevant official in his Department that they communicate with that organisation, that would be additionally helpful.
I am grateful to both Ministers for the spirit with which they have engaged with the potential difficulties facing housing co-ops in the legislation, and particularly to the Under-Secretary of State on the concerns about pay to stay, which genuinely put at risk some of the smaller housing co-ops due to the administrative burdens involved. In the spirit in which the Minister has responded, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Brandon Lewis
With your agreement and the Committee’s, Mr Gray, I move that we take clauses 92 to 95 stand part together.
Dr Blackman-Woods
I rise to ask the Minister a question about clause 94. Can he enlighten us on how neighbourhood planning forums and parish councils developing neighbourhood plans will take on board the provisions of clause 102? I will not go into the detail of clause 102 at the moment, but there will be neighbourhood plans, and there might or might not be allocated land for development. What involvement will they have in permission in principle being granted?
The Chair
Order. I think we are perhaps a bit ahead of ourselves. It has been suggested that we take the discussion on clause stand part on clauses 93, 94 and 95 together. That was the Minister’s proposal. Is the hon. Lady speaking to that?
Dr Blackman-Woods
Sorry, I am speaking to clause 94 on development orders and asking how later stages of the Bill will have an impact on them.
The Labour party very much welcomes the changes that are being made to the neighbourhood planning system to speed up the neighbourhood planning process, ensuring that deadlines are in place and that neighbourhood planning groups get the support of their local authorities in putting plans together. We would like to support and help the Government to achieve that important aspect of the legislation, but we have that one outstanding question that I would like the Minister to respond to.
Brandon Lewis
I would be happy to. We will come to this point when we get to planning permission in principle—clauses 102 and so on—but I reassure the hon. Lady that we are determined to ensure that such decisions are made locally. Neighbourhood plans have the advantage of having been through a local referendum. Local people will directly be involved in drafting and approving the local plans that will ultimately inform that planning in principle process, which we will come to in a short while.
The Chair
Order. Since there has been some discussion on some of the clauses, we will therefore take them separately as stand part debates.
Clauses 92 to 95 ordered to stand part of the Bill.
Clause 96
Power to direct amendment of local development scheme
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 14—Development plan documents: accessible design—
“In section 19 of the Planning and Compulsory Purchase Act 2004 [preparation of local documents] after subsection (1) insert—
‘(1B) Development Plan documents must (taken as a whole) include policies designed to secure inclusive design and accessibility for the maximum number of people including disabled people”’.
This new Clause would ensure all planning decisions fully consider the need to create places and buildings which meet the needs of all sections of society across their lifetimes. It would provide support for plans and planning decisions which seek to meet locally assessed needs for accessible homes.
New clause 15—Strengthening the Plan Led system—
“(1) In section 38 [Development plan] of the Planning and Compulsory Act 2004 subsection (6) after ‘considerations’ insert ‘of exceptional importance’”.
This new Clause would give more certainty to all parts of the community that the content of neighbourhood and local plans will be the prime factor in all decision making.
New clause 16—The Purpose of Planning—
“(1) In Part 2 (Local development) of the Planning and Compulsory Act 2004 insert—
‘12A The Purpose of Planning
(1) The Purpose of Planning is the achievement of long-term sustainable development and place making.
(2) Under this Act sustainable development and place making means managing the use, development and protection of land and natural resources in a way which enables people and communities to provide for their legitimate social, economic and cultural wellbeing while sustaining the potential of future generations to meet their own needs and in achieving sustainable development, development the local planning authority should—
(a) positively identify suitable land for development in line with the economic, social and environmental objectives so as to improve the quality of life, wellbeing and health of people and the community;
(b) contribute to the sustainable economic development of the community;
(c) contribute to the vibrant cultural and artistic development of the community;
(d) protect and enhance the natural and historic environment;
(e) contribute to mitigation and adaptation to climate change in line with the objectives of the Climate Change Act 2008;
(f) positively promote high quality and inclusive design;
(g) ensure that decision-making is open, transparent, participative and accountable; and
(h) ensure that assets are managed for long-term interest of the community.’”
This new Clause would make clear in statute that the planning system should be focused above all on the public interest and in achieving quality outcomes including place-making.
This is the first clause on local planning. Therefore, it might be convenient for the Committee to allow for a slightly wider Second Reading-type debate, encompassing new clauses at the same time as the stand part debate on clause 96.
Mr Jones
Thank you, Mr Gray. We are committed to a planning system that provides communities with certainty on where new homes are to be built. Local plans set out how housing and other development needs will be met and provide the starting point for dealing with planning applications. Over the previous Parliament, the Government removed top-down regional strategies and placed local planning authorities at the fore of planning how to meet the need for housing through their local plans. Local authorities have had more than a decade to produce a local plan under the Planning and Compulsory Purchase Act 2004. Most have done so—83% of authorities have a published local plan.
The Government have put targeted support in place through the Local Government Association’s planning advisory service and through the planning inspectorate to assist authorities that are struggling to get a local plan in place. Residents deserve to know where their new homes and other essential developments will be. Those decisions should be made locally but if that is not happening, it is right that we intervene. If we intervene, currently we have no choice but to take over responsibility for the entire process of preparing, examining and approving the local plan. That is wrong. The measures in the Bill would ensure that, when we have to intervene, we can return responsibility for plan making to the local authority for decisions to be made locally, where they belong.
Clause 96 ensures that directions requiring a local authority to amend its local development scheme are fully effective. A local planning authority must prepare and maintain a local development scheme. This sets out the development plan documents—the documents that comprise the local plan—that the authority intends to produce and the timetable for producing them. A local development scheme is a mechanism for keeping the public informed of plan making in an area and its progress.
Section 15(4) of the Planning and Compulsory Purchase Act 2004 currently enables the Secretary of State, or the Mayor of London where the authority is a London borough, to direct a local planning authority to amend its local development scheme. Such a direction must be to ensure effective coverage of the local authority’s area by plans. Clause 96 will allow for a less narrow interpretation of what is meant by “effective coverage”. The clause clarifies that the Secretary of State, or the Mayor of London where the authority is a London borough, could direct an authority to produce a specific type of plan—for example, one that addresses housing and other essential development—together with a timetable for its preparation. The clause removes the possibility of an unnecessarily narrow interpretation of section 15(4). By doing so, it ensures that, where there are delays, we can take the necessary action to get plans in place so that all communities benefit from the certainty that a local plan can provide.
Dr Blackman-Woods
I will start with where we agree with the Minister. It is important that our planning system is plan-led, and therefore it is important that local authorities are encouraged to produce plans in a timely manner and that those plans are based on a proper assessment of local housing need and of everything that is needed to support housing development. We need good land-use planning that meets the needs of the population that resides in an area, or that might reside in an area over the period of the plan. To that extent, we agree that local plans are pivotal to our whole plan-making system.
I draw the Minister’s attention to the Lyons review, which was set up by the Labour party in the last Parliament. The review contains a section on speeding up plan making, on requiring local authorities to carry out their plans in a timely way and on ensuring that, by the end of next year, all local authorities have a plan in place, because we think local authorities have had more than enough time to put a local plan together. It is extremely difficult to have a plan-led system if local authorities do not have plans in place.
Helen Hayes
Does my hon. Friend agree that, although there is no excuse for local authorities to have an inefficient plan-making system, a major contributory factor in some cases is the extent of cuts to local authority budgets? Planning is the second most cut service provided by local authorities, after cultural services. The Minister should be addressing how local authorities are to resource the timely completion of their local plans. All other things—efficiency, and so on—being equal, resources are the problem.
Dr Blackman-Woods
My hon. Friend makes an excellent point, and it is a point that we sought to address in the Lyons review by considering additional income streams that could flow into planning departments. Of course, in addition to the cuts that have been applied to local councils and planning departments, the Government’s changes, particularly to permitted development rights, have taken a huge lump of resources from local authorities because they are not able to apply the same fees for permitted development changes as they would for planning approvals. I am sure that the Ministers are well aware of the issue of the resourcing of local planning departments. I speak to lots of developers, and not one does not raise the issue. They all start by saying, “Look, the major barrier we currently have to getting planning permission is the fact that local authority planning departments are massively under-resourced”—they use the word “massively”—“and are having to take the brunt of cuts in some areas.” Councillors are having to make really difficult decisions about whether to cut their planning departments or care services.
Kevin Hollinrake (Thirsk and Malton) (Con)
Does the hon. Lady accept that there have been no Government cuts to planning departments? That is a choice for local government. Does she also accept that such cuts are a false economy, because planning departments are there to drive the economic prosperity of an area and therefore of the local authority?
Dr Blackman-Woods
I have already outlined the choices that many local authorities throughout the country are having to make. Many councillors are facing the extremely difficult to decision of whether to cut the planning department, care services or education services. Although the hon. Gentleman is right to the extent—
Dr Blackman-Woods
I will be getting on to the provisions in just a moment. If the Minister is suggesting from a sedentary position that I should not be addressing the intervention, perhaps that is a matter for the Chair. I am seeking to answer the hon. Gentleman’s questions.
Brandon Lewis
On a point of order, Mr Gray. What is the recourse for anyone on the Government Benches to clarify the fact that the hon. Lady has just completely misrepresented what I was saying? My point was that the entirety of what she has been saying for the past 10 minutes has been outside the scope of her amendments and the Bill.
The Chair
Order. The Minister should realise that had the hon. Lady been out of order, I would have been the first to bring that to her attention. As far as I am aware, her remarks have been absolutely in order: they have been on new clauses 14, 15 and 16.
Dr Blackman-Woods
Thank you, Mr Gray. I had better continue my discussion of new clause 14. I want to set out for the Committee the direction of travel on planning that we would like to see in the Bill. It might be slightly at odds with what the Government have outlined in clause 96, which, although it is concerned with local plan-making, seeks to take a direction that we would not entirely agree with. New clause 14 will ensure that planning decisions fully consider the need to create places and buildings that meet the needs of all sections of society across their lifetimes. It would provide support for plans and planning decisions that seek to meet locally assessed needs for accessible homes. Clause 96 is relevant because we are not sure that the interventions it will bring about will address the issue.
We want to see support for plans and planning decision making that would not only be based on locally assessed needs, but would seek to address particular needs. That is why the assessment of all needs is important. Sometimes, as the Minister will know, it is easy to overlook the number of fully accessible homes that are required in local plan making, for example. That needs to be based on a very careful consideration of what disabilities people might have in a particular area, and how that need might grow or diminish over the whole plan period.
What we would expect to see from local authorities is therefore not only some input in the local plan to demographic change and the realities of what an ageing population might mean for an area, but perhaps designing housing of a lifetime quality that would enable housing stock, particularly new housing that is developed, to be able to be applied to families and to people with special needs so that they do not have to move. What do the Ministers think about building lifetime homes that would be fully accessible over a lifespan? Or do they want more specialist housing? How do they think such housing would be planned for and built?
The new clause also has something about housing for older people. I was struck, as I am sure other members of the Committee were, in the evidence sessions at the beginning of our deliberations, by how many people across the sector were concerned with the needs of older people. Housing associations told us there is a real issue about supported housing for older people and people with special needs, and how it can be delivered.
Helen Hayes
Does my hon. Friend recognise the huge amount that has been invested by the development industry following the previous lifetime homes standard? The new clause would be a means by which that investment, which is no longer a cost to the industry but an efficiency, could be captured and taken forward, and we could all see the benefits of it.
Dr Blackman-Woods
My hon. Friend makes an important point about how lifetime homes could be funded. That is extremely important. We heard evidence in the early stages of the Committee that some funding streams for supported accommodation were disappearing because of the cuts to local authorities, making it harder for them to provide that much-needed accessible housing.
Peter Dowd
Does my hon. Friend agree that the issue is not only about resource, although I completely accept that that is important? Local authorities do not go out of their way to be difficult in terms of planning processes. In the main, they genuinely try to reflect on what their local communities say now.
Dr Blackman-Woods
I absolutely accept that. My hon. Friend is absolutely right to remind me that local authorities do a very good job in trying to assess local housing need. The purpose of the new clause is to make sure that in doing so they understand the need for accessible homes, and perhaps look at ways of adapting future stock to meet the needs of people over a lifetime, rather than only having to think about specialist housing. It is about how the definition is made.
New clauses 14 and 15 need to be considered together. Through new clause 15, we seek, in the light of clause 96 on the power to direct amendment of a local development scheme, to test the Minister on whether the local plan will have primacy in local planning, or whether clause 96 will give primacy to another body or document. With these new clauses, the Opposition want to assert the primacy of the local plan in plan making in this country. We think that local authorities best understand the needs of local communities. Although the local plan-making process could be improved—I will talk about improvements that could be made in a moment—what we like about it is that local authorities have to consult their local communities extensively when they put their local plans together. Therefore, all parts of the community are involved in the creation of those plans.
There are lots of different methods that local authorities can use to ensure that the community is not only involved in putting together the local plan, but actively participates in it. Committee members have had information about the charrette system, which can help local communities to participate actively in the plan making. There are excellent examples from across the country. In the south of my region, Scarborough is a very good example. With new clause 15, we are asking the Minister, in the light of clause 96, to ensure that primacy is still given to the local plan.
Helen Hayes
In my 18 years of working as a planner, I worked with many local communities in the charrette process that my hon. Friend describes, which is an efficient way to get communities to buy into and give informal consent to new, high-quality developments that contain the appropriate community facilities. In many instances, it helps local authorities to deliver more developments than they would otherwise have been able to deliver. It is therefore a democratic and efficient means of supporting plan making.
Dr Blackman-Woods
My hon. Friend makes a really important point, which I should have emphasised when I started to discuss the new clauses. We tabled the new clauses because we want positive planning. We want to encourage local communities to get actively involved in planning, and to give their permission for new developments in their area. We want them to be fully involved in the consensus-making system, and in saying what their areas should be like in 20 or 25 years’ time.
Those of us who have had a degree of involvement in that process in our constituencies are often surprised, in a very positive way, by how people think about their local community, and how they want it to look in 25 years’ time. They not only want to ensure that there is housing for their children and grandchildren, although that is incredibly important given the housing crisis, but they want it to be in communities in which people want to live. That is why positive planning is so important.
I want to spend a moment or two on new clause 16. We want a planning system that is plan-led and fully inclusive. That is the point of new clause 14. New clause 15 is about giving primacy to local plans, and new clause 16 is about what we want those local plans to encompass that we think they are in danger of not encompassing under clause 96. This is about place making. It is unfortunate that there is absolutely nothing in this part of the Bill on how we ensure that the local plans and interventions proposed deliver a planning system that looks at all of the infrastructure needed to make places that people want to live in. I was struck by the number of witnesses who said in their evidence to the Committee, time and again, that the Government’s proposals do not give enough consideration to the infrastructure needed to underpin housing.
Mr Jackson
I am puzzled by the hon. Lady’s comments. Incidentally, sustainability is at the heart of the national planning policy framework, which she will know has been in place for three years. On the one hand, she says she is in favour of localism, local choices and value judgments made by local planning authorities and local people, but on the other hand, she tells us that we have to put in the Bill variety, diversity and all the rest of it. Surely it is up to local planning authorities to work on things such as joint ventures and regeneration; we cannot legislate for that in the Bill.
Dr Blackman-Woods
It is perfectly legitimate for a Government to consider what framework they need to put in place to help local communities plan for their future, and their children’s and grandchildren’s futures. After all, I am trying to ensure that we have a planning system that is plan-led, totally inclusive, encourages local authorities to plan for the needs of everyone in their area, and focuses on place making, so that we do not have a planning system that only looks at housing, for example—although it could just as easily look at only transport.
We need a planning system that looks right across the board at place making. How local authorities do that will be a matter for them, within the framework, and what they seek to prioritise will be a matter for them locally. The system needs to do specific things, outlined in new clause 16, in order for development to be sustainable for the future. I do not want to test the Chair.
Dr Blackman-Woods
I will get on to the specific provisions, because it is important that this is read into the record. It would be wonderful if the Minister accepted what we are arguing for in new clause 16.
Helen Hayes
In relation to planning, does my hon. Friend agree that the problem with the Bill—the problem that new clause 16 seeks to address—is that it entirely lacks ambition for our planning system in this country? There is no ambition for planning. Planning is regarded in the Bill entirely as a constraint on development, to be minimised, whereas in fact it should be a set of facilitating processes helping to bring new development forward. In particular, there is no ambition for quality of place, or design quality and design standards in any sense, and no ambition for the sustainability of the communities that we create through the planning system. New clause 16 would address that.
Dr Blackman-Woods
My hon. Friend is exactly right. The problem that we want to address is the lack of vision for a planning system. Too often the Conservative party has characterised planning as a block to development, whereas we argue that if planning is done in the right way, and if the approach is fully inclusive, that brings communities along in the planning system. They help to plan neighbourhoods and that can speed up planning further down the line.
Perhaps something else happens as well—something that is even more important. We need a system that designs the communities that people want to live in, which should be fully sustainable. We have tried in new clause 16 to outline changes and improvements, and what the planning system should encompass to make that objective achievable, so that it can take root. We want a planning system based on principles of sustainable development that would positively identify land suitable for development in line with economic, social and environmental objectives, so as to improve the quality of life, wellbeing and health of people and the community.
Mr Jackson
The hon. Lady is most kind in giving way. I have a straightforward question. How is the new clause any different from the existing regime of a national planning policy framework, a robust system of checks and balances through the Planning Inspectorate and supplementary planning documents? For instance, in Peterborough there is the Peterborough city centre area action plan, a supplementary planning document for Peterborough district hospital, and so on. We all have those things in our local authorities. How would the new clause add any commitment to sustainability or effective planning that is not already in place?
Dr Blackman-Woods
We are trying to take some of the principles in the NPPF and give them life in local planning documents, so that local authorities will make very positive identifications of land.
What we propose would not be a system in which local authorities would be required just to find a certain amount of land on which to build a certain number of houses. It is important that they should do that, and we are not for a moment suggesting that they should not. We are suggesting that, in addition to thinking about land needed for housing, they should think about what the wider environment will be like if those houses are built. Will there be adequate transport and access to health facilities? Will the development contribute positively to the wellbeing of the community? How will that happen? Where are those objectives reflected in the land use plan? Those things are extremely important if we are to build resilience into communities for the future.
We also say that the plan should contribute to the sustainable economic development of the community. That is an important thing to ask of it. To give an example from my constituency, about putting a land use plan together, I happened to notice when our local plan was before the inspector that although a great many aspects of it related to economic development, and although sites were set aside here and there across the county for economic development, which was very welcome, something was missing. The bit that was missing was setting aside land for start-up units, in particular ones for new businesses that could be easily accessed by students from the university. Some of the start-up units were in an area that students would never be able to access, but that is important for sustainability and to ensure that jobs are there for the future and that we are developing jobs based on knowledge transfer and high-technology skills—we often hear about those exact things from the Conservatives, because that is the high-value and high-skilled economy that they want us to move to. Simply not enough was reflected in the local plan, which was also changed. That is the sort of difference that we think having those principles embedded in local planning would deliver.
The plan should also consider the cultural and artistic development of the community. That can often be missed out in the development of local plans, in which there is a concentration on land use for housing, the economy or transport, forgetting that, in order to ensure that a community develops holistically and is a good quality place to live, adequate notice should be taken of the need for space for new features that can be accessed by the whole community. Those features, whether for sport or leisure, should be inclusive, but they would need to be facilities that create opportunities for the whole community. That is why new clause 14 is so important and why the new clauses in this group must be seen as linked, because we want the principles to be totally inclusive, with planning for the needs of the whole community.
More needs to be done with the plans in areas such as mine, because they must protect and enhance the natural and the historic environment. The Woodland Trust and others gave written evidence to the Committee, and they were most concerned about how interventions could be made under clause 96 that might seek in some way to downplay the attention given in a local area to the planting of trees, for example. We can talk in more detail about garden cities when we reach later amendments, but one of the amazing things that Milton Keynes did when it was being developed under the positive planning agenda that I am outlining was to plant thousands and thousands of trees. Having enough trees was considered important to people’s quality of life and the ambience of the new city. It is extraordinary that that could be left out of new developments if it were not an underpinning principle of the local plan or reflected in neighbourhood and local plans.
In my own area I am working alongside a neighbourhood planning forum, and I often say—
Mr Bacon
I am listening to the hon. Lady with interest, but she sounds as if she is saying that one cannot trust local authorities to plant enough trees or ensure provision for local trees in the plan unless central Government tell them to do so. Will she elucidate, because I simply do not understand?
Dr Blackman-Woods
We are talking about a set of principles to underpin a local plan. That does not mean that we would say to local authority X, “You must plant additional trees in your area”; rather, it would be a gentle reminder.
As I was about to explain, I am working alongside my local neighbourhood forum, which is putting a neighbourhood plan together. Often I have to say, “Don’t forget about the trees. Where are you going to put the additional trees?” We are talking about a prompt—a set of principles that would have to be addressed when putting a plan together. In no way is the proposed measure seeking to be prescriptive with local authorities or to tell them they have to put trees in a particular place. It just says, “When you’re putting together a local plan, don’t forget that you need to enhance the natural and historic environment.” The word “enhance” is extremely important in that context.
Helen Hayes
I recently had the privilege of hearing Al Gore speak in London. He expressed his puzzlement—that was the moderate and polite term that he used—at how this Government had taken so many steps in the wrong direction on climate change. Several of those policy decisions related to planning. Does my hon. Friend agree that that is what lies behind the importance of the reference in the amendment to the Climate Change Act 2008? [Interruption.]
Dr Blackman-Woods
If I can continue to outline the measures in new clause 16, I will do so. My hon. Friend makes a good point, and gives additional evidence that such principles must underpin local planning if we are to create communities where people want to live.
Mr Jackson
The hon. Lady must have a short memory. I remember that in the good old days when we were both in Parliament under the Labour Government, her party downgraded code 6 for eco-homes in eco-towns to code 3, which was opposed by significant numbers of people in the sustainable energy sector. In that respect, we all make mistakes. She should understand, within the context of planning, that that was done for a good reason.
Dr Blackman-Woods
The hon. Gentleman can correct me if I am wrong, but my recollection is that we put in place a timeframe, which the industry said it needed in order to be able to move to zero-carbon homes. That timeframe was 2016. In the last Parliament, under the coalition Government, the requirement to produce zero-carbon homes by 2016 was removed. The hon. Gentleman must forgive me, but I am not sure I want to take lessons about building climate change-resilient homes from the Conservative party.
Moving swiftly on, we also want an underpinning principle that will promote high-quality and inclusive design. To return for a moment to the charrette system, one positive thing about it is that it involves people in design. I have seen it work by asking quite young children what sort of community they want. [Interruption.] That can be easily dismissed, but it is important that we encourage children from an early age to understand the importance of planning and what planning can contribute to improving our whole society if the right system is in place. We have lost that somewhere. That is what underpins the new clauses: if we go back to the intra-war and post-war periods, Britain was at the forefront of improving planning for everyone. Amazing new towns legislation and the Town and Country Planning Act 1947 set a plan-making system in place, but we are falling down the international ranks in planning because we are not ensuring that those sorts of principles are fully incorporated into local planning at all levels. We also want to ensure that decision making is open, transparent, participative and accountable.
The reason we are so concerned about clause 96 is because the whole basis of our local plan-making system is that it should be not only transparent and participative, but accountable. Local councillors should be putting schemes forward with participation from their neighbourhoods. People should be able to go along to a public inquiry and say, “I do not like this bit of the plan. I think it should be changed.” We tamper with that system at our peril. Perhaps we can discuss that more when considering later clauses.
Finally, I want stress the importance of paragraph (h) in new clause 16, which says that the planning authority should
“ensure that assets are managed for long-term interest of the community.”
That is something we must do, but that element of our plan making has almost, if not completely, disappeared from the Government’s thinking. We should use the uplift in land values that development brings for the long-term benefit of the community. Unfortunately, over several years—first under the coalition Government and now this Government—planning gain has been watered down, either through non-application of section 106 or the community infrastructure levy, removing the uplift money that could go towards communities’ long-term stability.
Some Government Members are looking at me quizzically, so I will give an example of how uplift planning gain can be invested for the long term in, for example, Letchworth or Milton Keynes. Milton Keynes has existed for 50 years and its roads now need to be improved. The authorities have been able to call on the levy that was attached to new development to fund infrastructure improvement on an ongoing basis. That is the sort of thing we would like to see, especially as so many people have suggested to us that there was no money for infrastructure.
I hope that helps members of the Committee to understand why the new clauses are so important. They would help to put in place a planning system that delivered places that all the people in our communities, as well as future generations, would want to live in—places that provided not only a good quality built environment, but a good quality natural environment, and that gave people access to the jobs and facilities they needed to be able to live comfortably and harmoniously not only in their own neighbourhoods, but with surrounding areas.
I hope the Minister’s response will positively welcome such principles and how they could be used to counter some of clause 96’s possible negative impacts.
Mr Jones
I refer the hon. Lady to my opening comments, particularly those about local and neighbourhood plans, which clearly outline that the system is plan-led. I will leave it at that.
Question put and agreed to.
Clause 96 accordingly ordered to stand part of the Bill.
Clauses 97 and 98 ordered to stand part of the Bill.
Clause 99
Secretary of State’s default powers
Brandon Lewis
I beg to move amendment 182, in clause 99, page 43, line 25, leave out “those matters” and insert
“publication of those recommendations and reasons”
This amendment is designed to clarify the intention of subsection (4)(b) of the section substituted by clause 99.
Brandon Lewis
This is a minor and technical amendment.
Amendment 182 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
The Chair
With this it will be convenient to consider the following:
Government new clause 17—Default powers exercisable by Mayor of London or combined authority.
Government new schedule 2—Default powers exercisable by Mayor of London or combined authority.
Brandon Lewis
New clause 17 and new schedule 2 insert a new section into, and amend section 17 of, the Planning and Compulsory Purchase Act 2004. The measures enable the Secretary of State to ask the Mayor of London or a combined authority to prepare a development plan. The Mayor of London will be able to do so where a local planning authority is a London borough, and a combined authority will be able to do so where the local planning authority is a constituent authority or combined authority. The Mayor or combined authority will be responsible for having the document examined and approving it.
Currently, where it is necessary for the Secretary of State to intervene to prepare or revise a development plan, his only option is to take over responsibility for the process of preparing, examining and approving. Our proposals will move more power back to a local level. Mayors and combined authorities provide strong and directly accountable governance, which makes them appropriate bodies to ensure that plans that support the delivery of new homes are in place across their areas. The new clause and new schedule, together with clause 99, enable more targeted and appropriate intervention where a local planning authority has failed to take action to get a plan in place, despite having every opportunity to do so.
Dr Blackman-Woods
I want to take the Minister to what clause 99 actually says:
“(1) This section applies if the Secretary of State thinks that a local planning authority are failing or omitting to do anything it is necessary for them to do in connection with the preparation, revision or adoption of a development plan document.
(2) The Secretary of State may—
(a) prepare or revise (as the case may be) the document, or
(b) give directions to the authority in relation to the preparation or revision of the document.
(3) The Secretary of State must either—
(a) hold an independent examination, or
(b) direct the authority to submit the document for independent examination.”
I am happy to take a correction from the Minister, but that seems to me to be a total and fundamental change to how we do local plan making. In the current system, local authorities prepare a local plan, consult on it and take it to an inspector, who, through a public inquiry, either approves or does not approve it. I may be reading too much into the clause, but it appears to allow the Secretary of State to intervene in the process and say, “Hold on. I do not like what is happening in that plan. I am going to change it.”
Dr Blackman-Woods
If the Minister is rising to clarify that the Secretary of State cannot do so, that would be helpful.
Brandon Lewis
I am rising to say that the Secretary of State has had the power to do that from the very beginning. Clause 99 retains the existing powers and allows for more targeted intervention, so that it will not be quite as heavy-handed as it is at the moment. That should be a welcome change.
Dr Blackman-Woods
I hope that that is what the clause is really designed to do, because the Secretary of State’s intervention powers are rarely used at the moment. It is not custom and practice for the Secretary of State to intervene in the plan-making process, and clause 99 appeared to be an attempt to widen the scope for the Secretary of State to intervene under clause 99(1). If the Minister is reassuring us that this is a narrowing of the circumstances in which the Secretary of State should intervene, we will take him at his word, but the terminology used in the clause does not quite suggest that.
Brandon Lewis
I rise to give some clarity and, hopefully, confidence to the hon. Lady. As I said, the clause retains existing powers, but it also allows for more targeted intervention by enabling the Secretary of State to direct a local planning authority to prepare or revise a document and take other steps necessary for that to become part of the development plan in its area. That will be more targeted than the current heavy-handed approach. The existing requirement on the Secretary of State to give reasons for exercising those powers will be retained. The hon. Lady is quite right that those powers are used rarely—in fact, they have been used twice this year. The requirement in terms of local planning authorities reimbursing the Secretary of State will also be retained. He will have to give reasons.
Should the Secretary of State need to step in, the measures give him options that enable more decisions to be made locally, which is hopefully a beneficial change. For instance, if an authority is not making progress with its local plan, the Secretary of State could direct the authority to take steps to progress it. The authority would remain accountable for the plan and could determine with its community—quite rightly—how it will address the Secretary of State’s concerns most appropriately to get a plan in place.
The clause ensures that the Secretary of State will retain the ability to intervene and prepare or revise the plan in consultation with the local community. Importantly, when that happens, the clause will give the Secretary of State other options. He could, for example, return a plan to a local authority to take through the examination process or to decide whether to adopt a document. I hope that the hon. Lady accepts that that is a big step forward for localisation in the local planning process.
Question put and agreed to.
Clause 99, as amended, accordingly ordered to stand part of the Bill.
Clause 100 ordered to stand part of the Bill.
Clause 101
Planning powers of the Mayor of London
Question proposed, That the clause stand part of the Bill.
Helen Hayes
The Opposition support the aim of a planning process that does not inhibit the speed of potential delivery. London’s boroughs have a commitment to boosting London’s housing supply and building the homes that Londoners need in accordance with local priorities, but there is some concern about the planning requirements in the clause, which provide the Mayor of London with new powers of intervention. The Government must ensure that the new planning legislation that gives the Mayor greater powers to call in local planning applications does not undermine local planning controls that ensure that developments are of benefit to local communities and local development needs.
The Bill introduces new powers for the Mayor of London to call in planning applications in areas determined through the London plan. We support the Government’s ambition to ensure that the strategic importance of London’s housing supply is fully considered, particularly in those areas where it will have most impact. We also support more housing and a faster rate of home building in London. In July 2013, for example, more than 120,000 homes had agreed planning permission but had not yet been built.
It is not clear that the Bill gets the balance right between passing more power to the Mayor and local councils, or how it will achieve the right balance between rapid development and responsiveness to local communities. I would welcome more clarity on what the clause is specifically designed to achieve, why the change is necessary and what problems in the current London planning processes it will remove. Has the Minister consulted London’s local authorities on the new provision? Does he believe that responsiveness to local communities and the related duties of local borough planning authorities are safeguarded in the new provision? How will the role of authorities change? How will the provision be implemented?
Will the Minister publish further details on how the Mayor’s new intervention powers may be exercised in practice, safeguarding the need for active consultation with boroughs as part of the process, as well as detailed local community consultation? Will he make a commitment that any new intervention powers for the Mayor will be used only in instances of London-wide strategic importance?
To retain Londoners’ support for positive growth and development, it is critical that local communities have a say in planning decisions in their area. It is not clear how widely the new definitions of the London plan could be drawn or the extent to which the new powers could be used. There is therefore a risk that considerable new call-in scope could overwhelm the capacity of the Greater London Authority’s planning function and emphasise operational planning at the expense of its strategic role. It must therefore be ensured that any additional powers that seek to maximise the Mayor’s capabilities to control strategic housing supply do not undermine boroughs’ capabilities to deliver local housing stock. I would welcome the Minister’s response on those points.
Brandon Lewis
This clause, which amends sections 2A and 74(1B) of the Town and Country Planning Act 1990, empowers the Secretary of State to prescribe
“applications of potential strategic importance”
by reference to the Mayor of London’s spatial development strategy, otherwise known as the London plan or the London boroughs development plan document.
At present, the Mayor exercises powers under the 1990 Act to call in for his own decision certain planning applications of potential strategic importance for Greater London or to direct a local planning authority to refuse planning permission. The Secretary of State prescribes in secondary legislation which applications are subject to these powers. The practical effect of the clause will be to expand the circumstances in which the Secretary of State can prescribe applications as being of potential strategic importance, for the purposes of the Mayor’s call-in and refusal powers. For instance, it could allow different thresholds in growth areas identified in the London plan, allowing the Mayor greater influence over development in those areas where necessary. That would be an important additional tool to allow the Mayor to encourage development in key locations, helping to ensure the delivery of much needed additional homes.
The clause will also enable the Mayor, in circumstances prescribed by the Secretary of State, to issue consultation directions. These directions would require a London borough to consult the Mayor before granting planning permission for development described in the direction. The Secretary of State can already, under existing powers, issue similar directions to require local authorities to consult the Mayor when receiving applications for development on certain safeguarded wharfs on the River Thames or developments that would affect key London sightlines. In conjunction with the Mayor’s power to direct refusal of planning applications and policies in the London plan, those directions control development that might harm London’s capacity for waterborne freight or its protected views.
The effect of the clause would be to enable the Secretary of State to devolve decisions on which wharfs and sightlines to protect to the Mayor, which would complement the Mayor’s existing strategic planning role and allow the Mayor to be more responsive to London’s changing needs in the future.
Question put and agreed to.
Clause 101 accordingly ordered to stand part of the Bill.
Clause 102
Permission in principle for development of land
Dr Blackman-Woods
I beg to move amendment 230, in clause 102, page 45, line 14, after “of”, insert “housing”.
This amendment makes clear that “permission in principle” is limited to housing land in England.
The Chair
With this, it will be convenient to discuss amendment 231, in clause 102, page 45, line 26, after “to” insert “housing”.
This amendment is consequential to amendment 230.
Dr Blackman-Woods
These amendments are quite straightforward. The explanatory notes state:
“Permission in principle for development of land”
will apply only to housing sites and to future plans. I would be very grateful if the Minister clarified whether permission in principle can apply to any form of development in England, including highly controversial development, for example waste and energy sites, and what exactly is meant by “other register” or “other document”. We are not very clear what that means, and some clarity would be very helpful.
Brandon Lewis
The clause sets out that permission in principle can be granted in relation to land that is allocated in a qualifying document for development of a prescribed description. The clause gives us the power to prescribe in secondary legislation which classes of development should be granted permission in principle. I hope that I can give the hon. Lady the assurance she needs. I will be very clear with the Committee today and answer her question directly.
We intend to limit the type of development that can be granted permission in principle to housing-led development. As the hon. Lady rightly outlined, the amendment, which I take from what she said is probing, would mean that it was not possible to have mixed use. That is why we are very clear that it must be housing-led development. Our intention is to set out in secondary legislation that as long as a site allocation includes residential development, local authorities will be able to grant permission in principle for other uses. For example, in a mixed-use development, developers may wish to have some retail premises, community buildings and other things that are compatible with residential properties, but ultimately that will be a decision for the local authority. I hope that the hon. Lady will be able to withdraw the amendment.
Dr Blackman-Woods
Does “housing-led” mean predominantly housing? There could be a mixed development scheme that is housing-led in that housing happens first, but then it is actually a massive new employment complex or a waste or energy complex.
Brandon Lewis
First, that would be a matter for local authorities to decide. We will deal with this matter in secondary legislation, but we are clear that permission in principle will be housing-led. The reason for not limiting it to just houses is to allow for mixed use. For example—I am happy to make this clear to the Committee—if retail is mixed in with houses, that can be quite good in getting a community together. There may be a community centre or even a school, but it has to be a housing development or a housing-led development.
Dr Blackman-Woods
I am partly reassured by what the Minister has said, although I am still a little anxious about the total scope of developments that could be given permission in principle. If the Committee will bear with me, I would like to take the Minister’s comments away and think about them. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Stephen Hammond (Wimbledon) (Con)
I beg to move amendment 240, in clause 102, page 45, line 22, at end insert—
‘(4) A development order under subsection (1) shall be made in respect of land in Greater London by the Mayor of London and in respect of land in England outside of Greater London by the Secretary of State.
(5) Section 59B shall apply to the making of a development order under subsection (1) by the Mayor of London.”
See Member’s explanatory statement for amendment 245.
The Chair
With this it will be convenient to discuss the following:
Amendment 241, in clause 102, page 45, line 30, leave out paragraph (b) and insert—
“(b provide for the granting in respect of land in Greater London by the Mayor of London or the local planning authority, and in respect of land in England outside Greater London by the local planning authority on application to the authority in accordance with the provisions of the order, of permission in principle for development of a prescribed description.”
This amendment would provide for an application for permission in principle to be made to the Mayor of London in respect of land in Greater London and to a local planning authority elsewhere in England.
Amendment 242, in clause 102, page 46, line 5, leave out “Secretary of State” and insert
“the Mayor of London in respect of land in Greater London and the Secretary of State in respect of land in England outside of Greater London”.
This amendment is consequential to amendment 241.
Amendment 243, in clause 102, page 46, line 8, leave out “Secretary of State” and insert
“Mayor of London in respect of land in Greater London and the Secretary of State in respect of land in England outside of Greater London”.
This amendment is consequential to amendment 241.
Amendment 244, in clause 102, page 46, line 28, after “authorities” insert
“and the Mayor of London”.
This amendment is consequential to amendment 241.
Amendment 245, in clause 102, page 46, line 30, at end insert—
‘(2A) After section 59A of that Act insert—
“59B Development orders made by the Mayor of London
(1) Subsection (2) shall apply to a development order made by the Mayor of London under section 58A(1).
(2) The Mayor of London may make a development order if—
(a) the Mayor of London has consulted the persons specified by subsection (3);
(b) the Mayor of London has had regard to any comments made in response by the consultees;
(c) in the event that those comments include comments made by the Secretary of State, the London Assembly or a consultee under subsection (3)(e) or (f) that are comments that the Mayor of London does not accept, the Mayor of London has published a statement giving the reasons for the non-acceptance;
(d) the Mayor of London has laid before the London Assembly, in accordance with standing orders of the Greater London Authority, a document that is a draft of the development order that the Mayor of London is proposing to make, and
(e) the consideration period for the document has expired without the London Assembly having rejected the proposal.
(3) The persons who have to be consulted before a development order may be made by the Mayor of London are—
(a) the Secretary of State;
(b) the London Assembly;
(c) each constituency member of the London Assembly;
(d) each Member of Parliament whose parliamentary constituency is in Greater London;
(e) each London borough council;
(f) the Common Council of the City of London, and
(g) any other person whom the Mayor considers it appropriate to consult.
(4) In this section—
the “consideration period” for a document is the 21 days beginning with the day the document is laid before the London Assembly in accordance with standing orders of the Greater London Authority, and
the London Assembly rejects a proposal if it resolves to do so on a motion—
(a) considered at a meeting of the Assembly throughout which members of the public are entitled to be present, and
(b) agreed to by at least two thirds of the Assembly members voting.
(5) If the Mayor of London makes a development order he must—
(a) ??publish a notice setting out the effect of the development order in the London Gazette and otherwise give the development order adequate publicity including on the Greater London Authority’s website, and
(b) notify and send a copy of the development order to—
(i) the Secretary of State, and
(ii) every London local planning authority.”
This amendment would give the power to make development orders in respect of land in Greater London to the Mayor of London, as the Secretary of State will have in respect of land elsewhere in England.
Stephen Hammond
Even at this hour of the day, it is a pleasure to serve under your chairmanship, Mr Gray. The GLA and the Localism Act 2011 give the responsibility for planning and housing in London to the Mayor. He has a strategic role for the whole of London in setting the framework for local planning policies and the London plan. The London plan constitutes part of every borough’s local development plan and is effectively the expression for London in the national planning policy framework. The Mayor has a range of decision-making powers of strategic importance, and he can take over an application to act as the local planning authority as well. Although he has rarely used that power, it is there. He has a unique role in working with London boroughs and the GLA to focus on the need for housing in London and the number of new houses needed in London.
While there are, as I have said, a number of welcome things in the Bill, my six amendments are designed to test the Minister’s will, as this issue is important given the Mayor’s strategic role. The amendments in toto would give the Mayor the power to make development orders and give permission in principle for land in Greater London, in the same way as the Secretary of State has those planning powers for elsewhere in England. Effectively, the amendments would tidy things up and acknowledge the Mayor’s strategic role. Given the central role of the Mayor in the implementation of the powers, it is only right that he has those powers for London. I hope that the Minister can reassure me that that is possible.
Brandon Lewis
I would like to explain the clause in the context of the amendments, after which I hope my hon. Friend will feel confident enough to withdraw them.
Clause 102 will make it possible for local authorities and neighbourhood groups to grant a new form of planning consent called permission in principle for sites that they identify and qualify in documents. As I have said, we plan to set out the details of that in secondary legislation. The clause enables the Secretary of State to make a development order that itself grants permission in principle, but only to sites allocated in the qualifying documents by a local planning authority or a neighbourhood group. To be clear, the Secretary of State will have no direct role in choosing which sites to grant permission in principle to. Simply put, the clause makes it possible for plans and registers to grant a new level of planning consent.
Permission in principle is a new element in the planning system that gives local authorities an extra tool to deliver the housing that the country needs. It will therefore be crucial for the Secretary of State to maintain oversight of how that functions across England. In particular, the Secretary of State will need to have oversight of what form of development can be granted permission in principle and what qualifying documents can grant permission in principle.
Kevin Hollinrake
I would like quickly to sound the Minister out on what might be a key issue and a key opportunity—a further step on planning in principle for the brownfield register. This is really an opportunity for small and medium-sized enterprise house builders. I am a very strong advocate for SMEs, coming from a small-business background, but this is not just ideological. SMEs used to build around 100,000 homes a year in the UK, but now only build about 18,000, so this is a key opportunity. It is not just about building homes, but about who we find to build them.
Members will remember the evidence given to the Committee by Brian Berry from the Federation of Master Builders, who said:
“The brownfield register is a positive step, because there are very small parcels of land which our”—
SME—
“members could build on…That would encourage more development.”––[Official Report, Housing and Planning Public Bill Committee, 10 November 2015; c. 50, Q122.]
However, all that assumes that those plots of land are going to be released and made available to buy. We need to persuade local authorities, the NHS, Network Rail and the Ministry of Defence to give up their dominion over this land. It has been very interesting to hear the shadow Housing and Planning Minister talk about their dominion over their residential housing stock. We are trying to put that housing stock to better use, talking about a tax or a levy, but this is in public ownership. How can we tax something that is already in public ownership?
I took the opportunity to look up the stock for Durham County Council. There are 18,500 residential homes—I know recently there has been a stock transfer—and 9,234 commercial sites. There is a list of all those commercial sites all under Durham County Council’s ownership.
Dr Blackman-Woods
Will the hon. Gentleman outline what evidence he has that those sites are not being efficiently used at present?
Kevin Hollinrake
I am not saying that all those sites are developable, of course, but 6,500 of those sites are occupied by Durham County Council and 200 are vacant today. Why can those properties not be put to better use? I am not just focusing on Durham. Southwark Council owns 43% of the land in Southwark—there are 10,000 garages. We need to put that to better use.
Helen Hayes
Southwark Council is indeed a large landowner in the borough, but I hope the hon. Gentleman recognises that it also has the single biggest commitment to building council homes—11,000 new homes over 30 years—on much of that land, including many garage sites in the borough.
Kevin Hollinrake
I am very pleased to hear that but, when I travel home this evening, I will start at King’s Cross, which was a desolate brownfield site for decades. At the other end of my journey is York central, a desolate brownfield site for 20 years—in fact, since I started in business in York nearly 30 years ago.
The Chair
Order. The amendments are entirely about London, so to talk about York or, indeed, Durham is out of order.
Kevin Hollinrake
I was making a general point, Mr Gray. I would say that the same applies nationally. In conclusion—
The Chair
Order. It may well apply elsewhere as well as in London, but the amendments are entirely about London. It is therefore in order for the hon. Gentleman to discuss only matters to do with London. If he discusses matters to do with anywhere else in England, he is out of order.
Kevin Hollinrake
I stand corrected, Mr Gray. To go back to my point about King’s Cross, how can we release the land in such locations owned by, for example, the NHS, local authorities, the Ministry of Defence or Network Rail?
Maria Caulfield (Lewes) (Con)
Does my hon. Friend agree that we need to look at the processes via which local authorities and other public bodies in London—and, indeed, elsewhere—release that land so that we can speed up the planning process?
Kevin Hollinrake
I could not agree more. In conclusion, will my hon. Friend the Minister consider how we move that public land out of public sector ownership and into use for the public good?
Brandon Lewis
I have heard my hon. Friend’s comments and the intervention by my hon. Friend the Member for Lewes. Bearing in mind the amount of land we have in London, they make a sensible point. We have established the London Land Commission, which I chair jointly with the Mayor of London, to ensure we get that land released, and it is a really good vehicle for doing so. Nevertheless, I will take away their comments because they make a fair point about how we ensure that local authorities generally and public bodies particularly in London and elsewhere release that land.
Mr Bacon
On that point, I draw my hon. Friend the Minister’s attention to the National Audit Office report on the disposal of land programme, which affects many public bodies and Government Departments—the NHS, the MOD and so on—in London and elsewhere. Will he study the information that different Departments have, or rather do not have, about the extent to which land that has been sold has actually been used or built on?
Brandon Lewis
My hon. Friend makes a good point. I am well aware of that report. Just last week the Chancellor announced that land for 160,000 homes has been identified by Government Departments. We need to look at whether those Departments, both in London and nationally, and public bodies and local authorities should have some sort of duty for what they do with surplus land. I will take away the comments made by my hon. Friends and, if they will bear with me, I might come back to the matter later in Committee.
Stephen Hammond
I always have confidence in my hon. Friend the Minister. I am very hopeful that the London Land Commission will bring forward a lot of land. I hope that when he reviews matters in a year’s time he will look at powers to force co-operation on some of the public bodies that are dragging their heels. That is not for now, but I know that he will want to look into it.
Peter Dowd
It would be helpful if the hon. Gentleman named names in terms of the authorities that are dragging their feet, because there is a danger that all public sector organisations are tarred with the same brush. We really need to be forensic about this.
Stephen Hammond
I can be very forensic if the hon. Gentleman likes. The NHS took eight years to bring a site in Wimbledon to development. I am sure I will not need the help of my London colleague, my hon. Friend the Member for Croydon South, to provide other examples. I am very hopeful that the London Land Commission will work, and I am pleased that the Minister is its joint chairman.
Chris Philp (Croydon South) (Con)
I can add another example. There is a site in my constituency called Cane Hill, which was owned by the NHS for many years but has stood derelict for about 20 years. It was transferred to the GLA a few years ago, and progress has been rapid—650 houses are now being built. That could have happened 20 years ago.
Stephen Hammond
Excellent. That is another great example. I am sure that the joint chairman of the London Land Commission is listening to those examples with relish and that, when he conducts his review in a year’s time, he will want to ensure that there is a duty to co-operate.
I listened to the Minister carefully, and I follow his logic about the need for oversight on some of my amendments. He was extremely kind in granting me some time when I was preparing the amendments, but I hope he will grant me more time before Report. I accept his point that the Secretary of State needs oversight and that neither the Secretary of State nor the Mayor will be directly making an application, but surely the powers in London are similar and, because of the way in which the Localism Act 2011 and the GLA Acts work, amendment 240 would merely be giving the Mayor similar powers to the Secretary of State. I hope the Minister might be persuaded to have another look at that prior to Report. I take his points on a number of my amendments, but there is one point that I hope he will reconsider. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Blackman-Woods
I beg to move amendment 232, in clause 102, page 46, line 14, leave out “not”.
This amendment would ensure that permission in principle expires when the plan that created it expires.
The Chair
With this it will be convenient to discuss the following:
Amendment 233, in clause 102, page 46, line 41, at end insert—
“unless any material considerations indicate otherwise”.
This amendment would make clear that local planning authorities can still consider a full range of material considerations as well as the plan.
Amendment 234, in clause 102, page 47, line 8, after “period”, insert—
“and in any event no longer than five years”.
This amendment would insert an upper limit on permission in principle which is the same as the current planning permission period of five years.
Dr Blackman-Woods
These are probing amendments that seek more information from the Minister on how the brownfield register might operate in practice. Amendment 232 addresses the fact that, as currently drafted, it appears that permission in principle can outlive the plan that created it. We are concerned about that, and the amendment’s contention is that permission in principle should expire when the plan is no longer relevant or has been replaced. A one-word amendment would accommodate that.
Proposed new section 59A(4)(b) of the Town and Country Planning Act 1990 currently reads:
“is not brought to an end by the qualifying document ceasing to have effect or being revised, unless the order provides otherwise.”
Amendment 232 would change that to read:
“is brought to an end by the qualifying document ceasing to have effect or being revised, unless the order provides otherwise.”
If the Minister refuses the amendment, will he explain why permission in principle should outlive the document by which it is granted? If that is the case, how long is the permission in principle to last? We do not know how long that could be.
Amendment 233 is extremely important, and it is a pity that we are addressing this issue now. Tuesday morning, when we are all fresh, would have been an appropriate time for the Committee to consider clause 102 given the extraordinary changes that it makes to our planning system. In the limited time available today, will the Minister explain how a decision could depart from permission in principle? What exactly would the material consideration be? How would it overturn a permission-in-principle decision?
Brandon Lewis
I hope I can give the hon. Lady the reassurance she requires. With regard to her opening remarks, it is right that I put on the record that we are running behind on our agreed timetable, but that is at the request of the Opposition. That is why we are where we are. I am happy to be flexible on that, as I have been in accepting debates on late amendments, to ensure we have full and proper debates, as I am sure the hon. Lady will confirm.
I want to reassure the hon. Lady that we intend to set out a sensible duration for a permission in principle created by a plan or register in secondary legislation. We have no intention of allowing a permission in principle to exist in perpetuity. The power in the Bill currently gives an important flexibility to ensure that, in appropriate circumstances, where a plan or register is revised or updated, it does not automatically mean that permission in principle comes to an end. This is necessary for technical reasons to ensure that permission in principle can work effectively. I will give an example.
We propose that the brownfield register will be annually updated. In those circumstances, we would want to ensure that permission in principle could live longer than a one-year period. Because we will be setting out the duration of permission in principle in secondary legislation, we intend to consult. We will do that shortly and will seek views from experts in the sector and from the general public. Planning in principle is something that experts in the sector have called for. Setting a timeframe in the Bill for permission in principle is therefore unnecessary and would remove the flexibility to work as intended.
Amendment 233 would entirely undermine the purpose of the clause, although I appreciate that the hon. Lady has made it clear that this is a probing amendment. Permission in principle will agree and establish the fundamental principle of development once—namely, at plan-making stage. This ensures that the existing work local authorities undertake when they allocate a site as suitable for development during the plan-making process is made good use of.
Currently, under section 70 of the Town and Country Planning Act 1990, when the local authority determines an application for technical details consent, it cannot revisit the principles agreed by the permission in principle. Amendment 233 would have the effect of giving the local planning authority scope to reopen the principle of development and would reintroduce the uncertainty that the clause will address.
Dr Blackman-Woods
I want to get this clear: is the Minister saying that before a piece of land is put on the register and given permission in principle, local authorities must have carried out a full archaeological survey of that land, and checked whether it is liable to flooding or subsidence and a whole range of things that they might not have to do normally to put it on the register? If that is what the Minister is suggesting, it would seem to incur huge costs for the local authority.
Brandon Lewis
Actually, what I am suggesting is that the amendment would undermine the entire principle of the permission in principle. I remind the Committee that although the local planning authority will not be able to revisit the decision as far as the fundamental principle of development is concerned when determining an application for technical details consent, it will at that point be required to consider the details of the application fully and properly against the national planning policy framework and local policy. Technical details consent can therefore be refused if the detail is not acceptable.
Amendment 234 would have the effect of allowing the principles of development to be revisited in determining an application for technical details after five years. As I said, we intend to set out a sensible duration for this principle in secondary legislation and will consult on that shortly. I strongly discourage an amendment that sets out a fixed timeframe in the Bill because it would take away the flexibility for the principle to work as intended. Therefore, I hope the hon. Lady will withdraw the amendment.
Dr Blackman-Woods
I think I have even more grave concerns about the clause and how it will affect the planning system than I did before the Minister spoke. Actually, I would like to seek the leave of the Committee to withdraw the amendment so that I can consult with people more widely in the planning sector about what this could mean in practice, particularly for local planning authorities, and what costs they will incur. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Stephen Hammond
I want to raise two issues with the Minister, which I think are appropriate to raise under this clause but would not have been appropriate when discussing the amendments to which I was speaking a few moments ago. One of the issues follows on directly from what my hon. Friend the Member for Thirsk and Malton said. The thrust of the Bill is to ensure that housing suppliers build more housing. He spoke about how the Bill could help small and medium-sized developers.
Many of us, during our times as Members of Parliament, will have had people come to us who are frustrated with the application process and the lengthy time of it, notwithstanding the inability to pay for a pre-application process. I ask the Minister to think about whether there is a way of writing into the Bill a fast-track or accelerated process for small and medium-sized enterprises with small pieces of land, for which they could pay a fee. That would perhaps enable smaller pockets of land to be developed and help smaller industries. I ask the Minister to think about that.
The clause seems to open up some real possibilities. As a London MP, I know that there are pieces of land that do not fall wholly within one borough. In fact, this time next week my local planning committee will decide on an application that is right on the boundary between two boroughs. Is there a way of allowing those sorts of applications not to go to a particular borough? For instance, I know of a London borough that is very slow in bringing forward applications, while the borough next door has a reputation for being extraordinarily efficient. Some plots of land for housing development are on the boundary between boroughs.
The hon. Member for City of Durham, when speaking on her new clauses, talked about sustainable communities and local transport links. In some instances, the boundary line between boroughs is purely arbitrary, and that must be true of other parts of the country, too. Will my hon. Friend the Minister consider allowing applicants to apply to what they regard as the more efficient authority?
Brandon Lewis
In speaking on clause stand part, I hope I can give some more clarity to the hon. Member for City of Durham and address her queries and amendments.
Planning permission in principle will give applicants greater certainty that the suitability of land for development is agreed so they have the confidence to invest in the technical detail without fear that the fundamental principle of development will be reopened. The technical detail stage will provide the opportunity to assess the detailed design of the scheme to ensure that any impacts are appropriately mitigated and that the contributions to essential infrastructure, for example, are secured. If the technical details are not acceptable, the local authority can refuse the application. A community infrastructure levy will still be payable when an authority has a charging schedule in place.
Up-front clarity on the principle of development will free local authorities and communities to concentrate their efforts on the technical details to ensure high standards and quality development. I stress that the areas that are open to planning permission in principle are aimed at small developers and will be driven by the local community.
My hon. Friend the Member for Wimbledon raised two queries that link to this issue. He asked about making the process quicker and more transparent and efficient for people. He spoke about fast-tracking planning options and having a product that local authorities can offer to small and medium-sized developers for a faster process. That is a very interesting model. He also spoke about having a more competitive planning process and allowing local authorities to bid against each other to take on planning applications, which fits with the ethos behind the Bill. We want a more transparent, faster, efficient, locally led system that gives confidence and speed to the community and developers. If he will bear with me, I will take those points away and come back to him later in the Bill process.
The clause contains an enabling power that will allow us to set out procedural details, such as the process that local authorities must follow when granting permission in principle, in secondary legislation. We will consult on procedural matters very shortly.
Question put and agreed to.
Clause 102 accordingly ordered to stand part of the Bill.
Schedule 6
Permission in principle for development of land: minor and consequential amendments
Brandon Lewis
I beg to move amendment 238, in schedule 6, page 87, line 11, leave out sub-paragraph (3) and insert—
“(3) In subsection (4)—
(a) for ‘subsection (5), where’ substitute ‘subsection (5)—
(a) where’;
(b) for ‘local planning authority and’ substitute ‘local planning authority;
(b) ??where an application for permission in principle is referred to the Secretary of State under this section, section 70 shall apply, with any necessary modifications, as it applies to such an application which falls to be determined by the local planning authority;
and’.”
This makes a drafting change to the consequential amendment in section 77(4) of the 1990 Act, to avoid disturbing the effect of the existing reference to “the Secretary of State”— which, in relation to Wales, falls to be read as referring to the Welsh Ministers.
Brandon Lewis
The amendments are small, technical corrections to two consequential amendments listed in schedule 6 to the Bill and I am happy to outline them briefly.
Amendment 238 makes a change to ensure that the introduction of permission in principle does not change the existing reference to the Secretary of State in the legislation, which is a reference to Welsh Ministers when the matter relates to Wales. Amendment 239 deals with the same issue, but also ensures that provisions about planning applications, whether in relation to planning permission or permission in principle, apply also when there is an appeal.
Dr Blackman-Woods
I beg to move amendment 235, in clause 103, page 48, line 16, at end insert—
“and in particular the achievement of sustainable development and good design”.
This amendment would insert an explicit duty to consider sustainable development and place making when including sites on brownfield register.
Before I speak to the amendment, I want to read something into the record to counter what the Minister said earlier. There was no agreement with the Opposition that we would reach clause 103 today. The brownfield register and permission in principle are important issues that require greater consideration. My hon. Friend the Member for Dulwich and West Norwood tabled amendments to which she hoped to speak, and it is unfortunate that the information communicated to the Minister, by whom I do not know, was not entirely correct.
Amendment 235 seeks to add into the legislation that the brownfield register and land that is on the brownfield register should conform to the place-making and sustainable development obligations that I set out earlier when discussing the local planning part of the Bill. It would amend proposed new section 14A(7)(b) in the Planning and Compulsory Purchase Act 2004 so that to “national policies and advice” would be added
“and in particular the achievement of sustainable development and good design”.
Due to the late hour and the fact that we have been in this Committee for many hours today, I will not go through again what I think good design should entail, but I hope, given how we are considering the clauses, that we will be able to return to some of these important issues at a later stage in our deliberations. Amendment 235 is essentially a probing amendment to ask the Minister whether he would consider adding that line to the Bill, and if not, why not.
Brandon Lewis
I hope I can give the hon. Lady some reassurance in response to her probing amendment. She and I stood outside this room and had a conversation. We, as a Committee, have been very flexible. We gave the extended time she asked for by moving provisions from Tuesday to today, to allow for a longer debate. We are working to ensure we have proper time to scrutinise the Bill properly, so I think her comments are somewhat misguided.
Amendment 235 would explicitly require local planning authorities to consider sustainable development and good design when entering sites on the brownfield register. The clause, as it stands, will enable the Secretary of State to make regulations requiring a planning authority in England to compile and maintain registers of a particular kind of land. We intend to use that power to require local planning authorities to compile registers of previously developed land that is suitable for housing development. I emphasise that the clause already provides a power to require local planning authorities to have regard to the national planning policy framework when making decisions about sites to include on local registers. The framework makes it clear that sustainable development should be at the heart of both plan making and decision making, and we are in agreement on wanting good-quality design to be part of the process.
The national planning policy framework also emphasises the importance of good design, stating that it is a
“key aspect of sustainable development”
that should
“contribute positively to making places better for people.”
It follows that decisions on sites to be included on the register will already take account of planning policies on sustainable development and good design.
Furthermore, local authority decisions about sites to include on local registers will be required to take the policies of the local plan into account, and sustainable development will have been considered as part of that process. Sites considered suitable for permission in principle still need technical detail consent, and design is one issue that will be considered at that stage.
I will say to the hon. Lady what I said to one of her colleagues last week: if there are amendments on planning issues that Opposition Members have not tabled in time but wish to debate, I am happy to look at debating them, as I have done before. The hon. Lady kindly thanked me for doing that before, and I am happy to give that flexibility again. I therefore ask her to withdraw her amendment.
Dr Blackman-Woods
I have noted those comments and will perhaps seek clarity from the Clerk outside of the Committee about how that can be achieved. I have heard what the Minister has to say on the amendment. It is a pity he is not taking up the opportunity to write into the primary legislation that the land should contribute to the achievement of sustainable development and good design, but we will return to that in our deliberations on the Bill, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 103 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Julian Smith.)
Westminster Hall
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Fisheries Policy
(9 years ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Mr David Nuttall (in the Chair)
Before I call Mrs Sheryll Murray to move the motion, one or two Members have said that it is a little warm in Westminster Hall this afternoon. If any gentleman Members wish to remove their jackets, they may do so.
Mrs Sheryll Murray (South East Cornwall) (Con)
I beg to move,
That this House has considered fisheries policy.
First, I thank the hon. Member for South Down (Ms Ritchie) for making the case for this debate to the Backbench Business Committee. She is a strong voice for her fishing industry. I thank the Committee for allowing time for this debate, although it would have been good if we could have held it in the main Chamber, as we usually do.
I ask Members to spare a moment to pay tribute to those brave fishermen and women who put to sea, sometimes in the most dangerous conditions, to bring a fry to our table. I would also like the House to remember those who, over the past year, paid the ultimate price in the course of their daily work and did not return to their families. My heart goes out to their loved ones. From my own experience, I know how they feel. I also pay tribute to all the maritime rescue services, including the Royal National Lifeboat Institution, the coastguard and the National Coastwatch Institution, and those maritime charities that help our seafarers and fishermen in times of need, including the Fishermen’s Mission.
I have been involved in fishing for many years. As an observer of—and, since 2010, a participant in—these debates, I have noticed that we hear the same message each year from all over the UK: fishermen are struggling to survive and the fleet is getting smaller. While no one would question the need to manage our fish stocks responsibly, the system of management first introduced in 1983—the total allowable catch and quotas system—has been an absolute disaster for fish stocks, fishermen and the UK industry. Various tweaks and changes over the years have made things no more credible.
The European Commission’s proposals this year seem to fly in the face of the sensible conservation of some stocks in the south-west. One example is Dover sole in area VIIe. A 44% TAC increase is advised by the International Council for the Exploration of the Sea, but article 4 of Council of the European Union regulation No. 509/2007 limits any increase or reduction of that stock to 15%, because that stock is subject to a management plan. That flies in the face of the demersal landing obligation. We would need an uplift of around 30%, or to have fishermen tied to the quay, if we were to take account of the ICES advice. In the light of the introduction in 2016 of the demersal landing obligation for Dover sole, among other stocks, there can be no justification for restricting the TAC increase to the 15% laid down in the regulation. I urge the Minister to make that point to the Fisheries Council in a couple of weeks.
I also ask the Minister to look at channel plaice in areas VIId and VIIe. In area VIIe—the western channel part of the stock—the advice corresponds to a 20% increase in catches because of growing biomass, which is well above the maximum sustainable yield, and falling fishing mortality. Area VIId, which is the eastern channel part of the stock, is similarly growing in biomass, with fishing mortality falling steadily over years. Under the maximum sustainable yield approach, the increase in catches could be up to 202%—yes, 202%—with biomass falling by just 4%. The Commission very recently agreed an in-year increase in the 2015 TAC for the stock, which provided the UK with an immediate 30% increase for the final quarter. Given the impending introduction of the demersal landing obligation, I hope the Minister supported the French in their endeavours to maximise the increase in the TAC and quota for plaice in areas VIId and VIIe in 2016. Indeed, I hope he may have some good news on the stock.
I am also looking for reassurance from the Minister that he will totally oppose the Commission’s proposal to reduce the TAC for haddock in area VIIa by 52%, given that ICES has advised that it could be increased by 400%. Turning to other stocks in area VII, there is no new advice for pollock, and the advice for monk is the same as last year, but the Commission have proposed a cut in pollock of 20% and in monk of 11.9%. I urge the Minister to secure at least a roll-over of the TAC from last year.
Given how the Commission puts the proposals in place, I wonder whether the Minister, who I know is hard-working, is being constrained by the European legislation under which he has to operate. In October 2014, he said on his web blog:
“Another feature of the reform is that there will be a ban on discarding healthy fish back into the sea. Instead, we will help fishermen manage the realities of the marine environment allowing flexibilities between the quotas they have. So if a fisherman catches more haddock than he expected, rather than having to throw the catch overboard, he can count it against quotas he has for other species, like whiting or cod, so that he can land the fish he has caught. He will also be able to borrow some quota from the following year if needed and there will be an uplift in the amount that he can catch to take account of the fact that fish are no longer being discarded.”
Is he prepared to share with us today the precise size of that uplift for each species? Furthermore, is it right to encourage year-on-year borrowing? Could that not result in next year’s quota being used up prematurely?
Sea bass is a concern for my hon. Friend the Member for Southend West (Sir David Amess), who has not been able to get to this debate because of other duties. On 30 March last year, the National Federation of Fishermen’s Organisations published an article on its website that stated:
“The Federation accepts that some remedial measures are inevitable, although we do not agree that the 80% reduction in fishing mortality, suggested by an MSY approach, would be deliverable, necessary or appropriate. We support a balanced package of measures, including all fisheries which impact the bass stocks, applied in a fair and proportionate way.”
The Commission’s factsheet said:
“Sea bass is a special case: real management measures for sea bass were only put in place in January 2015 and catch limits were only put in place in June 2015. The Commission is therefore building on the measures taken in 2015 to halt the dramatic decline in this important stock. Today’s proposal includes a complete fishing ban for commercial vessels and recreational anglers in the first half of 2016. For the second half of 2016, the Commission is proposing a monthly one tonne catch limit”—
that almost halves the quota for my Looe fishermen—
“and a one fish bag limit for recreational anglers.”
The Minister confirmed in a recent answer to my written parliamentary question that the UK response to those proposals is being considered in advance of negotiations at the December Fisheries Council meeting. Can he share with the House today what that response will be?
Finally, I wish the Minister well in his negotiations. I know he will do his best for Cornish and UK fishermen. However, having seen the industry suffer under the common fisheries policy, first as someone connected with the industry and, from 2010, as a Member of Parliament, I have to say that enough is enough. On the 12-mile limit, there is a case for ending access rights. We see from the regulations that France has access to 15 areas in UK territorial waters. Ireland has access to two areas, Germany to six, the Netherlands to three and Belgium to five for a variety of species. The UK gains access to two areas in German waters and one area in French waters. This is not fair.
Mr Christopher Chope (Christchurch) (Con)
My hon. Friend is making a brilliant speech. Is the natural conclusion of her analysis that unless or until we leave the European Union, things will go from bad to worse?
Mrs Sheryll Murray
My hon. Friend has anticipated the point that I will end with.
My hon. Friend the Minister was the Conservative party’s head of press when Michael Howard said:
“From a British perspective, the Common Fisheries Policy has been a failure: it has led simultaneously to the dwindling of fish stocks and the near-destruction of the British fishing industry.”
He went on to say:
“That which no one owns, no one will care for. The first step towards regenerating fisheries as a renewable resource is to establish the concept of ownership. That is why an incoming Conservative government will immediately negotiate to restore national control over British fishing grounds, out to 200 miles or the median line as allowed under maritime law, with sensible bilateral deals and recognition of the historic rights of other nations.”
The shadow Minister at the time, my right hon. Friend the Member for North Shropshire (Mr Paterson), drew up a Conservative party Green Paper of more than 30 pages, entitled “Consultation on a National Policy on Fisheries Management in UK Waters”, dated January 2005.
A recent debate in Westminster Hall demonstrated cross-party support for fisheries to be included in the EU renegotiations being carried out by my right hon. Friend the Prime Minister. I know that it is not in the Minister’s gift to deliver a promise of national control today, but would he make a simple request on behalf of Cornish and British fishermen, and ask the Prime Minister to make this inclusion in his negotiations? It is not a case of fish knowing no boundaries, but more that, as his then boss said,
“That which no one owns, no one will care for.”
Mr Alan Campbell (Tynemouth) (Lab)
It is a pleasure to serve under your chairmanship, Mr Nuttall. I congratulate the hon. Members for South East Cornwall (Mrs Murray) and for South Down (Ms Ritchie) on securing the debate, and I welcome my hon. Friend the Member for Stockton North (Alex Cunningham) to his new role. I thank the Backbench Business Committee for granting time for the debate, but not for granting this venue. In my view, debates of such importance should be on the Floor of the House. In my constituency—indeed, in the north-east as a whole—the fishing industry is still a significant employer. It also remains the most dangerous peacetime occupation, an unfortunate fact that we reflect upon each year in our annual service for lost fishermen and seafarers. I hope that in future years the venue will reflect the industry’s importance, even if it means having a debate in Government time.
I wish to raise three points; I make no apology for their being local to my constituency. The first concerns the difficulties that fishermen are currently having where they depend upon the nephrops fishery—prawns to the rest of us—particularly in the Farne Deeps, which is a critical fishing ground for local fishermen, particularly for the under-10 metre boats. I understand that stocks in the Farne Deeps are under a great deal of pressure. Local fishermen talk about boats coming from other parts of the United Kingdom, including from Northern Ireland and Scotland. Before I cause a stir, this is not a geographical or even a national point, it is about the size of the boats that are coming and the amount of stock that they are able to take. My guess is that they have been displaced from their traditional fishing grounds, or that they have diversified into prawn fishery.
The danger level for the Farne Deeps is being reached. ICES would say that the stocks are at least heading towards being unsustainable, even if they are appropriate at present. If the answer is a reduction in catch, which some are talking about, then unless the issue of access is dealt with, that will not support the local fishermen I am here to speak on behalf of. The options that the Minister has suggested to me that his officials are looking at have been met with scepticism by local fishermen. Why does he appear to have rejected measures that would limit access to the Farne Deeps?
The prawn fishery is key for North Shields fishermen, and those fishermen and the fleet are key to the success of the port. The port is key to the successful regeneration of the coast, and regeneration of the coast is key to the local economy. So this is of the utmost importance to my constituency and the fishermen in it. What can the Minister say to reassure them? What does he believe will come out of the Fisheries Council that might reduce pressure on areas such as the Farne Deeps and at the same time support the livelihoods of local fishermen? Will he, for example press for low-impact boats to have priority access to coastal waters under article 17? That is my first set of questions.
My second set of questions is about the salmon fishery and the future of the relatively few driftnet licences that remain. There are at present only 11 licences left. They are few in number, but very important to the local families who still hold them. The fishermen who have licences not only take salmon but play a part in renewing the salmon stock. It is a sustainable fishery. The salmon summit met on 19 November, and I look forward to the outcome, but why did pressure from me and others have to be applied before fishermen themselves were invited? The list of invitees that I saw was so weighted in favour of groups that want to get rid of those few licences that it looks like the end of the fishery is in sight. Does the Minister at least accept that it looks like vested interests are playing a part in driving policy towards the end of the licences as soon as possible? Why is this sustainable heritage fishery being kept in Ministers’ sights when it is exactly the sort of sustainable local fishery we should be looking to support?
I have raised my third point in a slightly different form in previous debates. It concerns the regeneration of North Shields port and the much-needed urgent quay renewal project. I understand that the European fisheries fund is being replaced with the European maritime and fisheries fund, but that grants from the new fund might be capped. The new arrangements might work against investing in port infrastructure, particularly in small ports such as North Shields, which might prove to be the big losers, yet those are precisely the ports that are struggling with the implementation of the discard ban. Can the Minister clarify whether the EMFF is on track to replace the EFF? If it is, can he reassure me and my local fishermen that it will not work to the detriment of North Shields, where regeneration is vital if we are to safeguard the future of the fishing industry?
Dr Sarah Wollaston (Totnes) (Con)
It is a pleasure to serve under your expert chairmanship, Mr Nuttall. I thank and pay tribute to my hon. Friend the Member for South East Cornwall (Mrs Murray), who spoke on a complex subject with her customary expertise and set out the difficulties faced by the fisheries industry. I join her in paying tribute to our fishermen, who put their lives on the line by taking to sea to put food on our plates. Likewise, I pay tribute to all those in the rescue services and those who raise money for charitable causes throughout our fishing industry and beyond.
I have the great honour of representing Brixham, Dartmouth and Salcombe. The fishing industry’s contribution to our local economy cannot be overestimated. Brixham lands the highest-value catch in England, and has added an extraordinary amount to our economy. Although the catch has increased by 5% since last year— largely because this year we have not had the appalling winter storms that we suffered in 2014—we still have not recovered to the level we were at five years ago, and much of the uplift in fishermen’s income has come because of factors such as falling oil prices, rather than because the challenges they face at sea are being addressed.
It is not just the fishermen themselves who contribute to our local economy; the wider industry on land does too. There is not only the processing sector but the engineers, electricians, painters, riggers and marine scientists, so the impact on our wider economy cannot be overestimated. It is not just about the value of the catch, which this year alone was £21.441 million; we need to bear in mind the effect across the wider economy rather than focus only on the fishing industry.
I do not want to repeat the points about the quotas that my hon. Friend the Member for South East Cornwall made so eloquently, but will the Minister bear in mind the fact that in a mixed fishery the implementation of the discard ban has unintended consequences? Everyone recognises that there can be no morality in discarding perfectly good dead fish at sea. We have to be careful that implementing the policy does not just equate to discarding on land, and that discarding does not continue in the run-up to the introduction of the total ban.
In our mixed fisheries, particularly where species are recovering, if changes along the lines of those that my hon. Friend suggested are not made, we will see considerable, completely wasteful discarding this year. Will the Minister look into that? I hope that he will make the point very strongly that if we expect our fishermen to support changes that sometimes demand reductions in catches, we expect the same rigour to be applied when there is a clear increase in biomass and a compelling case to send things in the other direction. My hon. Friend’s point about the arbitrary 15% limit on the maximum uplift is right—surely that is wholly unacceptable. Will the Minister set out the points he will make at the Fisheries Council to try to get things to work in the other direction?
We should be going further on the issue of bass. No one in this Chamber is unconcerned about bass stocks. Although it was difficult for some sectors, the important change that was made to bring to an end pair trawling and increase the minimum landing size has received widespread support. Nevertheless, closing the fishery entirely for six months appears draconian, and it will have huge unintended consequences for other species. Fishermen will be forced to switch their effort to other species, and we are likely to see an increase in wreck netting, for example. There are also implications for the spawning stock of fish such as pollock.
We need to look at the bigger picture. Fishermen make a strong case that we risk seeing the destruction of our sustainable under-10 metre fleet, which includes many rod-and-line fishermen who face becoming entirely unsustainable. That case has been put forcibly by a number of fishermen from the under-10 metre fleet. Rather than agreeing to conditions that will effectively put them out of business forever, will the Minister consider asking whether we can have a little more time to see the impact of important measures that have not yet been given a chance to take effect? Might there be a compromise that addresses the fact that such fishermen will be changing their effort?
We must also consider the fact that some fishermen in small vessels will be put at personal risk if they are driven further out to sea in dangerous conditions in order to sustain a livelihood. Will the Minister give us more detail about the measures he is going to put in place? The difficulty in trying to impose a one fish per angler bag limit on recreational anglers is that it is likely to be ignored. We want to carry recreational anglers with us. We must at least ask how the limit is going to be policed, because it is not clear at the moment.
On the science of our seas, we all know that we are in challenging times financially, but the importance of good science to guide the decisions made in Europe cannot be overstated. Will the Minister set out what he is doing to support the science behind our fisheries to ensure that future decisions are based on the best possible science?
Peter Aldous (Waveney) (Con)
My hon. Friend is spot on about the importance of science. Hidden away in last week’s autumn statement was the announcement of a significant £5 million investment in the Centre for Environment, Fisheries and Aquaculture Science, which is the marine science arm of the Department for Environment, Food and Rural Affairs, to be spent on refurbishing its premises in Lowestoft. That will give it the opportunity to work up exciting plans to carry forward its great work.
Dr Wollaston
I am delighted to hear that that is happening in my hon. Friend’s area. We would like to see that kind of investment around the UK, and we would like more scientists out on boats with our fishermen to collect the evidence that they need in real time. We should focus on basic marine science as well. My hon. Friend will know, for example, that the AstraZeneca premises in my constituency were taken over by Plymouth University. I hope that there will be a strong focus on everything we can do to improve our knowledge of marine science.
I know that many Members wish to speak, so I will bring my remarks to a close. I say again that I hope my hon. Friend the Minister will stress as firmly as he can that in a mixed fishery, particularly as biomass is increasing, the proposed quotas will not save a single fish unless we see the right level of uplift for some species. The fish will still be discarded at sea, perfectly healthy to eat, but dead. No one in this Chamber or beyond would support that.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
It is a pleasure to serve under your chairmanship, Mr Nuttall. I congratulate the hon. Members for South East Cornwall (Mrs Murray) and for South Down (Ms Ritchie) on securing this debate, and I endorse the view expressed by the right hon. Member for Tynemouth (Mr Campbell) that this subject really belongs in the main Chamber. The fishing industry matters for all our coastal and island communities and deserves that degree of respect. I hope it will receive it in years to come.
I echo the comments made by the hon. Member for South East Cornwall when she spoke of the current EU renegotiations as a missed opportunity to reopen discussions on the common fisheries policy. There was an opportunity for the Prime Minister to atone for the sins of his political ancestors, if I may put it that way, and it would be an eminently achievable objective, because I do not think the common fisheries policy, as it stands, has many friends, even in Brussels. We can all see the damage that it has done to our respective countries and industries. We have the opportunity to reboot it.
Mrs Murray
I praise the right hon. Gentleman for securing the earlier Westminster Hall debate on the common fisheries policy. Does he agree that it would send a message to the fishing industry that the Government care about fishermen and women?
Mr Carmichael
Indeed it would. For that reason, I intend to keep making the case, and I do not doubt that the hon. Lady will, too. This case is best made in this House, as is generally the case—I speak as a Member who represents a fishing community—to ensure it is made in the broadest possible way. By and large, there is not a great deal of difference between the parties on fisheries policy. We all face the same challenges in our communities. For that reason, it will be easy to build a cross-party consensus.
I want to dwell on two areas today. I understand—perhaps the Minister will deal with this in his remarks—that the EU-Norway negotiations are proceeding fairly well. It looks as though they will produce quota uplifts for most species, with a significant—and worrying for my constituency—exception for mackerel and blue whiting. That exception will be even more significant in the discussions that are about to start in Copenhagen between the European Union and the Faroe Islands. I hope the Minister will take that point away and pursue it vigorously with the EU negotiators in those discussions. There is grave concern in the pelagic industry about the way in which the 2014 deal between the EU and the Faroe Islands is being allowed to operate.
As hon. Members are doubtless aware, the deal was designed to allow EU vessels some access to Faroese waters. In return, Faroese vessels can catch a proportion of their mackerel and blue whiting in EU waters. The deal was met with substantial scepticism in my constituency and by the pelagic fleet in Shetland, in particular. They have gone along with it and have done their best to make it work, but with every week and month that passes it becomes more apparent that the deal requires urgent review.
The recent Seafish study shows that this year the Faroese have overcaught their entitlement of mackerel by 1,400 tonnes, but there have been no boats catching mackerel or blue whiting in the Faroese waters. Surely, it is possible to do this without threatening the access of EU vessels to Faroese waters. Essentially, the Faroese were given an inch in 2014, since which time they have taken a mile. The deal looks more and more unbalanced with every day that passes. It requires urgent attention from Britain and the EU.
The other matter that I wish to bring to the attention of the Minister and of those in the devolved Administrations, because it is of significance to them, is the implementation of the demersal discard ban, which is due to come into force at the beginning of the year. We always knew that the demersal ban would be tricky.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The right hon. Gentleman probably has the same concerns as I do about the lack of port infrastructure for the discard ban, which will affect some boats. Has he encountered that issue in Orkney and Shetland?
Mr Carmichael
It is very much an issue that we have encountered, especially in Shetland. The real difficulty is that until we have the discard ban, we will not know exactly what we are dealing with, in terms of stocks and the infrastructure that will be needed. However, all the indications are that it will be substantial. The Government have a role, because the way in which the discard ban is implemented is down to the Scottish Government, the UK Government and the other devolved Administrations. I say to the Minister, as I say to others, that there is a real need for much greater flexibility, especially in the early years, until we see exactly what we are dealing with and how it will work.
Mr MacNeil
I have two boats—the Aquarius and the Cheerfull—in Barra. They are not very cheerful at the moment, because the discard ban is coming into force on 1 January—in four weeks’ time—and the main port they are landing in does not have the infrastructure.
Mr Carmichael
But no doubt issues will come down the track shortly thereafter. Flexibility in the implementation is needed. The indication is that the approach of the fisheries departments in Edinburgh and elsewhere is too prescriptive and does not allow the flexibility that is needed.
I bring to the House’s attention the recent report from Seafish entitled “Landing Obligation Economic Impact Assessment, Interim Report Two”—a snappy title—from August. I will read it into the record, because it should concern every representative of a fishing community. It states:
“Even considering the benefit of the most generously defined policy levers”—
that is, flexibilities and exemptions—
“the analysis shows that a significant volume and value of quota could remain uncaught as a result of the landing obligation.”
The worst-case scenario is that,
“In 2019...the fleet segments in Scotland would catch and land 51% (£99.9 million) of the value”
of the total allowable catch. Essentially, that would leave 49% of the catch unaccounted for, uncaught and unlanded. No fishing fleet can cope with a cut of that significance. That is the worst-case scenario and worst-case scenarios need not happen, but it is a warning. That is what the Scottish fishing fleets face at the moment. Unless we have the necessary flexibility, something that was brought in with good intentions could have serious and profound unintended consequences.
I hope that Ministers here and elsewhere will heed these warnings and act on them. It comes down to a basic principle that we have spoken about over the years: when it comes to fisheries management, the people who need to be listened to first are the fishermen. We will be watching to see whether the Minister and his counterpart in Edinburgh, Richard Lochhead, are prepared to do that. It will be obvious to all if they are not.
Craig Mackinlay (South Thanet) (Con)
I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing this debate.
Craig Mackinlay
I apologise. I thank the hon. Member for South East Cornwall (Mrs Murray) for opening the debate. Once again, all Members will congratulate the House of Commons Library on its excellent publication.
The Prime Minister recently wrote a letter setting out the areas in which he is seeking to reform our membership of the European Union. The second of the four areas in what everyone is now calling the Tusk letter is competitiveness. In that section, he called for a target to cut the total burden on business and he sought to boost the competiveness and productivity of the European Union and drive growth and jobs for all—all very good, laudable aims. However, he missed the opportunity to raise the question of the damaging common fisheries policy and, for that matter, the common agricultural policy.
Later in that letter, the Prime Minister highlighted the fact that the United Kingdom is the European Union’s second-largest economy and the fifth biggest in the world. He could also have noted that, until relatively recently, Britain had claims to 80% of Europe’s fishing waters and that, in some estimates, British waters enclose up to 80% of western Europe’s fish.
It cannot be underestimated how wrong it is that, despite all the reforms of the CFP—every 10 years we have a new cycle of reforms—43% of the UK’s quota is bought by foreign-owned vessels. The UK was allocated just 30% of the EU quota for fishing ground stocks that occur in UK waters. The United Nations convention mentioned by my hon. Friend the Member for South East Cornwall states that the usual limit is 200 miles or the median line, but our membership of the EU has reduced those rights to just 12 miles.
I am here to discuss the problems in my constituency, where Ramsgate is the focus for local fishermen. In 2013, those fishermen implemented a pilot community quota group that provided 26% more quota to small boat—under 10 metres—fishermen and helped to reduce discards. It was deemed a great success by DEFRA at the time, but it has not been taken any further. Failing the extension of such local measures, which are in the Minister’s sphere of influence, local fishermen with whom I have spoken feel that we sincerely need to re-establish the principle of British fishermen in British waters.
Reports suggest that two thirds of the seafood consumed in Britain is now imported. Although that partly represents our evolving tastes and demand, it is also about supply. Last year, imports of fish and fish preparations fell by 3% to 721,000 tonnes, while exports increased by 10% to 499,000 tonnes. The main imports were cod, tuna, shrimp and prawns, and the main exports were salmon, mackerel and herring. By and large, we export what we catch and import what we eat. If we had a fairer share of the fish in the seas around this island nation, once described as an island of coal surrounded by a sea of fish, we would surely be a net exporter, not a net importer.
Over 78% of vessels in the UK fishing fleet are under 10 metres, such as those that operate out of Ramsgate and other ports in the constituencies of Members around the room. Shellfish is increasing in importance in the catch of those vessels, now representing 80%. The increase in relatively high-value shellfish catches has arisen because there is little else for boats to do, Ramsgate has seen a particular increase in whelks. The more than fivefold growth in shellfish landings since 1960 is explained by much, if not all, shellfish being outside of quota stocks.
The fish in our own seas are no more of a common resource to which all members of the EU should have equal and free access than the sunshine enjoyed by member states in the Mediterranean. If we really want to boost competitiveness, as so well described in the Tusk letter, and to drive our need for growth and jobs for all, we need to take back responsibility for managing our own fishing fleets and conserving our own fish stocks, but that is perhaps wishful thinking. Let’s get back down to brass tacks: we are where we currently are.
The brass tacks in Ramsgate are that we now have just 25 under-10 metre vessels, representing just 20 full-time employees and a landed value of just £1.5 million. With the value added in other local jobs, we can perhaps double the employment figure and the value to the local economy. The under-10s fleet is environmentally sustainable and well supported by organisations such as Greenpeace, which currently has legal action under way. The vessels have a low impact on local stocks and provide a greater opportunity for local job creation than industrial fishing. Article 17 of the common fisheries policy includes the right to earn a living, but that right is simply fantasy in Ramsgate. The article also allows Ministers to devise mechanisms to ensure that distributions to coastal and inshore fishermen are right and fair, and the modern CFP is meant to incentivise sustainable fishing that benefits local coastal economies.
My fishing community faces problems on four fronts. First, members will be aware of the massive expansion in offshore wind in that part of Kent and the substantial dredging for operations in London. It would be fair to say that fishermen in Ramsgate are operating in a new building site, which causes them particular problems.
Secondly, the six-month precautionary ban on bass that is proposed by the European Commission for January to June next year will be simply devastating.
Mrs Sheryll Murray
Does my hon. Friend agree that our fishermen would want the Minister to go over and ask the Commission to keep the restrictions that were introduced last year, so that we can see their effects before the bass quota is reduced even further?
Craig Mackinlay
My hon. Friend raises a wider point about the validity of the current scientific data, which often falls far behind the reality on the ground. To get back to bass, it is a key catch during a tough period for the industry. My fishermen need 300 kg a month simply to survive, but that will be taken away from them.
The third problem, which I have spent much time discussing with the Minister when we meet in corridors, is the nonsensical situation of the quotas for skates and rays. The classification used under the CFP is far too broad. The precautionary quota reduction of recent years now means that my boats are allowed only 275 kg a month on average, which is barely enough to pay for fuel. However, local fishermen are reporting an abundance of thornback ray. They are almost like paving slabs on the bottom of the sea, but the fishermen are unable to catch this valuable and well-loved fish. The science is once more well out of step with reality. With the extra £5 million that is available, I ask the Minister for an urgent review by CEFAS, so that we can see what the reality is, particularly for thornbacks, which should fall outside of quotas under any reasonable expectation.
Another issue that I have never managed to get to the bottom of is the apparent lack of mackerel allocation in the southern North sea or zone IVc. I hope the Minister will be able to explain that this afternoon.
My hon. Friend the Member for Totnes (Dr Wollaston) made a good point that the discarding of good fish in a hungry world is frankly unacceptable. The ban on pelagic discards, which is not particularly relevant to my fishermen, is already in place, but the demersal discard ban coming in from next year will cause particular difficulties. Like much of the CFP, the ban is ill thought out, particularly for smaller ports and the under-10 metre fleet. There is no capability in Ramsgate for the sale, distribution or disposal of potential discards. We do not have agricultural product or food producers on hand ready to take away discards for other use. The ban will simply lead to an additional cost in an already struggling fishing community. I am, however, aware of the de minimis and survivability exemptions.
The reality of life for Ramsgate fishermen is truly dire. A living is impossible. Too many fishermen are now lone working, with the dangers that that brings. Low fuel prices are perhaps one of the few saving graces in the industry at the moment. Most fishermen have to supplement their income with part-time work, and there are no new entrants into the industry locally. I therefore want to appeal to the Minister as he goes off to the meeting on 15 December. I want him to utilise his powers of flexibility for quota allocation, so that the under-10 fleet gets its fair share. I want him to push for a special category for thornback rays that is outside of the quotas, because the facts differ from the science. The category of skates and rays is too broad, covering more than 40 species. I would like to see a ban on the truly appalling pulse beaming, which has become factory fishing of the wrong type. I will certainly ask the Prime Minister to secure the return of fisheries policy to the UK as part of the EU renegotiation.
I wish the Minister well on 15 December and I look forward to his answers this afternoon.
Calum Kerr (Berwickshire, Roxburgh and Selkirk) (SNP)
It is a pleasure to serve under your chairmanship for the first time, Mr Nuttall. Thank you for the opportunity to speak in the debate.
One thing that strikes me about fishing debates is the passion people have for the subject, and the way in which they fight for their constituencies. We have already had excellent contributions from the hon. Member for South East Cornwall (Mrs Murray) and the right hon. Member for Orkney and Shetland (Mr Carmichael). I await with interest the speech of my hon. Friend the Member for Banff and Buchan (Dr Whiteford), who was of great help as I tried to get my head around the language and terminology of the fishing industry. Having worked in telecoms, I am used to acronyms, but I have had to learn a whole new set of them.
Fishing is an important contributor to the UK economy, and especially to Scotland’s, but it remains an inherently dangerous way to earn a living, and many sacrifices have been made to the sea. Few other jobs require those involved to brave the full force of the elements when they can be at their most terrifying. Only this week in Scotland we were reminded of that by the marine accident investigation branch report on the death of a fisherman from the Beryl who went overboard off Shetland in February.
Many brave efforts are of course made to protect and save those who are constantly in peril, and I express our gratitude to the officials, coastguards and volunteers of organisations such as the Royal National Lifeboat Institution and the Fishermen’s Mission, which provide rescue and support. Their job is vital and selfless, and we must thank them for it.
I have already alluded to the fact that fishing is of major importance to Scotland. We have only 8.4% of the UK population, but land around two thirds of the total UK catch at our ports. The Scottish fishing zone accounts by weight for 80% of landings of key stocks. The fishing industry is an important contributor to the economy of my constituency, so it is very much an activity taking place on my doorstep.
At this time of year, our attention turns to the annual fisheries round in Brussels, which always acts to concentrate minds. There is some good news to report. Scientific advice from ICES for 2016 has now been released, and it incorporates joint science and industry data on many of Scotland’s key fish stocks. For white fish in particular, it paints a promising picture. North sea cod appears to have turned a corner, and there was a recommended increase in quota of 15%. Other rises to be recommended include one of 56% for haddock, 20% for monkfish, 26% for megrim, 20% for Rockall haddock and 6% for northern hake. On the west coast there is a recommended rise of 15% for nephrops, although disappointing recommendations include an advised reduction of 26% for North sea nephrops and 10% for North sea whiting. The Scottish Government in particular are fully aware of the challenges to do with such stocks and will be seeking to mitigate them in future negotiations.
The launch of the ban on discards for white fish and prawn stocks next year will prove to be nothing less than a milestone for the fishing industry in Scotland. As we have heard, there is widespread concern about the practical implementation of the discard ban in our mixed fisheries; that poses real challenges, so I am pleased about the agreement on phasing in the landing obligation from the start of next year. On discards in general, I am pleased that in Scotland we are already making sound progress, with combined discards of North sea cod, haddock and whiting falling from 40% of the catch to only 18% in the six years to 2014. There is more to do, but we should be pleased with the results so far. They are the outcome of pioneering conservation measures devised with the fishing industry.
Mrs Murray
It is good to hear the hon. Gentleman send a message to the Minister that Scottish white fish vessels that target cod and haddock are doing well. Has the hon. Gentleman had the same message from those vessels that at times come down as far as area VII? There we see a proposed cut in the TAC of 27.1% for haddock, for which we already have a minuscule quota, at only 8% of the European TAC or thereabouts, and a 29.6% cut for cod, for which we have about 10% of the EU TAC. Has he had that message from the Scottish vessels that come to the south-west?
Calum Kerr
The hon. Lady has a level of knowledge to which I aspire. There are some definite challenges in different areas, but the danger is that we always see the negative side. We should also look at the positive impact. Fish stocks are recovering in certain areas, but we should never be complacent about the challenges that she expresses so well.
It is encouraging to see more young skippers being attracted to fishing, because they represent the future of the sector. We have to recognise in some areas the economic hurdle to getting involved. We now have the European Commission’s initial draft of its proposals for fishing opportunities during 2016, which includes quotas for stocks exclusively managed by the EU. At this stage, the proposals largely follow scientific advice and reflect the Commission’s drive towards achieving MSY by 2020 at the latest. There are still gaps relating to stocks for which the quota depends on negotiations with third countries such as Norway, the Faroe Islands and other coastal states. Talks between the EU and Norway should conclude tomorrow. There are other gaps, too, but talks, as is usual at this point in the cycle, are under way and progressing.
The final package of quota will be agreed at the December Fisheries Council, at which key goals for Scotland will include continuing the effort freeze in all sea areas and working to dismantle the discredited cod recovery plan. We will also seek to conclude discussions establishing a new flexibility provision for haddock and securing increased flexibility for monkfish. In addition, we shall seek a more proportionate response to the challenging advice on herring in the west of Scotland fishery, and to overturn the zero-catch recommendation. We want recognition that that fishery is sustainable, and to secure a TAC that allows fishing to take place while supporting the Pelagic Advisory Council’s rebuilding plan. We hope that the Minister will be supportive of that.
Some of the issues that I am raising are not exclusively Scottish. There are challenges, in particular with western herring, for Northern Ireland’s fishermen, as well as for England’s. That leads me on to the wider pelagic issues. The discard ban that came into force at the beginning of the year does not seem to have caused any significant problems in the sector, which is encouraging. Economically, the mackerel catch is the most important pelagic catch, and the Scottish Pelagic Fishermen’s Association reports that the stock is in good health. It is disappointing, though, that Norway will have access to the benefit of reduced-tariff mackerel exports to the EU and an increase in the herring tonnage, which will make worse an already difficult marketing environment. Furthermore, the fact that this week’s mackerel talks in London closed without agreement, leaving Iceland and Russia outwith the arrangement, is clearly a source of disappointment. It is likely to lead to overfishing, and that will impact on all of us.
We must remember that the onshore part of the fishing sector is important as well, in particular in Scotland, where processing plays an extremely important role in places such as Peterhead, Fraserburgh and Shetland. Disappointingly, we have seen some job losses in the processing sector, but north-east Scotland is now the most important seafood processing centre in the UK. More than 70 companies employ nearly 4,000 people and deal with not only cod and haddock, but pelagic fish, shellfish and, of course, farmed salmon. We must not lose sight of that important part of the industry, and its value both economically and to the consumer in the wider food chain.
We also need to continue our strong focus on sustainability. Of Scotland’s 12 key commercial stocks, eight have already met the maximum sustainable yield target. That is commendable. Scotland has led the way in developing innovative conservation measures, and it is vital that we continue to develop approaches to fisheries management that incentivise behaviour that brings social, economic and environmental benefits.
As far as the CFP is concerned, the Scottish National party has been sceptical about its effectiveness over the past 40 years, though we are not alone in that. However, even the policy’s fiercest critics should acknowledge that the last round of reforms represent a substantial step forward in terms of regionalising the CFP and bringing key stakeholders to the table.
Mrs Sheryll Murray
Is the hon. Gentleman saying that the SNP’s policy of withdrawing from the CFP and taking back national control over the 200-mile limit has changed?
Calum Kerr
I may be a new boy, but the hon. Lady cannot trip me up so easily. No, it has not changed. I am sure that, over the coming months, we will have considerable debate on this. In fact, I see fellow members of the European Scrutiny Committee here who do not share all of my views. The EU’s role in fishing will be a key part of that debate. In this debate, it is important to focus on our own interests and regional interests, because a wider discussion will follow.
Kelvin Hopkins (Luton North) (Lab)
The reality is, if we gave notice that we as a nation wanted to withdraw from the common fisheries policy, we might be thrown out of the EU. I tested that with a member of UKRep, the UK Permanent Representation to the European Union. It is a bit of a contradiction to be in favour of the EU but want to get out of the CFP.
Calum Kerr
I thank the hon. Gentleman for his contribution; I always enjoy them. [Interruption.] I am still to develop that skill. We are at a point where the issue is not whether we should be in or out of the CFP, but how we can make it better, more effective and work for all our communities. I look forward to sparring with him when we come to the EU debate.
Ms Margaret Ritchie (South Down) (SDLP)
The hon. Gentleman is making compelling points. Does he not agree that if we are to have areas of compromise, it would be best to ensure greater devolution under the CFP, so that we had continued membership of the European Union while enjoying the benefits of greater decision making in relation to quotas?
Calum Kerr
What the hon. Lady said is what I should have said. I thank her for that most excellent intervention—I shall endeavour to visit Hansard and memorise it for next time. I am surprised we got this far without that coming up, but I notice one or two Eurosceptics in the Chamber. The important point to make is that, all along, the SNP has championed the regional approach to fisheries, and we will continue to do so. The system is not perfect, but we shall work hard to make it better.
There is another important point, which my hon. Friend the Member for Argyll and Bute (Brendan O'Hara) was going to raise, but unfortunately he cannot be here today. There are real problems recruiting local crews to work on boats, on the west coast in particular. For some time that has been addressed by employing staff, notably from the Philippines, who have a specific employment classification. Without them, some boats simply would not be able to put to sea. We already see the impact of that.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
Is my hon. Friend aware that the Irish Government have just announced that they will give up to 500 permits for such fishermen, and will guarantee that those who come from outside the European economic area will be given the minimum wage? Should the Westminster Government not do that as well?
Calum Kerr
I thank my hon. Friend for that intervention. His example shows that where there is political will, a solution can be found. The Government’s clear focus is on reducing immigration numbers, which is why they are starting to clamp down on those personnel, but the important classification of international seafarers is notably different. The answer given to many skippers—to look to recruit from eastern Europe—will make things worse. Next Wednesday, a number of us are attending a meeting with the Minister for Immigration. I ask the Minister present today to speak in support of this endeavour to ensure that we keep our boats in the water.
Finally, I was disappointed not to see sea fish levies in the Smith commission proposals. I encourage the Minister to look at how the issue could be devolved to the Scottish Parliament as a matter of urgency. There has been some discussion, but I would welcome his input and support for that. That would address the bewildering and anomalous situation whereby Scottish levy money is used to promote Norwegian fish in the UK market.
Calum Kerr
I will not, if the hon. Lady does not mind. I would like to finish, because I am conscious of time. Our approach to this year’s talks will be dictated by numerous fundamental principles, which include respecting science, stock sustainability, and protecting the socioeconomic wellbeing of the industry and the communities that depend on it.
We also aim to continue pursuing our commitment to achieving discard-free fisheries, and opposing the “use it or lose it” strategy of automatic cuts for data-limited stocks. There is a lot to do, but I am confident that we are on the right path. Credible, sensible and practical monitoring, along with a robust defence of our fishing and processing industries, is the best way to effect positive change and achieve the long-term sustainability of the catch. If we do that, we will ensure that our fishing communities in Scotland and throughout the UK not only survive, but prosper.
Peter Aldous (Waveney) (Con)
It is a pleasure to serve under your chairmanship, Mr Nuttall. I congratulate the hon. Member for South Down (Ms Ritchie) and my hon. Friend the Member for South East Cornwall (Mrs Murray) on securing the debate.
Last month, I attended the annual festival of the sea service at Christ church in Lowestoft, which is the most easterly church in the UK. That was an opportunity to acknowledge and thank fishermen and their families. When we eat our meals, we should not forget the risks that they take to put fish on our plates. We should also acknowledge, as many Members have, the work that the RNLI, the Fishermen’s Mission and other support groups do around the coast of these islands. Our coast is one of the British Isles’ main assets, but at times it can be unforgiving.
Our current fisheries policy is set out in the CFP, which was reformed in 2014. The reforms consisted of three parts: first, a legally binding commitment to fish at sustainable levels; secondly, more local decision making; and thirdly, the phased ban of discards. If those policies are implemented, they can bring significant benefits to the coastal communities we represent. I represent the port of Lowestoft, which was once the fishing capital of the southern North sea.
Kelvin Hopkins
I used to know Lowestoft well in my youth—[Interruption.] It was a long time ago. When I was a youth we used to go to Lowestoft, where there were many fishing boats. Would the hon. Gentleman like to contrast the number of fishing boats in Lowestoft now with 50 years ago?
Peter Aldous
Indeed I would. Although the hon. Gentleman casts his mind back to his youth as being a long time ago, he must have extremely good eyesight, because he has read what I was coming on to.
In days gone by—I will not say anything about the hon. Gentleman’s youth—it was possible to cross from one side of Hamilton dock in Lowestoft to the other by walking from boat to boat. Today, that same dock is virtually empty of fishing boats. The trawlers that underpinned the industry have gone. The vessels in the Lowestoft Fish Producers’ Organisation are now largely based in the Netherlands. Their fixed quota allocation of 79,000 units is landed elsewhere, not in Lowestoft. The industry that remains in Lowestoft is an under-10 metre inshore fleet of 10 to 12 vessels.
When we have debated this subject previously, I have been pretty pessimistic and said, “Time is of the essence. We’re at one minute to midnight. We have very limited time to save the industry in Lowestoft.” Today, I am more optimistic. I can see a light at the end of the tunnel, although I am conscious that it might be an oncoming train. I believe there is a real future for the industry in Lowestoft, and not only because of the announcement about CEFAS that I mentioned.
We can build a new, 21st-century fishing industry in Lowestoft. The future of the port is beginning to become clear: it is a sustainable and exciting future, involving offshore wind and fishing working together. Two weeks ago, it was announced that the construction base and the operations and maintenance base for the East Anglia One offshore wind farm would be in the port of Lowestoft. It has also been announced that the construction base for the Galloper offshore wind farm will be in Lowestoft.
The fishing industry, through Associated British Ports and other interested parties, is now providing us with the opportunity to work together to invest in the fish market and to secure a long-term future for fishing in the port. My vision is of an inshore fleet of approximately 25 boats that can help to underpin the processing businesses and smokehouses that remain in the town to this day. It will not be easy to achieve that vision, and I will outline the five challenges we need to address in order to deliver that goal.
First, the Government need to honour the legally binding commitment in article 17 of the reformed CFP to encourage sustainable fishing that has the least possible impact on the marine environment and that maximises economic and social returns to coastal communities such as Lowestoft.
Mrs Sheryll Murray
Does my hon. Friend agree that to have a productive and healthy fish market, we need not only the quality of supply from the inshore fleet but also the quantity of supply from the larger offshore vessels? We must never forget that one complements the other.
Peter Aldous
That is a point well made. The nature of the fish market has probably changed over the years, in that it is no longer only about the merchants in it; we must bring the public into the fish market as well.
There are opportunities to address the article 17 commitment on sustainable fishing. Research carried out by the New Economics Foundation shows that coastal communities can derive significant social benefits from having an active port with fishing vessels. That, in turn, can play a significant role in revitalising and regenerating the towns and villages all around the British coast that we represent, therefore achieving the goal we so often talk about of rebalancing the economy.
The second challenge is the elephant in the room: quotas. We need to ensure that the inshore fleet has a realistic quota available to it. I covered that issue in quite a lot of detail in the debate we had in this Chamber in September, so I will not go into the same detail again, other than to repeat that the under-10s have been treated poorly in the past. I compare them to Oliver Twist in the workhouse, holding out their bowl for more fish, only to be denied it by an overbearing Mr Bumble. That still applies.
I acknowledge the work that the Minister is doing in top-slicing 25% of the quota uplift in England and allocating it to the under-10s, but much more is needed. The industry also needs to play its role in keeping accurate records, so that we avoid the problem the under-10s had in the 1990s when they were not keeping those records. That is one reason why they have had such a poor result in the past.
Mrs Sheryll Murray
I do not know whether my hon. Friend was around the fleet at the time, but it was not a question of the fishermen not keeping those records; they were not required to keep the records according to EU legislation. The Ministry of Agriculture, Fisheries and Food—the equivalent of DEFRA at the time—estimated their catches.
Peter Aldous
I thank my hon. Friend for correcting me; she has far more historical knowledge than I do. That tells us that fishermen must not rely on others to do the hard work and the recording, they must do it themselves. The Marine Management Organisation is doing a sampling project at the moment, carried out by CEFAS, to address that particular problem.
The third challenge is the discards ban. It is right that we eliminate discards, but for the inshore fleet the road to doing so will not be an easy one along which to travel. We have heard from around the coast that port infrastructure needs to be significantly upgraded so that we can address that problem. There is real concern that the discard ban could yet bankrupt many inshore interests if not carried out properly.
To be fair to the Minister and his officials, I know that they have been working with the sector, through Jerry Percy of the New Under Ten Fishermen’s Association, to develop a workable approach to implementing the new rules. That approach must meet the spirit and requirements of the new legislation, but we must ensure that it does not have grave unintended consequences. The MMO needs to take a pragmatic and sensible approach to implementing the legislation and must not be over-zealous.
A similarly pragmatic approach is required for the management of sea bass stocks, which are particularly important for smaller coastal fleets. As we have heard, the current proposals present real challenges. I direct the Minister to the detailed proposals from the Low Impact Fishers of Europe organisation—LIFE—which I believe would safeguard the interests of both bass as a stock and fishermen. I urge the Minister and his European colleagues to look at those proposals closely.
My final point, which has been touched upon, is the massive increase we have seen in electric pulse fishing, particularly by Dutch vessels. There are major concerns about the impact that that is having. It is estimated that 105 such vessels are currently charging around the North sea, using a system that is causing significant damage to fish stocks and leaving fish to die on the seabed. We are transferring discarding from taking place on land to taking place at the bottom of the sea, which flies in the face of everything the Government and responsible British fishermen seek to achieve. I urge the Minister to halt that practice, at least until full scientific research has been carried out, hopefully by CEFAS.
Significant challenges remain, but my tone has changed from being pessimistic about the future of the Lowestoft industry to being more optimistic. I acknowledge that significant hurdles remain along the way. There will be plenty of shouting and plenty of banging of tables, as there always is in fishing, but I believe that together, fishermen, their representatives, scientists, the Government, the managing organisations, the European Union, MPs and MEPs can deliver an exciting future. It will be very different from what took place in the past, and we must do our best to ensure that it is sustainable, that we do not just move from boom to bust, and that it provides those working in the industry with an opportunity to earn a wage that reflects the risks that they take—both the risks in investing in their businesses, and the risks to their very lives by going to sea.
Jim Shannon (Strangford) (DUP)
It is always a pleasure to speak on anything to do with fishing, Mr Nuttall. I congratulate the hon. Member for South Down (Ms Ritchie) on securing the debate—or as we call her, the Member for down south, for her politics. We were pleased to go along with the hon. Lady and Members of the Scottish National party to present our case for this debate at the Backbench Business Committee. Of course, my opinion on Europe and the EU is very different from that of my other three colleagues who were there, but I would like to ask some questions along those lines, as it is important to do so.
First, I want to thank some people who have given us background information. In particular, I mention Alan McCulla from the Anglo-North Irish Fish Producers’ Organisation, who is here in the Gallery today. I also mention Dick James from the Northern Ireland Fish Producers’ Organisation and Mark Palmer from the Northern Ireland Trawlermen’s Trading Company. Those are three people and three organisations that have given me some information on this matter.
Once again, loathed diktats from Brussels are making our fishermen’s lives much harder than they should be. First, there were the illogical quotas, on which we have all commented. Then there were the Spanish fishing fleets—the modern-day armada—robbing fish from our seas, and now we have a new threat in the form of the EU landing obligation. Although the delegation who went to the Backbench Business Committee have different opinions on Europe, we are united on how we can help our fishing industry across all the regions of the United Kingdom. Perhaps some of those hon. Members will swallow their anti-Europe rhetoric and accept that we need to work together on addressing these issues.
Fisheries up and down our United Kingdom need to be on a sustainable footing—that is so important. Fishing lobbies from across the United Kingdom of Great Britain and Northern Ireland, including the National Federation of Fishermen’s Organisations, which incorporates all those and many more, have contacted me and others in this House, saying that the EU landing obligation was an issue that continually raised its head. I understand that it is not the aim of the new landing obligation to be of harm to the fishing industry; rather it has ended up bad for fishermen because of the way in which the EU has gone about the obligation. When it comes to addressing that issue, hopefully the shadow Minister and the Minister will be able to indicate how best we can help our fishing sectors, given the way in which the EU has gone about those obligations.
On Saturday week I will be at my advice centre in Portavogie, where fishermen will come and tell me about all these things, including the landing obligation. Looking at Portavogie as an example of one of the fishing villages that I represent, there was once a vast and vibrant sector there, with 130 boats at one time, but that is now down to 70, which indicates where things are going. The landings, by the way, are pretty much the same as they were, so the gap has been filled. However, although we used to have four fishing factories to process the landings, now we only have one small one. Some have moved to Kilkeel, and I am pleased that they have been retained and that at least one of the villages has benefited.
According to the NFFO:
“The most serious aspect of the landings obligation is its potential to ‘choke’ mixed fisheries; meaning that the exhaustion of one…quota would require vessels to tie up for the rest of the year, foregoing their main economic quotas.”
That could be absolutely disastrous for the men and women whose livelihood comes from fishing, but we have yet to hear any suggestion of EU research into how to avoid that, let alone mitigate it altogether.
It is critical that the concerns of fishermen up and down this nation are addressed in respect of the landing obligation, as we do not want to see good, honest, hard-working people falling on hard times as a result of red tape and bureaucracy. Just to reiterate, the views that I have contributed were expressed to me by not just one individual, or by one individual organisation, but by a large number of different individuals and different groups from all across our United Kingdom of Great Britain and Northern Ireland, many of whom I am sure have never met, but who all have the same concerns and feel the same pain. I presume that some have contacted Members of Parliament who are here as well. The main concern of the people affected was not about moving toward a sustainable fishing system for the United Kingdom; we would be hard pushed to find anyone who disagrees with doing that. Their concern was that they were not being included in decisions that matter to them—decisions they care about, and which potentially have a huge impact on their lives.
We can lead by example in Parliament by listening to those in the fishing industry—as we all do, and we reflect those viewpoints in this Chamber in today’s debate—and by consulting them when deciding how best to regulate our fishing industry. We do not need the top-down diktats that we have seen in this well-intended yet hated EU landing obligation. We need to do things differently, recognising that those who ultimately know best about our fishing industry are from the fishing industry itself.
Let me come back to a point referred to by the hon. Member for Berwickshire, Roxburgh and Selkirk (Calum Kerr) about Filipino fishermen. The men in the fishing sector in the village of Portavogie—and the hon. Member for South Down could refer to her two fishing ports—want to have Filipino fishermen. And do you know why? Because they are dependable. There was a tradition of service in the boats in the fishing fleets in Portavogie, but that is not there any more. Next week, we have the opportunity to meet the Minister and we have to express these concerns. We cannot ignore the fact that the Republic of Ireland has taken a step in that direction, and next week that must be part of our attempts to persuade the Minister of the merits of our case.
The NFFO has issued a bleak warning about what may happen if we continue to do things as they are currently being done. It stated:
“The EU’s blundering policy, supported it has to be said, by UK fisheries ministers, has the capacity to derail our fisheries and put us back decades if not handled very sensitively from here on in.”
That must be addressed—if that is not a wake-up call, what is? In the future, the approach to these issues should be to include fishermen and the organisations that represent them at the heart of such legislation, whether it is sovereign legislation or imposed on us from Brussels—good old Brussels. Well, Brussels sprouts are good.
I want to mention one final quote that illustrates just how illogical the bureaucratic EU diktat on landings is. If it were true that the EU and the Council of Ministers routinely set quotas that are unsustainable, it is a little difficult to explain how our fisheries are doing so well. At the annual “State of the Stocks” meeting in Brussels, the chairman of the International Council for the Exploration of the Sea advisory committee, Eskild Kirkegaard—it is hard to get my tongue around that; I imagine it does not sound right in my Ulster-Scots accent—said, importantly:
“Over the last ten to fifteen years, we have seen a general decline in fishing mortality in the Northeast Atlantic and the Baltic Sea…For the majority of stocks, it has been observed that fishing mortality has decreased to a level consistent with Maximum Sustainable Yield…meaning levels that are not only sustainable but will also deliver high long term yields.”
It is clear from that statement by that knowledgeable person, who is chairman of the International Council for the Exploration of the Sea advisory committee, through the EU, that there is a sustainable industry out there. The hon. Member for Waveney (Peter Aldous) referred to positivity—let us breathe the positivity into this debate and make sure that we get the return, which is very important.
To refer to my constituency of Strangford, fishermen from the Irish sea and from the boats of Portavogie tell me that they have never seen the abundance of cod in the Irish sea that they have been seeing in recent times. Although the fishermen see that every week, the scientists who advise Europe do not see it, so we need to address that issue. We need to ensure that the quotas are right. The Minister knows about getting the quotas right for the prawn industry. That is very important; it is now the backbone of the industry in Portavogie and of the fishing fleets. When it comes to addressing those issues, let us have some reality from Europe in relation to a sustainable fishing industry and the fish that we have in the sea—the cod and the prawns.
I can only hope that hon. Members have taken note of these very important issues, that in the future fishermen and their organisations have a proper say in what affects them, and that fishermen from the villages of Kilkeel and Ardglass in the constituency of the hon. Member for South Down and from the village of Portavogie in my constituency are afforded an integral role in deciding the best way forward for the industry. After all, who knows the industry better than the fishermen themselves? I wish the Minister every success. I place it on the record that he has done well for us in the past few years and we look forward to his doing well—no pressure—for us again this year.
Mr Iain Wright (Hartlepool) (Lab)
It is a pleasure to serve under your chairmanship, Mr Nuttall, and to follow the hon. Member for Strangford (Jim Shannon), who is always an assiduous attender of these debates and takes his parliamentary duties extremely seriously. I thank the Backbench Business Committee, and I particularly thank the hon. Members for South East Cornwall (Mrs Murray) and for South Down (Ms Ritchie) for securing an important debate that I think should be taking place on the Floor of the House.
I have tried to attend fisheries debates every year since I became a Member of the House and have tried to represent the interests of the fishermen in Hartlepool. The fishing industry in my constituency is perhaps not a staple part of the local economy as it is in other constituencies, but the key point is that generations of Hartlepool families, going back at least 800 years, have carved out a hard living in the dangerous and often unforgiving North sea. Bluntly, I find it very difficult to understand the conditions in which these brave men and, often, women serve: wet, cold, often dark, treacherous, freezing and far too often fatal.
[Mr David Crausby in the Chair]
Mrs Murray
I thank the hon. Gentleman for those comments. Will he acknowledge that a commercial fisherman often also has to be an accountant, an engineer, a mathematician, a fisheries scientist and a gear mender? There are masses of qualities and areas of expertise that these hard-working fishermen need before they go to sea.
Mr Wright
The hon. Lady makes an important point. With regard to the point about being an accountant, I should declare my interest: I am a chartered accountant. If any fishermen want my services, I will be more than happy to provide them for a reasonable fee. But there is an important point, which is that fishing is a dangerous profession. My right hon. Friend the Member for Tynemouth (Mr Campbell) made an important point about a service that happens in North Shields. The same service happens annually in my own constituency, organised by the Mission to Seafarers for the Tees and Hartlepool, whose headquarters are on Seal Sands Road. There is a nice connection there, because it is a delight to be able to say that it is in the constituency of my parliamentary neighbour, my hon. Friend the Member for Stockton North (Alex Cunningham). It is a delight to see him serving on the Front Bench in this debate.
As I said, in my time in the House I have tried to reflect the concerns and issues of Hartlepool fishermen. The fishing fleet in my constituency consists predominantly, if not exclusively, of under-10 metre boats. The fishermen have expressed the same issues to me year in, year out, and I have raised them in these fisheries debates year in, year out. They have struggled with persistent problems: the quotas for under-10 metre boats and how those quotas are being squeezed by the bigger boats; unlicensed fishing; discards; and how to ensure that there is sustainable stock that allows for the maximum yield. However, what is really frustrating is that the issues that I raised in these debates on behalf of Hartlepool fishermen a decade ago remain concerns that threaten the livelihoods of people in my constituency today, such as Phil and Marty Walsh. Those problems pose—I am not being melodramatic—an existential threat to the Hartlepool and UK fishing industry.
I want to put some figures on that—perhaps I am comfortable about doing that, being a chartered accountant. People might think that an awful lot of money is involved, but in 2014, according to figures from the Marine Management Organisation, under-10 metre boats in Hartlepool landed fish with a value of just over £69,000. That is spread over a number of boats—a number of small businesses—in my constituency, so it is clear that the fishermen are hardly getting fat on the proceeds of their trade. It is a harsh climate—often literally, but also financially. The fishermen have to pay fixed costs such as insurance, without any guarantee of whether conditions will allow them to go out to fish. That is coupled with the fact that the revenue arising from their endeavours is low and often precarious.
I have raised the matter repeatedly in the House, and other hon. Members have done so far more eloquently than I can. The quota system is unfair—it favours large producer organisations at the expense of smaller boats. The quota allocations for 2015 show that although the under-10 metre fleet makes up 77% or 78% of England’s fleet—a fact mentioned by the hon. Member for South Thanet (Craig Mackinlay)—it was allocated only 3.2% of the quota. To add insult to injury, the producer organisations often do not use all the quota allocated to them. That suggests to me that the market is distorted and failing, and that smaller boats should be given a larger allocation.
I believe that the Minister is sympathetic to that point. I know that he is certainly very knowledgeable in this area, and I commend the work that he has done in the past two or three years. I am not telling him anything that he is not aware of or that I have not mentioned time and again in previous fisheries debates. He has recently committed to ring-fencing for small boats the first 100 tonnes of quota uplift, followed by an additional 10% or 15% of all available uplifts. That is a welcome step, but can he go further? Will he safeguard the interests of the under-10 metre fleet in Hartlepool and elsewhere?
In last year’s debate, I mentioned how the discards policy, although incredibly welcome and entirely sensible, is consolidating further market power in the hands of producer organisations at the expense of smaller players. I asked the Minister what the Government were doing to ensure that they met the requirements of article 17 of the reformed CFP, which requires member states to use transparent and objective criteria, including of an environmental, social and economic nature, when allocating fishing opportunities. Article 17 should move the quota system away from a methodology based on what was caught before and a system that disproportionately favours those who caught the most in the past. Those points are identical to the ones that I raised last year, but the question remains.
Several hon. Members have mentioned Greenpeace. Let me quote what Greenpeace has argued, which I think is striking:
“The government is currently starving our local, low impact fleet of fishing quota, sending some of them to bankruptcy or food banks. Meanwhile just one Dutch controlled vessel continues to get a mammoth amount of fishing quota because the system of allocating quota hasn’t changed since the 1990s. This is despite the fundamental change in the CFP that says that fishing quota should be used to incentivise sustainable fishing and benefit coastal economies. So it’s not just blatantly unfair, it’s also unlawful.”
We need to change that.
Mrs Murray
Actually, if the hon. Gentleman had attended the last-but-one meeting of the all-party group on fisheries, he would have heard the other side of the argument. He might like to look at the very short film on the all-party group’s website that counters some of the mis-messaging from Greenpeace, because it puts the point of view of that large Dutch vessel. I think that the hon. Gentleman would be better advised to hear the other side of the argument before using Greenpeace’s complete propaganda.
Mr Wright
Well, I do feel disciplined, Mr Crausby; I feel chastised, and I will certainly look at the film that the hon. Lady mentions. The point about Greenpeace is important, because the Minister is obviously aware of the judicial review that it has brought about on the grounds that the Government have not fully and properly implemented article 17. I understand that a verdict is imminent. It could even come this side of Christmas, and I know that the Minister, in responding to the debate, will be hindered in what he can say.
Dr Wollaston
Does the hon. Gentleman acknowledge, though, that there is a value attached to these quotas, and that there should be full compensation if they are removed unilaterally? As my hon. Friend the Member for South East Cornwall (Mrs Murray) said, we need to recognise that the bulk of the fish on our plates must come from the large fleet.
Mr Wright
The hon. Lady makes a really important point. This is not an easy matter to solve, and successive Governments have struggled with it, although the Minister has gone some way towards addressing it. The hon. Lady is right that the quota allocation has a value and can be classed as an asset on the balance sheet, so there would need to be some sort of legal compensation if it changed. I fully recognise that it is a complex issue, but I am trying to represent my constituents, who are suffering deeply because the allocation of quota is incredibly unfair.
Peter Aldous
The hon. Gentleman is making his point extremely well, and we represent very similar constituencies with the same issue. However, I want to question what he said about quota being an asset on the balance sheet. Lord Justice Cranston, in his judgment in summer 2013, said that fish was a public resource, not an asset for any company to own.
Mr Wright
But the producer organisations can often lease quota and put the lease and the future revenue streams on the balance sheet, so, in that regard, quota can be seen as an asset.
What can the Minister say about making sure we fully implement article 17? Despite the complexities and confusions, which I fully recognise, can he do anything to increase the quota for the under-10 metre fleet? Will he commit to ensuring that under-10 metre fleet representatives have a place at the table when decisions are made on fishing at national and EU level?
I started by saying that the fishing industry in Hartlepool is more than 800 years old. It is a tough way to make a living, and it is made tougher by the restrictions and market distortions that are in place. As I said, the arguments I have set out are not new, and I have raised them time and again in fisheries debates. None the less, will the Minister do all he can following this annual debate to ensure that firm and tangible action is taken, and taken now, to ensure that this 800-year-old heritage industry, which, crucially, provides the livelihood of fishermen in Hartlepool, is not lost to history in the next few months or years?
Several hon. Members rose—
Mr David Crausby (in the Chair)
Order. I want to call the Front-Bench speakers at about 3.50 pm, so that I can give Margaret Ritchie time to wind up. Four or five Members are standing, so if they can keep their contributions to less than 10 minutes, we should just about fit all them in.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
It is a pleasure to serve under your chairmanship, Mr Crausby. I thank the hon. Member for South Down (Ms Ritchie) and others for securing the debate.
I am lucky enough to serve what I would argue is the most beautiful constituency in the country, but it is also the one with the longest coastline. It therefore has a large number of fishing ports, including larger ones, such as Mallaig and Ullapool, and some very small ones. I want to raise an important constituency matter, and I would like the Minister with responsibility for fisheries to discuss with the Secretary of State for Defence the issues that I will raise, because they run across both their portfolios.
The North West Inshore Fisheries Group has made representations to me and the Secretary of State for Defence about the consultation on the proposals, published on 30 September 2015, to extend the British Underwater Test and Evaluation Centre range and to introduce new byelaws. Like me, the NWIFG fully accepts that measures need to be expedited in the interests of national security, and that a suitable operational area is required for the secure deployment of acoustic and other test equipment, which the Ministry of Defence has used in this area for many years. I stress that I fully support BUTEC operating in the area, but that must be done on a sustainable basis, and it must take the local fishing community’s interests into account.
Given the significant scale of the proposed area extension and the associated restrictions, more could and should have been done to liaise with fishing and other interests. A full socioeconomic and environmental impact assessment should have been carried out before the consultation proposals were made public. A number of Members have mentioned the value of the fish landings in their areas, and analysis carried out over a three-month period in the area I am talking about—the fishing grounds at the edge of the existing MOD range—showed that just seven vessels landed 28 tonnes of nephrops with a value of £271,000. Those seven vessels are a tiny proportion of the fleet in the area, and I should add that the value of the nephrops catch there is approximately three times the national average—this is the most important area for nephrops in the whole of western Scotland, so it is an area of some importance for us all.
The fact that there has been little liaison with the industry is important, given the assurances given in an Adjournment debate that I secured on 23 June. The Minister for Defence Procurement said:
“I want to ensure that full and proper discussions are held with representatives of the local fishing communities, which we will start shortly, in advance of the byelaw consultation. The aim of these talks will be to investigate what options might be available that would allow some fishing to take place at certain times within the revised water space—much as happens at present in part of the area other than that which is completely prohibited, which the fishing communities are well accustomed to.”—[Official Report, 23 June 2015; Vol. 597, c. 863.]
Local fishermen’s attempts to engage in constructive dialogue with the Defence Infrastructure Organisation and QinetiQ to get information about the plans and about the reasons behind the extent of the proposed extension were largely unsuccessful. The one meeting that did take place, with representatives of the North West Responsible Fishing Association, did not provide sufficient detail to enable the association to assess the proposals’ implications for local fisheries and communities. Those were not the proper and full discussions that the Minister for Defence Procurement promised in the House on 23 June, and that must be corrected.
The NWRFA, which is a member of the NWIFG, represents 70-plus fishing vessels in the area of Skye and Lochalsh and constitutes approximately 60% of the fishing fleet registered in the Portree fisheries district. Of the 70-plus vessels represented by the NWRFA, 25 fish directly in the Inner Sound area, and the majority are directly affected by the BUTEC proposal, so this is no small matter.
The one public meeting that was held, in Kyleakin on 13 November, did provide some useful information, but there was insufficient time for that information to be reflected in responses before the original consultation deadline of 18 November. We appreciate the short extension until 30 November, but the consultation period was still well short of the standard 90 days generally allowed by other Departments. Scotland has just come through a consultation on marine protected areas, which has taken some months and involved a full public consultation. Why are my constituents not afforded the same rights when the Ministry of Defence wants to come in and make changes? Forty-nine days is not sufficient time to allow for a detailed economic impact assessment of the loss of vessel earnings if the inner sea area of the BUTEC range is more than doubled, as is proposed in the new byelaws.
Thanks to support from Highlands and Islands Enterprise, a Government agency, the NWIFG has commissioned a short economic impact assessment to provide a clearer understanding of the proposals’ implications. Significant work is required to compile information that adequately reflects the complex interrelationship between the various issues—fishing activities, the displacement of activities impacting on wider areas beyond the BUTEC range and the repercussions for onshore businesses and support services that are reliant on fisheries, secondary employment and so on. It was not possible to prepare a substantive report of that kind before the consultation deadline of 30 November. The draft report is due in the third week of December. The need for such an economic assessment was discussed at the public meeting, and there was consensus that it needed to be done well, even if that went beyond the deadline I mentioned, which has now passed.
With the NWIFG, I have requested that a period of at least three months be allowed following the publication of the full socioeconomic impact assessment, to allow sufficient time for consideration of its findings. We have also requested that a working group be set up to facilitate constructive dialogue, and that it include representatives from the local fishing industry, the Ministry of Defence, QinetiQ and other relevant stakeholders. The group could consider the implications of any economic and environmental impact reports and discuss possible options in relation to the size or location of any restricted areas required for BUTEC’s activities. It is not good enough for the Ministry of Defence to complete its consultation, as it has done, for the Minister then to rule, and for the fishing communities in my constituency to be put at risk. There must be proper consultation.
The BUTEC range is in the inner sound of Raasay, in the middle of some of Scotland’s most valuable and intensively used inshore fishing grounds. The new draft byelaw proposes an extended inner sea area of 53.9 sq km, which would more than double the area in which fishing by any method is prohibited at all times, and reduce the fishable area in the creel-only zone by 11%. Based on information on fishing areas collected during the ScotMap exercise and fisheries officers’ local knowledge, it is estimated that at least 23 creel fishing vessels could be directly affected and no longer able to deploy a proportion of their gear where they do now; some vessels will be affected more than others.
These are all small, locally based vessels with limited range and very few, if any, options to relocate to fish elsewhere. It is therefore highly likely that the proposed extension of the inner sea area would displace creel fishing effort on to adjacent grounds, with concomitant impacts on others fishing in the area, particularly in the creel-only zone. Displaced fishing effort might result in an additional loss of catch in the adjacent area. Those involved in the fishery advise that it will exacerbate gear conflict on what are already crowded fishing grounds targeting nephrops.
I want to deal briefly with the consultation process. There are discrepancies in latitudes and longitudes of range boundaries published in MOD consultation documents. The consultation document does not sufficiently explain the reasons for selection of the boundary areas indicated, and whether any alternative areas could and should be considered. As part of the proposed working group discussions, the NWIFG requests further consideration of whether all fishing activity must be excluded from the entire expanded inner sea area, and whether continued activity may be possible, even for part of the year, or around areas with creel-friendly hydrophones. None of that has been addressed to date. Much of the proposed expansion is into the only designated creel area on the Scottish coastline. Further discussion is requested on potential for a cap or limit on the number of days that the outer sea would be closed to fishing activity. Presently, the outer sea area is open to fishing activity all the time.
Fishermen would like the current arrangement to continue, and would like assurances from the MOD and QinetiQ that the outer sea area will not be closed more regularly if the BUTEC range expands and operates under the new proposed byelaws. The MOD and QinetiQ are requested to provide a protocol for closure of the outer sea area; input should be sought from the fishing industry and sufficient forward notice and details of the closure period should be provided. We all have to work together. If the outer sea area is closed and fishing gear must be removed, fishermen will need sufficient notice to get access to their gear and move it, prior to closure. Most fishing vessels that would be displaced from the expanded BUTEC range will not be able to continue fishing with the same effect elsewhere, because the surrounding waters are already fully exploited with fishing activity. Displaced vessels may need to be scaled down, with respect to both vessel size and amount of gear, and in some instances vessels may be forced to stop fishing entirely.
If fishing vessels are forced out of operation, fishermen and their families will suffer directly through loss of jobs, and there will also be indirect negative impacts downstream—for processors, restaurants and the local service industry. Creel fishing represents a significant economic activity in the highlands; the vast majority of fishing vessels working within the inner sound are full-time operators, not part-time or hobby fishermen. A typical creel vessel in the Skye and Lochalsh area employs two to three people—and only local people. In addition, many fishing businesses have been passed down through families, and will be inherited by the next generation. If the BUTEC range expands, a wider negative ripple effect will be felt by the community; that will include the many issues associated with elevated unemployment, and insufficient opportunities for alternative employment in the area. Ultimately, loss of local fishing jobs could result in depopulation—something that we are all too familiar with—which would have a negative impact on schools, other local enterprises’ income, and service provision. I therefore appeal to the Minister to talk to the Secretary of State for Defence and come up with something respectful to local fishing interests, as well as the interests of the MOD.
Mr David Crausby (in the Chair)
Order. Members will have to keep their speeches shorter than 10 minutes, as I asked, if I am to get everyone in.
Melanie Onn (Great Grimsby) (Lab)
It is a pleasure to serve under your chairmanship, Mr Crausby. I want to echo the comments that colleagues have made about the Fishermen’s Mission, the RNLI and all the other support organisations that help fishing communities and do such good work. I also want to thank the Minister, because a couple of months ago, he met some of my constituents, and constituents of my Conservative neighbour, the hon. Member for Cleethorpes (Martin Vickers). They were deeply grateful for his time, and I was impressed by the extent of his understanding in that conversation. I cannot say that I followed it with the same degree of expertise.
There have been some excellent contributions in the debate, and there is a great depth of knowledge of the industry in the Chamber. There are many different elements to the industry. For example, Great Grimsby recently held the world seafood congress; visitors came from across the world to discuss, celebrate and support the fishing industry’s future success and sustainability. The organisers are to be congratulated because the event put the focus on the fishing industry as well as on my town and its historical relationship to that industry.
I want to keep my speech quite contemporary and short, and to focus on the issues raised by constituents of mine employed in fisheries, and on how the industry can grow and continue to be successful. Many in the fishing industry to whom I have spoken believe the discards ban to be the most significant change to the common fisheries policy since its inception. The vast majority of the industry of course agrees with the principle of the ban, but there is a lot of concern, as has been discussed. There are many reasons for that, but the common theme is uncertainty. Under the landing obligation, ports are responsible for facilitating the landing of discards. At this point, though, before the ban comes in on 1 January, ports are unaware of what weight will need to be landed. Is the Minister confident that ports will be adequately prepared for the periods in the year in which discards will be high? What support are the Government offering to ports in this first year, when the level of discards is unknown?
There is also the issue of costs for landing, and on-costs. First, can the Minister confirm that fishermen will be expected to cover those costs—or will ports be asked to take the burden of the costs of the policy? Has the Minister fully considered transportation? It is assumed that the majority of discards will go to fish meal, but I understand that there are only two mainland fish meal plants in the UK—one in Aberdeen and, luckily for businesses in my constituency, one in Grimsby. The cost of transportation from areas in Wales or the south of England is likely to exceed the value of the fish being transported.
The chief executive of my local fish merchants association has raised with me the issue of the fuel surcharge, and how it particularly affects small seafood companies across the UK. The reason for a surcharge is clear, but there is a concern that it is being used to generate extra profits for distribution firms, rather than only to cover the fluctuating cost of fuel. For example, one local refrigerated transport company charges almost double the surcharge of that charged by a competitor. That suggests that some firms are not sharing the savings from low oil prices across the local economy. In a reply to my predecessor before the election, the former Exchequer Secretary to the Treasury suggested referring that complaint to the Competition and Markets Authority. Does the Minister agree with my constituent that that is harming small seafood firms? Does he believe that it is worthy of a Government referral to the CMA?
Looking to the future, we need to ensure that a career in fisheries is an attractive option for young people. The industry workforce is ageing, and that is cause for concern for the industry in the long term. There is a risk that the skills held by the current workforce will be lost.
Mrs Sheryll Murray
Does the hon. Lady agree that Seafish, under its training arm, is carrying out a lot of training of young fishermen, and that that should be applauded and encouraged, so that there is new blood entering the industry?
Melanie Onn
Any assistance given to rejuvenate and revitalise the fishing industry, and to bring younger people into it, is of course to be welcomed. In addition to having such training directly related to fishing, it would be great if it were expanded into all areas of the industry. A low wage and an insecure job will not attract many young people when they consider what to do on leaving education.
Justin Madders (Ellesmere Port and Neston) (Lab)
My hon. Friend is absolutely right to raise the future of the industry and the risk of low pay. In my constituency, fishermen working on the River Dee are really struggling to make a living because of decisions being made on quotas by Natural Resources Wales. As those fishermen are based on the English side of the river, they are struggling to get their voices heard. Does my hon. Friend agree that since so many fishing areas cross boundaries, it is important that the developing devolution agenda ensures that there is a mechanism for all voices to be heard?
Melanie Onn
If true devolution is to be delivered properly, it is essential that all communities feel they have an influence over matters that are of particular importance to them. My hon. Friend makes an important point about a matter that I was unaware of.
The hon. Member for South East Cornwall (Mrs Murray) may have partly addressed this question, but I want to ask the Minister how he plans to attract more young people to the industry. It seems to me that the industry needs a proper strategy to secure its long-term future. I may well already have the answer.
There has been a lot of discussion in recent weeks about how to discourage the consumption of unhealthy food and drink, prompted by proposals to introduce a sugar tax. Should we also promote healthy foods such as seafood? Has the Minister had any meetings with the Under-Secretary of State for Health, the hon. Member for Battersea (Jane Ellison), who has responsibility for public health, to discuss that? Haddock, in particular, is a healthy and environmentally sustainable food, and stocks have increased in recent years. Greater demand for British seafood would also help to revitalise parts of the industry that need investment to improve their working environment, such as the wonderful traditional, bespoke smokehouses in Grimsby docks.
I will finish on a rather cheeky point. I have somewhat foolishly agreed to run the London marathon. [Laughter.] I know. I would like to take the opportunity—excuse the puns—to cast my net wide and ask all hon. Members who have attended and participated in the debate to throw me a line and donate, because I will be running for the cause of the Fishermen’s Mission. I say that I will be running, but I am not sure whether that will be the case. If all the participants in this debate were to donate £20, I would be well on my way.
Mr David Crausby (in the Chair)
Order. We have two people standing, and I will call the Front-Bench spokesmen at 3.50 pm. If Kelvin Hopkins could keep his speech below nine minutes, I will call David Simpson, and he will get the same amount of time.
Kelvin Hopkins (Luton North) (Lab)
It is a great pleasure to serve under your chairmanship, Mr Crausby. I shall be considerably less than 10 minutes, I hope. It is something of an embarrassment that I speak from a non-fishing constituency; the fishing fleet of Luton North is not large. On the other hand, I have spoken in fishing debates many times, and on every occasion I have spoken about the nonsense that is the common fisheries policy. I have consistently argued for the abandonment of the CFP, or the UK’s unilateral withdrawal from it, which would allow us to re-establish the limit of 200 miles, or 50%, for Great Britain and, I would hope, the British Isles in general.
I applaud the hon. Member for South East Cornwall (Mrs Murray), who put in her own very fine words what I am saying, and the hon. Member for South Thanet (Craig Mackinlay), who spoke in similar terms. If we withdrew from the CFP and permitted only UK fishing vessels to fish in our home waters—with possible licensing for a small number of foreign vessels, where appropriate, on an individual and carefully monitored basis—I think we would see a massive revival of the British fishing industry and of fish stocks across our waters. If all member states and, indeed, all nations operated under similar arrangements, they would all have a powerful vested interest in managing and monitoring their own stocks and fisheries. There would surely be plenty of fish for all British fishermen working under such arrangements, and stocks would be sustained at appropriate levels for the long term.
I recently had the pleasure of meeting representatives of the Government of Guernsey, which is not in the CFP. They showed me what could be done if we managed our own fishing stocks. They have their own 12-mile limit, and they are not governed by the CFP quota limits. They manage their fishing stocks extremely well. They are, in microcosm, what we could become. They are concerned that the British Government might give away control of their fishing areas to the CFP, and they have asked me to urge the Minister to take note of their case and be sympathetic to them. They manage the number and sizes of their boats very carefully. All the fishermen involved make a good living and fish stocks remain buoyant, if that is not a contradiction in terms. That is what we should become, with our 200-mile limit.
The representatives from Guernsey contrasted their experience with that of Jersey, which has seen its fish stocks disappear because it does not have the same control over its own fishing grounds. We should give notice now of withdrawal from the CFP and make Britain another Norway—another Guernsey writ large. The CFP has been a disaster, and it should be abandoned. That would be to the benefit of all fishing nations in the European Union, not just to us.
The appalling insanity of discards has been the most grotesque feature of the CFP. Discards are supposedly being phased out, but they continue for the time being. The excellent Library note on this topic states that according to the Environment, Food and Rural Affairs Committee report published in February 2012, in European fisheries, 1.7 million tonnes of fish were discarded annually, with some discards being up to 90% of catches. That is a complete nonsense. It will be to the benefit of us all—not just fishing fleets, the fishing industry and people who fish, but the whole country—and our diets if we maintain good fish stocks and a healthy fishing industry. As a great lover of fish, I hope that we will do so.
David Simpson (Upper Bann) (DUP)
It is good to speak in this debate, and I may now have a few extra minutes available. As a new member of the Environment, Food and Rural Affairs Committee, like the hon. Member for South Down (Ms Ritchie), I have a lot of terminology to use. Despite the fact that I have been in the agri-food industry for some 35 years—if it comes to beef, lamb or pork I could probably hold my own—in relation to fisheries I am dependent on my Northern Ireland colleagues to keep me right on much of the terminology.
In recent days, I strayed into the hon. Lady’s constituency to visit one of the ports in Kilkeel. It was an interesting visit. Although some of the facts shocked me, I was greatly encouraged by the vibrancy and positive attitude of many who were employed around the harbour. I met trawler owners, fishermen, marine engineers and boat builders, all of whom see a future for themselves with the industry. The blue, marine-based economy of Kilkeel is developing, and it is an honour to give them some level of recognition today. I heard about the challenges that are of great interest to the fishermen, and the rising barriers that are being faced in the industry.
In terms of the recent reform of the common fisheries policy, promises of decentralisation have failed to deliver much, albeit we are only two years into a 10-year programme. Industry representatives voiced their growing frustration with the advisory council, and the feeling that they are being disfranchised by the system. Will the Minister give his opinion, if he dares, on how to encourage our most important fishing stakeholders to continue active participation in the advisory council?
During my visit to Kilkeel harbour, I received a presentation about the development of the fishing industry in the 32 years since the creation of the common fisheries policy. It was interesting to see how the industry had changed from a profitable, mixed fisheries approach to one that had been struggling with dependence on a single species—nephrops or prawns. Now, thanks to the leadership shown by the industry, many are trying to turn the corner and redevelop the mixed fisheries model that has been so successful in the past, albeit with little help from the European Union.
On 10 November, the European Commission proposed its fishing opportunities in the Atlantic and in the North sea for 2016. The numbers for the aforementioned stocks were published by the Commission last Thursday and did not make good reading. Depending on how we interpret the Commission’s proposal for area VII prawns, it advocates a 10% or 17% cut for the stock. For Irish sea haddock, the proposal is for a 52% reduction in the next year’s total allowable catch. If the proposals were based on rational arguments they might carry some more credibility, but the fact is that, despite the promises of the reformed common fisheries policy, the Commission continues with its outdated approach to the annual negotiations by turning out numbers that have absolutely no basis in reality.
Will the Minister explain how the Commission justifies a proposed 52% cut in the Irish sea haddock quota when scientists state that, year on year, there has been an increase of some 400% in the number of those fish in the Irish sea? I hope he agrees that Northern Ireland’s fishermen have made tremendous sacrifices over the past few years to comply with EU regulations. The use of highly selective fishing gear, a reduction in the size of the fleet and a range of other measures have combined to reduce fishing effort in the Irish sea by around half.
Fish stocks, including the iconic cod, are showing encouraging signs of recovery. Local fishermen want to return to a mixed fishery form of management—a goal that the Commission claimed to share. However, the annual debacle that surrounds the EU’s December Fisheries Council really calls into question any confidence in the Commission’s ability to effectively remain in control of our fisheries. With that in mind, I ask the Minister to aim to secure a deal for the Irish sea when he goes to Brussels in a few days for the annual quota negotiations. The deal should recognise the socio-economic dominance of the prawn sector and the realistic goal, based upon fisheries science, of re-creating a mixed fishery with haddock at its core.
I would like to take a few minutes briefly to discuss the issue of recruitment and current crew shortages—a subject that has been touched on. When I spoke to a number of people in the Kilkeel harbour area, including in businesses owned by fishermen, it was made clear that there is a major difficulty in recruiting local staff or workers for the boats. I think we have a meeting with the Immigration Minister next Wednesday to discuss trying to get permits to allow some people from outside the EU to come to work on the fishing boats because young people do not believe that there is a future within the industry that can sustain long-term salaries for them.
A company in the Kilkeel area, called Sea Source, has recently run courses for young people and has tried to encourage them. On one occasion, the chief executive met one of the young men who had been on the course. He was working in a car-wash. When he was asked why he was working in a car-wash after getting top marks on the course, he simply said that he did not believe that the industry and life on a fishing boat could sustain his life—marriage, buying a house and even just a full-time salary. Those are issues that we greatly need to address.
I wish the Minister every success over the next few days. I do not envy his job. He has done a sterling job since he became Minister of State and I know that he has the industry at heart, but it is vital that we get a common-sense approach. There is a good future for the industry and the industry will acknowledge that, but there must be a common-sense approach, so that everyone can get a livelihood.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
We have had an extremely wide-ranging debate this afternoon. Several Members have opened their remarks by paying tribute to our coastguards, and to the work of the RNLI and the Fishermen’s Mission. I echo that and express my thanks to the men and women who crew our lifeboats in Fraserburgh, Peterhead and Macduff in my constituency. They are volunteers who risk their lives in all weathers to keep others safe. I thank many more besides, who work onshore for the wellbeing and welfare of our fishing communities.
I take a keen interest in this debate every year, as an MP representing two of the three largest fishing ports in the UK—Peterhead and Fraserburgh—and some of Europe’s most fishing-dependent communities, and given the crucial importance of the annual December talks not only to the fishing industry, but to the onshore processors, retailers and suppliers that depend on it. I am disappointed, therefore, like the right hon. Member for Tynemouth (Mr Campbell), that we find ourselves here in Westminster Hall once again debating this crucial industry in Back-Bench time, rather than in the main Chamber. Nevertheless, I am grateful to the Backbench Business Committee for allocating this time. I particularly thank the hon. Member for South Down (Ms Ritchie) for securing the debate.
Mr Alistair Carmichael
I just want to place it on the record that the main Chamber has now been adjourned for quite some time. With a bit of efficient business management, we could have been in there.
Dr Whiteford
I am grateful to the right hon. Gentleman for that helpful point, which I hope is noted across the House.
For the Scottish fleet, this year the EU-Norway negotiations are at least as important as the December Council—arguably more so—and they are going on as we speak. There are science-based recommendations for substantial increases in some of our most important jointly managed stocks, including cod, haddock, herring and plaice, which offer substantial reward to our fleet for their conservation efforts. We need to work towards a fair and balanced exchange with Norway that takes account of our present and future needs.
The right hon. Member for Orkney and Shetland (Mr Carmichael), the hon. Member for Totnes (Dr Wollaston) and my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (Calum Kerr), among others, talked about the implementation of the discard ban. Members will know that in previous years that has been the key focus of our fisheries debates, particularly the challenges of making a discard ban workable in a mixed fishery when there is a strong likelihood that vessels will pick up by-catch of species for which they do not hold enough quota. That issue has not gone away. Indeed, it is one of the reasons that such a lot is at stake in the Norwegian talks. It is extremely important that we do not trade away stocks now that could become “choke” species in the next few years as the landing obligation is phased in for jointly managed stocks. The Government need to think ahead about the longer-term challenge. I hope the Minister takes that point on board.
On the wider issue of discards, it is important to reiterate that, for the Scottish fleet, discarding has not just stabilised over the past few years, but in many fisheries has actively substantially reduced as a result of conservation measures. I am glad that the practical concerns about the landing obligation in relation to the demersal fleet have been heard, and that it is being phased in gradually starting in January, but I am conscious of the need for ongoing flexibilities.
I hope the Minister can address the issues raised by the hon. Member for Great Grimsby (Melanie Onn) and clarify where the responsibility will rest for the disposal of unwanted, unmarketable fish landed under the discard ban. There has been some debate and confusion about that and it would be immensely helpful if the Minister would set out his interpretation of the regulations.
On the December Council, I am really quite surprised that no one has yet mentioned the ruling earlier this week of the European Court of Justice regarding the stand-off between the European Council on one hand, and the Commission and Parliament on the other. That has some implications for our fleet. It is critical that fishing does not, once again, become a political football in the turf war between those institutions any more than it has already.
When the Council took the entirely sensible and responsible decision a few years back to depart from the cod recovery plan and place a freeze on effort, they did so on conservation grounds and on the basis of sound scientific advice. The cod recovery plan was proving to be counterproductive, undermining its own environmental objectives and, at the same time, putting untold pressure on ordinary fishermen and communities. The decision to abandon the cod recovery plan has been wholly vindicated, regardless of the procedural issues it has raised, by the fact that we now have healthy cod stocks, and that the intended target has been achieved through an alternative approach. There is agreement from all the North sea EU member states that the cod recovery plan needs to be repealed before cod is brought into the landing obligation. I would welcome the Minister’s assurance that he will press for that as a priority. The bottom line is that there is no need for further effort cuts when cod stocks are recovering so strongly in the North sea.
There has been a fair bit of debate this afternoon about renegotiating the CFP, and I agree with the right hon. Member for Orkney and Shetland that the UK Government could make progress on that with better hope of a positive outcome than on many of their other demands. I would welcome the Minister’s assessment of his prospects for pushing CFP renegotiation up the political agenda over the next few weeks.
Dr Whiteford
I will not give way because I have a lot to get through and I have already taken one intervention.
Dr Whiteford
Thank you very much, Mr Crausby. I want to pick up on the important points raised by the right hon. Member for Orkney and Shetland on the EU-Faroes deal. Between us, we represent the bulk of the UK’s pelagic fleet, and I fully appreciate his frustration about Faroese access to EU waters, given the experiences of recent years and the sacrifices that our pelagic fleet has made to secure a compromise to end the stand-off on mackerel. However, it is important to remember that during those years of deadlock there were also significant adverse impacts on those parts of our white-fish fleet that historically have fished in Faroese waters. Reciprocal access to Faroese waters is extremely valuable to our demersal fleet, not least because it gives them effort refuge. Although I would strongly resist any further Faroese incursions into our waters, we need a balanced outcome that recognises the needs of every part of the fleet, including our white-fish fleet, and that is fair and workable for all parties.
Another key issue currently affecting the pelagic sector is the proposed zero TAC for west of Scotland herring, which was alluded to by my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk and the hon. Member for Strangford (Jim Shannon).
Mrs Sheryll Murray
On a point of order, Mr Crausby. I was talking about renegotiating the repatriation of UK waters, not the CFP. Is it in order for that to be corrected on the record?
Mr David Crausby (in the Chair)
That is not a point of order; it is a point of debate.
Dr Whiteford
I am keen to address the important point raised by the right hon. Member for Orkney and Shetland, with which I am in substantial agreement. Everyone here today is committed to the long-term sustainability of the marine environment, our fishing industry and our coastal communities, and to the sustainable harvesting of this precious food resource. It follows from that that we are committed to basing TACs on the best available scientific evidence. However, there is wide acknowledgment that the evidence on herring in area VIa is partial and inconsistent and does not accurately reflect what is likely to be happening in the whole area, which is ultimately a somewhat arbitrary set of lines drawn on a map. I accept the need for a precautionary approach and the need to consider clearer evidence, but that needs to be proportionate. We need an allocation that allows fishing to take place in support of the Pelagic Advisory Council plan that is already in place.
My hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) mentioned the MOD consultation on the BUTEC range, which could potentially affect a large number of fishing vessels in the area. The inner sound of Raasay is home to some of Scotland’s most valuable inshore fishing grounds, and the nephrops creel fishery alone supports 54 vessels and is worth nearly £3.5 million to the fairly fragile local rural economy. I hope the Minister has listened to him and will undertake to make representations to his ministerial colleagues in the MOD.
On the subject of Government Departments that intersect with fisheries, my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk, the hon. Member for Strangford and other Members from Northern Ireland and parts of the west coast of Scotland have raised concerns about the way in which UK Border Force appears to have changed its approach to international seafarers who crew fishing vessels in our fleet. That issue affects my constituency, too, although the issues on the east coast and the west coast are somewhat different because of their geography. The boats are mostly fishing outside the 12-mile zone, and these seafarers are immensely valued by the skippers and are impossible to replace in the current context, so it is important to understand that they are not immigrants; they are contract workers who do not settle here. They are mariners whose main base is still in their home country. The industry is keen to clarify and regularise their status, so that they can continue to run their businesses effectively. I hope the Minister will help us to explain to his colleagues in the Home Office the value that those seafarers bring to the industry and to our wider economy.
The fishing industry is extremely important to Scotland’s economy. It contributes more than £500 million a year in revenues and sustains many coastal communities. Sea fish are not only important to our economy and exports; they are a key sustainable healthy food source, and we must continue to work with the industry to protect our marine environment. Harvesting this renewable resource in a long-term sustainable way is in the interests of everyone, including the fishing industry, and no one recognises that better than those who work on our seas. We recognise that we have some way to go on making the discard ban fully workable, and flexibility will be essential, but we are seeing the tangible results of conservation measures. It is crucial that our fishing industry derives concrete benefits from its efforts.
The passion and commitment we have heard from Members on both sides of the Chamber today, and the wide range of issues that have been raised, illustrates the importance of the industry to our coastal communities. The viability of the industry depends on the political decisions made in the next few days, so I urge the Minister to pick up the points made by Members on both sides of the Chamber this afternoon. I wish him well for the negotiations.
Alex Cunningham (Stockton North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Crausby. I begin by congratulating the hon. Members for South Down (Ms Ritchie) and for South East Cornwall (Mrs Murray) on leading the charge by securing this debate. Colleagues from both Government and Opposition parties have made a number of excellent points, and I am grateful for the opportunity to contribute further on some of those matters, albeit not on the Floor of the House.
I am also grateful to the many organisations and individuals, some of them with clearly conflicting interests and views, who have taken the time to brief me since I took over this portfolio just a few weeks ago. I add my tributes to the people who work in our fishing industry, and particularly to those we see on television fighting tremendous waves offshore, to those who have died for their industry and to the voluntary organisations that provide such a tremendous service on our seas.
The annual meeting of the EU Agriculture and Fisheries Council will take place in a little under a fortnight’s time, and it is a key event in the marine calendar. We must make it clear what is in the UK’s best interests when the all-important fishing quotas are examined and agreed by member states. With the changes made to the common fisheries policy in recent years and the continuing assessment of their impact, it is right that we review and understand the issues ahead of the Council’s meeting and make sure that the Minister knows what we, and the communities we represent, believe he should be doing in the best interests of both the industry and the marine environment.
Various Members have spoken about the agreement to reform the policy, and I will speak about discards in a little more detail. It is estimated that discards previously accounted for 23% of all EU catches, or about 1.7 million tonnes of fish, annually. Some fisheries, however, experience a staggeringly high discard rate of up to 90% of catches, as my hon. Friend the Member for Luton North (Kelvin Hopkins) highlighted. The European Commission has rightly described the practice as “unethical” and identified the problem as
“a substantial waste of natural resources”.
We have heard how, on 1 January 2015, the phased introduction of a landing obligation got under way in an effort to address such waste by outlawing the discarding of fish for all pelagic fisheries. Discard bans for all other species, and all EU fisheries, are due to be phased in over the coming years, beginning in less than a month’s time on 1 January 2016.
That element of the reformed common fisheries policy undoubtedly provides us with a real opportunity to promote the long-term sustainability of fish stocks and the viability of the fishing industry. However, I am aware that the imminent expansion poses a number of challenges, not least because demersal species are largely caught in mixed fisheries. Regrettably, it is highly likely that the next chapter will see additional bycatch and make this phasing in of the landing obligation more complex to implement and monitor than the ban on discards of pelagic species. Although there are various exemptions to mitigate that likelihood, what additional measures will the Government introduce to incentivise the increased use of selective fishing methods, so that we can minimise bycatch and enhance sustainability as the landing obligation is gradually introduced for demersal species? What assessment has the Minister made of the number of fleets that have already adopted more selective measures and, more importantly, the number that have not?
Although the intentions behind a discard ban—to reduce the wasting of our fisheries’ resources and to drive improvements in environmental performance—are welcome, the change to allow the proportion of the total allowable catch originally held back to cover discards to be added to fishing quotas is anticipated to result in an increase in fishing quotas—the so-called “quota uplift.” Although uplift itself should not increase fishing mortality beyond recommended levels, that conclusion is built on an assumption that estimations of discarding are both accurate and verifiable. Were fishing fleets to receive quota uplift and yet continue to discard or high-grade illegally, fishing mortality could rapidly rise beyond sustainable levels and undermine recent improvements.
A report commissioned by the World Wide Fund for Nature suggests that equipping and installing all fishing vessels in the over-10 metre UK fleet with remote electronic monitoring camera systems and undertaking to review 8% of video footage could cost less than is currently spent on traditional monitoring options in the UK, which account for only 0.1% of the hours fished by the fleet. I therefore challenge the Minister to outline what safeguards he will be seeking on EU-wide monitoring to ensure compliance with the new rules and a level playing field for all member states. I would also be grateful if he told us what thought has been given to providing enhanced monitoring at sea, whether remotely by CCTV or on board by scientific observers, and what plans he has for developing a risk-based approach to monitoring through the development of catch profiles.
On a related theme, it is notable that the reformed policy establishes that decision making in areas such as fixing fishing opportunities must be guided by scientific advice on maximum sustainable yield, a theme raised in some detail by the hon. Members for Totnes (Dr Wollaston) and for South Thanet (Craig Mackinlay), among others. The central aim, as we know, is to implement sustainable management of fisheries while allowing the highest rate of extraction at which stocks can be fished without risking depletion and jeopardising future catches. That is the view of the conservationists and the industry, but I am aware that there are different views on the accuracy of the science, with some arguing for increased rather than decreased quotas.
Overfishing, as we know, is proven to be bad for fish stocks and has negative knock-on consequences for the fishing industry that relies on them and the communities supported by the sector, so the science must be accurate and verifiable. There is all the more reason for it to be so when we consider the October decision of the Fisheries Council to set total allowable catches for 2016 in the Baltic sea that exceed scientific advice in a majority of cases.
My hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), speaking in the fisheries debate last year, affirmed that,
“the interests of the marine environment go hand in hand with the best interests of the fishing industry and of our hard-pressed coastal communities.”—[Official Report, 11 December 2014; Vol. 589, c. 1047.]
I reiterate that sentiment, and I highlight again the need to develop stronger partnerships with the fishing industry to shape the transition to a more sustainable future.
We already know of the increase in marine conservation zones around our coast. Again, co-operative work is needed to ensure that we can conserve while allowing the fishing industry to exist alongside conservation. I am clear that we will arrive at that future only when we heed the scientific advice available and exploit it to develop policies firmly grounded in evidence. While Ministers in the Agriculture and Fisheries Council continue to set limits each December that outstrip the recommendations of so-called experts, despite a commitment to end overfishing by 2020 in the worst-case scenario, that future still appears some way off.
Of the total allowable catches announced for 2014, for instance, 31 of 69 stocks, or 45%, were fished above scientific advice. The UK is a prime offender, having been placed at the top of the EU overfishing league table for 2015 by the New Economics Foundation. I hope the Minister will therefore commit to seeking agreement on fishing limits that do not exceed those levels when he attends the Council meeting in Brussels in 10 days’ time or so, rather than accepting higher limits that risk more severe cuts in the run-up to 2020.
The situation is all the more pressing given that, as the Marine Conservation Society tells me, most stocks in the EU are data-poor. Almost two thirds of demersal stocks in the North sea alone are estimated to be data-deficient, ahead of the implementation of the landing obligation on 1 January. I also hope that the Minister will support a risk-based approach to the management of such data-deficient species in the short term and push for those species to be made a priority for research and assessment. Delaying that process means delaying the benefits of sustainable fishing. If the outcomes of the Council meeting show a lack of ambition similar to last year’s, it will unnecessarily interrupt progress.
We have heard in the debate about the recruitment challenges facing boat owners and their desire to recruit more non-EU workers within a regulated scheme to enforce minimum standards on service, pay and treatment. I am hopeful that the Minister will respond to that in co-operation with his Home Office colleagues. As my hon. Friend the Member for Great Grimsby (Melanie Onn) and others mentioned, it is sad that so many of today’s young people who might have been mariners two generations ago now shun the sea, preferring a more family-friendly lifestyle. Perhaps if the earning power of past days returned, attitudes might be different and more young people would move into the fishing industry.
Although our industry still supports a huge number of jobs in our coastal communities, those opportunities risk becoming unsustainable as long as small vessels have disproportionately restricted access to the UK’s quota. Many Members have raised that issue in the debate, including my north-east neighbours, my right hon. Friend the Member for Tynemouth (Mr Campbell) and my hon. Friend the Member for Hartlepool (Mr Wright). I look forward to hearing the Minister address Members’ challenging and serious questions on that issue.
I know that Greenpeace is not the flavour of the month for some Members here, but it calculates that small-scale vessels represent more than three quarters of the total UK fleet but have access to just 4% of the UK quota. The remaining 96% is held by larger-scale interests. I am sure the Minister knows that the right decisions at the Council are required to support our coastal fishermen and the communities and jobs that they sustain, but I hope to hear also that he will use the power in his gift to give a fairer deal to smaller boats and open up wider access to the UK’s fishing quota.
The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)
I thank all hon. Members for their contributions to this debate. In particular, I congratulate the members of the all-party parliamentary group on fisheries on securing this debate from the Backbench Business Committee. I note that the House has adjourned, as the right hon. Member for Orkney and Shetland (Mr Carmichael) pointed out. I hope that in future years, we can hold this debate where it belongs: on the Floor of the House.
I begin by recognising those who, sadly, paid the ultimate price and lost their lives while fishing this year. It is an incredibly dangerous occupation; this year, no fewer than 11 fishermen lost their lives in accidents at sea, a number slightly higher than in previous years. As many hon. Members have said, our thoughts are with the families of those killed. It is a dangerous occupation, and fishermen put their lives at risk to bring food to our table. In that regard, I acknowledge my hon. Friend the Member for South East Cornwall (Mrs Murray) who, as we all know, has personal experience of that, and so will feel particularly strongly for the families affected.
I will say a little bit about the reforms to the common fisheries policy. As I have said in similar debates, the reality is that no man-made system of administration will ever be perfect for the management of fisheries. The marine environment is incredibly complex—thousands of different species interact with one another in mixed fisheries—and no administrative legal regulation will ever be perfect, but the test that we should set ourselves is whether our changes and reforms are moving us significantly in the right direction. I contend that they are, and that the latest CFP reform—my predecessor, my hon. Friend the Member for Newbury (Richard Benyon), took a leading role in the negotiations—is a step in the right direction.
We have achieved a number of things in the latest reform, which is now being implemented. The first is regional decision making. Nation states sit around a table to agree multilaterally how they should deal with the issue of discards and implement multi-annual plans. The role of the Commission, rather than dictating from the centre, is effectively to sign off and agree those management plans put together by member states. To return to the point made by my hon. Friend the Member for South East Cornwall, that is because everybody has a stake in the fishery—those countries have a shared interest in responsible management—and it is the right thing to do.
Secondly, we have introduced the discipline of a discard ban, which is important. Discarding is a shameful practice that has continued over many decades—a couple of years ago I was reading a book written by George Orwell in 1942, which talked about the scandal of fish being discarded back into the sea—so the discipline of a discard ban is important.
We will only make a discard ban work in practice as well as in theory if we have as many flexibilities as are necessary to make it work. Despite the concerns that fishermen have expressed, which I hear, there are many flexibilities in this policy. For instance, there is the ability to bank and borrow quota, so if someone does not use all their quota in one year they can roll it over to the next. My hon. Friend the Member for South East Cornwall pointed out that we cannot allow that flexibility to exhaust the following year’s quota, which is why there are limits of around 10%.
There is also the ability to have inter-species flexibility, so that if someone catches over their quota on one species but still has quota for another species, they could count one species against the other. We will probably need some sort of exchange system, so that we have the right values of fish; otherwise, there could be unintended consequences. Nevertheless, that is a second important flexibility. There is also a survivability exemption. With certain flatfish species that are caught by certain nets, if they are juvenile and undersize but would survive, it is not good to land them; it is good to put them back in the water and give them time to grow. If all else fails, there is a de minimis exemption. If someone has tried everything else in the book, and nothing can prevent some level of discarding, that de minimis exemption enables some discarding to continue, but in strictly limited circumstances.
With all these flexibilities, the discipline of fishing sustainably, and—as the shadow Minister pointed out—the aim and policy of getting to maximum sustainable yield this year where possible, and everywhere by 2020, we have started to make progress. For instance, as recently as 2009, only about five quota species were being fished sustainably. We are now up to 32 species being fished at maximum sustainable yield, which is up from 26 last year. Also, the stock trends in many areas are moving in the right direction, so there has been some good progress on MSY.
The advantage of fishing sustainably is that fishermen can then catch more fish. That is a very important point, which we must keep stressing. Pulling belts in and showing some restraint today, provided that we are not discarding those fish, means that tomorrow, next year and the year after we should have more fish. I think we are starting to see that come through in the advice from ICES.
Only a few hon. Members touched on the situation in the North sea, but I will highlight it, because it is very positive for most stocks. There is always a danger in these debates that we focus on things that are difficult and challenging, and fail to recognise success. However, with cod, for instance, there is a recommendation for a 15% increase in the total allowable catch. There are also recommendations for a 30% increase in the TAC for North sea haddock, a 16% increase for herring, a 15% increase for plaice and a 20% increase for monkfish in some areas. We are seeing some really positive results in the North sea, and that is partly a consequence of our fishing sustainably there in recent years.
Mrs Sheryll Murray
I acknowledge the success in the North sea, but the UK share of the North sea TAC is considerably more than it is in area VII. Only 8% or 10% of the cod and haddock are in area VII to begin with, so any cut would have a disproportionate effect on fishermen in the south-west.
George Eustice
My hon. Friend highlights an important point. In the Celtic sea, depending on which area we look at, the French and the Irish have the majority of stock, particularly of haddock. She is right about that; I think that the figure I saw was more than 80%. However, to make a slightly different point, a cut there has a disproportionate effect on the French and Irish, because they have a larger starting base, and if it is a stock that we never had much of in the first place, a cut does not matter as much. Nevertheless, I understand her point, and we should probably have a fairer share of that stock.
I also recognise that the news is not universally good. Yet again, for the third year running that I have been Minister—and it was the case for some years before that, too—there is some very challenging science for the Irish sea in particular, which I will return to later. As the hon. Member for Upper Bann (David Simpson) pointed out, dramatic cuts are being proposed for haddock; we will try to get the cuts to VIIa haddock reduced, and to get something that we regard as more proportionate. There is also very challenging advice on plaice.
In the Celtic sea, things are a little more mixed. Once again, we got challenging advice, as we expected, on cod and haddock, with cuts of 30% and 27% respectively being recommended. In previous years, we carried out what we call mixed fishery analysis on those stocks, to ensure that we were not disproportionately cutting something to the point that we end up having to discard it in a mixed fishery. Those figures are more closely aligned this year than last year, so the mixed fishery analysis is probably less likely to help us as an argument this time around. Nevertheless, we will make that analysis, and will work with the French and the Irish, who have a shared interest in that stock.
There are positives as well, not least VIId and VIIe plaice in the channel. The ICES recommendation, as my hon. Friend the Member for South East Cornwall pointed out, is for a 125% increase. Western channel sole is recommended for a 15% increase, due to the management plan, which I will come back to. Also, the scientific advice on skates and rays, despite the fact that they are regarded as a data-limited stock, and despite the complications that my hon. Friend the hon. Member for South Thanet (Craig Mackinlay) highlighted, points towards a 40% increase in the quota.
A number of hon. Members, including my hon. Friends the Members for Totnes (Dr Wollaston) and for Waveney (Peter Aldous), pointed out the importance of reliable science, and I absolutely agree with them. As I said at the start, no system will ever be perfect; the science will never be perfect. There will always be evidence gaps, and however much scientists try to model things to make the science as up-to-date as possible, there will always be instances in which the science is not quite right. Nevertheless, it is still right to take the science as our starting-point in negotiations.
We are improving the science that we have. Last year, we had enough science and enough evidence to carry out an MSY assessment on 46 stocks, and that number is now up to 62. We are getting better each year at moving stocks away from the data-limited category, and at getting reliable science, so that we can set accurate MSY assessments. Those assessments will be absolutely crucial if we are to get to MSY on all quota species by 2020.
May I pay tribute to the fantastic work that the Centre for Environment, Fisheries and Aquaculture Science does in Lowestoft? I should add that Lowestoft is the right place for CEFAS to be located. We have given a vote of confidence in CEFAS and its future by making available money to upgrade its laboratories. I visited CEFAS last year and I was incredibly impressed by the work that it does on Endeavour, the vessel there. I also pay tribute to the great work that my hon. Friend the Member for Waveney has done to lobby in the interests of CEFAS when it comes to investment.
A number of hon. Members, including the hon. Member for Great Grimsby (Melanie Onn), asked about port capacity and how we will deal with discards that are landed. I can confirm that we have a group of people working with industry on this issue. There is a ports group that deals with officials in my Department. I had a meeting with, and an update from, one such official at the beginning of this week, and we believe that we are making good progress in addressing people’s concerns.
I will make a few points about that. The first thing to note is that just as we are phasing in an approach to achieve MSY on stocks, so too we are phasing in the landing obligation on fish species. We are starting in quite a modest way with some of the larger species that define a fishery. This year, we are considering haddock in the North sea, and whiting, sole and nephrops in Ireland, but in the Celtic sea we are mainly looking at hake and Dover sole. In each area, we have typically picked only two or three species to which the discard ban applies this year, and our assessment so far is that the amount of additional fish that will be landed and that will not be sold into the human food chain is actually negligible. We do not believe that that is a challenge that will present itself this year, as some people do.
Longer term, a number of options are available. We will make available grants to those ports that want to have quayside facilities to manage undersized fish that is landed. We will make funding available to support fishermen in investing in even more selective fishing gear, so that they do not catch and land undersize fish in the first place. For those who do not want to invest in such quayside facilities, there are enterprising companies—one of them is based in Great Grimsby—that have surplus processing capacity. Already, they are running a network of lorries around the country, collecting offal from fish processing factories and turning it into fishmeal. We believe that in many instances—this is already being investigated—they will be able to expand their network to consider taking undersize fish to that processing capacity. Yes, there will be challenges, but I come back to what I said at the beginning: the policy will never be perfect and will always present challenges. The question is whether we are moving in the right direction.
My hon. Friend the Member for South East Cornwall raised the issue of the Commission’s proposal for a 125% increase in channel plaice in areas VIId and VIIe. The Commission proposal is looking at something more around 63% as a recommendation. That is partly because, on the basis of strong science, we secured an in-year increase in 2015, and the Commission is starting to take that into account. Nevertheless, things are positive for plaice in the channel.
My hon. Friend also mentioned Dover sole. She is right that the management plan limits that to a 15% increase, despite the science advising a 44% increase. We will be looking closely to see whether we can improve that. As a general rule, we are a bit sceptical of management plans. In a reformed CFP, we believe that clear criteria are needed around the discard plan and quotas, with all the flexibilities that I described.
Mr David Crausby (in the Chair)
Order. I remind the Minister that I was hoping for time for Mrs Ritchie to wind up.
George Eustice
Thank you, Mr Crausby. I will make sure that there is.
The right hon. Member for Tynemouth (Mr Campbell) mentioned the Farne Deeps. I have a meeting with officials tomorrow to discuss the challenge there. He also mentioned salmon, and I attended the summit. I pay tribute to some of the work done by the fishermen with their nets, and the progress made, but the salmon stock is in a dire state. We need to protect all the salmon as they come into our waters, and that is why we are looking at catch-and-release schemes for anglers, improving fish passes and water quality, and removing net gear. We are also looking at options to buy out some licences to secure early closure.
The right hon. Member for Orkney and Shetland (Mr Carmichael) mentioned the EU-Norway deal, which is incredibly important to his constituents. We made good progress and managed to get the proposed TAC reduction there down to 15%; the original proposal had been much higher. It has been more challenging to get an agreement on blue whiting. Looking at zonal attachment, we believe that we have a strong case for a higher share of the quota, but it has been hard to get agreement. As the hon. Member for Berwickshire, Roxburgh and Selkirk (Calum Kerr) said, we were not able to get Iceland and Russia at the table for an agreement on that. We had issues with Iceland seeking access to our waters as the quid pro quo for coming on board, and we were not able to agree to that. My hon. Friend the Member for South Thanet mentioned skates and rays.
Mr David Crausby (in the Chair)
Order. Minister, we finish at 4.30, so you are not giving Ms Ritchie very much time.
George Eustice
Thank you very much, Mr Crausby. I am afraid I have not managed to get to the other points, but I make one final point before wrapping up, relating to the under-10 metre quota. We are rebalancing the quota. We have made it clear that 25% of the uplift will go to the under-10s. We are doing that by giving the first 100 tonnes to the under-10s, and 10% thereafter. That will mean that next year, for instance, much of the inshore fleet will have a substantial increase in the amount of mackerel they have. There will probably be a trebling of the amount of mackerel, which they will then be able to trade as currency.[Official Report, 14 December 2015, Vol. 603, c. 1-2MC.]
Mrs Sheryll Murray
On a point of order, Mr Crausby. I was under the impression that Ms Ritchie was to be given adequate time to wind up the debate.
Mr David Crausby (in the Chair)
Well, you are taking up time, Mrs Murray. I am not empowered to sit the Minister down. It is in his hands, so can we let him conclude?
George Eustice
In view of your guidance, Mr Crausby, I will conclude my speech earlier than would be the norm. Normally, those winding up the debate get a couple of minutes, but I conclude very briefly by saying that at the next EU negotiation—some have said that we should seek to repatriate this matter—there is a case for looking at the whole issue of relative stability. It is too early to decide what our negotiating position would be, but I am open to suggestions from Members.
Ms Margaret Ritchie (South Down) (SDLP)
I thank everyone who participated in the debate. Seventeen Members, including the Front Benchers, made contributions, representing the needs of their constituents. Front Benchers from the SNP, the Opposition and the Government responded to the debate. We all know that the fishing industry presents many risks and challenges to those directly employed in it, but there is no doubt that the offshore and inshore fishing industry contributes an enormous amount to all our local economies, whether in Britain or Northern Ireland.
In the next few weeks, the Minister will make direct representations as part of the negotiations in relation to total allowable catch. I hope that he will ensure that none of our industries in our fishing villages—I think of Ardglass and Kilkeel in my constituency—and none of the people involved in them will be imperilled by any downturn in any fish quota species, or by the discard ban, the landing obligation or any of those issues.
Other issues raised today by Members include crewing. We will discuss that directly with a Home Office Minister next week, but it is important that we obtain proper regulations to ensure that our fleets can operate, day to day. Many fleets would be tied up if we did not have the support of the Filipino fishermen. We in the west of Scotland and Northern Ireland have a unique position on that, because we have an impediment with the restricted inlets and fjords and the geography. That means that the 12-mile limit and all that has to be looked at. We have to adopt a common-sense approach.
The common fisheries policy has recently undergone several key reforms, including: a phased ban on discarding fish, effective for pelagic as of last year and demersal as of this coming January; a legally binding commitment to fishing at sustainable levels; and increasingly decentralised decision making. Political points were made about repatriating powers from the European Union in relation to that, but I do not agree with them. We would like the Minister to write back to us on the European Court of Justice decision this week on the cod plan. Those of us who represent fishing constituencies need that issue addressed. Running alongside that is the need, whether we represent constituencies in the devolved regions or in England and Wales, for the ongoing infrastructure investment to meet the requirements of the landing obligation and the discard ban. More investment will be required for that ongoing modernisation.
We wish the Minister well in the negotiations in the next two weeks. We hope that he can achieve an upturn in the quota allocations for all the significant fish species. If I may be a little local, area VIIa needs an upturn in the quotas for haddock, nephrops and cod. My colleagues across the UK also need that, because fishing is central to the growth and productivity of all our local economies. The fishing industry, whether offshore or inshore, fuels both those interconnected factors. I think the Minister may have wanted to comment on cod.
George Eustice
I would like to deal with a couple of the points that the hon. Lady raised. I sadly did not get a chance to speak about nephrops in my speech, but the proposal is for an 18% reduction. In previous years, we have been successful in getting the proposal substantially down. Last year, we even got an increase in the TAC.
On the institutional impasse and the ECJ decision this week, the judges have predictably come down on the side of the Commission and the Council, but it is one of those matters where we won on the substance, if not the technical legal issue. That was recognised by the Court, which made it clear that nothing will be done until at least 2017. That gives us a year to accommodate the viewpoint of the European Parliament, and to ensure that in future it has the correct viewpoint.
Ms Ritchie
I thank the Minister for that information. Let us hope that we get a sensible outcome that brings benefit to all our fishing communities. Once again, I thank all who participated—
Written Statements
Horserace Betting Levy
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
On 4 November 2015 the Chair of the Horserace Betting Levy Board (“the HBLB”) informed me that the HBLB had been unable to approve a recommendation from the Bookmakers’ Committee as to the terms of the 55th levy scheme. Under section 1(2) of the Horserace Betting Levy Act 1969 (“the Act”), it therefore now falls to me to determine those terms. The Act allows me to determine a new scheme for the said period or direct that the current scheme shall continue to have effect for that period.
I have decided to direct that the current levy scheme should continue to have effect for 2016-17. In making this determination I have had regard to the offer made by the Bookmakers’ Committee, which also proposed that the headline rate of 10.75% was maintained for another year. I also took into account the reason why the offer was rejected by the HBLB, which is that racing felt that it could not accept the overall proposed package, which included supplementary contributions outside of the statutory levy.
Any discussions or negotiations about voluntary levy contributions in respect of offshore remote betting operators are outside the scope of my statutory role in making this determination. I am aware that such negotiations took place and several bookmakers had undertaken to make wholly voluntary levy contributions, which would have secured additional funding for racing for the next three years, and I welcome this offer. With the statutory levy rate now set for next year, I hope that these discussions continue and that an agreement can be reached.
Having concluded the determination I would like express my disappointment that the HBLB and Bookmakers’ Committee were not able to agree the levy scheme and that it has been necessary to refer this matter to Government.
[HCWS353]
Employment, Social Policy, Health and consumer Affairs Council
(9 years ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Health (Jane Ellison)
The Employment, Social Policy, Health and Consumer Affairs Council will meet on 7 December in Brussels. The Health and Consumer Affairs part of the Council will take place in the afternoon.
The main agenda items will be the following:
Council conclusions—the Council will adopt conclusions on:
“An EU strategy on the reduction of alcohol-related harm”
Personalised medicines for patients
Supporting people living with dementia: improving care policies and practices
Lessons learned for public health from the Ebola outbreak in west Africa—health security in the European Union
Under any other business there will also be presentations on three other points:
Regulations on medical devices and in vitro diagnostic medical devices—the presidency will provide an update on the state of play, with negotiations currently at trialogue stage.
The regulations seek to address weaknesses in the current regulatory system, ensure a more consistent level of implementation across the EU, and ensure that the EU will continue to be viewed by business as an innovation-friendly regulatory environment. The UK has broadly supported the Commission’s proposals in order to ensure high standards of patient safety.
Public health conferences—information from the presidency of conferences it organised in this field
Dutch presidency—the Dutch delegation will set out priorities for their forthcoming presidency, which will run from January until June 2016.
A copy of the latest agenda can be found online at:
http://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2015-12-03/HCWS354/
[HCWS354]
Online Child Sexual Exploitation
(9 years ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
I am pleased to share with the House the Government’s progress in galvanising a co-ordinated global response against online child sexual exploitation.
On 16 and 17 November the UK and United Arab Emirates brought together Governments, companies and civil society organisations in Abu Dhabi for the second WePROTECT summit, to protect children from online sexual exploitation. This built on the first summit hosted by the Prime Minister in London last year.
While I could not attend due to the Paris attacks, Baroness Shields and His Highness Sheikh Saif bin Zayed Al Nahyan opened the summit. I am pleased Baroness Shields was able to attend in my place, and welcome that she has been appointed as joint Minister for Internet Safety and Security for the Department for Culture, Media and Sport and the Home Office. This appointment serves to further underpin the importance this Government place on tackling online child sexual exploitation. The event secured a wider global reach for WePROTECT, with new countries from the middle east and Latin America and, for the first time, China. This brought to 62 the total number of countries and international organisations signed up to the WePROTECT commitments.
The summit commitments included an agreement on taking co-ordinated national action against online child sexual exploitation, guided by the WePROTECT model national response. To drive national action, Governments will publish an analysis of their own response and use this to identify further capabilities needed.
I am pleased to say that the UK has already made significant progress in tackling this crime. All UK police forces and the National Crime Agency are now connected to the new child abuse image database (CAID) that was launched last year. A new operational victim identification strategy has been established around CAID by the National Crime Agency and is helping to identify even more victims of online child abuse. In the first six months of this year alone, UK authorities identified over 185 victims—already more than for the whole of any previous year.
In addition, the Internet Watch Foundation shared almost 19,000 digital fingerprints of child sexual abuse material—all of which originated from CAID—with five major global technology firms, to enable the removal and prevent the sharing of potentially thousands of images from their platforms and services. Companies have committed to build on this by co-ordinating the sharing of these digital fingerprints globally. The Prime Minister will hold international discussions next year to take this forward.
We are also fulfilling our commitment to support others to build their capabilities. At the London summit, the Prime Minister pledged £50 million over five years to tackle violence against children globally. The first £10 million of this funding is financing a global programme by UNICEF to tackle online child sexual exploitation in 17 countries.
To drive further progress, all WePROTECT signatories at the Abu Dhabi summit agreed to put the WePROTECT advisory board on a firm long-term footing, as a body responsible to all those signed up to this initiative and charged with supporting countries and other stakeholders to implement their commitments. The board will also take forward a joint proposal by the UK, US and EU Commission to merge WePROTECT with the global alliance against child sexual abuse online to bring together global efforts to combat online child sexual exploitation.
[HCWS356]
Courts
(9 years ago)
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The Lord Chancellor and Secretary of State for Justice (Michael Gove)
The courts take money from offenders in a number of ways, including fines, the victim surcharge, compensation orders, prosecution costs and the criminal courts charge.
This array of penalties, fines and charges is complex and confusing. I have therefore asked my Department to review the entire structure, and purpose, of court-ordered financial impositions for offenders, in order to bring greater simplicity and clarity to the system.
This review will seek to achieve three goals: giving the judiciary greater discretion in setting financial impositions; making financial penalties a more effective tool in delivering improved noncustodial sentences; and ensuring that money raised through financial penalties plays an appropriate—and sustainable—role in supporting taxpayers to meet the costs of running the courts.
The review will consider how to ensure offenders make a fair contribution. The criminal courts charge was introduced in order to ensure that those who break the law make a financial contribution to the costs of seeing justice done.
The basic principle behind the policy—that those who have broken the law should bear some of the costs of running the criminal courts—is right. However, as the Justice Select Committee set out in its recent report, there have been concerns raised about how this has worked in practice.
I am today laying in Parliament an amending statutory instrument which will mean that, as of 24 December, the criminal courts charge will no longer be imposed. Our review will consider alternative ways of ensuring that criminals pay their fair share.
[HCWS355]
Rail Franchising: West Midlands
(9 years ago)
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The Parliamentary Under-Secretary of State for Transport (Claire Perry)
Today I have announced the successful conclusion of negotiations for a new directly awarded franchise agreement with London Midland. This deal will see London Midland continue to run passenger rail services on the West Midlands franchise until October 2017 covering services between London, the West Midlands and the North West of England. The direct award ensures continuity of passenger services and paves the way for the start of the formal franchise that will commence in autumn 2017. This franchise competition will be launched later this month.
During the course of this direct award, West Midlands passengers will benefit from a £13 million package of improvements; which builds on the massive £750 million refurbishment of Birmingham New Street station and the investment of a £60 million fleet of brand new trains, which has already been delivered.
First, the new direct award will put the passenger first and provide new and extended services across the route, resulting in around 6,600 additional seats from Euston to Crewe, into Birmingham on a Sunday and the Abbey line every week. These services include two extra evening services every weekday from London Euston to the Trent Valley providing 2,300 extra seats each week; earlier services to Birmingham on Sunday mornings from a number of towns including Rugby and Lichfield, with new Sunday services from Dorridge, Whitlocks End and Longbridge providing more than 900 extra seats, and an extra return evening service on the Abbey line between Watford Junction and St Albans Abbey which will provide an extra 3,400 seats every week.
Secondly, passengers will benefit from new ticket machines, an upgrade of existing ticket machines with “click and collect” capability and contactless payment options. Also, passengers on all long distance services between London Euston, Birmingham, Crewe and Liverpool will be able to enjoy free wi-fi. When the next full franchise starts in 2017, it is our commitment to roll-out free wi-fi on all London Midland services.
Thirdly, new passenger satisfaction, punctuality and cleanliness targets will be introduced on the franchise. These commitments will be supported through greater staff presence. In the contract, London Midland will recruit additional drivers, conductors, revenue protection staff and employ more apprentices in different departments across the business. London Midland will be contracted to achieve a 2% improvement in overall customer satisfaction before the end of the direct award franchise.
As well as the benefits delivered through the direct award franchise, the Government are also continuing to invest in rail infrastructure in the franchise area, improve rail services in the West Midlands including projects to electrify the line at Bromsgrove and between Walsall and Rugeley, as well building a new station at Kenilworth.
Reaching this agreement with London Midland builds on the success of my Department’s ongoing rail franchising programme; working in partnership with the rail industry to deliver better services for passengers as well as value for money for the taxpayer.
[HCWS351]
Employment, Social Policy, Health and Consumer Affairs Council: Agenda
(9 years ago)
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The Minister for Employment (Priti Patel)
The Employment, Social Policy, Health and Consumer Affairs Council will take place on 7 December 2015 in Brussels. Baroness Neville-Rolfe, Under-Secretary of State at the Department for Business, Innovation and Skills, will represent the UK.
The Council will be invited to seek a general approach on the proposal for a directive of the European Parliament and of the Council on a better gender balance among the non-executive directors of listed companies and related measures.
The Council will receive a progress report on the proposal for a Council directive on implementing the principle of equal treatment between persons irrespective of religion or belief, disability, age or sexual orientation.
The Council will be invited to adopt draft Council conclusions on: equality between women and men in the field of decision making, the promotion of social enterprise as a key driver of economic and social development in Europe and on social governance for an inclusive Europe.
The Council will be invited to seek political agreement on a proposal for a Council recommendation concerning the integration of the long-term unemployed into the labour market.
The European Commission will present the annual growth survey 2016, the draft joint employment report, the alert mechanism report and also seek the views of member states on a draft recommendation of the Council of the eurozone.
Under any other business, the presidency will provide an update on progress on EURES and undeclared work. The Commission will present information on the pact for youth employment launched at the summit “Enterprise 2020”, the European Accessibility Act and measures to advance the equal treatment of LGBTI people. The current presidency will report on the conferences and initiatives it has organised and the Dutch delegation will present the work programme of their upcoming presidency.
[HCWS352]
House of Lords
Introduction: Baroness Thornhill
Introduction: Lord Watts
Sir John Cass Faculty of Art, Architecture and Design
The Earl of Clancarty
To ask Her Majesty’s Government whether they will intervene to halt the sale of the Sir John Cass Faculty of Art, Architecture and Design building, Central House in Aldgate.
Baroness Evans of Bowes Park (Con)
My Lords, the strength of our universities rests on their autonomy and government is, rightly, discouraged by statute from direct intervention in their affairs. The consolidation of the estate of London Metropolitan University, as set out in its One Campus, One Community strategy, is entirely a matter for the university. The Higher Education Funding Council expects any university to take appropriate professional advice when engaging in any major sales of its estate.
The Earl of Clancarty (CB)
My Lords, does the Minister appreciate that, with the intended move to a single campus, London Met is saying that it cannot support the Cass, the loss of which would be a tragedy for art design and manufacture in this country? Will she accept that the Cass should remain in the East End, where it belongs, as an independent centre of excellence—a solution that the Government could expedite, as they now own one of the three campus buildings? This is a matter for the Government.
Baroness Evans of Bowes Park
My Lords, I am afraid I must reiterate that this is not a matter for government intervention; it is for the university to make the decision. However, I can certainly say that this Government absolutely support art and heritage in this country. That is why we announced in the comprehensive spending review £1.6 billion of capital investment in culture across our country in 2021.
Lord Cashman (Lab)
My Lords, does the Minister agree that, in view of the importance of the creative industries both nationally and regionally, we should be expanding and developing art and design colleges, that Cass is a total success, that there is no necessity for its move, and that its closure is not in the long-term interests of east London?
Baroness Evans of Bowes Park
I thank the noble Lord for his question and am delighted to tell him that in the comprehensive spending review the Government indicated that they will support the £100 million development of a new Royal College of Art campus in Battersea, subject to the business case. We agree that the creative industries are extremely important, which is why we are, for instance, helping to support that project.
Baroness Gardner of Parkes (Con)
I declare a past interest in that my husband did silversmithing there at the same time as Baroness Serota’s husband, who was a much better silversmith, I might add, and had been doing it for many more years. Can the Minister assure me that those courses will continue, because they are extremely valuable?
Baroness Evans of Bowes Park
As I have said in answer to a couple of questions, I am afraid that I cannot comment on this particular case. It is a matter for the university. But I am very happy to talk about the fact that the Government provide around £60 million of funding for specialist art and music colleges, which do this country proud.
The Earl of Glasgow (LD)
My Lords, the Sir John Cass faculty is one of the most successful and highly regarded educational institutions in London, maybe even in Britain. Part of its success has always been attributed to its location in the East End close to the City, where it has thrived for more than 250 years. It seems that it is now likely to be forcibly moved out to Holloway, due mostly to London Metropolitan University’s financial difficulties. Surely this is the sort of situation in which the Government should step in and help.
Baroness Evans of Bowes Park
I know that noble Lords around this House value university autonomy. As I have said, this is a matter for the university, not for the Government.
Lord Berkeley of Knighton (CB)
My Lords, does the Minister appreciate that with this move we will lose the only musical instrument building course in the country at a time when the Chancellor is quite rightly, and very admirably, focusing on building up the arts? But this is about the next generation. How are we going to train people for the future?
Baroness Evans of Bowes Park
My Lords, as I have said, we provide more than £40 million in funding to specialist arts and music colleges around the country, such as the Courtauld Institute of Art, the Liverpool Institute for Performing Arts, the Royal College of Music and the Royal College of Art. This Government are committed to supporting the creative industries in this country.
Baroness Nye (Lab)
My Lords, following on from the noble Lord’s question, would the Minister say what the Government are doing to allay the very strong concerns of the arts and creative industries community that the introduction of the EBacc, with its concentration on STEM and not STEAM subjects, has meant the downgrading of art and design, and that without the facilities, courses and teachers at places like the Cass the next generation of creative talent is being diminished?
Baroness Evans of Bowes Park
I reassure the noble Baroness that, in fact, since the introduction of the EBacc, the proportion of pupils in state-funded schools taking at least one GCSE in an arts subject has increased. In 2005, entries for GCSE art and design were 2% higher than the year before, and for music the figure was 3% higher. We absolutely believe that the arts and culture are part of a well-balanced broad curriculum, which we support.
Lord Mawhinney (Con)
My Lords, will my noble friend accept that the Government’s commitment to art and design is admirable, as is their commitment to the autonomy of universities?
Baroness Evans of Bowes Park
They have all been quite hard so far, so I thank my noble friend for his question.
Lord Hughes of Woodside (Lab)
My Lords, will the Minister tell me, as an innocent in these matters, why she does not agree to at least say that the concerns of the House, which she has listened to, will be transmitted to the university concerned? Churning out figures about the millions of pounds that have been spent is no good at all to the people who are losing this very valuable asset.
Baroness Evans of Bowes Park
As I have said, this is not a matter for government. But I am very sure that the university will take note of what has been said this morning.
Lord Wallace of Saltaire (LD)
My Lords, does the Minister accept that music teaching in schools is a very important part of building resilience and self-confidence and improving self-discipline, and that cutting state schools’ provision of music—the number of music teachers is currently going down—is a major step back for precisely those state schools that need to build all those qualities in their pupils?
Baroness Evans of Bowes Park
I entirely agree with what the noble Lord says about the value of music and the enjoyment that pupils can get from it. But as I have said, in 2015, GCSE entries for music were in fact 3% higher.
Baroness Hayter of Kentish Town (Lab)
My Lords, I turn the attention of the Minister to the other bit of the Question, which is about the physical building in this ancient area of Aldgate, just beyond the Roman and medieval city walls. What steps can the Government take to preserve this building? It and the Whitechapel Gallery alone have survived the replacement of our physical heritage by ever-more anonymous, overpriced sky-scrapers, which serve neither the local community nor the built environment.
Baroness Evans of Bowes Park
I am afraid that this is not a matter for the Government. As I said in my original Answer, the Higher Education Funding Council expects any university to take appropriate professional advice when engaging in any major sales of its estate.
House of Lords: Strathclyde Review
(9 years ago)
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Lord Hunt of Kings Heath
To ask Her Majesty’s Government, further to the comments made by Baroness Chisholm of Owlpen on 3 November (HL Deb, col. 1516), how Lord Strathclyde and his review team will take account of the views of Members of the House of Lords.
The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
My Lords, my noble friend Lord Strathclyde has written to the Members of both Houses inviting them to submit their views. A number of Peers from around the House have already made submissions to his review or shared their views with him in person. I have no doubt that he will consider carefully all representations from Members of this House.
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to the Leader for that reply. Can she assure me that, when the noble Lord, Lord Strathclyde, has reported, there will be an opportunity for the House to debate the contents of the report before the Government come to any conclusions? Can she also say whether, in view of the 1994 resolution of this House that we have an unfettered right to vote on secondary legislation, which was confirmed by the Joint Select Committee on Conventions, if the noble Lord proposes reducing the powers of this House, she will ensure that a further Joint Select Committee of both Houses is established to consider the consequences both for this House and the other place?
Baroness Stowell of Beeston
I certainly do not want to pre-empt my noble friend’s conclusions when he comes forward with his response to the Prime Minister, but it is worth me reminding the House that he is looking into the constitutional issues that were raised by the proceedings in this House in October. They were unprecedented; they did raise serious questions.
Baroness Stowell of Beeston
They did, my Lords. My noble friend is looking at them while consulting widely—both Members of the other place as well as here. When he reaches his conclusions, I am confident that we will have an opportunity to consider them carefully and decide next steps at that time.
Lord Forsyth of Drumlean (Con)
My Lords, does my noble friend accept that, had this House passed the secondary legislation on tax credits, it would have had the immediate force of law and prevented the Chancellor of the Exchequer abandoning his proposals in his Autumn Statement?
Baroness Stowell of Beeston
My noble friend raises an interesting point. It is interesting because it allows me to say two things. It demonstrates what this House did: it withheld its approval from a Motion that had already been voted on three times and decided in the other House. The key thing about the review that my noble friend is doing is not what the views of this House were but how it decided to express them and the route by which it chose to do so.
Lord Lisvane (CB)
My Lords, will Her Majesty’s Government heed the serious concerns expressed by the Constitution Committee and the Delegated Powers Committee of your Lordships’ House to the effect that the threshold between primary and secondary legislation continues to move upwards, with secondary legislation used increasingly for matters of policy and principle which should be the subject of primary legislation? Will the Leader accept that these issues should be at the heart of the matters which the noble Lord, Lord Strathclyde, is examining?
Baroness Stowell of Beeston
My noble friend is examining how to secure the decisive role of the elected House on matters associated with secondary legislation. Clearly, it is important that all Governments use the right vehicle to secure Parliament’s decision on their business. That is what all Governments seek to do, and it is what we have been doing and will continue to do
Lord Wallace of Tankerness (LD)
My Lords, given that the Leader of the House has indicated that the noble Lord, Lord Strathclyde, and his review team will take into account the views of Members of your Lordships’ House, will she take this opportunity to commend the view of one noble Lord who said in oral evidence to the Joint Committee on Conventions:
“I think we can spend a great deal of time thinking about how one could improve the convention on secondary legislation, but I would not remove the power”?
They were the words of the noble Lord, Lord Strathclyde.
Baroness Stowell of Beeston
Another noble and learned Lord gave evidence to the same Joint Committee—the noble and learned Lord, Lord Falconer. He said this about secondary legislation:
“The question is not: is the power there to vote against it? The question is: is there a convention that says constitutionally we should not do it?”
The answer to the question must be, and is, no.
Baroness Hollis of Heigham (Lab)
My Lords, surely the Minister would agree that this was in no sense a constitutional crisis merely because the House of Lords did what it was supposed to and should do, which is to scrutinise and, where appropriate, ask the Commons to think again. That is what this House decided to do—not to destroy the SI but to delay it to allow the Commons to think again. Once the Commons as a body had thought again, following the Chancellor of the Exchequer, the constitutional crisis disappeared and we all got a result which was welcomed around the House.
Baroness Stowell of Beeston
My Lords, I am sorry, but I disagree with the way in which the noble Baroness represents what happened in October. This House withheld its approval from that statutory instrument and issued a set of demands: it overruled the House of Commons. It did not ask the House of Commons to think again; it overruled a decision that the other House had already considered and decided.
Lord Flight (Con)
My Lords, I believe that in addition to the review of the noble Lord, Lord Strathclyde, there are one or two other bodies working on reform proposals for this House, including one in which the noble Baroness has some involvement. How are the other groups intended to liaise with the research of the noble Lord, Lord Strathclyde?
Baroness Stowell of Beeston
My noble friend Lord Strathclyde is focusing only on secondary legislation, as I have already described. The other groups to which my noble friend refers are looking at other, separate, matters.
Lord Richard (Lab)
My Lords, following on from the question of the noble Lord, Lord Lisvane, does the Leader of the House recognise that it is all very well to say that there is a convention that we should let statutory instruments through without too much difficulty in this House, but that there is a quid pro quo for that—which is that matters which should be considered in primary legislation at the other end of this building should not be introduced by statutory instrument? If the result of the deliberations of the noble Lord, Lord Strathclyde, is, “All right, this House loses the right to throw out statutory instruments”, the other side of that equation is that at the other end of the building the Government undertake that major financial issues should not be introduced by statutory instrument but by primary legislation.
Baroness Stowell of Beeston
In October the Government used the vehicle set out for them to use in the original Act. That is what the Government did and they were at liberty to do so.
Kurdistan Workers’ Party
(9 years ago)
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Lord Hylton
To ask Her Majesty’s Government whether they will reclassify the Kurdistan Workers’ Party as a national resistance movement.
The Minister of State, Home Office (Lord Bates) (Con)
My Lords, the Kurdistan Workers’ Party, the PKK, is a proscribed organisation. The Terrorism Act 2000 allows the Home Secretary to consider deproscription by written application. There are no provisions in legislation to classify a group as a resistance movement.
Lord Hylton (CB)
My Lords, when I tabled this Question I did not expect the Answer to be, “Yes, of course”. However, have the Government fully considered that the PKK long ago stopped killing civilians; that it has offered many ceasefires, particularly since 1999; that it is asking not for independence but for devolution; and that it has the support of non-violent civil society in the south-east and of many other minorities in Turkey? They all want a new constitution. Will the Government consider these points?
Lord Bates
Political aspirations are of course noble and those are the types of issues which should be addressed in the peace talks that we want the PKK to return to. But the fact is that the PKK has been responsible for 140 deaths of military police and civilians in Turkey just in recent months, and that is the reason it is proscribed as a terrorist organisation and why it will remain so.
Lord Wallace of Saltaire (LD)
My Lords, we understand the urgency of the Kurdish issue in Turkish politics, and of course now in both Syrian and Iraqi politics, but can the Government at the very least be active in saying to the AKP Government in Turkey that we welcome the peace negotiations between the PKK and the Government, but we think that the provision of better civil rights for the substantial Kurdish minority in Turkey is an important issue for the future, and that the treatment of the HDP over the past few months within Turkish domestic politics has been deeply unfortunate?
Lord Bates
A number of those points were raised at the EU/Turkey summit on Sunday which the Prime Minister attended. Of course there is an absolute need for those discussions to continue, but they must go through a diplomatic and political process; this is not to be decided by military violence.
Lord Rosser (Lab)
My Lords, first, given that the Kurdistan Workers’ Party is also proscribed as a terrorist organisation by several states and organisations including, I believe, Germany, the EU and NATO, do the Government accept that any decision on this issue would have to be made in consultation with our closest allies, especially our European partners? Secondly, the Prime Minister referred yesterday to 70,000 Syrian opposition fighters on the ground who do not belong to extremist groups. Can the Minister say whether the claimed figure of 70,000 does or does not include the Kurdistan Workers’ Party, which is engaged in the war on the ground against the so-called Islamic State and which appears to have gained support from the Mayor of London when he said in the media last week that his sympathies were with the PKK?
Lord Bates
I think the Prime Minister said that there are 20,000 Kurdish fighters, who of course are Peshmerga and from the PYD, which of course is not a proscribed organisation. The noble Lord’s point about EU co-operation in these matters is absolutely central, although of course we will retain the power to decide these things at the national level. We have the cross-government Proscription Review and Recommendation Group, and the Home Secretary acts not only on its advice, but also on advice from other external organisations which can make their representations to her.
Baroness Royall of Blaisdon (Lab)
My Lords, the noble Lord has mentioned the peace process in Turkey, which is extremely important. I am sure that the Government, along with our European partners, are urging Turkey to carry on with that process. However, will they also urge Turkey to return to a ceasefire in order to create the conditions for a proper dialogue? Perhaps I may suggest that, because of our experience in Northern Ireland, we might have a lot to offer in terms of working with the Turks to find a resolution to this difficult question.
Lord Bates
Certainly our position is that we are very supportive of a resumption of the peace talks because that is the only way to reach a lasting solution. It is part of a wider package which we need to recognise in terms of Turkey’s aspirations to join the European Union and how that is related to its progress on issues such as human rights and freedom of the press. All these are bundled together and linked also, of course, to the ongoing problems with migration and the situation in Syria.
Baroness Hussein-Ece (LD)
My Lords, were the very important issues of human rights, press freedom and restarting the peace talks with the PKK on the table during the recent talks between the EU and Turkey on the package that has been announced on the refugee issue? Surely these issues must have been central to any discussions between the EU and Turkey.
Lord Bates
I do not have a specific answer, but I can write to the noble Baroness with details from the communiqué that was produced after the summit. At the summit the EU announced the prospect of a €3 billion package, while the Prime Minister has announced a payment of £275 million to help Turkey secure its southern border in order to reduce the flow of migrants into the European Union. However, I will certainly send a copy of the communiqué to the noble Baroness.
Lord Campbell-Savours (Lab)
My Lords, is the Minister actually suggesting that the PKK is not part of the coalition attacking Daesh?
Lord Bates
What I am saying is that the PKK is a proscribed organisation in terms of the global coalition against Daesh. It is not part of that coalition. There are Kurdish groups in the coalition, and I have mentioned the PYD and the Peshmerga in the Kurdish autonomous region of northern Iraq. The reason is that our main ally in the fight against Daesh in the efforts to stem the flow of migration is Turkey, so we need to maintain strong links with our key NATO ally, and indeed EU aspirant.
Flood Defences
Baroness McIntosh of Pickering
To ask Her Majesty’s Government, in the light of recent flood warnings and alerts, what assessment they have made of the state of the United Kingdom’s flood defences.
Baroness McIntosh of Pickering (Con)
I beg leave to ask the Question standing in my name on the Order Paper and declare an interest as a vice-president of the Association of Drainage Authorities.
Lord Gardiner of Kimble (Con)
My Lords, the Government are committed to long-term investment in new and existing flood defences. Some 96% of the UK’s key flood defences are at or above target condition, with temporary measures in place for those undergoing repair. The department, the Environment Agency and key responders are in a state of heightened readiness to respond rapidly to deploy pumps and temporary barriers, having learnt the lessons from the winter of 2013-14.
Baroness McIntosh of Pickering
I thank my noble friend the Minister for that Answer, and the key responders and emergency services such as the Environment Agency, local councils, flood wardens and others for all that they do. Will he take this opportunity to confirm that maintenance spending will match capital spending on flood defences and that he will leverage in as much private sector funding to improve flood defences as is possible?
Lord Gardiner of Kimble
My Lords, my noble friend is absolutely right in acknowledging the work that the vital services, the department, the Environment Agency, the Army and all sorts of voluntary groups do to deal with a dreadful situation when we have flooding of property and land. What the Government are doing by way of maintenance is important. Indeed, it was confirmed in the spending review that the maintenance budget would be safeguarded. It is also very important that we are spending more money on capital projects—£2.3 billion on more than 1,500 schemes. I am pleased to say that in the recovery programme for the maintenance of flood defences, 99.8% of flood defences damaged in the winter of 2013-14 now have permanent repairs. The remaining 0.2% have temporary repairs. Permanent repairs will be in place by March next year.
Earl Cathcart (Con)
My Lords, given the spate of floods in recent years, what measures have the Government put in place to ensure that we are properly prepared for the next one?
Lord Gardiner of Kimble
My Lords, the best example of what my noble friend asked about is what happened over the weekend of 14-15 November this year, when very heavy rainfall was projected in the north of England. There was a considerable number of severe flood warnings and flood warnings. After the appropriate action was taken, 20,000 properties were protected by using permanent and temporary defences, such as pumps and barriers. I am sorry to say that 29 properties were flooded, but the work of people over that weekend prevented an enormous amount of damage.
Lord Foulkes of Cumnock (Lab)
My Lords, both the Question and the Minister’s Answer referred to the United Kingdom. What discussions have he and his colleagues in Defra had with their counterparts in the Scottish Government?
Lord Gardiner of Kimble
My Lords, clearly, because we are an extended family, we have continuing discussions, although Defra is responsible for England and the Scottish Government and the other Administrations are responsible for their areas. I have not personally had discussions, but discussions are taking place because, clearly, river courses cross boundaries. It is therefore important that we have a co-ordinated response because, for example, in the case of rain in the mountains of Wales, we need to work with the Welsh authorities to prevent the flow of water coming into the Severn.
Lord Crickhowell (Con)
My noble friend concentrated almost entirely on the maintenance activities of the actual flood defences. Does he not understand that it is almost equally important for the Environment Agency to work with the agricultural industry to prevent unnecessary flow off the land of the mud and silt that causes much of the damage, and for the local authorities and planning authorities to try to ensure that there is not unnecessary run-off from the hardstanding, concreting and all the other things that are a fundamental reason for much of the flooding?
Lord Gardiner of Kimble
My Lords, my noble friend is absolutely right that we need not only to protect property but to ensure that agricultural land and production of our food are safeguarded. That is why more than 98% of arable land in England is protected by flood-risk management assets. There has been no risk of flooding in those areas from seas and rivers.
My noble friend is absolutely right: we need to get our planning guidance right. That is why there has recently been a revision of planning guidance so that we avoid flash flooding as best we can. We are working closely with the NFU and our joint action plan on that is vital. My noble friend said that we need to reflect on how we farm near watercourses. We need to improve. Indeed, in relation to my noble friend who asked the Question, we are working on slowing the flow in Pickering, for instance. We have done great work in preventing flooding in Pickering by working with local farmers.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, as the Minister has already said, the memory of the last disastrous flooding of the winter of 2013-14 is still with us. Is the Minister confident that, when Flood Re comes on board next April, it will both cope and be fit for purpose?
Lord Gardiner of Kimble
My Lords, it was my privilege to take the Flood Re regulations through this House. We had an interesting and useful debate on them. Flood Re is expected to cover the 1% to 2% of households at the highest risk of flooding. It will protect people in those properties to ensure that they can find affordable flood insurance. It will come in next spring and it will be a great advantage for people in those situations.
Lord De Mauley (Con)
My Lords, can my noble friend update the House on the progress being made with partnership funding? This can allow schemes to proceed that would not otherwise be able to do so.
Lord Gardiner of Kimble
My noble friend is absolutely right. Partnership funding is in addition to the £2.3 billion of government spending on capital expenditure, which we wish to have in our six-year investment programme. We think there is about £600 million additional partnership funding from private sources, local enterprise partnerships, public bodies and local levies. This will be very important. It will have a degree of flexibility, ensuring that we can work in areas that will be of the greatest benefit to the most people to protect their properties. It is a very important initiative.
Baroness Symons of Vernham Dean (Lab)
My Lords, I declare an interest as my own village of Vernham Dean was badly affected by flooding last year, although I personally was not affected. Can the Minister assure the House that the Government have had discussions with the insurance companies to ensure that payments are made promptly when people are badly affected and have to leave their homes?
Lord Gardiner of Kimble
The noble Baroness makes a good point. I have not personally had those discussions but I will ask colleagues about it and write to the noble Baroness. My house was flooded and my insurance company—I had better not say which one—was very co-operative and worked extremely fast, so I think it is very important. As the noble Baroness said, it is about payment of bills. When someone is in the dreadful position of having their property flooded, we all need to rally round and the insurance companies need to pay.
Business of the House
(9 years ago)
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Baroness Stowell of Beeston
That the debate on the Motion in the name of Lord Carrington of Fulham set down for today shall be limited to 2 hours and that in the name of Earl Attlee to 3 hours.
National Security Strategy
The Chairman of Committees
That the Commons message of 1 December be considered and that a Committee of 10 members be appointed to join with the Committee appointed by the Commons as the Joint Committee on the National Security Strategy, to consider the National Security Strategy;
That, as proposed by the Committee of Selection, the following members be appointed to the Committee:
L Boateng, B Buscombe, L Clark of Windermere, B Falkner of Margravine, L Hamilton of Epsom, L Levene of Portsoken, L Mitchell, L Ramsbotham, L Trimble, L West of Spithead;
That the Committee have power to agree with the Committee appointed by the Commons in the appointment of a Chairman;
That the Committee have power to send for persons, papers and records;
That the Committee have power to adjourn from place to place in the United Kingdom;
That the Committee have leave to report from time to time;
That the reports of the Committee be printed, regardless of any adjournment of the House;
That the evidence taken by the Committee in the last session of Parliament be referred to the Committee;
That the Committee have power to appoint specialist advisers;
That the evidence taken by the Committee be published, if the Committee so wishes.
Autumn Statement
(9 years ago)
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Lord Carrington of Fulham
That this House takes note of the economy in the light of the Autumn Statement.
Lord Carrington of Fulham (Con)
My Lords, I am delighted to have the opportunity to introduce this debate on the economy, because there is now every sign that we are coming out of the economic black hole after the events of 2007 and 2008. As we know—and to paraphrase Napoleon Bonaparte—it is not enough to be a good Chancellor of the Exchequer, it is important to be a lucky one—although Chancellors on the whole create their own luck. I think it was a golfer who once said, “It is funny how the harder I work, the luckier I get”.
The economy is doing well, especially when compared with the other economies of the European Union. This is not to downplay the problems we face and will continue to face in the future. Now, our GDP growth rate is at 2.4% and coming back to the long-term trend growth rate. Unemployment is at 5.3%. The figure is possibly still too high, but very encouraging—particularly when coupled with the number of people in employment being at the highest-ever level of 31 million. We can at last say that we are now well on the way out of the economic mess caused by the last Labour Government’s belief that the good times would roll for ever.
It has been a long struggle and we are not out of the woods yet. We will not be until our main trading partners follow us on the road to recovery and—in deference to my noble friend the Minister—until the BRIC countries sort out their very real problems. But growth in the economy goes a long way towards solving our economic problems. It is from that growth that everything else flows.
However, our debt levels are still too high at 84% of GDP, after adjusting for housing association debt, and need to be urgently brought down. My right honourable friend the Chancellor of the Exchequer’s commitment to get the Government’s budget into surplus by the end of this Parliament is a noble one that looks like being achieved—just about. This is important because when the next recession comes, as surely it will, we will have to have the room to borrow to see us through the bad times. Fantasy claims to end boom and bust and the economic cycle always were a mirage.
The turnaround in our economy has come about not just by luck but by hard work and very tough decisions. Everyone likes spending money, especially other people’s money, and cutting government expenditure is a ghastly business. Everyone who has experienced poverty, or, indeed, seen poverty at close hand—possibly in their constituency advice surgery if they have spent time in the other place—will know that cutting the welfare budget is harrowing. So I was pleased that the tax credits have not been reduced. But there is a reason why the Government’s spending has to be reduced. As my right honourable friend John Redwood never ceases to point out, it has not been reduced in either money or real terms; it has just gone up by less than it might otherwise have done.
The reason it needs to be reduced is straightforward: real growth in our economy does not come from government expenditure but from businesses being able to thrive, earn profits, employ people and then pay taxes. Incidentally, the crackdown on large multinational corporations not paying tax is something we can all applaud, although making them pay their proper share will be more difficult than perhaps it is sometimes suggested.
In creating our luck with the economy, my right honourable friend the Chancellor of the Exchequer worked hard to create a business-friendly environment. Our corporation tax rate is one of the most attractive in the major economies and our incentives to entrepreneurs to invest and take risks are as good as or better than those of our competitors. It is for this reason, if no other, that I applaud the determination of the Government to reduce the proportion of GDP taken up by the state to about 35%—I think that 36.5% is the figure in the Blue Book—a level which a Labour Government under Clement Attlee also achieved. While 35% is better than 40% or 45%, in my view it is still too high. We should be aiming for 30%—a level where government expenditure will not crowd out private investment and initiative and will enable more of those seeking work to find it. We must never forget that we can help those in need only if our manufacturing and service industries are making profits and paying taxes.
However, the fact remains that the UK is, and will remain, a high-cost economy. Our wage rates will always be higher—and quite rightly so—than those of the latest emerging economies. Our costs of production will always be higher than those of countries with lower health and safety standards. Our energy costs will always be higher than those of countries that do not seem to care about either pollution or greenhouse gases. The problems of our steel industry are just the latest example of this fundamental reality.
However, what we do have in our workforce are some of the best, cleverest and hardest-working people. All they need is an excellent education, superb skills training and a society which looks after them and theirs when in need, with healthcare and care for the elderly being top priorities, to enable them to work and give of their best. That is why, even though I think increasing taxes on business is regrettable, I support the apprentice training levy on large companies.
Some 10 years ago I ran a company with the second-largest apprentice training scheme in the UK. The scheme took on young people from all backgrounds. Even those whom the education system had let down during their 11 or 12 years in school could be taught to read, write and do basic arithmetic, and then to read technical manuals, after some three months of remedial work. Why this should be so is an interesting question. Perhaps it was because we were better at teaching them than the schools; more likely, it was because there was a purpose to their learning and they were more eager to learn in a work environment with a defined goal.
Apprenticeships do work, and it was a tragedy that we lost them in the 1970s. I am old enough to remember that, when I first joined an engineering firm, large companies had extensive apprenticeship programmes of very high quality. It was the only way for those companies to bring forward the skilled technicians they desperately needed even then. One major reason that companies abandoned their apprentice training was that they found that their competitor companies, instead of training their own apprentices, poached the newly qualified technicians finishing their training. So for the levy to work we will need to set up the scheme so that the large firms paying for apprenticeships get a lot of the benefit from the trained young people, and ensure that the scheme is not seen as a way for large firms to pay so that smaller companies can get a highly trained workforce on the cheap.
So much of what we do on the economy is futurology. Many highly rated economists make a very good living by predicting the future and getting it wrong. Some of them are advising the Labour shadow Chancellor of the Exchequer as we speak. There is always uncertainty about how the economy will perform in the future. Of course, all predictions are statistically based. We are dealing with probabilities. So when the Office for Budget Responsibility finds £27 billion for Her Majesty’s Government to spend—or, indeed, to save—it is obviously a median of a statistical spread. It could be half as much or it could be one and a half times as much. However, as nice as an upward revision of the tax receipts is, it is not as important as the growth rate in the economy. I am glad, therefore, that my right honourable friend the Chancellor of the Exchequer has decided to spend this lucky windfall amount. Using it to make the pain of transforming our country into a high-wage, low-welfare economy less severe is the moral as well as the right choice.
There is one area where I was disappointed not to see progress in the Autumn Statement. We have a very complex tax system, both personal and corporate. The tax statutes expand and expand as Chancellor after Chancellor adds more complexity to encourage this and to stop that. I suggest that it is time for my right honourable friend the Chancellor to become the tax lawyers’ worst nightmare and, following in the footsteps of my noble friend Lord Lawson all those years ago, to make a concerted effort on simplifying the tax system. I realise that that would mean taking on the legal profession, the accountants and possibly the Treasury, not to mention HMRC, and so may not be possible. But he would make even more friends among small business people and the poor benighted personal taxpayer struggling with a complex and often incomprehensible series of forms.
So while we are not yet out of the economic hole dug by the last Labour Government, we are at last within striking distance of getting back into the sunshine. We must be careful not to say, “Job done” and relax our determination to create a high-skill, high-wage, very competitive international economy. This task will continue to present many challenges, regardless of whether or not we stay in the EU. I beg to move.
Lord McFall of Alcluith (Lab)
My Lords, it is a pleasure to follow the noble Lord, Lord Carrington, on the Autumn Statement. In the past year, we have had four Budgets and Autumn Statements but all they have done is to serve to confuse, not clarify. My first plea is: let us stop the nonsense of this plethora of set pieces for the Chancellor and go back to the time when there was one Budget per annum. Then we might have some sense in our debate.
On 27 November, the Autumn Statement gave the Chancellor an early Christmas present from Santa in the guise of the Office for Budget Responsibility. The figures from the last three months alone improved by £27 billion and, like a nervous gambler, the Chancellor has cashed in all his chips on this issue, despite the OBR saying that there is just over a 50% chance of the Government achieving their fiscal mandate. This was from a Chancellor who has consistently failed to achieve his borrowing targets. Seven months into this financial year he has already borrowed £54 billion, adding to the £1.5 trillion of national debt. He has failed not only his own targets but those of Alistair Darling, now my noble friend Lord Darling, who would have had £74 billion in his Budget this year—a target the Chancellor proclaimed at that time risked economic catastrophe. Yet we are in a much more difficult situation today.
At a Thursday breakfast at the Institute of Economic Affairs, I was on the panel along with quite a number of distinguished Conservatives, former Cabinet Ministers, Select Committee chairs and others. At the beginning of my speech, I asked, “Did anyone here understand the figures produced by the Chancellor yesterday in the Autumn Statement?”. Everyone said no, so I have a message for the OBR. I am aware that on 15 September, the Treasury Select Committee endorsed Robert Chote for a second term on the basis of his professional competence and personal independence. That is a judgment with which I fully concur, having known Robert for many years in that position and elsewhere, but I have a warning for him. The OBR’s integrity will be questioned if he allows the Chancellor to play his Budget games.
What is the solution to that? It is for the OBR to have a bit of courage and make the reports publicly available a decent time before the Autumn Statement. Then the whole of Parliament can have that opportunity to analyse them and there can be meaningful engagement and a sensible debate between Parliament and the Executive. The Office for Budget Responsibility has to show its teeth here. There is also the issue of data across departments. Those were the bane of my life when I was chairman of the Treasury Committee; I note that Paul Johnson has asked for that very point to be addressed. The OBR could do that and help to demystify the figures.
The Autumn Statement has been defined by asset sales, the taxation of banks and pensions—asset sales which are, by the way, larger than we had in the 1980s under Mrs Thatcher. The taxation of banks will penalise the challenger banks at the expense of the too-big-to-fail banks and, on pensions, the Treasury coffers have been increased but the long-term costs and the risks to individuals are being loaded. So the Chancellor has put short-term reform above long-term reform, as we can see in terms of intergenerational fairness. People aged 40 now earn significantly less than people who were aged 40 earned 10 years ago.
On housing, the Chancellor made the proclamation, “We are the builders”. If so, we are not very good at it because, today, the construction survey showed that housebuilding is at its weakest pace since June 2013 and that the rise in construction jobs is the worst since that date. It said that there were shortages in key materials, supply chain capacity and skill capability. These are the core issues a Chancellor should be focusing on. Instead, we have vanity statements and projects that hope to ease his path into No. 10. When I came in here, I was thinking, “What is the Autumn Statement?”. It is a bit like a satnav and, given that, we should hear an instruction: “Make a U-turn at the next exit and make it quickly”. I think we wait in hope, rather than expectation, for that.
Lord Shipley (LD)
My Lords, I thank the noble Lord, Lord Carrington of Fulham, for enabling us to discuss the economy in the light of the Autumn Statement. I am grateful, too, to the Local Government Association, of which I am a vice-president, for its briefing earlier this week on the impact of the spending review on local government, not least its ability to expand its work in promoting growth. I hope there will be further opportunities to debate those cuts when we receive details of the local government settlement, but there is one overriding principle that I want to emphasise at the outset.
No Government should attempt to balance the books on the backs of the poor. I am glad the Government now recognise that their approach has been out of balance, through trying to get too much from cuts and too little from tax, and with growth too restricted by fiscal tightening, as the OBR itself has indicated.
In the March Budget, there were to be real spending cuts of 14.8% in departmental budgets over the three years from 2016 to 2018. Those spending cuts are now 2.3%, which is welcome. But have the Government got a long-term economic plan? I understand they have a long-term economic ambition, but I am not convinced it is a plan; nor is it adequately explained why the state has to be reduced in size by quite so much, particularly when infrastructure spending remains low. Taking the northern powerhouse as an example, I see that £400 million has gone into a northern powerhouse investment fund, but why that sum of money as opposed to another sum? Is there a plan for what investment will take place and where? For example, how much will go to support Teesside?
As the noble Lord, Lord Carrington, said, we have growth, but we have unbalanced growth. Most of it is in services, not in manufacturing, which is slowly declining due to lowering demand from the rest of the world as well as the strong pound. Last year, we had a trade deficit of £35 billion—we have to export more. A few days ago, I read a ResPublica report which says that the Government must distinguish between productive investment which generates jobs across the country and unproductive investment such as foreign investment in the London property market. Manufacturing provides 30% of the jobs in sectors producing goods for export, and the ResPublica proposal on export hubs seems a good one.
Growth is partly derived from greater productivity and investment in areas such as training, research and development, and infrastructure. The apprenticeship levy is welcome, but further education is suffering a real-terms cut over the next four years. The chief executive of the Association of Colleges has stated:
“If post-19 education starts to vanish so do the future prospects of the millions of people who may need to retrain as they continue to work beyond retirement age, as well as unemployed people who need support to train for a new role”.
As for energy, decarbonisation is going to be a big market worldwide, and we need to be able to compete in it. It is a mistake to axe the £1 billion support for carbon capture and storage and it is a mistake to cut so much from renewable energy projects. I wonder what the Government’s reaction has been to the attack on their policies by so many of our blue chip companies, which say the scale of the budget-support cuts for renewable energy is risking UK businesses.
Having announced plans for 400,000 affordable homes from 2018-19, could the Government explain how those figures will be achieved given the lack of construction industry workers and skills? In addition, there is the 1% rent reduction for social housing each year for four years, which will restrict housing association borrowing. Would it not be a good idea to look again at a housing investment bank to get further growth in housebuilding?
Finally, why is it that we cannot build our own nuclear power stations and our own high-speed rail infrastructure rather than relying on the nationalised industries of China and France to help us? That seems to me to say a lot about our failures to invest adequately in infrastructure.
The Lord Bishop of Portsmouth
My Lords, the Chancellor in his Statement in the other place described this as a Government who do big things. I begin by acknowledging with gratitude the big decision to retract the proposals to alter the tax credit thresholds and taper rate. I spoke from these Benches not many weeks ago when we were assured that the Chancellor was listening. It would be possible to say more about that journey of listening leading to this big decision, but that might be churlish. I simply welcome the announcement.
As decisions are taken to move the economy towards higher wages, lower benefits and lower taxes, we shall though continue to ask where the burdens and costs of transition—and there always costs of transition—are being borne. The Government’s aspirations are good ones; as people are helped and supported into good jobs at higher wage levels, it is crucial that work should be encouraged, when possible, alongside commitments to the young, the elderly, the vulnerable and disabled people. I remain surprised—that is a restrained word—when marginal taper and withdrawal rates are considered an encouragement for benefit recipients, when they would be considered discouraging as marginal income tax rates.
There is much to welcome in the Autumn Statement. I welcome the rise in the state pension, as well as commitments to rail infrastructure improvements, particularly beyond the south-east, the retention of free entry to museums and galleries, and support for renovation of military museums, including the D-Day and Royal Marines museums in my own diocese of Portsmouth. However, time is short and I turn to some reservations.
In the pursuit of efficiency and cost-effectiveness, I appreciate that local services and provision are often easy targets. For instance, many of us committed to local communities are disappointed that the delivery of justice through our Crown, county and magistrates’ courts will be further removed and distanced from people. There are issues here of the visibility of justice as well as the costs involved in travelling to a smaller number of bigger, more distant courts. On a similar theme, few of us would criticise the increased spending on elite sport but, of course, provision for sport locally, particularly in schools, has taken a battering over some years in local communities.
I conclude with some comments about the proposals outlined by the Chancellor for increased stamp duty on additional properties. This is a matter which demands attention. Empty properties when people are inadequately housed or without housing are clearly wrong. However, these proposals are not without complexity. I apologise if I have missed further detail, but I ask the Government in the promised consultation on policy detail to bear two groups in mind. First, we need to encourage older people to move at the right time from a family home to something smaller, but that transition can be difficult enough for people who are ill, vulnerable or recently widowed, for instance, without the threat of a stamp duty penalty, if their sale and purchase do not precisely coincide. Secondly, and not without interest for the clergy of my diocese, I refer to those who occupy tied accommodation during employment or service as a condition of employment. Often on low or modest incomes, they seek what may technically be a second home to provide for their housing needs in retirement. There are complexities here.
Lord Wakeham (Con)
My Lords, it is a pleasure to follow the right reverend Prelate as I have just retired after 18 years as a trustee of HMS “Warrior”, right in the middle of his diocese, and I have had a very happy time doing that job.
I would like to say a word or two about the role of the House of Lords in the recent Autumn Statement. I listened at Question Time, although I am not too sure that Question Time is the best way of solving these problems when the proposals that we hope are going to come forth have not even been delivered. Nevertheless it is clear that recent events did not satisfy the Government, but nor did they give those opposed to the Government a very satisfactory way of expressing that opposition. As we all know, conventions are a big part of the House of Lords, but circumstances change and, necessarily, conventions need to change as well.
A myth seems to have emerged this year that the Chancellor was lucky and was able to adjust some of his earlier thinking on tax credits. In my view, it was not the Chancellor who was lucky but the House of Lords. If the Chancellor had not had revised estimates that enabled him to change his thinking, we would be faced with a serious difficulty as to what was the proper role for an unelected House of Lords. I fully recognise that many Peers felt strongly about what the House of Commons had passed but, if I may leave aside entirely for one minute the merits of the issue, it is simply not acceptable for the unelected House of Lords to seek to overrule a decision of the democratically elected House of Commons on a financial matter of that magnitude.
I also fully accept that our procedures are inadequate in dealing with secondary legislation. Indeed, 15 years ago my royal commission report proposed another way of dealing with these issues that gave the House of Lords a say but left the final decision to the democratically elected House of Commons. I ought to add that there are also a fair number of other proper procedural ways that could be thought of in which these matters could be dealt with more satisfactorily.
The House of Lords should have its say, but in the end financial matters are for the House of Commons. For the House of Lords to seek to overrule the House of Commons is a recipe for disaster. No democratically elected Government, whether Labour, Conservative, or Liberal, would stand for it. Indeed, this issue arose in a major way in 1909 when Mr Asquith’s Liberal Government took on the House of Lords. He won because the diehards backed off; they simply did not want an influx of 250 more Liberal Peers in the House. It was rumoured that the reason they did so was that many of them, Curzon included, had married rich American wives who were not prepared to see the peerage devalued in this way.
So what is the lesson from recent events for the House of Lords? To me, the way forward is clear. The Prime Minister has asked my noble friend Lord Strathclyde to look at these matters and suggest what we should do. That is a very constructive suggestion and I hope that all those Peers who have a view will engage with my noble friend to see if we can find a way forward that is acceptable for everyone.
We in this House should remember that we are a revising Chamber, and in my view that means we should seek to help the Government and the House of Commons to implement their policies in a better way, not to try to inflict our views on them. If the House of Commons is sure of itself, our role is necessarily limited. If they are singing on an unclear note, however, that is the time when the House of Lords plays a very important part. I suggest that we engage very constructively with my noble friend and see if we can find sensible and agreed ways forward. I very much fear for the future if we do not address these and other issues constructively.
Lord Haskel (Lab)
My Lords, I say to the noble Lord, Lord Wakeham, that I have an American wife.
My noble friend Lord McFall spoke of a plethora of Chancellor’s Statements. He is absolutely right. In July, we were told to expect severe cuts in public spending; three months later, a small improvement in tax income is forecast, and this during an October which official figures show to be the worst for public finances in six years. The improvement is based not on healthy growth, as the noble Lord, Lord Shipley, pointed out, but, according to the OBR, on rising consumer credit—but never mind. Multiply this small expected rise over five years, and we are £27 billion better off. Wonderful.
The noble Lord, Lord Carrington, calls this luck. I call it creative accounting. It is the kind of accounting that I remember contributing to the collapse of industrial giants such as ICI and GEC. It is the kind of accounting which eventually led to the creation of the Investor Forum and the Financial Reporting Council to watch over it. It is wrong, it is dangerous and it is short termist. I suspect that the Chancellor and the Minister know this and have used it as an excuse to slow down austerity; to slow it down to Labour’s speed, if you like. However, universal credit will eventually do what the intended cuts in tax credits tried to do, but later. Even so, some low-income couples with three children will lose out now, so will single parents with one child working part time on the national minimum living wage, and women are again disproportionally adversely affected by the cuts. Is this balancing the books on the backs of the poor, as the noble Lord, Lord Shipley, suggested?
However, the noble Lord, Lord Carrington, and the right reverend Prelate told us to aim for a high skill, high pay, high tech, low welfare economy. How are we going to get there? In July, this journey was outlined by the Minister in the Government’s paper Fixing the Foundations: Creating a More Prosperous Nation. Well, I failed to find any mention of that in this Statement four months later. There is a passing mention of productivity on page 6 saying that it is growing, but we still lag behind most of our competitors. What the Chancellor did not say is that the OBR has revised down the growth in productivity next year and the year after that. So is that productivity paper history? Is it another victim of short termism? We must not let that happen. The Minister laughs. I think it is a serious matter because otherwise the rising national minimum wage will lead to serious job losses if it is not matched by rising productivity. If the route to increasing prosperity is productivity, surely the Statement should have said so.
The various changes should be put in the context of raising the nation’s productivity over the long term in the sense of the modern tangible and intangible world of work instead of in the context of short-term politics. For instance, the Autumn Statement commits to protecting the £4.7 billion science budget in real terms up to the end of the Parliament, but this needs to be within the culture of productivity to show that the culture is alive and well and that the state is engaging with industry in a positive way to rebalance the economy. This kind of government expenditure crowds in private investment; it does not crowd it out, as the noble Lord, Lord Carrington, suggested.
At the beginning of a five-year term, this Statement should have been forward looking. It should have been creative and pointed the way to a high wage, high skill, low welfare economy which unites us; it should have promoted productivity that in the long term is creative. Instead, the Government’s brand of austerity is short-term, divisive and destructive. What a lost opportunity.
Lord Ashton of Hyde (Con)
My Lords, I gently remind the House that this is a time-limited debate. Every speaker so far has gone over time, so we will cut into the Minister’s reply.
Baroness Burt of Solihull (LD)
My Lords, I will do my best; so much to say, so little time to say it. I will confine my remarks this morning to just two issues: the green industry and further education, which, not surprisingly, were also chosen by my noble friend Lord Shipley.
On green industry, Liberal Democrats are seriously concerned about the cuts to DECC and the renewable energy sector, which compromise our progress towards decarbonisation and our ability to tackle climate change. I will give just three examples for brevity: the £700 million cut to the renewable heat incentive; the cuts to renewables, including solar and wind, have been reinforced; and the £1 billion from carbon capture, which will kill the industry. The Government are going backwards on progress made during the coalition, which saw a tripling of renewable electricity, the zero-carbon homes initiative, and of course the development of the Green Investment Bank, the principles of which were enshrined in our successful amendment earlier this week.
On FE, we are seeing a freeze in real terms, which equates to a £402 million reduction over the next four years. This is short-sighted. We already have huge skills shortages in this country and we need to be competitive in the world. This is yet another decision that will reduce the life chances of the young and which sits alongside the cuts in maintenance grants for the poorest students, who are being made to take out loans instead. We have yet to see what effect that will have on take-up. The reductions also mean that the number of colleges may reduce. In my own area, Birmingham, there are rumours that seven colleges are likely to be reduced to only two. This will mean longer travel times for most students but will also hurt the poorest most. It will certainly not mean better teaching—you would need investment for that.
What are we spending the FE funding on? The Government seem to have a mantra of 3 million apprenticeships, but what kind of apprenticeships will they be? Will they be higher apprenticeships or, in order to get the figures in, more along the mantra of, “Never mind the quality, feel the width”? HE funds are not just about apprenticeships. People who need English as a second language are desperate for training so that they can join the workforce. People need retraining throughout their lifetime, either because they have to change their jobs or because of the need for continuous professional development. Finally, we need lifelong learning in this country as much as anywhere else in the world to make a skilled, educated and civilised society—and I have done it in three minutes.
Lord Skidelsky (CB)
My Lords, four minutes is hardly long enough to have a properly developed argument or debate, so I will confine myself to a number of propositions that I hope might at least excite the interest of the noble Lord, Lord O’Neill.
The first proposition is that the Chancellor has failed to meet his deficit reduction targets. In 2010, he said that the deficit would be down to zero by now; this year he is set to borrow £70 billion, and the balancing is postponed for five years. To me the explanation is clear enough: the Chancellor’s policies depressed the growth of the economy, especially between 2010 and 2012, and therefore postponed the closing of the gap between spending and revenue. Perhaps the noble Lord, Lord O’Neill, will tell me why I am wrong.
Secondly, productivity, which was already low before the crash, has collapsed, as the noble Lord, Lord Shipley, pointed out. Between 1971 and 2007 productivity growth was fairly constant at between 2% and 3%. Since the crisis it has been closer to zero. Productivity growth did not collapse like this in previous cycles. The gap between our productivity and that of the rest of the G7 is now at the highest since records started in 1991. I have an explanation for this collapse, which is that recovery has produced a huge expansion of low-productivity jobs in retail, hospitality and suchlike, and that is the truth behind the much-vaunted recovery of employment. Does the noble Lord, Lord O’Neill, agree, and, if so, what do the Government propose to do to create that high-wage economy that Ministers constantly proclaim as their goal?
Thirdly, investment, already inadequate, fell from 19% of GDP pre-crash to 15%, and it is still at the pre-crash level. A robust recovery would expect to see investment for a time exceed its pre-crash level. This has not happened. Why? I have an explanation. Money which would have gone into investment in a healthy recovery has gone into speculation. Investment is down, but we have had a wonderful boom in asset prices, including house prices, which has mightily benefited the rich. Does the noble Lord, Lord O’Neill, think that this is healthy?
Fourthly, instead of borrowing to modernise our infrastructure, the Chancellor has encouraged foreign money to do it, even if the foreign companies, such as Deutsche Bahn, are state-owned. Now, he and the Prime Minister have gone bananas over China. What effect is that going to have on our balance of payments and therefore on our ability to increase exports? We privatised lots of our own public utilities because we thought they wasted money; now, we sell them to foreign state-owned enterprises because we want to save money. Public enterprise is apparently good if it is not British.
Fifthly, the Chancellor plans to privatise the Green Investment Bank—one of Vince Cable’s achievements in the coalition—because,
“it is necessary to move the bank off the public balance sheet if it is to raise additional funding through borrowing”.
This is an absurd reason. If it makes economic sense for a privatised GIB to borrow, why not for the Government?
I feel sympathy for the Chancellor trying to balance his budget on the back of bogus Treasury accounts but, instead of challenging the Treasury’s accounting rules, the Chancellor has committed himself to running an overall surplus in normal times, just like Victorian Chancellors, who never borrowed for anything except defence.
Failure to meet his budget targets, low productivity, low wages, low investment, a bonanza for speculators, rising inequality and still more austerity to come: these are the Chancellor’s bequests to the British economy. They have brought enormous harm to the country and will continue to do so unless he finds the confidence to challenge the Treasury’s view. But there is not much time.
Baroness Noakes (Con)
My Lords, I congratulate my noble friend Lord Carrington on leading today’s debate on the Autumn Statement. It is a pleasure to follow the noble Lord, Lord Skidelsky. I always enjoy his glass-half-empty analyses of the Chancellor’s policies but I hope one day to hear a cheerful critique of them.
In one of George W Bush’s characteristic statements, he said of a budget:
“It’s clearly a budget. It’s got a lot of numbers in it”.
This is clearly an Autumn Statement—it has a lot of numbers in it—and indeed the accompanying report from the Office for Budgetary Responsibility has even more numbers. As we have already heard, the OBR’s numbers are particularly important because its forecast of higher tax revenues, in particular, has in effect allowed the Chancellor to increase government spending. However, the fact remains that in this Autumn Statement the Government continue to plan for annual deficits—albeit on a declining scale—until the last year of this Parliament.
One benefit of the steady growth which has been referred to is that public sector debt will fall as a percentage of GDP every year, but the end point will still have GDP at over 70%, which is an uncomfortable level. This is no austerity Autumn Statement. Expenditure will continue to go up every year. Lots of budgets continue to be protected. Of course, some departments will have to make tough choices but I have every expectation that efficiencies will be found. That is what the history of public sector management tells us.
I am sorry that the Government have again ignored one of the easiest ways to cut public sector costs: reshaping the bloated departmental structure of Whitehall. But I live in hope that one day they will see the light on this. The Government are on stronger ground on not hoarding assets. I particularly welcome the £4.5 billion-worth of land that has been identified for release and sale.
All this is sensible but not radical financial planning. The good news is that, if the forecasts are met, public expenditure will be comfortably below 40% of GDP at the end of the Parliament. Within that, importantly, welfare expenditure will fall to its lowest percentage for 30 years. I entirely agree with my noble friend Lord Carrington that we can certainly go a lot lower than 40% on public expenditure.
The Autumn Statement is not a place for major tax changes, although there are some in it, but importantly it is the back-drop to next year’s Budget. The Government have already announced their path to a low rate of corporation tax, at 18%. That is excellent, and one of the factors contributing to Britain rising up the international competitive league tables again—we are now sixth for ease of doing business. But there is a lot of work still to do on taxation. In particular, the top rate of tax at 45% is still too high. It is above the top rates in the US, the global average and the EU average—and it is no comfort that it is below Zimbabwe’s top rate.
We also have one of the highest rates of inheritance tax and the yield from other capital taxes is forecast to rise significantly in the coming years. I understand completely that the Government need to raise taxes to balance the books. But they also need to be careful that the cumulative impact does not drive out incentives for wealth creation. The Government are aiming, rightly, for a lower tax and higher growth economy, but there is a lurking danger of achieving the reverse.
I completely agree with my noble friend Lord Carrington that complexity in the tax system is a major problem. The Chancellor has not helped in this regard, having increased the length and complexity of the tax code. It is time that the Government devoted more attention to streamlining the tax system.
This was a welcome Autumn Statement, but, as ever, there is much still to do to.
Lord Judd (Lab)
My Lords, I thank the noble Lord, Lord Carrington, for having introduced this debate with what was, I thought, a very interesting speech. I would like to quote another important member of the Conservative Party, if indeed he has been reported accurately:
“Even if councils stopped filling in potholes, maintaining parks, closed all children’s centres, libraries, museums, leisure centres and turned off every street light they will not have saved enough money to plug the financial black hole they face by 2020. These local services which people cherish will have to be drastically scaled back or lost altogether as councils are increasingly forced to do more with less and protect life and death services, such as caring for the elderly and protecting children, already buckling under growing demand”.
Those are cautionary words indeed. We must note that he refers to the need to “protect” life and death services. Any age in which thoughts of wanting to enhance the services that are available to the elderly in their declining years seems to have been forgotten altogether.
I have said this before in debate and feel it very strongly: what has gone fundamentally wrong in our society—this is not a party-political point; it goes right across the parties—is that we have moved into an age in which the economy and society have become separated. I am convinced that if we are to have a strong, healthy Britain for the future, we have to get back to the concept that we are not just producing statistics on the economy but have to produce evidence of what is really happening in society in terms of its improvement and progress.
I had nine years as president of YMCA England. I was immensely interested by the housing programme for the young and vulnerable. Tremendous work was done. It was not just managing houses; everybody involved in that programme knew that they were dealing with people. And the people whom they were dealing with, by definition almost, needed care, attention, love and appropriate support and services. What is happening to all that under this fascination with the economy alone?
We see every day on our television the evidence of the anxiety and distress among our elderly friends, who find themselves uncertain as to where they are really going to finish their lives in old age. Is that really what we have achieved in 2015? Where is this social progress? I am not ashamed to say that I think that we should sometimes learn from our past. Although it may have had faults, we should revisit the concept of the department of economic affairs. The Treasury in that model has the discipline, but there would be another department which brought together all elements of society in trying to work to an agreed strategy, and to have a common aim and common objective towards which they were all contributing—trade unions, too. I commend to all parties a re-look at a department of economic affairs.
Lord Palumbo of Southwark (LD)
Once again, my Lords, we meet to debate a Statement which consists of fractional tinkering, where a billion here and a billion there are magicked from thin air, where we know that none of it really adds up, makes sense or will come to pass, but there is no other way in western democratic politics. So I suggest an idea to the Minister for our next debate: no numbers. Instead, it should be a debate about what principles should guide our thinking. For example, do we believe that behaviour and consequences of behaviour should be connected? Fifty-nine thousand health appointments are missed daily in the UK and £16 billion is spent annually on conditions related to obesity. Should there be a financial sanction?
There are 11.2 million pensioners in the UK, including my esteemed uncle, who is sitting here today. Of these, 13% live in relative poverty, but millions are either comfortable or affluent. Yet all are entitled to the same benefits. Does means testing make sense? By 2020, health and welfare will account for 70% of total spending, including debt interest, and the country will have been in deficit for 19 years. Yet debate focuses on tax credits, a mere blink of a numerate eye in the overall budgetary quagmire. But it is good political sport and a distraction from unpleasant reality.
Last week, the Chancellor made great play of his housebuilding plans, echoing his rousing conference peroration: “We are the builders”. Since 2010, around 600,000 houses have been built, half the number needed. I shall not mention Heathrow or HS2. On any objective basis, the Conservatives are most emphatically not the builders. Yet in modern democratic politics, it is possible to say whatever you like. Throw in a few pictures of the Chancellor posing trimly in a hard hat and it is so.
This is the backdrop to our deliberations: another Statement, another wave of the magic wand, another declaration of triumphant success. It is a system where it is impossible to link behaviour with consequences of behaviour, where soundbites triumph over truth, where instead of saving the OBR windfall against a certain future recession it is used desperately to plug financial holes—like wattle on a monsooned mud hut—and where the Chancellor can stand on the steps of his metaphysical counting house and declare if he so chooses that the moon is made of cheese. Maybe the OBR would support even this contention.
This noble House is sometimes criticised for the fact that we are unelected, but perhaps this gives us the ability to debate the real issues. May the Minister summon the powers of his northern independent spirit to consider this idea.
Lord Horam (Con)
My Lords, I congratulate my noble friend Lord Carrington of Fulham on his excellent introduction to this short debate. If I can supply one small omission, it was Gary Player, the golfer, who said, “It’s funny, the more I practise the luckier I get”. My noble friend was commenting, of course, on the supposed luck of the £27 billion extra which the Office for Budget Responsibility discovered in the past few months. However, it was not luck. First, the Chancellor created the Office for Budget Responsibility—so it was an independent body which came up with this new figure—and, secondly, he has created the conditions in which the Office for Budget Responsibility could come up with such a figure. So, as my noble friend rightly pointed out, he deserved his luck.
As a consequence of that, we are exactly where a good, sensible Government should be. We have steady growth of roughly 2.5% per year and we are reducing the deficit in a steady, gradual way over the period of a Parliament. Whether we will achieve a small surplus at the end of this Parliament I rather doubt—the pressures on public spending are so great that, if we do not achieve that, I will not be bothered—but, none the less, we are heading in the right direction.
As someone who learnt his economics in Cambridge at the high point of Keynesian economic study, I am comfortable with a Chancellor who puts at the heart of the economy the need to keep economic growth going. That is the fundamental point of economic policy. If you get that right, most other things fall into place. I am not sure whether the noble Lord, Lord Skidelsky, who is a distinguished biographer of Keynes, will wholly agree with that because, as we know, no one economist ever agrees with another. None the less, I think that is the heart of the matter.
Let me put the central point of my short remarks to my noble friend Lord O’Neill of Gatley, who will be winding up shortly. This is a wonderful opportunity to invest in infrastructure and housing. Andrew Haldane, the chief economist at the Bank of England, pointed out that the Bank of England has worked out that interest rates are at their lowest since Babylonian times, 4,000 years ago. I hope the Bank of England’s historical research is rather better than its forecasting of interest rates but, if it is right, this is a unique opportunity for us to invest in the infrastructure and housing we so badly need.
On infrastructure, I am thinking of: obviously, HS2; more important in my view, as a northerner, HS3; more roads; as a former London MP, a third runway at Heathrow, please, for the sake of the London economy and others; power stations; and fracking. I was pleased to see in the review £1 billion extra for a shale gas sovereign wealth fund to help benefit local communities with the achievement of further fracking. That is good news. On housing, there is a vast gap to be filled. As the Chancellor said, one of the biggest social failures of our age is the failure to build enough housing. In particular, will the Government pay attention to low-cost rented social housing, which is as important as housing for people to buy?
All in all, this was a one-nation review, by a one-nation Conservative Chancellor, in a one-nation Conservative Government, and as a one-nation Conservative I applaud it.
Lord Bilimoria (CB)
My Lords, Britain has less than 1% of the world’s population and represents just 4% of the world’s GDP, and yet it makes up 7% of the world’s welfare spending. There is no question that the Budget deficit needs to be cut and that the Chancellor needs to balance the books, even if this has meant cuts of well over 20% in some departments, as we saw in the Statement. Yet now the British economy is growing faster than any other G7 economy, with low rates of unemployment and high employment, and projections which show that the growing economy will produce more tax receipts, allowing the Government to invest in the crucial means to make us more productive and innovative. I thank the noble Lord, Lord Carrington, for initiating this debate, and I could not agree with him more about tax simplification—in fact, I often say that the Office of Tax Simplification is an oxymoron.
I turn first to higher education, which is one of the jewels in this nation’s crown. The decision to allow part-time students to access maintenance, as well as the protection of science budgets in real terms, is an excellent one. The Government are finally moving in the right direction with regard to our universities. For decades we have underinvested in R&D, well below the OECD, EU and United States averages, but now there is a financial boost going towards Innovate UK and the UK’s network of world-leading Catapult centres. Investment is being made into promoting exports through UKTI. We see investment in our aerospace industries and other advanced manufacturing industries. Here I applaud the Chancellor’s decision to provide extra support for postgraduate students, who are a vital part of boosting productivity in this country.
As we have heard from the noble Baroness, Lady Noakes, by maintaining a historically low rate of corporation tax, the Chancellor has supported a business-friendly Britain, but as an entrepreneur and businessman of course I think that the top rate of income tax should fall back from 45% to 40%. If it did so, that would make us more competitive. Also, capital gains tax should be reduced from 28% to 18%, which is where it was. This week I spoke at the launch of ResPublica’s excellent report, Make or Break. It is all about encouraging manufacturing in the UK. During his visit to the UK in November the Indian Prime Minister, Narendra Modi, spoke of his “Make in India” initiative. India has a target to increase manufacturing as a percentage of GDP from 16% to 25%. Does the noble Lord, Lord O’Neill, agree that we in Britain should have a target to increase manufacturing from 10% of GDP, where it is today?
Furthermore, and more important, the Chancellor has understood our recommendations on military and defence spending. The warnings have been there since SDSR 2010, in which the scaling back of spending on defence and security, I believe, damaged our capabilities in those areas. On top of that, when it comes to security in the dangerous world we are living in, dismissing the idea of cuts to police forces is excellent news.
In full, this is an excellent review of the public finances. While it is right to continue to make the cuts that will make us more efficient as an economy, it is also essential to use the UK’s advantageous position to invest in helping the economy to grow. No business can grow by cutting alone; businesses can become more efficient by making cuts, but they also have to invest to grow. These are all steps in the right direction. However, this is dependent on a continuing increase in tax receipts and on net interest payments being low. If interest rates go up, it will be more difficult for the Chancellor to continue down this path.
Moreover, let us not forget that this was made possible by the Chancellor finding an extra £27 billion. The noble Lord, Lord Horam, talked about luck. Well, my best definition of luck is when determination meets opportunity. What is brilliant is that we must not forget that forecasts can be very badly wrong. Robert Chote, the director of the OBR, said that his organisation had predicted growth to be six times stronger between 2010 and 2012 than the official figures suggested was the real case.
I would like to conclude by saying that I am so glad that the Chancellor has made the decision to reverse his planned cuts on tax credits. While the media and the noble Lord, Lord McFall, may have branded the Chancellor as having committed a dreaded U-turn, let us not forget, with all due respect to the noble Lord, Lord Wakeham, that without the actions of this House, the mistakes the Chancellor would have made would now be mistakes enshrined in law. That is no better reminder of the importance of this House when carefully considering legislation, and as the check and balance and guardian of the nation. Steve Jobs, the founder of Apple, said that,
“changing your mind is a sign of intelligence”.
Clearly, we have a very intelligent Chancellor. I now also name him as “the listening Chancellor”. Thank you, Chancellor.
Lord Cavendish of Furness (Con)
My Lords, as other noble Lords have done, I commend my noble friend on securing this debate and on introducing it with such thought and clarity. This afternoon I will draw attention to various aspects of the Autumn Statement and do so largely through the prism of my own experience of living for most of my working life in south Cumbria. Accordingly, I declare a personal interest. Although I have surrendered the chairmanship of my family group of SME companies to my elder daughter, I remain involved and I refer noble Lords to the register of interests.
Not of direct interest to me but very well received in Cumbria as a whole was the announcement of the new Carlisle enterprise zone. It may well be that a number of northern noble Lords have campaigned for this. It is my understanding that the honourable Member for Carlisle, Mr John Stevenson, played a prominent part in winning this prize for the county. It is good news.
I was personally pleased by a number of announcements relating to housing, the fiscal treatment of the SME sector and much else. However, it remains the case that the SMEs still suffer disproportionately from the burden of regulation. I am happy to give credit to the Government for seeking with commendable rigour to address this problem. I join other noble Lords in the plea to finally address the simplification of tax—which, again, imposes on SMEs very badly.
I suppose that I have read thousands of column inches on the Chancellor’s Autumn Statement. There is the usual analysis of winners and losers. Two of the commonest themes are how lucky the Chancellor is with the economy and the OBR’s reading of it, and secondly, what a risk he takes with the windfall we taxpayers have handed him. On the first, I can say only that if the economy had worsened over the period I would have been surprised to hear his critics putting this down to bad luck. As to the risks he takes, he appears to have a greater confidence in our ability to grow the economy than do some of the commentariat. While I confess that his action took me by surprise, I share his confidence in the future. I cannot remember in my working lifetime there being so much excitement—in the north of England at least—and a sense of purpose in the SME sector, or, in my layman’s reading of the world, the economy in general.
History and politics are full of examples of people being handed a poisoned chalice. Some of us felt that it was a novel approach on the part of Mr Gordon Brown to poison the chalice just at the point when he was seizing it. If it turns out to be true that my right honourable friend the Chancellor of the Exchequer has in mind employment beyond his present job, I hardly think that he will want to make the same mistake.
On winners and losers, risks or the lack of them, fairness or otherwise, as the dust settles the commentators may conclude that the Autumn Statement was inconsequential. They would be wrong. An important feature of the Autumn Statement that has attracted almost no comment at all is that it is as much a statement of values and ideas as it is about the country’s finances. Here is why. I warmly welcome the general thrust of the Government’s policies towards devolution. We will never be a country at ease with ourselves until local men and women are once more accountable for the delivery of the services that our communities need and deserve. Now the opportunity really does seem to be at hand when it will genuinely be in the interests of local people to participate again. The rebirth of civic life is truly an exciting prospect and one that we should all support.
Those of us who have earned a living in the private sector have long known and understood that there is always scope to do more for less. All of us who have come through recessions have had to cut our cloth at one time or another. By contrast, the public sector and the trade unions have always insisted that any and all reduction in public spending must have a corresponding diminution in output. To their enormous credit, the Government, as far as I am aware for the first time ever, have exploded this myth. Under this Administration the state has got smaller.
I see that I am out of time, so I will finish by saying that there are other things that the noble Lord, Lord Judd, mentioned in terms of values and ideas. Our growth compares well with that of other economies. Our potential for exerting soft power remains significant. There is a radicalism in this Statement that repudiates the perception of national decline. With the Chancellor announcing additional resources for the Foreign Office, the Armed Forces, national security, the arts and other things, we have changed gear. I reflect that we are regaining some of our former influence, in a civilised way: not pushing others around, not grandstanding among nations, but positioning ourselves to defend our long-cherished freedoms and to grow and to build an economy that enriches all people and protects with a generosity of spirit those least able to fend for themselves.
Lord Macdonald of Tradeston (Lab)
My Lords, I, too, thank the noble Lord, Lord Carrington, for his introduction to the debate. As a time-served marine fitter, I identify with his comments on apprenticeships, on which I now hope to build.
In his Autumn Statement, the Chancellor announced an apprenticeship levy of 0.5% to be paid by companies with payrolls of more than £3 million per annum, effective from April 2017. It is estimated that this levy will raise £12 billion during this Parliament and help to fund the training of 3 million apprentices.
The Government say that only 2% of UK companies will pay the levy, getting vouchers to offset the cost of training the apprentices in return. The initial reaction of leading employer organisations was to complain that the levy was just another payroll tax on top of the increased cost of pension provision last year and the national living wage which is to be paid next year. By contrast, the response from the Trades Union Congress was positive. I, too, welcome the creation of an institute of apprenticeships to set rigorous standards and monitor the use of levy moneys. This institute is to be independent of Government, with a publicly appointed board of business leaders. I look forward to this businesslike board challenging the Government’s view that 25% of levy moneys would be spent on administration. This new institute will be crucially important to the success of the new apprenticeship system. In appointing board members, the Government should therefore ensure that the practical workplace experience of millions of trade union members is properly represented.
At a CBI conference this week for leaders of medium-sized businesses, the main concern of 36% of those attending was the difficulty in attracting skilled staff, particularly in the engineering and tech sectors. No doubt this helps to explain why most of the delegates reportedly welcomed the apprenticeship levy. The Minister will be aware that the present policy on apprenticeships is widely criticised for putting quantity before quality of training, as the noble Baroness, Lady Burt, mentioned.
A recent Ofsted investigation, Apprenticeships: Developing Skills for Future Prosperity, reported that increased apprenticeships numbers were not well matched to the skills most needed. One-third of skills providers visited by Ofsted were judged not to provide high-quality training. There was also a lack of collaboration between providers and employers. Too few 16 to 18 year-olds were starting an apprenticeship, with too many places going to those over 25. Ofsted’s chief inspector, Sir Michael Wilshaw, concluded,
“Despite the increase in numbers, very few apprenticeships are delivering the professional, up-to-date skills in the sectors that need them most”.
While welcoming the apprenticeship levy, we now need more detail on how the new arrangements will work. Can the Minister tell the House if key sectors with skills shortages, such as engineering, construction and the digital economy, will be given highest priority? How will the new institute for apprenticeships relate to the Skills Funding Agency, an executive agency with an annual budget of £3.7 billion? Will SMEs have access to levy moneys, as well as to the existing apprenticeship pot of the Skills Funding Agency?
Lord Taverne (LD)
My Lords, the Chancellor’s strategy, as confirmed in the Autumn Statement, is to shrink the state and turn Britain into a low tax, low spending economy, with a public sector reduced to 36% —the lowest in the European Union. I fear that there will be austerity in many ways more devastating than during the coalition years. This will affect local government, universities and education generally, but especially further education, as the noble Lord, Lord Shipley, pointed out. Tax credits, which imposed a considerable burden on the lowest paid, have not, in effect, been abandoned; they have been postponed. Inequality will increase—with what consequences? As Wilkinson and Pickett showed in The Spirit Level, a low tax, low public spending state is a recipe for a dysfunctional state. We will emulate all the worst characteristics of the United States.
It is all justified because, Mr Osborne claims, we must balance the books as a way to faster economic growth. Low-tax economies do not grow faster than higher-spending ones. Piketty’s meticulous record of the rise and fall and rise of inequality in France, Britain, Germany and the United States showed that, in the post-Second World War period until the Reagan-Thatcher era began—a period known as les trente glorieuses, during which inequality was reduced, not only in Europe but also in the United States—economic growth was in fact higher than in the days of inequality.
Conservatives have stressed the growth we have achieved, but I fear that our recovery is somewhat fragile. We have a huge trade deficit which has been financed by the inflow of hot money. We have increased our dependency on the financial sector and the Government have failed to rebalance the economy. The financial sector is very vulnerable to a renewed credit crunch—which is far from unlikely.
As the noble Lord, Lord Skidelsky, pointed out, we have not increased productivity. Mr Osborne’s policy of shrinking the state will not improve productivity. More equal, higher-tax European countries have higher productivity per hour not only than Britain but also the United States which depends for growth on immigration. Growing inequality in Britain means fewer youngsters from poorer families will go to university, worsening the shortage in skills. A sense of unfairness in industry, because of the huge inequalities of pay, militates against teamwork and trust—vital factors in productivity.
Further, Mr Osborne seems to believe “private investment good, public investment bad”. He now lumps public and private expenditure together as part of public spending. Public spending funds research and development which is too long term for private companies.
As the noble Lord, Lord Skidelsky, pointed out, the Government’s economic policy is a return to Victorian values. The Victorians believed in the moral virtue of balancing the books. It is a return to Ricardo and Montagu Norman and Herbert Hoover. It is as if Keynes had never lived.
Lord Young of Cookham (Con)
My Lords, I join other noble Lords in commending the excellent speech by my noble friend Lord Carrington in introducing this debate. I, too, welcome the broad thrust of the Autumn Statement. If I had two general comments to make, one would be on the absence of measures to deal with the balance of trade, which remains worryingly in deficit. Secondly, as other noble Lords have mentioned, there is an absence of measures directly to deal with productivity which has got to improve dramatically if we are to remain competitive in world markets.
In the time available, and as a former Housing Minister, I want to focus on the Chancellor’s welcome proposals to double the housing budget—fixing the foundations, as it were, while the sun is shining. The Government are broadening the definition of affordable housing to include accommodation for sale as well as accommodation for rent. This brings home ownership within the reach of more people through shared ownership, help with deposits and interest payments and by obliging developers to sell at a discount. There is much to be said for this change of emphasis, as home ownership is the preferred tenure of most people. This policy may, in the long run, be more cost effective. As my noble friend Lord Horam said, for many people the only answer is social housing for rent. My proposition to the Chancellor, therefore, is that these welcome measures to promote home ownership should, in the first instance, be focused on current tenants of social housing whose circumstances have improved and for whom home ownership is now a realistic proposition. By bringing home ownership to them, it frees up a re-let in social housing for rent for those in need.
I have a proposal for the Government on buy to let, on which the Chancellor had some proposals in his Autumn Statement. I understand why this section of the market has come under criticism during the past few years. In its defence, if one looks at the housing market during the past 15 years, the only section that has actually worked is the private sector for rent. Social housing for rent has been depressed, as has market housing for sale, so the private sector has provided accommodation for those who could not afford to buy but who did not qualify for social housing for rent. However, with all the fiscal and monetary changes that lie ahead, this sector faces turbulence and I should like to make a suggestion to the Minister to bring stability and resilience to this section of the housing market.
The financial institutions in this country, unlike those abroad, have never invested in market accommodation for rent. They have equities, gilts, commercial properties and fixed interest stock, but they have never invested in residential accommodation. Historically, this would have been a very good investment as part of a balanced portfolio. I believe they should now establish an investment trust to which buy-to-let landlords could sell their properties in return for shares. This would ensure that those landlords would continue to have exposure to the private rental market and possibly defer capital gains tax liability until such time as they disposed of their shares. Their tenants could remain in place, avoiding turbulence for them, and the properties could then be managed by social landlords who, of course, have good experience of managing rental properties. I believe that this would promote the transition on a voluntary basis to a more stable, better managed market rented sector. I would be grateful if the Minister replying would share this proposal with his opposite numbers in DCLG.
Baroness Kramer (LD)
My Lords, as the first of the winding-up speeches, I should say how much I appreciate the extraordinary quality and range of this debate. I, too, will be fascinated to hear the Minister’s response. As I know that we are under time pressure, I will try to speak a little faster than I otherwise would and I hope that noble Lords will forgive me if I do not cover all the points that have been raised.
There were some underlying themes in everything that we heard. One, sadly, was uncertainty and another was unanswered questions. If the Minister cannot answer those questions today, I hope very much that he will provide further information to the House later. As the noble Lord, Lord Carrington, said in his opening speech—this point was picked up by many other speakers—the Chancellor was able to take advantage of better forecasts from the OBR to step back from his planned tax credits cuts and give rather more money to infrastructure. I am glad that he did so. However, at best, that is a 50:50 forecast. The Chancellor has now pinioned himself and put impossible hurdles in place with his fiscal charter, which inhibits him raising the traditional kinds of taxes that could be levied if a forecast were to go wrong, and has tied himself to a commitment to a surplus. Again, that would normally give a Chancellor flexibility. So how will he cope with shocks to the system? We have the Syrian situation at the moment, and none of us is bold enough to say that we can guarantee that there will be no shocks over the next five years. The Budget seemed to me to take away virtually all flexibility.
However, the Chancellor gave himself additional flexibility with some very significant tax raising. I focus on one aspect which has not been mentioned today—namely, that we are in effect looking at a 4% increase in council tax, which has been frozen for a number of years. Uncertainty surrounds that strategy because it requires councils to agree to raise their taxes in a general sense by 2%. All these figures are fully absorbed in the forecasts that we have seen. That assumes a 2% increase on the part of every single council. Many councils will not do that because they are ideologically opposed to it. Others will look to their local populations and say that people cannot afford an increase in council tax. Yet others are afraid of the election consequences of increasing council tax, so we have a serious set of issues there. An additional 2% hypothecated to social care is supposedly the answer to the very serious shortfall that we face in adult social care. Once again, will councils be willing to do that? How many of them will be willing to do it? The councils with the most vulnerable elderly have the most limited council tax base, so in cash terms their 2% surely cannot meet the requirements of their adult social care services.
Councils have been given additional flexibility over the business rate. I totally approve of passing on that flexibility but, again, councils which already have a very strong business base and are able to benefit from increasing the business rate probably least need that additional income. However, highly deprived councils tend not to have much opportunity to raise additional funds through increasing the business rate. Therefore, it is completely unclear how equalisation between councils will now work. Without that clarity, it is very difficult to understand what publicly provided local services will be available, and how we can achieve the standards that we all want.
I was very glad to see additional money in the Budget being awarded to infrastructure. We have said that the time to borrow to feed infrastructure is when interest rates are low, and we have seen the Chancellor act on this. We need to make up for a generation of underinvestment in a wide range of key infrastructure areas. However, the Government are cutting the very departments which manage that infrastructure. Having been in the Department for Transport and observed that Network Rail, for example, has no shortage of capital but great difficulty managing its projects, I question whether cuts in operating budgets will enable critically needed infrastructure to be delivered.
A number of noble Lords have said that people need skills for us to achieve growth. Not increasing the cash settlement for FE has to be a serious problem. Apprenticeships and further education go hand in hand. To increase the funding of one without doing so for the other will surely lead to underlying problems. Every business person that I talk to repeats the constant mantra, “Skills, skills, skills”, when explaining the difficulties they face in expanding their businesses. I am sure that the Minister has the same experience.
We have also talked about the importance of business investment, but look what is happening in the renewables sector. The green economy has gone from being an also-ran in this country in pre-coalition days to becoming a major industry in which British companies were becoming leaders. This country was becoming a leader in producing construction materials to deliver zero-carbon homes. That policy has been scuppered by the abandonment of the zero-carbon regulations. This country was also becoming an absolute leader in carbon capture and storage, a technology required by the entire world, including China. There was huge appetite for that product, which was built up following investment in that sector. However, it has been completely scuppered. I have had calls—as other noble Lords may have done—from people financing renewable energy projects with not a penny of subsidy, where the investment has all been pulled in the last two and a half weeks because there is now so much political risk and uncertainty in this sector. I have talked with a wide variety of investors and banks who are saying that it is now impossible to get that money for renewable infrastructure because the Government are seen as being gratuitously anti-green and the political risk is now becoming a serious premium in an industry which was underpinning growth in this country.
We have heard many good speeches on a wide variety of issues. I hope that the Minister will pick up the reference to the importance of rental housing. Obviously, we want people to be able to purchase their homes and I support a lot of the Government’s strategies in that field, but social rental housing is absolutely critical for the 9 million people who rent and the 1.6 million who are on the waiting list for social housing. It is particularly important for young people. If we cannot house our young people at the beginning of their careers, surely the ability to expand growth and for them to make an effective commitment is exceedingly limited. I ask the Government to look at those intergenerational issues to better understand the issues of young people who have to build their lives.
Lord Davies of Oldham (Lab)
My Lords, this has been an excellent debate. We thank the noble Lord, Lord Carrington, for introducing it. I think it was Gary Player who said that the more he practised, the luckier he got. I am not sure that I can attribute those virtues to the Chancellor, but certainly we are very grateful to the noble Lord, Lord Carrington, for both securing this debate and for his introductory speech which kicked off the issues in a very interesting and able way.
The Government have long boasted of their long-term economic plan but have proved themselves quite incapable of sustaining it. The House will recall that the Government now propose to put the accounts into surplus by 2020. My noble friend Lord McFall indicated that the OBR thinks that the Chancellor has a 50% chance of meeting that objective. But since the Chancellor also promised to have eliminated the deficit by this year, it is really rather difficult for many of us to sustain his credibility when it comes to managing this economy. As my noble friend Lord Haskel indicated, there seemed to be elements of creative accounting with regard to the Government’s expectations and predictions for how their long-term economic plan was meant to work out.
Of course, the Autumn Statement was notable rather less for anything to do with planning and rather more for some pretty sharp U-turns—welcome, of course, but little credit to the Chancellor. The pressures that built up from the public and the professionals about the potential cut-backs in policing in these dangerous times, when already 17,000 officers have been lost to the force over recent years, were pressures that the Chancellor eventually succumbed to.
The other U-turn was occasioned by this House, to its everlasting credit. I heard what the noble Lord, Lord Wakeham, said. There is much to debate on this. I know that my side will conduct themselves as constructively as possible in those discussions but let the noble Lord, Lord Wakeham, be under no illusion. The Government start off on the wrong foot. Six hundred years of Conservative majority in this House ought to make them rather wary of seeking to reverse a majority against them at the first serious instance. I hope we will have some constructive discussions on that but they are not going to be easy ones.
The Government still intend to savage the welfare budget, even though they have abandoned their position on tax credits. The projected cuts to universal credit over the next five years indicate that the Government are still victimising the poor. As the noble Lord, Lord Shipley, said, why is it that the poor are meant to pay the price of the problems that the Government face? It used to be the shirkers, those who were on benefits. Now, because the Government have extended the cuts to those who do not have enough to live on but actually work, we do not hear quite so much of that argument. It is quite clear that the problem for so many of the poor is that they are in badly paid jobs which cannot sustain their living standards, and there are far too many people in jobs who would welcome longer hours but cannot secure them. That helps to ensure that their living standards are very low.
It is also the case that productivity is heading downwards. If the Chancellor really is intent on concentrating on the longer term, rather than the immediate, short-term needs of the economy, he ought to address himself much more forcefully and effectively towards productivity, which remains a great weakness of the British economy. We are still substantially behind other countries in the G7. The forecast is that productivity will actually head downwards over the next few years. The Government have got a great deal to do.
If the Government can guarantee that their levy will produce a greater number of highly valuable apprenticeships in industry, that is certainly a step in the right direction. But up until now they have been preoccupied with counting the number of apprenticeships rather than evaluating their worth. In the mean time, in another aspect of the skills economy, the Government are bent upon destroying those forces which could help to improve our skills. Further education, the unprotected part of education, has already taken a very substantial number of cuts in its provision and is due to take more under this Government, who guarantee only cash increases rather than real-terms sustainability. It means, as was indicated in the debate, that we may well see a number of our colleges close at a time when they ought to be providing the skills that are needed.
It is so obvious that to effectively expand the construction industry, we ought to expand it on the basis of British skilled workers. From what one can see at the present time, if the Government really are going to improve the question of housing—the noble Lord, Lord Young, pressed on this and indicated areas in which they could address themselves to fresh possibilities—they have to get themselves out of a position where they preside over the worst housing record for nearly a century. At the moment the industry looks to foreign skills. That is why the OBR has indicated that, of the very substantial number of jobs that will be created in our economy over the next five years, a great deal will go to those who immigrate into this country. What kind of world are the Government living in if they are ensuring that employers still look abroad for skills while the nation is greatly concerned about the opportunities for our own people and the overall level of immigration? I hope that the Minister will address himself to the fact that there appear to be predictions of 1.5 million more jobs being created but immigration going up by 925,000. The Government certainly have to answer this case. If they have this long-term economic plan, it ought not to be difficult for them to address these issues rather than concentrate on the issues which largely preoccupy them.
Of course, we all recognise not just the weakness of provision in social security but the real worries with regard to the health service, particularly the fact that the health service is dogged by hospitals being unable to place in social care those patients who are ready to leave hospital because of the devastating impact on social care of the cuts that the Government are enforcing. That situation is predicted to get worse so I hope the Minister will respond to the issues I have raised, which embellish the questions that the noble Lord, Lord Skidelsky, asked of the Minister—in only a four-minute speech. I used a rather longer speech last time to ask similar questions. I was not entirely satisfied with the answers. Perhaps I will have greater luck today.
I will finish with one obvious point. Austerity is not mandatory. It is not an economic necessity. It is a political choice and this Government persist in this choice and ask others to pay the price. That is why 3 million people who are in work are actually underemployed because of the kinds of jobs they can get. As for rebalancing the economy, manufacturing employment dropped by 10% over this last period. The Government have done absolutely nothing about the catastrophe of the steel industry. You would think that a right-wing, capitalist Government could not ever do anything about industry because their tenets are that they must do for success. Tell that to President Obama—the American car industry was in the most desperate straits and the federal state bailed it out. British industry looks for greater support from this Government than anything that is on the horizon.
The Commercial Secretary to the Treasury (Lord O'Neill of Gatley) (Con)
My Lords, once again, we have had a very healthy debate on the Autumn Statement, as we have before on economic and fiscal policy. Today there have been quite a lot of very valuable insights and thoughts about economic matters and finance. As I have done before, I thank all Members of the House for their excellent contributions. I am reminded of my maiden Statement, which I recall coincided with my dear and noble friend Lord King saying that the standard of debate in this place was, according to his vast experience, considerably higher than that of the other place. I have not had that other experience but each time I come here to discuss economic and financial matters, I can only echo that sentiment.
Let me quickly move on by making an apology to all your Lordships. As we have heard, we are on a very tight schedule and, if I am looking at the clock correctly, I have probably not much more than 15 minutes to respond to many of these interesting ideas. I will try to respond thematically as opposed to my preferred customary style, which is to respond to each noble Lord or noble Baroness individually. I will not be able to do that but I shall try to respond specifically to my noble friend Lord Carrington, the noble Lord, Lord Davies, and the noble Baroness, Lady Kramer. I will refer to others in the context of thematic issues.
Quickly moving forward, last week’s spending review and Autumn Statement presented by the Chancellor was an important fiscal event, one of the most important of recent times. In the spirit of what the noble Lord, Lord McFall, said—I will touch back on this in a second—it was particularly important because it was the spending review as well as the Autumn Statement, and it set forth in detail the path of public spending for the duration of the Parliament. As noted by some in this regard, we remain on track to achieve an overall surplus by the end of 2019-20—which, if it occurs, would be the first surplus since the turn of the millennium and of the century. As was also touched on—I shall come back to this—with stronger economic figures than anticipated we can do this while borrowing less, investing more in long-term capital spending on our infrastructure and smoothing the transition to a lower-welfare, higher-wage economy.
I turn to the thematic context. There are three broad areas, with sub-categories to some specifics. First, with respect to the background global environment within which the Autumn Statement was presented, my noble friend Lord Carrington set some of the scene in his wonderful opening remarks. I cannot resist an attempt at humour. He made reference to a number of supposedly highly-rated economists frequently getting their forecasts wrong. He made a comment soon after about the BRICs, so I trust that he was not referring to my past life in that regard. I should follow that by saying that I had remarked in a joke in that previous life that I might have ended up regarding them as ICs as opposed to BRICs, in view of the particular problems of Brazil and Russia.
At this stage, as we come towards the end of 2015, the ongoing evidence about the cyclical state of the world economy, as well as some of it structurally, is a little different in my view from the general view out there. While of course the world is slowing—or, let me emphasise, showing signs of slowing compared to expectations—I would draw attention to three or four things that are a little different.
First, and in slight contrast to something that my noble friend Lord Carrington said, in the year to date the biggest source of positive surprise comes from the eurozone area. Having seen the most up-to-date data in the monthly manufacturing and purchasing managers’ indexes around the world, which we have had in the last couple of days, some of the strongest data are coming out of the Eurozone—notably from Germany but, rather encouragingly given some of the structural issues, also from Spain and Italy. Secondly, in that regard, I draw your Lordships’ attention to the fact that the eurozone purchasing managers’ index is stronger than that of the United States. The USA’s own purchasing managers’ index, in its latest indications, is now weaker than that of many of the rest of the G7 countries, such as ourselves and much of continental Europe.
Thirdly, in the context of my attempt at humour about the BRICs, while China continues to show signs of slowing, very importantly for our priorities there is just as clear evidence that domestic consumption and its own services industry continue to increase their share of GDP rather rapidly. There is not much evidence of a significant slowing among Chinese consumers, which is an important, ongoing and positive thing for the rest of the world, including the UK, which wants to engage by providing things to their consumers. That strongly justifies our active engagement and many noble Lords here are aware of my strong involvement in that.
Fourthly, in this regard, I will mention that many other so-called emerging economies still have considerable challenges, a large number of which are in my view probably more cyclical in nature than structural. They relate to the intensity of the decline of commodity prices. Importantly, as the flipside to that, there remains an important source of ongoing support for real disposable incomes in many commodity-importing countries, ourselves included.
The second area, which I will touch on quickly, is the policy environment against that background and in particular the framework and role of the OBR, which many noble Lords touched on. Within that second area on policy, I have a couple of thoughts about the OBR. I will touch initially on the interesting suggestion made by the noble Lord, Lord McFall, about the OBR releasing its latest ideas earlier than has hitherto been possible. It would be very difficult for it to do that, not least because it is given a large amount of sensitive evidence about policy considerations that would dramatically impinge on the Government’s thinking in the lead-up to actual policy decisions.
However, I believe that yesterday, Robert Chope and the OBR were due to appear at the Treasury Select Committee, which was shifted for obvious reasons but will, I am sure, happen very soon. I imagine that many of the questions that the noble Lord, Lord McFall, the noble Baroness, Lady Kramer, and others touched on will come up on that occasion. If they do not, I am sure that there will be an opportunity for them to pursue those questions further. Having said that, the OBR is of course independent of government and it is its rightful role to come up with new suggestions on the relationship of the economy and the fiscal position, given its mandate.
Finally with respect to the OBR, while my own observations are that it has revised down slightly its forecast of productivity, as touched on by the noble Lord, Lord Haskel, interestingly it has also revised higher its forecast for investment. Importantly, going forward, its own forecasts remain on the more conservative end among many highly respected domestic forecasters. As a number of noble Lords have pointed out, while it is true that there could be risks to the downside as a result of its changes, equally, it could be just as vulnerable to being positively surprised again, as it clearly has been given those changes. I finish on this subject by pointing out that from what I can understand, of the £27 billion change that it made, £18 billion of it was due to the change in its modelling of the relationship between nominal GDP and various forms of tax revenue, particularly VAT, while £9 billion was due to its own revised higher estimates of the economy.
Sticking with this second theme of policy, yet again, a number of noble Lords offered very contrasting views about the appropriate stance for fiscal policy, which is not surprising in view of the nature of this place and the understandable biases that some Members may have. All I would say in this context is that, the spirit of the Autumn Statement is that fiscal policy—whatever the justified underlying stance—is less restrictive as of last week than had previously been believed by many. Several noble Lords have been particularly critical about the supposedly tough stance on fiscal policy. Although Members of this place may have their own judgments on that, which may be valid in principle, fiscal policy is certainly not as restrictive as they might have thought a week ago.
I will finish this part of my closing comments by taking this back to where I started. The Chancellor for some time now has been talking about policy in the context of both our national and our economic security. I was very pleased to have discovered how policy was going a couple of days before the announcement, as, in my judgment, against the background of such uncertainties around the world, it is probably appropriate that our stance on fiscal policy, within the flexibility we have been afforded, should be less stringent than we had otherwise planned for it to be. That gives us more internal momentum against the background of those never-ending, swirling uncertainties that unfortunately seem to be so prevalent.
The specific points that were made covered many areas, including the apprenticeship levy, and skills and productivity, which I will touch on together. They also related to investment spending and further education colleges. Separately, there were some very interesting ideas about energy policy, housing and the role of manufacturing. The noble Lord, Lord Palumbo, made some very interesting suggestions with respect to discussing broader principles and tempted me to live up to what I think he suggested was my independent northern spirit. I can never resist such a temptation, so I look forward to rising to that challenge whenever it comes.
The broad issue that links at least half those thematic points and that the noble Lord, Lord Davies, spent a lot of time on, is productivity. The noble Lord, Lord Haskel, also touched on this in some of his comments. Although the Chancellor did not use the word productivity in the Autumn Statement as much as he may have done previously in the summer Budget, I suggest to noble Lords that, on the contrary, there continues to be a strong focus on the important role of productivity. I will respond to some of the specific comments of the noble Lord, Lord Davies, as I have tried to do in recent discussions. Although our productivity level has been weak, and is significantly lower than the levels of our main partners among the developed countries, the evidence from the past year or so is that ours has improved slightly more than had been the case, and that the gap is not quite as big as it was.
I would not want to jump from that to immediately say that this is a consequence of the 92-page document that we published with the summer Budget, because some of those data relate to before then—and of course one swallow does not make a spring—but it seems to me that there are some signs of slight improvements at the margins of the data that are available to make judgments about. More importantly, there are a number of ongoing policy developments—which there was more focus on—including some that relate to the specific points that were made.
I will respond to points about skills, further education colleges and the apprenticeship levy together. The apprenticeship levy, which has been described by some as a back-door tax, is, as I have discussed here before, part of a conscious decision to try to encourage our corporate world to have a greater influence on and a greater obligation towards trying to sow the seeds of much stronger skills for today, tomorrow, and the medium-term and long-term future. It is only the largest employers that are likely to have to pay much and, in the event that they take up the challenge to its fullest, they will be more than recompensed for their endeavours. The desire is that, in the context of the apprenticeship plan, they will influence the nature of qualifications coming out of further education colleges and perhaps influence how those might develop further.
I would link FE itself with the goals for skills and apprenticeships. We need to strengthen the quality of the qualifications that come out of our further education colleges and get away from the focus just on the amount of money that is being spent or not. We need to ensure that the people who come out of those institutions have the right qualities and skills to cope in an increasingly competitive world. In my judgment, the real thrust of policy in the past six months in this regard has been about making it a priority to raise the standards of the qualifications that come out of further education colleges. If successful, that will play a critical role in moving towards raising the broad scope of the skills challenge, which a number of Members of the House have touched on and which, again, I have made significant reference to in the past.
Establishing manufacturing targets sounds like a very eye-catching thing to do. The noble Lord, Lord Bilimoria, mentioned this, but I know from my own association with the I in BRICs in the past that it would be absolutely remarkable if India got half way to achieving that kind of target. It is not clear to me that it would be particularly smart to suggest that an economy as sophisticated and diverse as ours has some defined target for manufacturing as a share of GDP, not least because the interplay between high- value-added manufacturing and services is a lot more sophisticated and complex than it once was, and you do not want to choke off one at the expense of the other.
What is clear in a broader sense is that we want to encourage an environment that creates more higher-value-added jobs that allow us to keep our head above water and compete in an endlessly changing world with lots of challenges, whether they are service jobs or manufacturing jobs. The focus on wages and the high-wage, low-welfare economy is at the core of this, together with a number of very specific initiatives, which again I directly relate to productivity. The northern powerhouse, the Midlands engine and the devolution of powers and decision-making to local authorities in those areas are critical in this.
Because of my shortened time, I will finish by saying thank you to all noble Lords whom I have not had the chance to specifically answer. Although considerable challenges from overseas remain, as well as our own long-term internal challenges, it seems that Britain is in a fundamentally stronger place than it was five or six years ago. This Autumn Statement and spending review set out how we will achieve the next steps of our economic recovery, and I commend it to your Lordships.
Lord Carrington of Fulham
My Lords, in the few seconds remaining of this debate, it behoves me just to thank my noble friend the Minister and all other Peers who have participated in what has been an excellent debate that has highlighted the issues very effectively. I think that any outside observer will have been rather surprised by the degree of commonality and agreement across the Benches. Of course, there are big differences: the biggest difference, perhaps, is between those who wish to spend the money before we earn it and those who wish to earn it and then spend it. Nevertheless, the analysis was very similar from all participants, to whom I am most grateful.
I do not intend to mention any particular contributions but will just pick up on something said by one or two noble Lords: the quality of debate in our economic debates here is so much higher than it is in the other place that it is a shame that we do not have more of them. With that, I beg to move.
State Pension: Women
(9 years ago)
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Baroness Bakewell
To ask Her Majesty’s Government, in the light of the new single-tier state pension, what provision they have made for informing women in their 50s of their pension expectations.
Baroness Bakewell (Lab)
My Lords, I am delighted to launch this topical Question for Short Debate arising from issues that have currently swept the country and the media involving the transition to new pension arrangements. This is a small gathering, but a distinguished one, and I look forward to hearing the Minister’s response to the issues that we have to raise.
The population is ageing; we know that. Life expectancy is currently 81 in the UK, and we now expect to work longer than we once did. Retirement will come later than it used to. We also believe in equality, so it is quite right that women and men should retire at the same age. This is all right and proper, and thoroughly understood by the population of this country. Legislation towards later and equal pensions was begun in 1995 and amended in 2011. The transitional arrangements towards that desire have, however, been a disaster. Through incompetence and faulty communications, many people, mostly women, have been left totally in the dark about what to expect and, as a consequence, suddenly presented with hardship, injustice and what some of them, writing to me, have called theft. I will be giving evidence of that in just a moment.
First, the changes to the state pension to be rolled out in April next year promise a fairer deal for women, but the new figures show that of the 400,000 expected to claim the new state pension, only 20,000 women will get the full flat rate of about £155 per week. There are reasons for this. Many women will not be reaching the state pension age over those years. They once expected to, of course—they expected to until quite recently. It has come as a shock to some 700,000 of them that they will not only not receive their pension until later but, as a consequence of this delay, will be missing out on even more than they had expected.
Complicated matters get more complicated. I put it to the Minister that serious issues of communication with those affected by the changes must be addressed— and urgently. The changes begin within a year. How much immediate contact is the DWP making with those whose features depend on these changing arrangements? What advice systems exist, and what information centres? What initiatives are in place to respond to the needs of these often distraught and deprived women? Why women? Women outnumber men in the pension population, and only a minority of women reaching state pension age have been entitled to the full basic state pension. As author John Macnicol defines it, we are talking about poverty among older women.
We know that transitions can go wrong because they already have. The move to bring forward women’s pension age towards that of men has left some 700,000 women who were on the brink of reaching what they believed was pensionable age completely bereft. They have come together as a powerful lobby—Women against State Pension Inequality, or WASPI—and are finding that their cause is met with sympathy and outrage when they explain their plight.
Many dozens of them have written to me. Let me give some examples of their distress.
“I started work at the age of 15, I have never claimed a penny benefits and worked continually until reaching 57, when because of a heart condition I took early retirement on the understanding that my pension would be forthcoming in the next few years. I have never had any communications from the government about the changes”.
Another writes:
“I resigned my teaching career to care for my husband when he was diagnosed with terminal cancer. On his subsequent death at 60 years of age I have found myself with half his teacher’s pension … and no state pension at 60 as I had planned for”.
Liz writes to me:
“I started work—part time—when I was 13 and I have always worked. Throughout my working life I understood that I would be able to take my state pension at the age of 60 and planned towards this. I now have to wait until I am nearly 66. The short notice given has made it impossible to save enough to cover the shortfall … The complete lack of notice given for a specific group of women … means that they have been treated very shabbily”.
Karen writes to me:
“I am a divorced woman of 60: I have no option but to claim ESA as I cannot work due to health issues … If it wasn’t for the fact the council are paying me housing benefit I would literally be on the streets”.
Here is a man’s voice:
“So let me get this right. We expect women to have time off to have children, earn on average 80% of what men earn, and now without fair and proper warning have imposed on them to work another 6 years. Is this the price of equality for women?”.
There are many more examples. One writes:
“I have worked as a nurse since the age of 18”.
Another writes:
“I worked solidly since I was 17”.
What emerges from those letters is that these women, deprived suddenly of their expected pensions, are often ailing, looking after an ailing partner, caring for a much older parent or may themselves be frail. Many are made redundant and, at the age of 58 or 59, are in no position to find other work.
One wonders what William Beveridge, architect of the nation’s national insurance project, would make of this unexpected occasion of want and injustice. Existing plans show a complete lack of understanding of the reality of these women’s lives. They are not cheats or scroungers; they are honourable citizens who, after a lifetime’s work and often 40-plus years of contributions, are seeking the pensions to which those contributions entitle them.
Many—almost all—of the women complain that they were not informed of the changes. The department made modest protest that it had informed them. Steve Webb, the former Pensions Minister, defending the record of communications before the Work and Pensions Committee, added to his evidence:
“Did we miss some people? Probably, when you move house do you tell the DWP and tell them your new address?”.
Some people? The department missed a large part of 700,000 women. This matter of communication of pension changes to those who are entitled is still in play. The WASPI group has raised a petition of more than 40,000 signatures. Those people want their case reviewed and compensating considerations brought in to redress the injustice.
The arrival of the new single-tier pension is meant to be cost-neutral, but it is not likely to be so. The Government must examine the provisions to see whether within their revenues they cannot find ways to accommodate the needs of those women. Pension changes read as bold and logical when they are set out on paper, but they all involve transitional adaptations. That is where the Government continually fall short of what is expected. The same applies to the recent freedoms given to pensioners to access and spend their pension pots and annuities. The proposal sounded like a new freedom, and was greeted as such. Yet we already hear of plenty of scams as perhaps naive older people are offered unrealistic promises by unscrupulous operators. Announcements of policy are all very well, but they are only the start. Will the Government undertake to remedy the many shortcomings to their communication with, and advice to, the pensioners of this country?
Baroness Jenkin of Kennington (Con)
My Lords, I am extremely grateful to the noble Baroness, Lady Bakewell, for raising this issue—just in the nick of time for me, as it happens, as I have another four days left in my 50s. We can only just scratch the surface of the subject of many women’s perceived and actual financial insecurity, especially as they approach retirement, but this is a very good place to start. Much has been said over recent years about how the financial protection enjoyed by pensioners, despite fiscal consolidation, contrasts a little too sharply with that for young people, as my son, who is in his 20s, reminds me on an almost daily basis. Instead of Britain being “no country for old men”, it should perhaps be described as a pretty good country for old men. Final salary pension schemes, after jobs for life, are now very much consigned to history, but many male baby boomers and their families still benefit—and I do mean old men.
Research from the Centre for the Modern Family, whose support in helping me to prepare for this debate has been much appreciated, shows that women entering retirement seem to be in a very different place. There are cultural reasons for this, and it is not due just to state and other pension arrangements, as I hope to make clear. The Pensions Act 2011, which gradually equalises pensions ages, has affected a significant number of women. DWP figures suggest 2.1 million women will see their state pension age increase by one year or less, with a maximum increase of 18 months. This is, of course, relative to the timetable set by the Pensions Act 1995, which affected a group of women born over a three-year period whose state pension age was set at between 60 and 63. However, all women affected by accelerated equalisation will reach the stated pension age after the introduction of the new state pension, which is more generous for those women who historically did poorly under the current system because of lower average earnings and part-time working.
The 2011 changes responded to increases in life expectancy that were faster than projected, and the price tag for not revising the 1995 timetable was a cool £39 billion. Also, the Institute for Fiscal Studies has shown that the rise in women’s state pension age since 2010 has been accompanied by increases in employment rates for the women affected. Going with the grain of this, the Government have abolished default retirement age for all workers and extended the right to request flexible working to all employees. As we are all too well aware, time sovereignty can be incredibly important to women, perhaps particularly at this stage of life when they may be acting as sandwich carers to grandchildren, disabled adults and often frail elderly parents and relatives. Life may only “work” for them if they have this flexibility, as they often still have an enormous amount to contribute to the labour market but cannot fit that contribution into the traditional nine-to-five slot.
The Centre for the Modern Family research, analysing the changing relationship between the family and the workplace, found that working later is the new norm. Remaining in work past the current state pension age is now an established concept among the general public, but retirement planning is left late. The majority of workers over the age of 55 have either not planned their retirement or wish to continue working. However, there is a big difference between men and women in terms of this latter category; while more than one-third of men—38%—want to carry on working because they like their jobs, barely more than one in 10 women feels this way. Financial education and advice provided through services such as the Money Advice Service and Citizens Advice are crucial to encouraging people to engage with retirement planning. Employers could also play a greater role in advising staff on their pension options, if they do not fall foul of regulations by providing financial advice that they are not qualified to offer. Perhaps the Minister might have some advice on that.
Obviously, the Government must inform recipients of the state pension on when they will be eligible and what they can expect. I think that I am right in saying that letters were sent out from DWP to addresses, current with HMRC at the time, to reach women affected by the 2011 changes at least two years before they reached state pension age—although, as the noble Baroness points out, it has not been by any means perfect. While this advance notice is important, planning and saving for retirement have to start far earlier than research suggests is the current social norm. Scottish Widows, for example, has been studying women’s retirement prospects for over a decade and has consistently found, year on year, that women lag behind men in saving adequately for retirement. While there are a number of reasons for this—and of course the gender pay gap must bear some responsibility—a problem remains specifically with women’s understanding of long-term financial savings products. Again, research shows that 43% of women still say that they have little or no understanding of individual pension savings, while 71% of women do not know what pension pot they will need to secure the retirement income they hope for. Pension providers, employers and individuals themselves all have a role to play to address this issue; it must become the norm for everyone to consider the size of their pension pot and their financial aspirations for retirement at an earlier stage.
This year’s research is beginning to provide some reasons for optimism, as latest figures show that 52% of Britain’s women are now saving adequately for retirement, but projections suggest that many women will not have a comfortable and enjoyable retirement, and may spend their later years worrying about their financial situation. Some 28% of retired women say that the income that they received once retired was less than they had expected, and 25% of females aged 30 to 49 are non-savers, compared to 15% of men. This is not all down to uncertain working patterns; only 19% of women on permanent contracts are now non-savers. However, this number jumps to 35% of self-employed, or women who work freelance. More than half of the UK’s self-employed or freelance working women—56%—are undersaving compared with 45% of those on permanent contracts.
Ultimately, women need to be able to make better informed decisions. Information, whether from the Government, pensions providers or other trusted sources of advice, is indispensable, but many women feel defeated from the outset in understanding what is being given to them in this regard because of their antipathy to financial and, more broadly, mathematical information. I was recently interviewed for a publication called The Fear Factor, which aimed to highlight how otherwise educated women can feel ill equipped, by dint of their sex, to understand maths and money. Poor maths skills and inadequate financial management skills are linked, and women are peculiarly willing to admit to being not just bad at maths but also anxious about figures, and not very good with money. Such attitudes—I am afraid that I am speaking to myself, particularly about maths—need to be challenged.
The Fear Factor project is run by Shirley Conran OBE, who wants to liberate women from these fears in the same way as she aimed to liberate women from housework in the 1980s. She is arguing for a national campaign to expose the maths myth that it is natural for women to be daunted by maths and they need men to manage their money because they lack the necessary maths gene to make sense of it. Ms Conran has been engaging with the Department for Education, as her focus was mainly on young women, but I think that the campaign needs to reach right up into the age range we are discussing today. Will the Minister consider meeting Shirley Conran and her team to discuss how to help women of pensionable age to gain mastery over their fears in this area so that they are able to approach retirement with more confidence and foresight?
Lord Stoneham of Droxford (LD)
My Lords, I thank the noble Baroness for initiating this debate and congratulate her on her ongoing efforts to campaign on behalf of women disadvantaged in our pension system. It is the first debate in which I have engaged with the noble Baroness, Lady Altmann, and I congratulate her on her appointment and wish her well—and wish her well in reply to this debate.
We know that women are hugely disadvantaged when it comes to pensions. Lower earnings and lower contributions have contributed to that disadvantage, and the trouble with pensions is that problems build up and are compounded. Change in pensions is always very difficult. We have seen that over the past five years, with the unravelling of many complexities that have built up in the past. We have had to deal with the economic constraints that have made it more difficult in helping that transition, and we have had to recognise that life expectancy is improving and that there is pressure for equality in pension ages.
Let us remind ourselves of the principal benefits of the new single state pension, which will be coming in in April 2016. The first benefit is that it is a much simpler system, and anyone who eventually has 35 years in that system will get a flat-rate pension and will know exactly what it is going to be. There are huge benefits from that certainty, which can help in planning and saving. We have got rid of the complexity, or at least we will, of the existing system of contracting out or contracting in.
A second advantage of the system, and the reason it was supported, is that it aims to improve outcomes for people who do not do well under the current system. Those are mainly women, particularly older women, whose participation in work and lower earnings have disadvantaged them. That has been helped by the retrospective re-evaluation of credits for contributions. The other group which benefits from the single state pension is the self-employed, a growing proportion of our working population.
The third advantage of the single state pension is that auto-enrolment can work only if we reduce means testing. With the state pension at £119, and with means-tested income just over £150, that means that any pension over £35 is immediately clawed back.
However, during the transition, there have inevitably been complications. There has been a misunderstanding, as there always is, that our pension system is contributory. That means that if you have not contributed for the full 35 years, even with credits, you do not get the full flat-rate pension. To do otherwise would be unfair on those who have made those contributions. Then there is the complication of contracting in. Those with the state pension will still get it, but those who have contracted out will get less. Many of them have other pension schemes, and it would be unfair if they, having paid lower contributions, got the same as those who paid the full contributions.
There is a third issue, which was complicated during the coalition Government by the Pensions Act 2011: the raising of the pension age. I accept that the notice given was probably too short. It would have been much more helpful to have a longer transition, but there were demands on the finances that insisted that it went ahead. Everyone who has been disadvantaged by the change, as the noble Baroness, Lady Jenkin, said, will have the benefit of the new single-tier pension, so advantages will accompany that change as well.
This debate is largely about the lack of information. In the pension field, information is never enough. One of the problems is that half the time people are not listening, because they do not want to. Sometimes they do not want to face up to the reality of their low savings in pension; it might make their working lives pretty miserable if they did. However, we just have to keep working at it.
There was a problem with the 1995 Act and the information that was given at that time. The 2011 changes suddenly stirred up a lot of people when they were told that the age was going up even more because they had not been properly informed of that first change. In the last few years, fortunately, at least we have had a good period for employment in terms of employment growth, which has helped people to come back into the labour market. We know that a lot of people who otherwise might have retired have stayed in the labour market, which, hopefully, will eventually be good for their pensions.
As we look at the efforts to inform, we have first to remember that we have been able to inform people only since March 2014, when this legislation went through. I understand that 500,000 personal letters have been issued where people asked for information, and, as someone who has delayed his state pension, I have to say that I recently rang up and it worked absolutely perfectly. I even found that I had another £30 from the state earnings-related pension scheme that I did not expect to have, and I had a letter by return of post. So it certainly worked for my sample of one, but clearly we have to do much more. Maybe the Minister could confirm the number of personal letters, because the key is to get people to register and go in and, as they start to think about their retirement and their pension, find out exactly what their pension position is.
I note in the Library papers that last autumn my colleague Steve Webb produced a detailed communication plan. I thought that it was actually quite good. Maybe the Minister can tell us the progress on it. Certainly a lot of work was done, although I accept that the situation can never be perfect.
The coalition Government initiated a number of top-up schemes for contributions. I know that not everyone can afford this, but there are voluntary contributions to top up this year’s pension. There is the possibility of delaying your pension so that you can take a 10.6% top-up, which lasts until April next year, and there is the top-up annuity, which has not been given a great deal of publicity but is available until April 2017, which, with the appropriate lump-sum payments, can lead to an extra £25 on your pension.
Obviously, the key is personalised communications. We want eventually to build up to a situation where people are getting communications 20 years, 10 years and five years before they retire, a bit like what is beginning to happen in the health service, where you are reminded about having checks and so on regarding your health. Similar things should be happening in the pension field as well. There is great scope for government departments to break down some of those silos. Why is the Inland Revenue, when it puts out its tax demands, not putting out reminders about people finding out about their pensions? Similarly, the health sector is sending out its letters. Some of these communications could be combined with promotion for what is happening in the pension field, as a way of sending money and increasing the number of communications. Inevitably, you just have to keep at the education effort to get communications through. Pension reform is not easy, but I think the single state pension will be seen as a great landmark for pension reform in the years to come.
There are just a couple of specific points that I want to ask the Minister about. We are talking about women being disadvantaged in pensions. There are two issues that are immediate at the moment. First, any delay in auto-enrolment affects women proportionately more. Could we have some details about delays that are already happening in auto-enrolment, and some assurance that as they go for this employment levy for apprenticeships the Government are not going to use that as a further excuse to delay the implementation of auto-enrolment?
Secondly, I come back to a point that I raised in a Question in the House a week or two ago: the whole issue of mobile portable pension pots. This is very important to women who are on low earnings and change jobs regularly; they need to be able to move their pension pots easily and together. I understand from the Minister’s reply that the Government, despite having had a policy laid down by the previous Government in legislation, are not contemplating implementing this until 2018. I hate to think how many pots will be available by then for people changing jobs in the interim. This is an issue that is set down in legislation; we should get on and do it because failing to do so will just build up further problems for women in the pension field.
With the single state pension, we have delivered on Beveridge’s principles. We have a pension approaching 20% of state earnings and a proper platform for private pension provision. Through the reforms of the previous Government, we have adjusted for life expectancy. We have automatic enrolment for private savings and, above all, we have the triple lock which improves and defends women’s pensions.
Lord McKenzie of Luton (Lab)
My Lords, I thank my noble friend Lady Bakewell for initiating this short debate and for bringing to our attention some of the distressing communications she has received in her postbag. I also thank the noble Baroness, Lady Jenkin, and the noble Lord, Lord Stoneham, for their contributions. We are a small but select band on this occasion.
The focus is the new single-tier state pension, which is due to come into effect in April 2016, and in particular how it is being communicated to people about to reach state pension age. This is brought into sharp focus as its introduction looms and the spotlight falls on the detail of what the changes mean to individuals. The issue is also to an extent entangled with the changes to the state pension age and the different ages at which men and women will gain entitlement to a state pension. It is also relevant to the changes to private pension provision and the new freedoms concerning access to pension pots if decisions are to be based on robust information about future income in retirement. It is also relevant, as we have heard, to progress on auto-enrolment.
The single-tier pension has been promoted as the route to speeding equalisation of pension outcomes between men and women a decade earlier than would be achieved under the 2007 legislation. Despite significant improvements under that legislation—in particular, the reduction of the number of years needed for a full basic state pension to 30, and more generous credits for carers—we know that women have continued to be at a disadvantage compared to men. They have been less likely to be in work, more likely to work part-time, often in multiple jobs, and more likely to be on low pay and therefore historically inherently less well treated by the mechanisms determining state pension entitlement. We know that life expectancy is increasing and that life expectancy for women is greater than for men. The majority of today’s pensioners are women, and this is projected to be the case into the long term.
Therefore, the prospect of accessing a new single-tier pension with the promise of greater simplicity and a shorter period before an equalised outcome with men is obviously to be welcomed. These changes are driven by the ending of the earnings-related state second pension and because a new single-tier year is worth more than the current basic state pension year. However, it is not all good news: 35 years of contributions are needed for a full single-tier pension and there are restrictive rules concerning reliance on a spouse’s national insurance contributions.
Despite the new arrangements offering the prospect of eventually leading to a simpler, more understandable pension system, the transition certainly has its complexities. We should acknowledge that the Minister is on record as recognising as an early issue on taking office that more needed to be done to communicate what these changes mean, and we look forward to an update when she replies.
The Minister will have heard from my noble friend about the confusion, frustration and disappointment that abounds on this issue, especially among women. That confusion is not only about what level of pension will be payable. There is frustration about the precipitate changes to the state pension age. These issues potentially make more difficult the choices, usually falling on women, about leaving employment to take up family caring responsibilities, for example.
My noble friend is right to challenge whether more could be done to encourage realistic expectations of what will flow from the single-tier pension. In this context, it is helpful to remind ourselves of the overall impact of the proposals. The DWP’s impact assessment produced for the Pensions Act 2014 showed that over the long term the overall expenditure on pensioner benefits from the state is projected to be lower than under the current system. It is broadly the same as the current system in overall costs through to 2040 but with savings thereafter. This includes pensions as well as pensioner benefits, pension credit in particular. However, we should not forget that the Exchequer will gain massively from the ending of contracting out next year and the consequent increase in national insurance contributions. This benefit was due to be applied to meet the proposed changes to the funding of social care, and perhaps the Minister will tell us whether that is still the case and how it is being put into effect.
The very helpful Library briefing reminds us that the Work and Pensions Committee concluded that the overall impact of the reforms, whether people gained or lost, is likely to be marginal. Reference is made to a Joseph Rowntree Foundation report which concluded that gainers from the new system will include the self-employed and those not qualifying for the additional state pension prior to 2002, but the conclusion is that overall and in the longer term the new single-tier pension will be less generous than the current system for most people. Do the Government accept this analysis?
Of course there are a host of reasons why from April 2016, contrary to many people’s expectations, there will not be a single-tier pension of £155.65 per week for all pensioners. For a start, the single-tier pension will apply only to people who reach state pension age on or after 6 April 2016 and, because state pension ages will not have been equalised by then, the starting point for a man is those born after 6 April 1951 but for a woman it is those born after 6 April 1953. Not all will have achieved the required number of national insurance contributions, by payment or crediting, for a full pension, which is to be increased to 35 years, and if at least 10 years’ contributions have not been earned then there will be no entitlement at all. Not all will have the opportunity to close gaps in their national insurance record, and those who have been contracted out of the additional state pension will suffer a deduction which can be made good in whole or in part only by post-April 2016 payments before state pension age. Some will have a starting amount under the current pension rules which provides for a protected payment in the new scheme.
These are just some of the factors which will determine entitlement or lack of it. Recent press reports, which were referred to by my noble friend Lady Bakewell, highlight the impact of these issues on the early years of the scheme. It is suggested that of the 400,000 expected to claim the new state pension next year only 20,000 women will get the full rate of £155.65. Do the Government accept these figures? What is the Government’s analysis of the actual reasons why individuals are not receiving the full rate?
The National Federation of Occupational Pensioners reinforces the point that its members are confused about which system they are in. It also points out what it says is an anomaly—that the triple lock applies to the entirety of the single-tier pension, whereas it applies to just the basic state pension under current arrangements. The federation also emphasises the difficulty which the increases in the state pension age have presented for women born in the 1950s.
As the noble Lord, Lord Stoneham, said, in October 2014, the previous Pensions Minister, Steve Webb, launched a service to provide individuals with a written estimate of what they might expect to receive under the single-tier pension. This is to be available for those reaching state pension age between April 2016 and August 2021. Will the Minister tell us how many such written estimates have been requested and provided to date? Will she say whether the information provided contains a comparison with the existing pension system and whether the projected levels of pension could be enhanced by, say, the payment of voluntary national insurance contributions? The papers we have provide further details of the single-tier communication strategy. Will the Minister update us on progress on the strategy and, in particular, on whether phase 3 is under way and on schedule?
Pension issues can be complicated, even for the sophisticated practitioner, as the noble Baroness, Lady Jenkin, acknowledged. It is clear that the Government are failing to communicate effectively with potential pensioners on these very significant changes to the system. My noble friend Lady Bakewell should be congratulated not only on bringing this issue before us today but for her continual support for those women—WASPI—whom this Government are letting down.
The Minister of State, Department for Work and Pensions (Baroness Altmann) (Con)
My Lords, I thank the noble Baroness, Lady Bakewell, for raising this issue once again and for securing this debate, to which it is important that I respond.
The debate highlights two integrated areas of the Government’s reform programme: the state pension age changes and the new state pension reforms. I hope to address some of the points raised by my noble friends here. I reiterate, as I have many times, that I have sympathy with the women who still feel aggrieved about their state pensions. I hope my remarks today will clarify some issues about which there has been much commentary. My aim has always been—and remains—to help people, where I can, to achieve better pensions. I hope to be able to steer future policy in positive directions to make pensions work better for people, both today and in future years.
First, I will address concerns, which the noble Baroness, Lady Bakewell, among other noble Lords, particularly focused on, that the women affected by state pension age changes were not given adequate notice of the 1995 state pension age equalisation. I recognise that there has been much criticism about the Government’s efforts to notify the women affected. However, I will explain more about what I have been told the department did on this matter.
State pension estimates, issued to individuals on request, made the 1995 changes clear. The DWP’s state pension estimates have been providing individuals with their most up-to-date state pension age since 1995. The department does not have figures before April 2000, but since then it has issued more than 11.5 million personalised state pension statements to people who requested them. We continue, as noble Lords have said, to encourage people to request one as part of our ongoing communications.
To raise further awareness of the state pension age equalisation under the Pensions Act 1995, in July 1995 the department issued leaflet EQP1a, Equality in State Pension Age: A Summary of Changes, to advise the general public on the changes. The DWP ran a pensions education campaign in 2004, which included informing people of the future equalisation of state pension age. That campaign included: advertising features in the press and women’s magazines; a “women’s pensions pack” containing leaflets for women about changes in state pension age, made available through the Pension Service; direct mailings targeted specifically at women, highlighting that women’s state pension age is changing; sending state pension forecast letters with leaflets explaining the changes to women’s state pension age to those who requested them; and developing an interactive state pension date/age calculator facility on the Pension Service website.
A 2004 DWP report, Public Awareness of State Pension Age Equalisation, reported its survey findings that 73% of those aged 45 to 54 at that time—in 2004—were aware of the changes to women’s state pension age. In addition to this, all those affected by the 1995 Act changes were sent letters from April 2009 to March 2011 using the address details we had—I admit that we may not have details for everybody, but what else could we do? It is therefore difficult for the Government to accept that people did not know that their state pension age has risen from 60, and it is not accurate to try to suggest that this is a six-year rise. The change is a maximum of one and half years.
The second concern, rightly expressed by noble Lords, concerns the short-notice changes made in 2011. Following the 2011 Act, the DWP wrote to all those directly affected individually to inform them of the change to their state pension age. By this point, state pension age was already in the process of rising. This involved sending more than 5 million letters to those affected between January 2012 and November 2013, which was a major exercise.
I will move on to the rationale behind the state pension age changes. The changes were made to ensure the affordability and financial sustainability of our state pension system, on which so many millions in the population rely. They were also of course required to remove the long-standing inequality between men’s and women’s state pension age. The previous arrangements meant that, for those reaching state pension age in 2010, women would spend on average over 40% of their adult lives in receipt of state pension, while men would receive their state pension on average for only 32% of their adult life due to their shorter life expectancy and the fact that they receive the state pension later. This was clearly unsustainable and was considered unfair by many at the time—for example, by men who were paying national insurance contributions for more years while women received their state pension earlier than them.
Parliament did not consider it fair to current or future taxpayers to continue prolonging the inequality between men’s and women’s state pension age beyond 2018. This was democratically debated and decided at the time. I campaigned hard for these women as I was aware of the problems faced by some of those affected. That campaign achieved a major concession, despite the grave fiscal situation at the time, which eased the timetable for around 250,000 of them. It committed the Government to prolonging the inequality between men’s and women’s state pension age by an extra six months relative to the original Pensions Act 2011 timetable—proposals that would cost the taxpayer more than £1 billion.
The noble Baroness, Lady Bakewell, rightly mentioned that people in an ageing population with rising longevity will work longer. Indeed, the average actual retirement age for women has for many years been above their state pension age, so clearly most women no longer wish to stop working at 60. My noble friend Lady Jenkin also rightly mentioned this. Encouraging and enabling those who want to work longer is a government priority and is the best solution to poverty in later life for those who can do so. Most people are just not “old” at 60 these days—or even at 65, in most cases—and the expectation of stopping work altogether at such a relatively young age is simply not sustainable.
Of course, I am concerned about the particular position of women—and indeed men—who cannot work. Some may have caring responsibilities, while others may suffer from disability or illness which make work difficult, but the Government will ensure that both women and men who are affected will be eligible for the in-work, out-of-work, ill-health or disability benefits that we have designed for them. Carer’s credits and carer’s allowances are available for both men and women who care for others. It also has to be said that a state pension is not a right—it is not like a private pension but is rather a social security benefit. The national insurance we pay pays for many other elements of the social insurance system: unemployment, ill health and disability benefits, as well as the NHS.
The noble Lord, Lord Stoneham, whom I thank for his warm words of welcome, rightly highlights the reasons why the new state pension reform is so important. The changes to the women’s state pension age helped pave the way for this radical major reform, which has introduced the new state pension. The cost savings resulting from those changes, and savings elsewhere, have allowed the new state pension to be introduced from April 2016. The women in their 50s whose state pension age was increased by the 2011 Act will all receive the new state pension when they reach their state pension age.
I reassure the noble Lord, Lord McKenzie, that, contrary to some media representation, the new state pension will be more generous for most women, who have historically done poorly under the current system—as I have long recognised and highlighted—largely as a result of their lower average earnings and periods of part-time working. Today we have published some analysis showing the impact of the new state pension on an individual’s pension outcome in the first 15 years of the new scheme. In that period, 70% to 75% of women will have a higher notional state pension income than under the old system.
My noble friend Lady Jenkin mentioned financial planning and financial education. She is absolutely right: this is vital, and the Government’s programme of reforms can help facilitate it. The new state pension reforms have paved the way to make auto-enrolment safe so that all workers will be entitled to a pension at work as long as they earn more than £10,000 a year. That gives us the opportunity to embed financial planning and financial education in the workforce via employers and providers. Of course, I am happy to consider meeting Shirley Conran about the important issue of female financial planning.
As I mentioned, the cost savings have paved the way for the new state pension. All of this is being done in the interests of gender and intergenerational equality and of a sustainable pension system for the future.
I thank noble Lords for their contributions. I agree that communication is vital and we are having a major communications campaign. Information is being rolled out and will continue to be rolled out in detailed blogs and advertisements, as well as in digital, radio and social media advertising. I have written extensively about this and will continue to do so.
I thank the noble Baroness for bringing forward this debate and am pleased that we have had the opportunity to discuss these vital issues. I reassure the noble Lord, Lord Stoneham, that we have no plans for further delays to auto-enrolment. We are merely aligning thresholds to make the increases in contributions easier so that we have fewer opt-outs. I want to say how much I have appreciated the quality of today’s debate and I thank noble Lords for taking part.
Strategic Defence and Security Review
(9 years ago)
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Earl Attlee
That this House takes note of the United Kingdom’s role in supporting international security and stability in the light of the strategic defence and security review.
Earl Attlee (Con)
My Lords, I am honoured to lead this debate today, although I fear that I am probably the least experienced speaker. I do not believe that yesterday’s debates and vote in Parliament have pre-empted our discussions this afternoon. The issue yesterday was about current and imminent military operations. Today, the issue is the Government’s SDSR White Paper, which concerns creating international stability and security in order to avoid conflict or confrontation arising in the first place, and, failing that, ensuring that we have the appropriate military capabilities to deal with any foreseeable problems. Post Mumbai and other large-scale atrocities, the horrific events in Paris do not mean that the White Paper is already out of date. It clearly anticipates such events and seeks to avoid them. I am sure that many noble Lords will want to cover the security situation in MENA because it is so central to our situation.
Today, we can look forward to no less than four maiden and 27 other speakers. Even with the time I have available, I cannot hope to cover all the ground of the SDSR. However, in due course, I think that we need to have far more detail about what is proposed in order to measure progress in future years.
The White Paper makes much of the fact that a strong economy is a prerequisite of a successful security and defence policy. Noble Lords will be aware that we spend more on interest payments on the national debt than we do on defence, and we simply cannot go on running a budget deficit for ever. At some point we have to pay off the debt. In the 2010 SDSR the Government had to make some very painful decisions and we have to be clear that they took on some significant risks.
I welcome the general tone of the White Paper, although it is necessarily rather more robust and stern than some of its predecessors. It offers three national security objectives. Objective 1 is to protect our people by meeting the NATO 2% target and investing in agile, capable and globally deployable Armed Forces. Of course, I would like to see more than 2% but one has to be realistic.
We are to respond robustly to the re-emergence of state-based threats, including with the renewal of the nuclear deterrent. The fight against terrorism, radicalisation and extremism at home and overseas will be prioritised by a range of sensible measures.
Objective 2 is to protect our global influence primarily with soft power. We will be spending 0.7 % of GNI on official development assistance—in other words, overseas aid with a slightly more relaxed definition, although still within OECD guidelines. I will return to this later. I was particularly pleased to hear about the increased resources to be allocated to the BBC World Service and the British Council. In the future we will be developing alliances, building new, stronger partnerships and seeking to persuade potential adversaries of the benefits of co-operation.
Finally, objective 3 is to promote our prosperity. We will do this by promoting a rules-based international order. Interestingly, we will be maximising prosperity opportunities from our defence, security, diplomatic and development activities. However, I hope that this does not mean that we will be relaxing our defence export control regime.
Some in my party question the wisdom of spending 0.7 % of GNI on ODA and protecting the aid budget, even in the difficult conditions of 2010. My background is military—that is, hard power—although I have also run an overseas aid operation. Nevertheless, I am sure that this is the right approach. When you look at the cake of government expenditure, the biggest slices, in order, are welfare, health, education, state pensions, interest payments, then defence at around £35 billion, and then, after several other ever-thinner slices, the DfID budget. Even with no aid budget at all, the cake would look no different and defence’s slice would look no bigger. For the reasons described in the White Paper, we need to have both soft and hard power. Of course, it is essential to spend ODA wisely and Command Paper 9163 describes how that will be achieved.
Paragraph 3.18 of the national security strategy covers the resurgence of state-based threats and, in particular, Russia’s behaviour. I approve of the tone and the drafting, especially where it is made clear that we want to co-operate. I think that we need to be very careful to make sure that we understand the Russian viewpoint. I suspect that their map of the world looks rather different from ours. That is one reason why I welcome the return to your Lordships’ House of my noble friend Lord Cameron of Fairfax as an elected hereditary Peer. He has much experience of Russia. I hope that after making his interests clear, he will not hesitate to regularly give us his insight.
I will leave cyber and technology to others, apart from welcoming what the White Paper says and making three of my own points. It is becoming apparent that, apart from the UK and France, EU states are poor at exchanging data, and we do not know who is in the UK at any time.
The White Paper mentions Galileo, which, as a satellite system, is just as vulnerable as GPS. Can the Minister say where we are with the terrestrial eLoran system, which might be much harder to interfere with?
I welcome the Government’s decision to renew the deterrent and have a vote in the House of Commons. I wonder how much time and money was wasted by the coalition Government due to the Lib Dems insisting on studying alternatives to a submarine-launched ballistic missile system when most of us are clear that there are not any. Can the Minister confirm that it is now necessary to run the Vanguard class of SSBN longer than was intended by the last Labour Government, even if it can be done safely?
I am sure that many noble Lords will talk about the maritime patrol aircraft. I was first briefed on the RMPA project before the 1997 election. It seemed even then to be an extraordinary project. The plan was to take an existing aircraft and give it new wings, engines and avionics but save the fuselage. Why not just buy a new aircraft and system, which would be far less risky? I was very surprised that the party opposite, in government, persisted with the project.
For SDSR 2010, I think it was better to cut a capability completely than degrade a lot of other capabilities by the traditional salami-slicing technique—but yes, of course it made it more difficult to ensure that the deterrent remained undetected, as I am sure many noble Lords will remind us today. It may be very inconvenient and challenging to get the necessary help from our allies in the current relatively benign strategic threat environment. However, no one is going to plan a strategic attack on the basis that there is a possibility that they might fleetingly know the location of one NATO SSBN. The beauty of having three closely aligned states with SSBN is that there is just too much uncertainty for a potential aggressor. It works.
I turn to other hard-power issues. The Royal Navy is just not big enough, but I strongly support the concept of the aircraft carriers because they can provide vigorous and independent air support to our forces deployed ashore. The White Paper talks about extending the role of the Type 45 to include ballistic missile defence. Presumably, that would be in a theatre or area role with interception in the terminal phase. Perhaps the Minister can tell us a bit more about that.
By the 2030s, the Royal Navy will have some new general purpose frigates. Can the Minister confirm that these will be proper warships and will carry and operate a helicopter? Although the offshore patrol vessels are not warships, but will be armed, I think that they will have much utility. I have seen the Irish OPVs being built at the Appledore shipyard, and I hope that the forthcoming shipbuilding strategy will secure a future for warship building, and not just in Scotland.
I am very concerned about the state of the Army. I recognise that I am not a capability manager. However, I think that we have too great a proliferation of armoured and protected mobility platforms, with too many UOR vehicles being taken into general service. These vehicles were designed for one particular operation, with no account being taken of long-term sustainability or other military requirements.
Currently, we have only three regular Challenger tank armoured regiments. Since we will only have two armoured infantry brigades, if I am correct, does that mean that we will be down to only two armoured regiments?
The White Paper indicates that two infantry battalions are to be reconfigured for defence engagement. It sounds to me as though a more accurate description is “downgraded and reduced”. Presumably, these battalions will not have the capability of even a light-role battalion. Can the Minister confirm that I am right in my thinking and what the headcount of these battalions will be?
Apparently there are to be 10,000 military personnel available to assist the civil authorities at short notice. Can the Minister confirm that this is MAC A, military assistance to the civil authority, and not MAC P, military assistance to the civil power, and that MAC P in the UK is normally only provided by Special Forces when military primacy takes place for only a short time? I think that it would be helpful if the Minister could explain exactly what this policy means.
Regarding air power and the RAF, I welcome the enhancements outlined in the White Paper. We also now have a much-improved and modern transport fleet that is well-placed to support future operations.
Finally, I turn to personnel. I think that this will be the biggest challenge in delivering the SDSR in future years, in particular nuclear and other highly skilled technical people, both in and out of uniform. I think that some very senior officers have a touching faith in what can be achieved with contractors, especially in theatre. Interestingly, the White Paper has almost nothing to say about reserves. Perhaps we will see a paper on that later.
I am a little worried about what might be behind some of the White Paper’s comments regarding accommodation, pay and allowances. Personally, I would like to see the Armed Forces pay review body take a rather more proactive role in ensuring that the Armed Forces are able to attract the right quality of recruit.
I look forward to hearing the views of other noble Lords. I beg to move.
Lord West of Spithead (Lab)
My Lords, it is somewhat poignant that five years ago today the newly refitted HMS “Ark Royal” entered Portsmouth harbour for the last time to pay off, accompanied by her doomed Sea Harriers. It was just one of the very poor decisions in SDSR 2010, which has resulted in a 30% reduction in our nation’s military capability since 2010.
Turning to today, the analysis of Britain’s changing strategic environment in SDSR 2015 is, I believe, largely sound. However, surprisingly, it fails to point out that we are an island, which seems fairly important in grand strategic terms. But SDSR 2015 remains replete with the tensions that are inherent in Britain’s taut defence budget. The slightest shock and/or commitment beyond what are now very limited defence planning assumptions could bring the entire SDSR edifice crashing down. Plus, everything is predicated on the assumption that the economy will continue to grow.
Our uniformed leaders are so relieved that there were no cuts in SDSR 2015 that they welcome it as a triumph. Indeed, it is their duty to do so—that is their job. But much of the trumpeted new money is existing resources re-tagged. If one compares the 2015 defence accounting model with the 2009 defence accounting model, one sees that British defence expenditure is 1.7% of GDP. This is because it includes so-called other, mainly non-military, items of expenditure that are within NATO’s definition of defence expenditure but not within the traditional British definition.
The much-lauded £12 billion increase in the defence equipment budget will include up to £11 billion of efficiency savings. It involves cutting 30,000 MoD civilian posts, many of which were created after SDSR 2010 to replace military personnel. Presumably, that will have a considerable impact.
SDSR 2015 is still clearly resource driven, rather than strategy, threat or interest driven. It makes us marginally stronger but fails to recover the capability lost since 2010. Debt reduction is clearly still more important to the Government than defence, and the Treasury’s continued grip on Britain’s defence strategy reinforces the “how much threat can we afford?” culture that still permeates Whitehall. That is somewhat surprising when one looks at an increasingly dangerous and chaotic world and thinks of things such as the decision made in the Commons last night.
SDSR 2015 imposes considerable constraints on the Royal Navy. The surface fleet is already down to 19 escorts. As I have said, that is a national disgrace. SDSR 2015 claims to want to preserve that number. However, it reduces the planned Type 26 frigates from 13 to eight, with five less capable further down the track, but there are no actual orders. What is the drum-beat of ship orders to ensure stability in our shipyards? I am sure that the noble Lord, Lord Sterling, will today mention the study he put in hand showing the value of orders and the need to maintain these sorts of orders. Will we run all the OPVs? I believe that we are heading towards a two-tier Navy by default. Is that what we want? Force projection does not escape, with the disgraceful withdrawal of HMS “Ocean” at only 20 years’ life. My plea to the Minister is that we must keep her in PxO and not get rid of or scrap her. It would be a disgrace to do that at that age.
I am delighted by the commitment to the deterrent and to replacing the submarines. However, as the noble Earl, Lord Attlee, said, there is a very real risk in running these boats on to 40 years old. That is presumably why there is such an increase in cost for the deterrent replacement: running 40 year-old submarines is dangerous and very costly. If we are having to do this, there is a gap in the build programme. Let us put in another Astute class—we can effectively get one for less than £200 million. Let us think laterally; that is the sort of thing that we need to do.
Even to crew the modest planned force, the Navy needs an additional 3,000 personnel—it has only 450. So SDSR 2015 scores six out of 10 in my book and the nation needs to spend more money on defence if we are to meaningfully support international security and stability.
Baroness Smith of Newnham (LD)
My Lords, the challenges of the 21st century ensure that traditional defence policies and capabilities alone are rendered inadequate to secure the United Kingdom or any other sovereign state. We need new capabilities, a broader understanding of security and greater international co-operation. In many ways, this is reflected in the SDSR and the strategic risk assessment of 2015.
The tier 1 threats are identified as international military conflict, instability overseas, major natural hazards, public health, cyber and terrorism. The timing of today’s debate could not bring into greater relief the extent to which those tier 1 threats are at play right now. They are not hypothetical; they are real and present. Yesterday’s decision in the other place regarding the engagement of the RAF in bombing ISIL in Syria and the debates in both Houses and among the public bring together a whole set of threats that have already been identified as tier 1: cyber, terrorism and international conflict. The decision yesterday reflected a commitment to our friends and allies in NATO and the EU, particularly in France, and highlighted the importance of international co-operation to tackle those current challenges, whether they be diplomatic, economic or military, through the UN, NATO or the EU.
Whatever view people took of the decision taken in the other place yesterday, it is vital to reflect on the commitment of the RAF and the Tornado squadrons operating out of RAF Marham and RAF Akrotiri. They are second to none in their commitment to this nation and our security, and I hope that everyone, regardless of their views on intervention, is able to recognise this. It is also important to recognise that, despite the welcome commitment to 2% spending on defence and the increased expenditure on capabilities and equipment envisaged in SDSR 2015—plugging gaps created by SDSR 2010—a range of commitments will put additional pressures on the Armed Forces: the deployments out of Cyprus, ongoing commitments to the Falklands and other international engagement, and responding to the current refugee crisis. How far have the Government looked at the impact of those repeated engagements on the armed services and on the morale of the Armed Forces?
In particular, on the second of the formal commitments —global reach, whereby the United Kingdom seeks to protect our global influence—the SDSR seems to suggest that global influence goes across all continents, with engagement against terrorism particularly in Africa as well as in the Middle East. All that puts pressure on our Armed Forces. Will the Minister convey to the Foreign Secretary and the Prime Minister that, however much it is in the UK’s interests to engage with partners across the globe, we should not feel the need to make yet another commitment every time there is an official visit? Clearly, only engagement in war necessitates a vote in the other place. Other things may go under the radar, but all of them have an impact on our Armed Forces.
Lord Stirrup (CB)
My Lords, it is perhaps worth reflecting that, during the previous strategic defence and security review in 2010, it was made clear to the Government of the day that achieving the kind of reductions that they sought in defence expenditure, at the pace at which they sought to make them, would inevitably result in a degree of strategic incoherence. If the Government nevertheless wished to proceed on that basis, the best that could be achieved was to leave defence in a position from which it could rebuild coherence between 2015 and 2020, hence Future Force 2020.
That, however, would require real-terms increases in the defence budget in each of the years after 2015. The Prime Minister acknowledged as much when presenting the outcome of the 2010 exercise in the other place. Following the most recent defence and security review and the preceding spending review, that funding increase has now, happily, been put in place. I welcome this, but we must be clear that it does no more than was assumed in 2010. It will allow defence to deliver a coherent programme, but it does not bring defence spending back to pre-2010 levels. We will still have smaller Armed Forces, and they will still be stretched to respond to the demands that the Government place on them.
We should also remember that the SDSR sets out an intent; that intent still has to be delivered. Some of the most significant defence shortcomings in recent years resulted not from the 2010 review but from the further cuts that were imposed in subsequent years, so we must seek to ensure that the plan set out in the current review is adhered to. Even that outcome was in doubt until recently. Two years ago, the prospect of the Government reversing the decline in defence spending looked fairly bleak to most of us. Among the important factors in turning that position around were undoubtedly the strong signals coming from Washington that the UK’s position as a reliable partner was in serious doubt.
We have long put our membership of NATO and, within that, the transatlantic relationship at the heart of our security strategy. We flirted dangerously with weakening, if not destroying, that crucial pillar of our defence. Thankfully, we appear to have recognised our folly in time and to have amended our way, but we must ensure that we do not repeat the error.
Any strategy must consist of ends, ways and means brought together in a coherent and achievable way. Our object is the security of our nation, its people and their interests. Two of the principal ways in which we pursue those goals are through our relationship with the United States and our leading position within NATO. This means that we have to employ our forces in a way that is consistent and appropriate, that we have to make levels of investment that are consistent and appropriate to the international situation, and that we have defence capabilities that we are clearly willing to use when the circumstances so require.
There is of course plenty of scope for debate over the exact meaning of terms such as “appropriate”, “relevant” and “circumstances”, and these complex questions and the difficult choices to which they give rise are at the heart of any defence and security review. But what should never be in doubt in the minds of friends and opponents alike is our willingness to put our security at the top of our political calculus. We have started to do that in this review and through more recent events. We must continue to do so in future.
Lord Howell of Guildford (Con)
My Lords, I congratulate my noble friend Lord Attlee on securing this debate. I am also looking forward greatly to the maiden speech of the noble Lord, Lord Hain, who during the whole of my time in Parliament, which is just short of 50 years, seems to have been campaigning for something or other—he is the campaigner par excellence. In between that, he has been Secretary of State for just about everything, but we will hear about that in a moment.
This document is of course a defence review, but it is also an overall view of the nation’s rapidly changing place in the world and how we survive and prosper in the future. I want to concentrate on the Prime Minister’s quote on page 6, about our outstanding Diplomatic Service and our formidable soft power and how we must put the one behind the other. I want to refer also to national security objective 2 on page 11, which again talks about soft power and how clearly it must reinforce and work hand in hand with hard power and more traditional, conventional forms of power deployment and influence. It all sounds fine. It has good remarks in it about the BBC World Service and the British Council in an information age. There is no mention at this point in the report about the Commonwealth, although on page 54 the whole tone suddenly changes and the authors there—they may have been different authors—grasp both the enormous security and trade implications of the Commonwealth network.
More important than that is whether the fine aspirations that the Prime Minister sets out are being followed up. We have a huge aid budget and we can argue about at what speed it should increase and so on, but, whatever its size, it must be backed up by the rest of the diplomatic, security and defence machinery of the nation so that we get a maximum impact from the enormous resources that we are putting into international affairs. Frankly, that is not happening. It may be happening at a junior level but at the senior levels in government we are missing the necessary linkage. The MoD, the FCO and DfID must work more closely together. I agree that the huge resources of DfID, which is doing an excellent job in many areas, need to brought into closer connection with our national interests, national purposes, national security and, indeed, with the Foreign and Commonwealth Office, as is the case in Australia, Canada and many other countries.
More widely, the report is weak on energy. It does not mention anything about the interconnectors which will keep our lights on. It does not mention much about Japanese nuclear power—not Chinese, but Japanese; I declare an interest—which will be the key spearhead in the development of our low-carbon economy. There is not much on Middle East oil and rather high hopes on US shale gas, which, by the time it gets to Europe, will be very expensive. There is little on Asian security and the newly developing common aim between India, Australia, New Zealand and Japan in containing Chinese expansion in Asia. Generally, the authors have not quite grasped that we have moved from an industrial world to an information world; that large-scale military force is less important than it was 50 years ago and that new agile forms are needed; that there are no superpowers anymore; that we live in a network world; and that we must invest in new tools of diplomacy in this network world.
For a clearer insight into what is really happening for this country, I refer noble Lords to a recent document from the London School of Economics Diplomacy Commission, which understands these points. It picks up a number of ideas from your Lordships’ own soft power report, without attribution—but, never mind, I am being kind to it—and frankly, if we want to understand where this country ought to be going, that is a much better read.
Lord Hain (Lab) (Maiden Speech)
My Lords, I am pleased to follow the noble Lord, Lord Howell, who was such an eminent Cabinet Minister while I was campaigning. I am also pleased that my noble friend Lord Touhig will be replying and that many other noble friends are contributing.
Forty-five years ago, when notorious for running on to rugby and cricket pitches to stop all-white South African sports teams selected on race not merit, I never imagined being here. Indeed, a tabloid editor wrote at the time:
“It would be a mercy for humanity if this unpleasant little creep were to fall into a sewage tank. Up to his ankles. Head first”.
I thank my sponsors. My noble friend Lord Kinnock, a great Labour leader, welcomed me into the Labour Party in 1977 to speak at a massive Tribune rally without mentioning that they always sang “The Red Flag”, its words then unknown to me. Perhaps my miserable performance inspired John Redwood’s excruciating public rendition of the Welsh national anthem. Your Lordships may be unaware that my noble friend Lady Morgan of Ely is as talented a singer-songwriter as a politician, as she proved with a provocatively witty song at my wedding. She was outshone only by Nelson Mandela, who mischievously apologised, “But I hope to be there next time”.
It has been a long journey from Pretoria boy to Neath Lord. I thank the people of Neath for their warm support for over a quarter of a century. In recent months I have often been asked about retiring, but to me retiring from politics would be like retiring from life. Politics has been in my DNA from when, as a boy, my brave anti-apartheid parents, Adelaine and Walter Hain, were successively jailed, silenced by banning orders and finally forced into exile in London in 1966, when I was 16.
The defence review clearly has to take account of one of the biggest threats to our country’s immediate security—the barbaric ISIL/Daesh. I hope your Lordships will challenge a British foreign policy seemingly based more on dominating headlines than serious diplomacy. Syria represents one of the worst western foreign policy catastrophes of modern times, encouraging a terrible human calamity to become a disaster of almost biblical proportions. For this was never just a battle between a barbaric dictator and a repressed people, as the Prime Minister first argued. Instead, it is a treacherous civil war, a fiendishly complex battle between Sunni and Shia Muslims, between Sunnis and fundamentalist Sunnis, between Saudis and Iranians and their militia proxies, and between the US and Russia.
Today the Prime Minister at least has a plan for the first time. It leaves me almost persuaded, not least because when voting last year to back air strikes against ISIL in Iraq to stop its genocide, I pointed out that it had also to be attacked in its Syrian heartland. Britain must use its leverage now to insist that the regional powers take full ownership of this battle and, above all, that there is a credible ground force strategy—that the Prime Minister’s alleged 70,000 rebels is emphatically not. Nor is his reliance on the army of an inclusive Syrian Government. That is a future aspiration and certainly not an option for the foreseeable future.
Kurdish forces are fighting ISIL/Daesh impressively, but only in their own territory. Shia militias or Iranian soldiers are no answer fighting a Sunni enemy in bitterly aggrieved Sunni communities in both Syria and Iraq. Western ground troops would create exactly the battle that ISIL/Daesh craves. The imperative now must surely be for Sunni soldiers from Saudi Arabia, the Emirates, Qatar, Jordan and, above all, Turkey to fight and beat ISIL/Daesh. Britain could and should offer logistical support to those Sunni ground forces but they are indispensable.
Finally, I thank all the staff of your Lordships’ House, who have been fantastically helpful, especially Nicola Rivis in Black Rod’s office. I also thank your Lordships, across all parties, for your generous welcomes, especially the noble Baroness who told me, “It’s nice to have somebody young joining us”. I am a trifling 65 with six grandchildren.
Lord Chidgey (LD)
My Lords, I am pleased to have the opportunity to follow the noble Lord, Lord Hain, on his maiden speech. He has had a long and varied political career. His anti-apartheid stance is well documented, as was his time later in the Foreign Office. As a member of the Foreign Affairs Select Committee in the other place, I regularly had the opportunity to debate African and European issues with him, particularly the future of Gibraltar. For me and thousands of others, however, it is his work as the Secretary of State for Work and Pensions that stands apart. He was the author of the financial assistance scheme to compensate those in pension schemes which had collapsed. As one of those victims I can now thank him for sorting it out.
Turning to the main issues, it is impossible to cover such an important aspect of policy in only four minutes and I hope that in due course the Government will allow more time properly to debate these issues. For now, I can touch only briefly on UK aid, the BBC World Service and an appreciation of the strategic defence and security review.
The recommitment to spending 0.7% of GNI on aid and development is welcome, as is the commitment to substantially improve the transparency of ODA. However, how does this increase in aid to fragile and conflict-affected states relate to the overall target of 30% of all UK aid? The unilateral decision to end budget support and how focusing more on our self-interests will work while still protecting the focus on poverty are also strong causes for concern. Having signed up to the sustainable development goals agenda in 2030 just two months ago, it is disturbing that they now appear to be given a low priority and that the call to “leave no one behind” seems to be fading gradually away.
With its annual budget rising to £340 million, the BBC World Service plans to increase its audience from 300 million to 500 million, particularly in Nigeria, Ethiopia and Eritrea. It will see a welcome return to joint Foreign Office and licence fee funding. Its impartiality helps to improve good governance and accountability in places that lack any semblance of either, to echo the London Times. There is not a lot of point to it, however, if the audience is prevented from receiving the message. The switch from short-wave transmission from Bush House in London to local FM stations in developing countries created a worrying vulnerability to interference and closure by the political estate. The argument at the time was that relatively few people had access to short-wave receivers while everyone had an FM transistor radio. I am not so sure. In my experience in fragile African states, everyone knew where to go to hear a short-wave BBC broadcast in times of trouble, whether it was to the workplace, to a friend or to the village headman. What evidence has been collected in the interim on the incidence of local FM radio stations carrying BBC World Service broadcasts being taken over by authoritarian Governments while short-wave transmissions elsewhere continue unchecked?
Finally, a few words about the SDSR. The unveiling of a more strategic, threat-based approach is welcome. It seems that a valuable lesson has been learned from the resource-driven approach to the 2010 SDSR. That has become rapidly obsolete with the emergence of unforeseen and as yet undetermined threats from Daesh and a resurgent Russia. To quote the Royal Aeronautical Society:
“We must avoid becoming prisoners of the present. Only the development of a more flexible, agile and technologically-advanced military, that can be readily and rapidly deployed in times of crisis, will ensure the UK maintains vital national security and influence on international issues whatever the geo-political situation”.
Lord Hannay of Chiswick (CB)
My Lords, the topicality of the noble Earl’s debate today, coming as it does just a week after the publication of the 2015 SDSR, can surely not be in doubt. It is a delight, too, to have four maiden speeches in the debate, three of them from noble Lords for whom or with whom I have worked in the past. Not only is the debate timely, it provides an opportunity to consider the UK’s security posture at a time of greater international volatility and challenge than has been the case for many decades. Recent trends of a drift towards a new world disorder and away from the new world order which some mistakenly predicted would follow the end of the Cold War are too numerous to require listing. The Government’s commitment to,
“work with our allies and partners to strengthen, adapt and extend the rules-based international order and its institutions, enabling further participation of growing powers”,
is therefore both welcome and overdue if that drift is to be challenged and reversed. It rightly recognises the extent to which Britain’s security extends beyond what could be called the classical formulation of the defence of the realm and requires a major collective effort, if it is to be achieved.
I shall focus my remarks on chapter 5 of the SDSR, entitled “Project our global influence”, and within it on two issues—support for international peacekeeping and help to fragile states. First, in recent years, this country’s contribution to UN peacekeeping has become at best marginal, and at worst insignificant. That could be explained, even if it could not be entirely justified, by our preoccupation with operations in Iraq and Afghanistan. That can no longer be so. The demand for UN peacekeepers, both military and civilian, remains as high as ever, with more than 100,000 currently deployed worldwide, and that shows no signs of abating. We cannot reasonably expect others to fill the whole of that on their own. The decision in the SDSR to double the number of military personnel we contribute to UN peacekeeping operations is therefore welcome, but I hope that the Minister can say whether the baseline for doubling is the present deployed figure or the figure including the 300 additional personnel announced by the Prime Minister in October for South Sudan and Somalia. If it is the former, I have to say that the commitment is thin gruel.
Do the Government accept that what we need to try to do is to make a real contribution not only in numbers—those well-known boots on the ground—but in the provision of more sophisticated equipment to UN peacekeeping, and more sophisticated personnel who are required if modern peacekeeping is to be effective? I refer also to things like reconnaissance drones, helicopters, intelligence capacity and many other logistical aspects of these operations. Are we prepared to contribute such items in the future?
Secondly, I refer to the commitment to spend at least 50% of our aid budget on fragile and failing states. This recognition is really welcome, and I hope that the UN and the OECD’s DAC guidelines will now take better account of the reality that you cannot do development in fragile or failing states. You have to stabilise them first and then you can do development. I hope that we can make a real success of that commitment.
Finally and in conclusion, I congratulate the Government on a review that is generally both more realistic and more action-oriented than the 2010 review. Whether it will also be more effective will depend on its implementation. In recent years, a rather wide gap has opened up between the Government’s rhetoric on international development and their actual performance. The success of this review will be determined by whether that gap can be narrowed, and in that context I welcome the outcome of last night’s debate in the other place and the decision there to authorise the extension of our military operations against IS to include its heartland in eastern Syria, a decision that I believe was morally, legally and strategically the right one to take.
Lord Arbuthnot of Edrom (Con) (Maiden Speech)
My Lords, it is easy to say that it is a great honour to join your Lordships’ House, but it is hard to convey quite how much it means to me. I thank my supporters, my noble friends Lady Stowell and Lady Bottomley, and my mentor, my noble friend Lady Browning, for their unstinting encouragement and help. I am afraid I shall continue to need it, having already sat on the wrong Benches, stood when I should have been sitting, and no doubt sat when I should have been standing. I also thank and congratulate the staff of this House. I do not know how they recognise us all, but I take my hat off to them.
In my time in another place as a Back-Bencher, Minister, Chief Whip and chairman of the Defence Select Committee, I came to appreciate with admiration the depth of the wisdom and expertise that is available on a daily basis in this House. An obvious example of that is the noble Lord, Lord Hannay, whom it is a privilege to follow, but then I have been benefiting from his experience on issues of nuclear proliferation for many years now, so no change there. He told me a fortnight or so ago that he was an optimist; I am not. I have been described by the Times as making Eeyore look like a happy-clappy type, and your Lordships are just about to find out why. And how daunting it is to be speaking in a defence debate surrounded by noble and gallant Lords and former and current Defence Ministers, and how thankful I am that I have only four minutes, which has to limit the number of mistakes I can make—but time will tell.
I declare my interests in that I advise Thales UK; Pure Storage, the computer storage company; and the strategic company SC Strategy Ltd. I am also an unpaid adviser for the Electric Infrastructure Security Council of the United States.
I welcome the Government’s commitment to spending 2% of GDP on defence. I suspect that most of us would like to see more, but in a time of austerity this is a real achievement. There is one aspect of the review on which I shall concentrate. Since the Industrial Revolution, the developed world has begun to rely on technology to an extent which has been increasing as the pace of change picks up. The developed world is now completely dependent on, for example, computers and electricity. This was the subject of an excellent speech in a debate in this House about a month ago by the noble Lord, Lord Harris of Haringey. Without computers, we could not function efficiently. If we lost our electricity, we could barely function at all. We would have no money, no communication, no chain of command, no water and no fuel. It would, as they say, be a really bad day. So our reliance on electricity creates for us an existential risk—a potential single point of failure that leaves us vulnerable as never before.
Therefore, I particularly welcome the concentration given in this review to the extra money provided to GCHQ, and to the recognition by the Prime Minister of the need for exercises to protect our energy infrastructure. I welcome the fact that when Oliver Letwin set out these vulnerabilities to the Chancellor of the Exchequer and asked for resources to deal with them, the Chancellor told him that he was being insufficiently ambitious and gave him more. I believe that that reflects well on both of them because, throughout the developed world, modern warfare will be fought not only on the beaches, in the fields and on the streets; it will be fought inside our infrastructure in ways we will not be able see, with no warning and with devastating consequences. I believe that the Government understand this, but there is much still to be done.
Lord Sterling of Plaistow (Con)
My Lords, I very much appreciate my noble friend Lord Attlee initiating this debate. For me, it is also a special pleasure to follow my noble friend Lord Arbuthnot’s most thoughtful maiden speech. I am absolutely sure that his experience will add lustre to this House. Over the last five years, James and I have had many discussions on defence. His knowledge on the subject, gained over many years, was put to excellent use when he served as chairman of the Defence Select Committee in the other place. As a matter of interest, having two ancestors who both fought at the Battle of Trafalgar and rose to the rank of admiral, and another a general, commanding cavalry in the Battle of Waterloo, his natural interest in the Armed Forces is possibly not surprising.
In the speech I made in the defence debate after the Queen’s Speech, I felt it only right to congratulate the Government on the outcome of the defence and security review. We are unquestionably in a better place than I and many others imagined six months ago. It has been received positively by our armed services. I understand that our American friends, who regard us as their key partner of choice, are pleased with the outcome, in particular noting the enhanced Royal Navy capability. Great effort has gone into this review, and I am sure that we all wish to thank all those involved, in particular the many civil servants, whose efforts often go totally unsung.
I completely endorse the Government’s strong link between prosperity and security. Indeed, I strongly suggest that the Armed Forces have an even greater role to play in this link. All three services can reinforce the Government’s global prosperity ambition through their deployed footprint, utilising soft power through exercises, visits and partnerships, signalling our regional commitments, military strength and military technology. All this makes the work of our industrial defence sector and our diplomats a great deal more effective. It will unquestionably help to enhance our international trade and will, of course, create wealth for the United Kingdom.
Having said that, I must nevertheless add a strong note of practical caution. The work to create and, indeed, restore the necessary capability has only just begun. It would take many highly motivated, capable people many years to make it happen. Leadership and commitment to the pace and quality of delivery is crucial. We must not waste a single day. As recent history clearly demonstrates, events may challenge us at any time, as my noble friend Lord Arbuthnot just mentioned, before we are ready to respond.
The core point of the 2% is that 20% of it is being spent on new kit, which will undoubtedly be a major factor in enforcing positive change. However, much of the new equipment will not be delivered and operational until 2025 and beyond—20 years after the 2010 SDSR future force planned structure. The world looks far more dangerous. In a sense, we will see a window of vulnerability over the next decade. In the round, we may not achieve the full strength of our military capability until 2030—that is three times the length of World War II and three Parliaments from now. In my view, everything that can be done to pull forward this programme would not only lead to much greater efficiency and cost gain, but motivate innovation. The time gain could be crucial to the United Kingdom’s security. The next two or three years will be more than exacting for our armed services as the budget now includes the cost for rapidly enhancing our cyber and intelligence capability.
In times of crisis, I am sure that the Government would find another £1 billion to accelerate this very positive change programme. Do we need to wait for a crisis? It is excellent news that we now have clear political will to engage and re-engage from strength. I hope that our Government will be prepared to consider going the extra mile, which would be splendid for morale and save money for the nation. I therefore ask my noble friend the Minister to consider my request to go the extra mile. I took very careful note of the very powerful speech by the noble and gallant Lord, Lord Stirrup. I look forward to the time when allocation to defence will be at least 3%.
Lord McConnell of Glenscorrodale (Lab)
My Lords, while I welcome and congratulate all our maiden speakers, I welcome and congratulate my noble friend Lord Hain in particular. As has already been suggested, his campaigning history goes back a very long way. He is still active today. I recall first meeting him on campaign visits to Scotland in the 1980s, when, as a young mathematics teacher, I used to do his son’s homework when he came with him for the visit for the weekend. It is terrific to be sitting beside him and to welcome him to your Lordships’ Chamber.
I welcome much of the content of the new national security strategy, but I will focus in particular on the stability element of the topic for debate, and the new policy statement UK Aid: Tackling Global Challenges in the National Interest. Much of the national security strategy is framed in the right terminology. As has been said, it recognises the critical links between development, diplomacy and defence. But in too many instances its rhetoric is not always matched by the content. For example, the section on the United Nations refers to UN peacekeeping, but does not in any way reference UN peacebuilding or the work that has been done over recent years to build greater collaboration between the United Nations, the World Bank and other multilateral institutions to secure greater success in post-conflict reconstruction.
The section on the European Union is far too cautious. It does not reference the potential of the External Action Service or the development commission to make a real difference in the world to the stability that we all seek. In the section on migration I was shocked to find only one paragraph of four sentences, the first of which talks of a comprehensive strategy; the other three make it clear that there is no such thing. When migration is a driver of so much conflict in the world today, surely that should have had greater recognition in this strategy. I was also surprised, given the key role of the United Kingdom in ensuring that goal 16 of the new sustainable development goals references peace and justice and their importance to development, that the section on the sustainable development goals does not mention that particular challenge.
However, I welcome the fact that the new policy commits 50% of our aid resources to fragile states and regions. I believe that a focusing of our overseas aid on the places that need it most, where we can make the most difference, is long overdue. I also welcome the new £1 billion fund for conflict stability and security. However, even now, the descriptions of the purpose of these new funds, the priorities that are being established and the strategies that will be used are far from clear. Will the Government consider allocating time in the new year for a debate on the strategies behind these two critical new commitments? We know that, after 15 years, the millennium development goals will not be met in any conflict-affected state in the world by 31 December. Not only will they not be met as a whole, but not one MDG will be met in any one conflict-affected or fragile state. There can be no peace without development, but there can also be no development without peace. If we are aiming for international stability as well as British security, we need to give greater priority to that within the detail of our strategy in the coming years.
In conclusion, I welcome the strong commitment given by the Government to defence spending and to development spending. To do this at the same time as cutting back on our diplomatic effort in so many important places and on the detail of our diplomatic analysis, research strength and accumulated knowledge over the years is a backward step. Development and defence, hand in hand are important, but development, defence and diplomacy have to go together if we are going to have the international security and stability that we seek.
Lord Bruce of Bennachie (LD) (Maiden Speech)
My Lords, I am delighted to follow the noble Lord, Lord McConnell, a very distinguished former First Minister of Scotland. I agreed with much of what he said.
When I stood in the October 1974 election, came fourth and lost my deposit, I never dreamed that I would rise today as a Member of your Lordships’ House. I want to thank everyone who has made my arrival here in the last few weeks such an enjoyable experience. I am genuinely grateful for all the guidance and help I have received at all levels and from my sponsors, the noble and learned Lord, Lord Wallace of Tankerness, and the noble Lord, Lord Kirkwood of Kirkhope. The doorkeepers, attendants and catering staff are incessantly cheerful, helpful and friendly—not just to me but to my friends and family, my demanding children and grandchildren.
I had the honour to represent the constituency of Gordon for 32 years. Gordon is not a place; it is the heartland of the Gordon family, historically headed by the Dukes of Gordon, including General Gordon of Khartoum and the 18th-century Duchess who recruited soldiers into the Gordon Highlanders with a kiss. It also produced a Prime Minister, Lord Aberdeen, who appointed Gladstone to his Cabinet. Lord Aberdeen’s family seat was Haddo House where, until fairly recently, June, the late Dowager Marchioness of Aberdeen, presided over many musical and cultural activities. She endeared herself to me when, after one election, she said: “Malcolm, I am so pleased you got back. I worried you might lose. I was so worried, in fact, I very nearly voted for you”.
A colleague said to me that if you are going to be a long-serving MP you need to reinvent yourself from time to time. I certainly have carried out many different roles, including leading my party in Scotland and working with Donald Dewar and others in the constitutional convention to lay the foundations for the restoration of the Scottish Parliament. I am more committed than ever to the case for a federal United Kingdom that can secure the wishes of the majority of the people of Scotland to be self-governing within the UK, rather than leaving it.
I am particularly proud of the role with which I was entrusted by the House of Commons for 10 years, as chair of the International Development Committee. That gave me a privileged and unique insight into the work of the UK’s aid and development activities— by government, by world-class development and humanitarian NGOs and by charities and international and global players. It is on the basis of this experience that I choose to make my short intervention in this debate.
I understand the Government’s aim of demonstrating how our official development assistance directly serves the national interest but it has to be done while conforming to the OECD Development Advisory Committee guidelines. I am pleased that the aid review continues to highlight the focus on poverty reduction as a key objective, as it must be if the post-MDG objective of eliminating absolute poverty by 2030 is to be realised. I also note the interesting report of this House’s Committee on Soft Power and reassert my own view that tackling the challenges of poverty, humanitarian disasters, migration and conflict requires the whole of Government’s engagement. I can only echo the committee when it said,
“soft power can only deliver tangible and measurable results over time, and with patience and dedication”.
I would express caution that, while we retain flexibility, we do not chop and change priorities too quickly and too often. In particular, in our desire to address the current refugee crisis—and I have visited refugees in Lebanon and Jordan—we should not divert funding from vulnerable communities in sub-Saharan Africa and south Asia.
I welcome the fact that the Government’s national security strategy and strategic defence review maintain the commitment to tackling conflict and building stability overseas. I will watch with interest how the increase in the fund from £1 billion to £1.3 billion will be prioritised and in what ways the Government will deliver annually 50% of DfID’s budget in fragile states and regions.
I hope I shall have further opportunities to address this House on these matters and that, from my past experience and continuing engagement, I shall be able to contribute usefully to the deliberations of your Lordships’ House.
Earl of Stair (CB)
My Lords, we have four maiden speakers. It gives me great pleasure to have the honour of congratulating the noble Lord, Lord Bruce of Bennachie, on his excellent maiden speech in such an important debate. Although we come from opposite corners of Scotland, I am reassured to note that we have both campaigned on similar issues of health and transport. He has had considerable experience, not only as deputy leader of his party, but also as Shadow Secretary of State for Scotland and spokesman for multiple departments. He mentioned his role in the Scottish Constitutional Convention and I am sure we shall look forward to the benefit of that experience in the coming months as well. His speech has given a very different view on defence and international security and stability from the perspective of the International Development Committee. The constituency of Gordon has benefited from his experience for 32 years, and I am sure that noble Lords on all sides of the House look forward to his contributions based on his very wide experience.
I believe that this is the most encouraging defence review for some time. Sadly, previous reviews have to my mind overlooked the developing threat and concentrated far too much on reduction and cost saving. It is true that the threat has evolved massively over the last 30 years, particularly in the fields of cyberattacks, electronic intelligence and international terrorism on a large scale, such as is seen in Syria at present.
I am a firm believer in the nuclear deterrent and concerned that, while Russia appears intent on restarting what was so carefully dismantled 30 years ago, now there are nuclear threats from other nations as well. I agree that the concept is abhorrent but am sure that the deterrent is effective, if only by its established existence over the last 50 years. The whole scenario of warfare has changed and appears to have settled into a pattern of multinational approach, rather than the solo campaign such as that fought in the Falklands and South Atlantic, and I welcome a strategy of working with partners.
I am pleased that the Government have confirmed that expenditure is, and will remain, at the agreed 2% of GDP, and look forward to this being maintained in all future Budgets. More than ever before is a guaranteed expenditure necessary. The list of new equipment promised in the review is also very encouraging. Properly equipped aircraft carriers will be essential to help us to fulfil the obligations we have on the worldwide theatre, along with fighting ships and helicopters. However, it should not be forgotten that it takes only one good shot to lose that asset. I hope that plans are in place to provide adequate resources to ensure the security and protection needed to support all our future deployments.
This is a very long review and I want to focus on only two subjects. I am saddened, though, that with the increased threat and greater demands on defence resources and following so many reviews with proposed cuts, there is such a small increase in the numbers of personnel, and that the Army is to be maintained at only 82,000, which I assume includes reservists. I welcome the 1,900 increase in personnel to cover cyber and other threats, but I hope there will be enough to cover the defence force requirements, particularly given the expectation that twice as many available forces will be used for peacekeeping and other international roles. Equally, I appreciate that the use of remote technology and modern equipment can replace personnel included within that plan.
Previous reviews have cut manpower to a point where it has become a significant issue, as I have found in conversations with serving personnel. Long operational deployments with a short home base time before training for the next deployment have a wearing effect on morale and family life. This is particularly noticeable in specialist sectors such as air defence and support arms, where skilled operators in specific roles are very much in demand. While I welcome the improvements to family life, pay and accommodation, I fear that the human factor of the service men and women is not being given as high a priority as it should.
Secondly, I could see no provision for a greater allowance of resources for training. A shortfall of personnel means that operational demands are likely to absorb training time and resources will be cut as well. The provision of shiny new equipment appears to be just sufficient to fulfil the role expected.
Will the Minister, in summing up, give me some assurance that I have in fact misread the review; that as well as the shiny new equipment there will be adequate time and resource for training, and, indeed, the human elements of the services; and that the manning levels of all services will be regularly monitored and even increased if necessary?
The Lord Bishop of Portsmouth
My Lords, even before we reach the halfway point of this debate, a range of significant and important matters have been raised. Some merit much more substantial consideration—for example, international partnerships and relationships, the deliverability of counterterrorism and the cyberterrorism agendas, and the huge importance of diplomatic presence and influence. To these I add the projected development of the delegated model.
Like others, I look forward to further opportunities to discuss these and the many issues before us as we consider the SDSR. However, I shall restrict myself to three specific and, I hope, succinct comments and queries. First, noting the small increase in numbers in the defence review—400 for the Navy and 300 for the Air Force—what steps will the Ministry of Defence take to address the equally important matter of skills imbalances in the services—for instance, the Navy’s challenge in recruiting engineers? Existing commitments, equipment and new hardware need not just any soldiers, airmen and sailors but properly skilled, trained and experienced men and women. Further, if, as I suspect, military commanders sought increases, or greater increases, in their numbers—if they argued that they needed, let us say, 2,000 more—do the Government accept responsibility if one or other of the forces cannot deliver what they ask and expect of them?
Secondly, paragraphs 60 and 61 of chapter 4 of the White Paper amount to just three sentences announcing a 30% reduction in defence civil servants. There is no detail there. Indeed, the lack of it makes me quizzical, perhaps even anxious about whether there is clarity within the proposal. So I ask: is some percentage of this already anticipated; for instance, in withdrawal from Germany or from outsourcing or privatising plans already in place? What does this reduction mean? It might seem to imply that further civilianisation of tasks is not possible. Might it, by contrast and worryingly, mean that the tasks presently done by civil servants are to be transferred to the armed services, further stretching their people resources?
Thirdly and finally, in the Royal Navy and in Portsmouth there is relief at the news that the one new carrier that is operational at any time will have 24 aircraft. Can the Minister tell us what decisions have been made about the attribution of these aircraft? If not, when will these crucial decisions be made?
Viscount Hailsham (Con) (Maiden Speech)
My Lords, for well over 50 years, I have been a silent attender at the deliberations of this House, initially on the Steps of the Throne, then later at the Bar of the House. I have always been immensely impressed by the important role that this House plays in the working of the British constitution. Therefore, for me, it is a huge privilege and pleasure to have the opportunity of addressing your Lordships directly from these Benches.
Inevitably, one is conscious of those who have been before. If your Lordships will forgive me a personal observation, when I look at the Privy Council Bench occupied by three of my noble friends, whom I have known for a very long time, I am conscious of my father and father-in-law. They used to sit there together, mostly in harmony and very often grumbling about the shortcomings of a government spokesman.
I am also very touched to see the noble Baroness my wife on the Cross Benches. This is not an Oscar ceremony and anyway I eschew the emotional stuff but it was very brave of her to marry a prospective politician and very resilient of her, if I may say so, to attend his maiden speech—she has heard an awful lot of the other ones. Frankly, without her I would not have survived the political course.
I am extremely grateful to the noble Lords, Lord Garel-Jones and Lord Goodlad, who did me the honour of introducing me to this place. We go back an awfully long way—back to 1979 and the Government Back Benches, to the Government Whips’ Office and, of course, to the Foreign Office, where we had the privilege of serving under the noble Lord, Lord Hurd of Westwell, who to my mind is one of the most distinguished Foreign Secretaries this country has had since the war.
I am deeply touched by the kind reception I have received from so many of your Lordships and the staff of this House. In return, I am very conscious that the qualities expected of a Member of this place are very different from those that are expected down the corridor; in particular, a more collegiate, less partisan approach to debate and a certain self-restraint as to the frequency and length of one’s interventions. It is in that spirit that I respond to the Motion so well moved by my noble mentor, the noble Earl, Lord Attlee. I will confine myself to making four substantive points and no more.
First, the defence review is to be welcomed, especially as regards the enhancement in equipment and the recognition for nimbleness and flexibility. The Chancellor is to be congratulated on making the resources available. But our forces are lean and in a crisis we may not have the opportunity to repair the deficiencies. So I hope that the Government will be sensitive to the need to accelerate some of the programmes. In that context, I will make a point about Paris. Our security forces are well used to dealing with prolonged sieges and terrorists who are anxious to escape with their lives, but we face something different now; namely, suicidal killers intent upon widespread and immediate murder. In respect of them, I hope that our services are properly armed, equipped and trained.
The second point I want to make relates to keeping your word. One needs to be very cautious about giving assurances and uttering threats but, once done, they must be honoured; otherwise, policy-making loses all credibility.
My third point relates to Russia. Putin’s Russia is never going to be a comfortable neighbour, but we now have real issues in common. I hope that we can come to some modus vivendi. True, it will be at a price. The annexation of Crimea will not be reversed and the displacement of President Assad will not be the first priority, but I think we can come to a modus vivendi.
Lastly, on ISIL, I speak as one of those who voted against the second Gulf War. I was a teller on that Motion and assisted with its drafting, but I think that the House of Commons made the wholly right decision yesterday. I do not believe that bombing specific targets in Syria will defeat that organisation, but not to play our part will diminish our standing among those already engaged. It would also display a shaming degree of disengagement. The moral and ethical basis for such action clearly exists. The recent Security Council resolution gives explicit legal authority and, incidentally, it was declaratory only of long-existing principles of deterrence and self-defence. Precisely those principles justify the use of lethal force against individuals such as Jihadi John, who have committed heinous crimes against all humanity. For they have made themselves outlaws in the true sense of the word in that by putting themselves outside the reach of the law, they have also put themselves outside the protection of law.
Those are the four points that I venture to place before your Lordships’ House for your consideration.
Lord Cormack (Con)
My Lords, that was quite a speech. I am glad that there were not eight points. It is a very great joy to follow my noble friend and Lincolnshire neighbour Lord Hailsham. He is a considerable figure and has made a considerable speech. As he was speaking, in fact, I kept thinking of that description which Churchill once gave when he said, “That is not a maiden speech but a brazen hussy of a speech”. We have heard a robust speech, robustly delivered, and we look forward to many more.
I have known my noble friend Lord Hailsham for many years. I knew him when he was the most dogmatic of government Whips, lecturing the 1922 Committee on how we should behave. I saw him as a splendid Minister of Agriculture when he came to stay at our home and spoke in my constituency, accompanied by his bag-carrier—one George Osborne. I also knew him when he became the gamekeeper turned poacher par excellence because in 1997, when our party was somewhat reduced in numbers in the other House, he became the harrier of the Government, never giving them quarter and keeping at them day and night—in fact, so much at night that they brought in Programme Motions so that he could not carry on doing it. He is a notable addition to your Lordships’ House. I am delighted that he is here and it is a privilege to congratulate him on a very notable maiden speech.
I am conscious that this defence review is a significant improvement on the one we had in 2010. A number of your Lordships have made that point during the debate. I echo the words of my noble friend Lord Sterling of Plaistow when he urged the Government to try to accelerate the timetable a little. We really need them to do that.
Talking of brilliant speeches, what a marvellous speech Hilary Benn made in the other place last night. Yesterday’s debate and decision brought into sharp focus the need for our defences to be kept up. We must identify and distinguish between enemies and irritants. I was glad that my noble friend Lord Hailsham talked about Russia, because many of us have of course been irritated but we have a common cause. We must remember that it is not possible easily to fight wars on two fronts. We have to give real priority to identifying and eliminating the worst enemy we have had for many generations and making common cause with the great power of Russia—and it is a great power.
We need a broad alliance with those with whom we have much in common. I urge the Government, through my noble friend Lord Howe, who is responding on their behalf, to have real recognition of that fact and, in consequence, to have a determination of the priorities which will serve the nation well. The review is a good blueprint: it maps out a strategic direction which needs to be followed but, as my noble friend Lord Sterling said, rather more quickly than the review itself indicates.
I wish the Government well in what they are doing. I again congratulate my noble friend on a splendid debut and look forward to the rest of the debate.
Lord Davies of Stamford (Lab)
My Lords, I add my own congratulations on the four maiden speeches we have heard this afternoon. All four maiden speakers not only are well known to me but have been colleagues and indeed friends of mine for decades. I commend them to the House as the ideal candidates for coming to this place, because they are men of great integrity, they are all people of very considerable experience and knowledge of the world, and they have always been committed, as I am sure they will remain committed here. We will therefore have very valuable contributions from them for, I hope, a very long time.
I do not want to say much about the SDSR itself. I thoroughly agreed with the brilliant analysis delivered by my noble friend Lord West and the noble and gallant Lord, Lord Stirrup, on that subject, but just add one thought, which I might repeat from time to time to make sure the Government do not forget it. Although of course I am delighted at the purchase of the P-8s, the Government would have saved an awful lot of public money and avoided an awful lot of risk if they had kept the Nimrod MRA4. It was a great mistake to cut those aircraft up in the vandalistic fashion that they did when they came to power in 2010.
I have a good announcement for the House, which is that I think we have solved the long-standing problem of the black hole—the alleged deficit in the MoD’s programme, which it is said the Labour Government left in 2010 to their coalition successors. I have been conducting correspondence with the noble Earl about this for some weeks. Buried in his latest letter to me is a single sentence telling us that the Government went through our programme, which was based on resources being increased at 1.5% in real terms per annum, to see what would happen if resources had no real-terms increase at all but were flat in real terms for the 20 years of the programme. Of course, they came up with a deficit, and my maths showed that that deficit was even greater than the £19 billion or so in the equipment programme which is mentioned in the noble Earl’s letter to me. I wanted to put all our correspondence in the Library of the House but, when I tried to do so, I discovered that Back-Benchers could not put correspondence in the Library. Ministers of course can, and I invite the noble Earl, if he would be so kind, to put our correspondence in the Library so that colleagues can follow this matter in detail. I hope we will not need to speak about it any more because this particular myth will be put thoroughly to rest.
I want to just say a little about Russia, which the last two speakers both touched on. Mr Putin must be congratulating himself on having carried off a brilliant coup. He has succeeded in getting away with changing frontiers by force, with annexing the Crimea and, in his own estimation, with ensuring that Ukraine can never join either NATO or the EU—partially because we have always said, since the Cyprus problem, that we would not have another state in either organisation which was split, and partially because it is quite difficult to extend an Article 5 guarantee to a country when a part of it is already occupied. He has guaranteed that the future of Ukraine will be very difficult and unstable. No one will have any incentive to invest there, and therefore the great poverty and very high unemployment in that country will continue indefinitely. I am sure that Putin thinks and calculates that that can in itself only lead to one of two things. One is that eventually the poor Ukrainian population will give up, throw in the sponge and vote in a pro-Russian Government, who will join the Eurasian Economic Union and do whatever else Putin tells them to do. The other is that the West will give up, and do a shameful thing and tear up its commitments to Ukraine on both NATO and the EU. The West will say that Ukraine cannot come into either organisation and will do some deal involving other parts of the world.
I am all for doing deals with the Russians, I must say, but not at the expense of good faith and the guarantees that we have given to Ukraine. Of course, the result of that would be more or less the same for Ukraine, but it would be a devastating blow to the morale of NATO, the EU and, particularly, the east European countries. It would be a terrible betrayal: something that we would regret for decades and perhaps centuries.
My final thought is therefore that we need to think carefully about how we can avoid that scenario. I think that the only way that we can is by thinking how we can extend an Article 5 guarantee to that part of a territory which is not occupied. That is a matter on which we should focus and which we should discuss with our allies over the coming months, despite the other very important issues which we also have to determine during that period.
Baroness Ludford (LD)
My Lords, I join others in thanking the noble Earl, Lord Attlee, for initiating this debate and in warmly applauding the four maiden speeches. I hope that it is not invidious if I single out my noble friend Lord Bruce of Bennachie as a very strong addition to our Benches.
The SDSR was of course accompanied by the national security strategy. Although that is not name-checked in the title of this debate, it is security in the broadest sense that I want to focus on rather than defence. One priority in the national security strategy, according to the Government, is to:
“Help strengthen the rules-based international order and its institutions”.
To that end, the UK will work,
“to promote stability, good governance and human rights”.
Then there is a high-level objective in the document, which is to “project our global influence”, which covers means such as expanding our world-leading soft power, investing more in alliances and building stronger partnerships. I fully support both the overall priority and the enumerating objectives. What I struggle with is matching the Government’s words with their actions. How does the pledge to abolish the Human Rights Act, threatening our adherence to the European Convention on Human Rights and our respect for Strasbourg court judgments, comply with the aspirations of strengthening the rules-based international order, upholding our values and promoting human rights? If we cannot do it on the European front, how can we do it internationally?
Under the rubric of “protecting our people”, the National Security Strategy and Strategic Defence and Security Review pledged to work with allies to respond to threats and challenges. However, as the noble Lord, Lord McConnell, said, there is no mention of European co-operation in the response to the migration challenge. While there is a commitment to strengthen our capabilities to disrupt serious and organised crime, and the Prime Minister’s forward vows to counter threats which recognise no borders, those pledges are contradicted by the Government’s refusal to participate in a strengthened Europol—which, as it happens, has a British director. The Prime Minister said in his recent Chatham House speech that the EU matters for national security, so is he not endangering our security by repeating his periodic claim—not least in the Daily Telegraph today—that he might recommend a Brexit? The EU as such is hardly mentioned in the national security/SDSR document.
Another example of contradiction is the reported omission from the revised Ministerial Code of any specific pledge to uphold international law. That surely completely cuts across the pledge to a rules-based international order. Indeed, the constant sniping that we hear against judges and courts of all kinds—both European and domestic—strikes a contradictory note if the Government are attached to rules.
Too many in the UK, and even in the Government, seem not to be at ease with our international and European role and want to pull up the drawbridge and retreat into aggrieved and curmudgeonly isolation. We should, on the contrary, capitalise on our strengths in democracy, human rights and law and on our position at the intersection of so many networks—the EU, the Commonwealth, the United Nations, the transatlantic relationship and NATO—to contribute with confidence to Europe and the world. We should take our cue as a country from the contribution that all those British individuals who we furnish to European and international institutions make—most recently, and I congratulate her in her absence, the noble and learned Baroness, Lady Scotland, the new Secretary-General of the Commonwealth. There are so many more whom I do not have either time or place to name-check. We as a country should follow their example.
Lord Ashton of Hyde (Con)
I remind noble Lords about the four-minute limit, because otherwise we are going to cut into the Minister's reply.
Lord Bilimoria (CB)
My Lords, I welcome SDSR 2015, which starts with a vision of a secure and prosperous United Kingdom, with global reach and influence, with the NATO target of 2% of GDP spending on defence agreed by the Government. Thank you very much. There will be an increase in the defence budget in real terms every year—thank you very much—as well as a commitment to increase and not to reduce the Army below 82,000, and to increase the RAF and Navy by 700 people. Thank you very much. Spending will be,
“£178 billion over the next decade on equipment and equipment support”,
increasing by 1% in real terms. This is all excellent news. The nuclear deterrent will be maintained, and the replacement of the Vanguard class with the new class. There will be an increase in,
“the resources for counter-terrorism police and the security and intelligence agencies to pursue terrorists”,
and,
“more than double our spending on aviation security around the world”.
This is absolutely marvellous. India’s Prime Minister, Narendra Modi, on his visit last month to the UK, spoke in the Royal Gallery of three joint defence exercises between the UK and India already in one year. This is marvellous. Does the Minister agree that we should continue that?
We will be dedicating 1.2% of the defence budget to science and technology over this Parliament, and establishing,
“a defence and security accelerator for government to help the private sector, allies and academia turn ideas into innovative equipment and services”.
This is absolutely brilliant—all music to my ears. I thank the noble Earl, Lord Attlee, for initiating this debate and congratulate all the maiden speakers.
The Economist has gone so far as to say that the SDSR 2015 allows Britain to reassert,
“itself as a serious military power”,
and will allow it to regain some of the respect that it has lost in Washington. Given the debate and the action in Syria, both here and in the other place yesterday, there is every possibility that we will have to put boots on the ground to fight the spread of anarchy across Syria and Iraq, and we will be left in a difficult position.
The expertise in this House was demonstrated yesterday to be a hundred times that of the other place, yet we did not get to vote yesterday at all. It shows how important it is that we look ahead and recognise the effects of the so-called Black Swans. The Prime Minister said that we must expect the unexpected. Earlier this year, I was privileged to lead the debate in this House on the 200th anniversary of the Gurkhas’ contribution to the UK and India. My late father, Lieutenant-General Bilimoria, was commissioned into the 2/5th Royal Gurkha Rifles, Frontier Force, and commanded his battalion in the 1971 war for the liberation of Bangladesh, was colonel of the Gurkha regiment and president of the Brigade of Gurkhas and retired as commander-in-chief of the central Indian army.
The noble Lord, Lord Howell, spoke about soft power, the BBC and the British Council. Professor Joseph Nye of Harvard University said that a combination of hard power and soft power gives you “smart power”. SDSR 2010 was not smart—it was dumb. Quite frankly, it was negligent; we had no carriers, no Harriers, no maritime reconnaissance, cuts to our troops and means before ends. Does the Minister agree with the noble Lord, Lord West, that there has been a 30% reduction in military capability since 2010? I have been very outspoken in my criticism of the SDSR 2010, with the cuts to the troops of 80,000—you cannot even fill Wembley stadium. Prime Minister Narendra Modi spoke in Wembley stadium. Today there are barely 3,000 Gurkhas in the British Army whereas, in India, the Gurkhas are approaching 100,000. I was privileged to show General Dalbir Singh, the chief of the Indian army, from the 5th Gurkhas, around Parliament. Will the Minister confirm and reassure us that there will be no further cuts to the Gurkhas? Field Marshall Sam Manekshaw, former chief of the Indian army, said that if a man says that he is not afraid of dying, he is either lying or a Gurkha.
Yesterday, we saw the fight of the evil of Daesh, ISIL, ISIS, Islamic State or IS, whatever these monsters are called—we decided to intervene in Iraq and Syria yesterday, whereas last year we decided to intervene only in Iraq. Does the Minister agree that that was a mistake and that we should have intervened in Iraq and Syria a year ago?
Without doubt, defence of the realm is the most important role of government. We are a tiny nation with just 1% of the world’s population but thanks to the hard and soft power we have one of the most powerful defence forces in the world, so powerful that the world knows that this hard and soft power emanate from a country that is respected for and has fought for freedom, fairness, justice and liberty for centuries.
Lord James of Blackheath (Con)
My Lords, I fear that I may be flying under false colours in this debate, because the title makes direct reference to international security and stability but all my concerns are with the lack of any direct reference to our domestic internal security and stability, which I think should have been closely addressed in the report, and the lack of which I think is shameful. We are not going to be able to play any role in the international sector unless we have made our own internal lines secure and our own internal security reliable. Where are the initiatives to deal with that in a changing world?
We have had the horrible example of what has gone on in France, and I think that we should stop and think about what that actually means. It is a new form of warfare for which we have no ready-made defence. It is also hugely geared towards being tele-sensational. We should therefore be putting everything in place that we can to limit anyone’s capability to harness the media against us by putting on a “television spectacular”, as they did in France. We should be seriously considering banning all television coverage of any terrorist incident that occurs, because that is the lifeblood off which they feed. The most that I would go along with would be having some embedded tele-journalist going with our own internal teams.
We really need to have some internal rapid response units, which have got to be created specially, with the particular capability of addressing the other great deficiency in the report, to which the noble Lord, Lord West, has made reference: where are the defences of our greatest border of all, the sea? There is nothing. I live on the south coast. We have 140 miles of coastline with two tiny coastguard vessels that would not look out of place on the Round Pond in Kensington Gardens. There is nothing else at all. How is anyone going to have a rapid response to any sea-borne attack coming in? That is our easiest and most vulnerable target of all.
The report ought to be addressing the possibility of creating two very intensive rapid response units; I suggest one at Northolt and one at Catterick, and dividing the country between them on those lines. They should be equipped with a minimum of seven or eight helicopters each to give them reach anywhere in the country where a situation could arise, and they should have a dedicated combination, accessing the police most emphatically and the fire brigade if necessary. The SAS should emphatically have a permanent always-on-duty presence in each of those camps, and there should be an ability to go wherever.
In the French episodes, the first news that we had came in at 9.22 pm on the Friday evening. By the next morning the television was permanently showing the subject. We have to ensure in our case that anything that occurs here is completely wiped out as an attack before the television cameras come on by the morning; otherwise, once it goes that far, there is no holding it. The report does not at all address an adequate rapid response unit, and that is shameful. I hope very much that the Minister and his team will look back at this to see what they can do. It is not going to be very cost intensive because, if we are not going to be making war abroad, our own resources can be reshaped and reallocated to create these response units. For God’s sake, though, please give them some viable craft to patrol our shorelines.
I wanted to address my final half-minute to the noble Lord, Lord Hain, but he has just left. The noble Lord was the other man in the ruination of the first great romance of my life, though he probably never knew it and never even met the lady concerned. She thought he was a combination of Jesus Christ and Trotsky. She got herself arrested every Sunday afternoon, and I had to appear in court on Monday morning and pay her fines for four years in a row. I was nearly bankrupted by it, so I am very glad to see the noble Lord here; he owes me an apology and quite a lot of money.
Lord Soley (Lab)
My Lords, I do not think I can cap that. Knowing all four of the speakers from the House of Commons, I know they will all make a great contribution. Some years ago, I considered inviting my noble friend Lord Hain to plant a tree in my constituency, but we got a bit worried that, when he cut the first turf, he would not know where to stop. He could have laid waste to the whole of Shepherd’s Bush Green, so we did not.
I thank the noble Earl, Lord Howe, for his assistance in getting the LIBOR funds for the Mary Seacole memorial, plus the memorial gardens for nurses and other medical forces in combat zones and in danger zones, such as west Africa in the Ebola crisis. The Army has asked me to spread the word that it appreciates the opportunity to convey to people the importance of recognising the whole force concept—not just nurses and doctors but the people recruited from the NHS to go out to danger zones in order provide assistance. It is important, however briefly in a debate of this nature, where time is so limited, to put on record that sometimes we do not recognise enough the need for memorials to people in and around the armed services—not just the service personnel, but those they recruit and employ in other areas. I hope the proposed memorial gardens will meet an unmet need in the country. I know we all appreciate it. The Minister might be slightly worried because charities keep ringing me and asking how much money is left in the LIBOR fund. One lady said to me that, if it runs out, they could slap another fine on them if they are late with her bank statement. There is an offer there.
There are only two points I want to make in this inevitably short debate. The first is about the naval base at Bahrain. I led a delegation to Bahrain last year. I know there is criticism of the Government there, and some of it is justified, but that very small country is struggling to develop the rule of law and a democratic structure. We sometimes underestimate how difficult that is for countries, but it is particularly difficult when just a short way down the causeway you have Saudi Arabia and just across the Gulf, directly opposite, you have Iran. It is a very unenviable position for a tiny nation to be in and the naval base and the US naval base lend stability to that country and are very important. In paragraph 5.57 the Minister commits the Government to build a new naval base, and I very much want to see that happen. This SDSR puts right some of the things we got wrong in the previous one, which was poor. Sometimes I feel that the wording is better than what the reality might turn out to be.
My final point is one that my noble friend Lord McConnell made about the crucial importance in this day and age of linking up foreign policy, defence policy and development policy. One example is Libya. I supported the Libya operation, but I was worried, as with all these interventions, about whether we would get the post-conflict situation right. Generally speaking, I am in favour of intervention. Condoleezza Rice, the Secretary of State under George Bush, got it right when she said that the really big mistake that the West made in post-war years was to give too much sympathy to dictators. When these brutal dictators fall, whether it is Saddam Hussein, Gaddafi or Assad in Syria, the consequences are enormous because their country is virtually wrecked and has very little structure to it. We need to do better than we have done so far. It is not easy to get it right. What I am saying should not be taken as criticism, particularly of our staff in Libya, who I know are putting their lives on the line at times, but it is profoundly important that we link up these three areas of policy and make sure that we make that extra effort in the post-conflict situation.
Lord Oates (LD)
My Lords, I congratulate my noble friend Lord Bruce of Bennachie on his excellent and informative maiden speech. His expertise on international development is obvious, but his knowledge and experience are much wider. During the coalition, he was always a source of wise and generous counsel. He was also one of the most articulate advocates in the media for the role of the Liberal Democrats in the coalition, a job we did not, I confess, always make easy for him.
I also congratulate all the noble Lords who have made compelling maiden speeches. I spent a number of years working in South Africa, where the name of the noble Lord, Lord Hain, is not surprisingly held in very high regard.
I will focus on the Government’s strategy for international development assistance, which was published alongside the SDSR. In particular, I will address the key role of economic development as part of our international aid effort, the strengthening of tax collection systems and the development of own resources. First, however, I will address the tone of the document. It describes the approach of the Government as a,
“fundamental shift in how we use 0.7%”,
which will show that,
“reducing poverty, tackling global challenges and serving our national interest … are inextricably linked”.
But I am not sure how that marks a fundamental shift. The coalition strongly believed that these issues were intrinsically linked. It supported a greater emphasis on economic development, recognised the role of ODA in strengthening global peace and security and responding effectively to crises, and was committed to helping the world’s most vulnerable.
The fact that this strategy was published under the imprimatur of the Chancellor of the Exchequer makes me slightly uneasy. I suppose that by now we are getting used to George Osborne’s omnipresence—if not his omniscience—but in my experience, if George gets involved, there is always a trick to look out for. Therefore, we will need to scrutinise very carefully the budgets of those departments which will now spend ODA to check that the Chancellor has not just found a way to fund departments he is otherwise cutting.
However, I strongly support the emphasis of the coalition Government, continued by the current Government, on economic development as part of their aid strategy. It seems self-evident to me that the purpose of our aid budget must be to assist countries to get to the position where development can be driven from their own resources. Aid is necessary to assist many countries in overcoming the huge challenges that they face, and I am proud that the coalition met the 0.7% GNI target. However, the provision of aid is not a demonstration of success—it is the opposite. Our objective must be to provide aid in the most intelligent and effective manner to release the economic potential of the countries to which we provide it so that in time they no longer require our support. Stimulating private sector growth and freeing up trade is critical to driving this development. However, we must be clear about our objectives.
The Government are keen to stress the opportunities for British business that arise from our aid strategy. If that means that with economic development will come rising demand and that British business will be well positioned to take advantage, I wholeheartedly support it. However, our economic development strategy has to be about creating an environment where indigenous business can spring up and grow, where an educated populace can provide a skilled workforce and where the resulting economic activity can fund social development. It cannot be about flogging British goods and services or about multinational corporations further exploiting the resources of developing nations. That approach has comprehensively failed in the past.
That brings me to the second key issue: how Governments can strengthen their ability to get hold of their own resources through strengthened tax collection systems. As Dr Carlos Lopes, executive director of the UN Economic Commission for Africa, told us this morning at a breakfast for the Africa APPG, the solution for Africa is not more aid but using aid effectively to release domestic resources. The tax take in African countries is half the world average. The extractive industries pay less than half that.
In conclusion, I welcome the emphasis in the strategy on tackling tax evasion and avoidance and on improving tax systems in the developing world. That is closely tied to tackling corruption, for although the formal tax take is low in many developing countries, the informal tax burden through corruption can make the costs of doing business prohibitive.
Lord Thomas of Swynnerton (CB)
My Lords, in the 100 years or so since Britain gave up its proud policy of splendid isolation, we have been beset by a number of violent attacks. Some of these have been primarily murders of individuals, as in the case of the anarchists of the early 20th century and the IRA in the 1960s and 1970s. The bombing campaigns of the Germans in the First and Second World Wars were indiscriminate attempts to disrupt and kill, but as far as I know they did not target individuals. From the 1920s onwards, and intensely after 1945, we were beset by the revolutionary Bolshevik regime of Soviet Russia, whose interest was to subvert western civilisation by all means short of war. It is very satisfactory to think that that era has come to an end, and Russia has become a nation rather than a crusade—I echo the words of Chip Bohlen, the American ambassador to Russia, in 1962. The Falklands inspired a war but Argentina, of course, never threatened these islands.
Now, we respond to the new subversion of the caliphate, or Daesh, or ISIL—it seems that it is a movement with as many names as Chinese emperors. Their aim seems to be to kill indiscriminately, unlike the anarchists or the IRA, but all the same to shock the world by what the anarchists call the “propaganda of the deed”, and to force the West and Christianity out of the entire Middle East.
There have been similar violent movements in the Muslim world in the past, such as the Assassins in medieval Lebanon, but the difference is that there are now suicide bombers, which is a new development. Since we need to be in the Middle East for our own commercial and strategic interests, and because, after all, we have friends and allies there, the UN has agreed to react and encourages us to do so in strength. As a historian of military matters to some extent, it is hard for me to imagine that we shall be able to defeat this new enemy without some form of ground campaign. Those 70,000 Syrian soldiers of liberty in whom the Prime Minister urges us to have faith may turn out to be less reliable allies than the Kurds, whose success nevertheless would not be a recipe for peace in the Middle East in general because of Turkey.
Saladin, the great medieval Kurdish general who conquered Jerusalem, taking it from the crusaders, would have been delighted to hear that statement in this House. If noble Lords want to know more of Saladin, I recommend The Talisman by the great Sir Walter Scott, whose novel is the best investigation of the crusades.
In my final minute, I would like to say how much I agreed with the noble Lord, Lord James of Blackheath, when he talked about control of the media. However, what he has raised is a very difficult matter and such control would require a great deal of strength and intelligence. It is not a question of asking a newspaper editor to shut down critical cartoons, as was the case during the war in the era of Mr Herbert Morrison, the grandfather of the noble Lord, Lord Mandelson.
Lord Fairfax of Cameron (Con)
My Lords, unlike the four admirable maiden speeches that we have heard today, this is not my maiden speech, because I made that 36 years ago when I was 23. However, this is the first time that I have spoken in your Lordships’ House for several years following a short involuntary absence since 1999. I am very honoured to be back and thank those of my noble friends on this side of the House who voted for me. I hope to be able to repay their trust.
I declare two interests in this debate. First, I am the co-founder and chairman of a private security company, and, secondly, I am a senior executive with one of the world’s leading tanker shipping companies, which is also owned by the Russian State Property Fund. I think it is only right that I declare those. I also thank the noble Earl, Lord Attlee, for his kind remarks in relation to me and my connections with Russia. I hope to be able to contribute on the subject of Russia in future.
On the subject of Russia, in particular I would like to approve the statement in paragraph 3.22 that Her Majesty’s Government,
“will seek ways of cooperating and engaging with Russia on a range of global security issues”,
including ISIL. That seems an admirably practical approach.
But also keep in mind Lord Palmerston’s famous maxim that we have no eternal enemies or perpetual friends; we have only our eternal interests.
Turning to the review itself, and keeping an eye on the clock, I commend the Government on their clarity and impressive vision. I also single out for approval three particular ambitions that they mention in their review. The first is that of strategic reach, and in particular reference to the incoming QE class carriers, F35s and a land division strike force. Secondly, it is paramount to maintain our position at the top table in NATO and other international and strategic alliances. Thirdly, we should ensure that service men and women, and in particular their families, are properly looked after when their loved ones are abroad.
However, having spoken to current and former soldiers recently, including Special Forces soldiers, I ask the Government how their impressive vision is going to sit with the current realities, especially the funding realities. As one of them recently said to me, “This time, not another fudge, please”.
I would also like to ask three particular questions. First, is NATO too old-fashioned and cumbersome for purpose? We need a NATO spearhead force able to mobilise and be deployed at short notice. Secondly, can the British Army really deploy a war-fighting division and is our reserve structure able to mobilise quickly in a crisis? Thirdly, does the review contemplate enough innovation and collaboration across the defence community?
I support the point made by my noble friend Lord Robathan yesterday about the tension between the expressed desire to recruit more Special Forces soldiers, but this coming from a smaller and smaller gene pool.
Finally—perhaps one original point—I would like to adopt the suggestion that I know is being promoted by the CGS at the moment in relation to his new CHACR initiative; namely, aligning the UK’s commercial and military objectives while abroad, as do the US and France rather aggressively. I think it would do well for us to adopt the same to bridge the obvious funding gap.
Lord Lyell (Con)
My Lords, I start by thanking my noble friend Lord Attlee for giving us the chance today to look at the defence review. He and I go back quite a long way, from bouncing like peas in a pod in Poole harbour when we visited the special boat squadron, as members of your Lordships’ defence group. He showed commendable guts then. My noble friend also accompanied me to Kosovo, where we became entangled with the Swedish and Finnish brigade, which was attached to our own brigade out there. My noble friend has been of valuable help and I assure him, and indeed the Minister, that the House of Lords defence group, otherwise known as the war Lords, has not gone away. The noble Baroness, Lady Dean, is not with us for some reason today, and, alas, my noble friend Lord Astor is taking a short period of leave. However, I say to the Minister that we have always relished the enormous and very tight relationship between military defence and Back-Bench Members of your Lordships’ House who at various times in their lives perhaps got their knees quite brown in one way or another, either as a conscript or worse.
I direct your Lordships’ attention just briefly to paragraph 4.40 in the paper in front of us today. It refers to the brigades and the number 50,000. It might come out in the course of his remarks, but can the Minister let us know what the mix of those 50,000 will be? That might be the number, but there will be all sorts of capabilities and capacities involved. Indeed, there is a very valuable illustration on page 28. I was particularly interested to see “LAND—A war-fighting Division”. The symbol for “Intelligence, Surveillance and Reconnaissance” seems rather like that of the Whips’ Office, but I do not worry necessarily about that.
Perhaps I may then direct your Lordships’ attention to paragraphs 4.45 and 4.46, which detail the Special Forces. In any defence debate or on many matters, the less said about the Special Forces the better. We are delighted when we get news later of what happens, but one particular aspect of paragraph 4.46 concerns me a trifle. It states:
“We will buy advanced communications equipment”.
I say cobblers to that; we want the best. And only the best will do, not just for the Special Forces but for the men and women who are also occupied with them.
On paragraph 4.48, perhaps my noble friend will be able to enlighten me either today or in writing on the term “innovative brigades”. I am interested in what the mix will be or what they might get up to.
On paragraph 4.49 on the Typhoons, can my noble friend let me know at some stage what the mix in the numbers will be? I understand there to be 138 F-35 Lightning aircraft at some stage. Can he advise me, please, what the mixture of F-35As and F-35Bs is likely to be?
The noble Earl, Lord Stair, who, alas, is not in his place, mentioned accommodation. This has concerned your Lordships’ defence group when we visit, but I am delighted to see in paragraph 4.53 that this will be one of the major projects. I see the noble Lord on the Front Bench indicating that my time is up—he will be relieved to learn that I am about to sit down—but if my noble friend the Minister could glance at paragraph 4.53, it would reassure me greatly.
Lord Boyce (CB)
My Lords, I declare my interests as in the register. It has been good to see that this SDSR has arrested the decline of the defence budget over the past five years and made some attempt to redress some of the woefully short-sighted decisions made in 2010. It is particularly encouraging to see in the Prime Minister’s foreword to the review his recognition of the need for,
“sea lanes to stay open and the arteries of global commerce to remain free flowing”,
and, from this, maritime security and the role of the Royal Navy moving back to where it should be in the centre of our defence strategy.
However, in the context of keeping sea lanes open, I have two concerns. First, safe navigation is fundamental. The Minister will be aware of the vulnerability of the global navigation satellite system—GNSS—to interruption and jamming and of the availability of eLoran, which is not similarly susceptible and provides a safe back-up in this eventuality. I declare an interest in this as an Elder Brother of Trinity House. Would the Minister care to comment on the Government’s intentions regarding a reliable and robust alternative to GNSS when eLoran is terminated at the end of this year when the French shut down their station, a station without which the eLoran system cannot function? There is a national resilience component to this—it is not just safe navigation—with regards to GNSS-generated positioning, navigation and timing, or PNT. It is on its signals that key elements of much of our national infrastructure depend.
Secondly on safe sea lanes, and as I mentioned in the debate following the Statement on the SDSR in the House last week, we should be concerned about the small size of our destroyer/frigate force. These are the workhorses of the fleet on which we depend to keep the sea lanes open. In replying to questions, the Minister said:
“As regards the sufficiency of ships, we are advised by the Chief of Naval Staff that a 19-ship destroyer and frigate fleet, capable of co-operating on a global scale, is what is required”.—[Official Report, 23/11/15; col. 518.]
That may be so, and it may be what the Chief of Naval Staff said, but that is only because the number of tasks that we have traditionally and quite properly undertaken has been cut to accommodate the paucity of escorts.
For example, if the aspiration to meet national security objective 2, which is to project our global influence, is to be sensibly realised so far as the Royal Navy’s contribution to the core MoD task of defence engagement is concerned, we need more ships to cover the necessary footprint. Although we may be able to draw some comfort about the announcement of the concept of designing and building a new class of lighter, flexible, general-purpose frigates, it is simply too long to wait until the 2030s to see them.
In the upcoming and new national shipbuilding strategy, I exhort the Government to see what can be done to bring forward the introduction of those ships into service. This will benefit the industry by having a better shipbuilding drumbeat; it will generate earlier foreign sales potential, where other navies like to see the Royal Navy using a class of ship before they buy into it; and, of course, it would underpin the United Kingdom’s role in supporting international security and stability in the light of the SDSR.
Lord Anderson of Swansea (Lab)
My Lords, I congratulate the four maiden speakers and wish to make three brief reflections.
First, there is a consensus that this SDSR is valuable and welcome. It is certainly an improvement on its 2010 cost-cutting-exercise predecessor. However, I question whether the pace of change has been fully taken into account. There must be concern about the timeframe given the many uncertainties—the play of the “contingent and the unforeseen”, the “unknown unknowns”, such as the fall of the Berlin Wall, 9/11, the Arab spring and mass migration to Europe—all of which stand as a corrective to long-term planning.
There is a need, of course, for flexibility and agility in doctrine and procurement, where the lead times—such as for the maritime patrol capability and the new strike brigades—are long. Again, the Vanguard replacement seems to have been stretched incredibly from 2024 to 2028, and now to the early 2030s. Surely the case for adaptable platforms capable of modification as the nature of the threat changes has been made.
The history of the Upholder class submarine is instructive—planned in the early 1980s, abandoned in the early 1990s and eventually sold cheaply to Canada. I concede that part of the reason was cost-cutting, but the key consideration was that its role as a barrier to Soviet incursions into the North Sea had become redundant. Thus, even five-year projections can be swiftly undermined by events. For example, had Scotland become independent with an anti-Trident Government, we would need a massive rethink of strategy and bases.
We need to learn from overseas examples. From his previous knowledge of the health brief, I ask the noble Earl whether he is confident that there is, for example, sufficient spare capacity in our London hospitals to cope with a major terror attack as the Paris hospitals appear to have coped. Is the planning for this contingency adequate?
My second reflection is that the SDSR has a welcome emphasis on inter-departmentalism at home and co-operation with our alliances abroad—certainly compared with its predecessor—but are the boundaries between the MoD, DfID and the FCO still too stark, as the noble Lord, Lord Howell, said? Should the departments not be seen as three legs of a tripod? Yet two of the three legs have a guaranteed budget, so the FCO has to take the strain. Is the balance correct? Are the boundaries of these budgets sufficiently flexible? For example, our military contribution to tackling Ebola was properly charged to the defence budget.
I come to my third and final reflection. The Oracle at Delphi advised those who sought its wisdom to “know yourself”. Yes, we are pre-eminent in soft power, but have we reached a true understanding of our role in the world? Did I detect a certain bravado in the tone of the review? The Prime Minister said exultantly, “Britain is back”. Have we made a root-and-branch examination of our role and capabilities? The Falklands, the last of our unilateral campaigns, could not now be repeated. The review should be read in parallel with the LSE review already cited. Thus, have we fully adjusted to our proper role in the alliances with increased specialisation in procurement and in regional market share? Is there now a case for a new St Malo treaty to add Germany to the Franco-UK alliance? Must we in the UK continue to have the full spectrum of capability? I am not confident that these and other questions have been adequately answered in the review.
Lord Robathan (Con)
My Lords, in congratulating the four very good maiden speeches, perhaps I may invidiously pick out that of my noble friend Lord Hailsham, who was introduced on the same day as me last month. I think noble Lords will agree that he will contribute greatly to this House. He made some excellent points and I thought that his timekeeping, in keeping himself to within four minutes, was particularly to be congratulated.
We are really taking up where we left off yesterday, except that in my case I was the 64th speaker in that debate, but today I am the 28th, so I suppose that I have been promoted. I welcome much in the SDSR, and today I concentrate on the Army. I walked down the Royal Gallery earlier and saw the names on the panels of those from the House of Lords who have died in service to this country. Many of course would have been volunteers for the First World War and the Second World War, but many would have had careers in the Army. We should all ask whether the Army will remain an attractive career.
Accommodation is extremely important, but young men—and they are primarily young men—want excitement, adventure, job satisfaction and above all a challenge. I am afraid that they may be less bothered about en suite facilities. Some 82,000 troops in the Army are too few. In the campaigns in Iraq and Afghanistan we created a much more professional force than the one I joined. If we wish to retain those professional people, we have to offer them a continuing challenge. I was talking to young officers on Tuesday night. One had been to Oman, Jordan and Belize in the past year, which was pretty interesting. They were clever young men, and in their late 20s they look at an 82,000-strong force and think that, in the future, perhaps their careers may be limited.
On numbers, there are too few soldiers if we wish to saturate a city, as the French did in Paris after that attack. There are too few to deal with infrastructure attacks, as my noble friend Lord Arbuthnot mentioned in his maiden speech. Turning to those boots on the ground about which we hear so much, in the first Gulf War we deployed a division, as I recall. In the second Gulf War in 2003 we deployed something similar, although both were pretty difficult. Now it would be very difficult, and the Falklands, which the noble Lord, Lord Anderson, has just mentioned, would be impossible. That is because we have very few boots to stick on the ground. The SDSR has great aspirations, but I repeat: we need more troops. I should say that I told the Prime Minister this five years ago when I was a Minister in the MoD, and I survived—for a few years, at least.
If our Special Forces are to be elite and special, they have to undergo a rigorous selection process. Often that process is actually rather unfair and good people fail to get through, but one is totally reliant on the quality and the capability of the personnel—the individuals. Our Special Forces are very busy and extremely good at their job, but you cannot create larger Special Forces on a whim. The Americans tried something similar in Vietnam and it did not work well. Yes, of course the equipment is important, but you need to select and keep good people. Reducing the size of the Army to half of what it was 40 years ago has shrunk the pool from which we can recruit.
Until the 1980 embassy siege, not many people had heard of the SAS, but now it is lauded to the rafters. A huge amount is expected of the Special Forces. I am concerned that we expect too much from what, by its very nature, has to be a small, elite force. I remember training Sergeant Major Taff Richards, formerly of the Welsh Guards, running a selection in 1981. He said, “There are no supermen here. We cannot perform miracles or walk on water”. We have to have excellent people, we have to keep them, and we have to select from a larger pool.
I welcome the direction of the SDSR, but only that. I have highlighted the three concerns that I have about our depleted Army. It is too small, I am concerned that it does not offer an attractive enough career structure to keep people in, and we should not assume and cannot expect that very small, elite special forces can do everything that people seem to think they can.
Baroness Jolly (LD)
My Lords, I thank the noble Earl, Lord Attlee, for tabling this timely debate. I think we would all agree that we have had a really interesting few hours. I congratulate the Government on the full-spectrum approach to our security taken in the SDSR. The complexity of every security issue that we face means that we need to take a more strategic and co-ordinated approach to using our military, intelligence, diplomacy, international aid and soft power resources to contribute with other like-minded states to our international security. Others on my Benches who are more expert than I have addressed aid and diplomacy. Here, I welcome my noble friend Lord Bruce of Bennachie and his maiden speech. He will be a welcome and great addition to our Benches.
On defence, the equipment announced in the SDSR and the posture that Future Force 2025 will deliver will, once set up, enhance the UK’s ability to support international stability and security with Her Majesty’s Armed Forces when required. The UK has never demurred in its commitment to working with our allies and partners to deliver international security. This SDSR acknowledges the important role that Britain plays. We can explore this further in Monday’s debate in the name of my noble friend Lord Wallace of Saltaire.
When considering our ability to support international security and stability and work with our allies, one of my concerns is the personnel levels in Her Majesty’s Armed Forces and in the supply chain, and our ability to deliver sovereign capabilities—more specifically, our ability to recruit and retain expertise in high-skill trades, such as nuclear engineers, avionics and also cyber specialists. I will return to cyber shortly. Having the equipment to deploy in support of international security is one thing; it is quite another to have the requisite personnel so that military capabilities can be fully used when directed by HMG.
The increase of the UK’s expeditionary capability to 50,000 personnel will mean that one in three of the defence force will need to be deployable at any one time, compared with the current overall ratio of one in five. This narrows down to one in four for the RAF and one in three for the Royal Navy. What impact will this have on harmony time? There will be a division for high-intensity combat, drawing from two armoured infantry brigades and two new strike brigades. The strike brigades will use the Ajax armoured vehicles and the new mechanised infantry vehicles. Regulars and reservists will work on strategic communications and hybrid warfare alongside one another in the two new brigades. They will deliver better battlefield intelligence.
In addition to the stupendous new carriers, which will form the platform for the F35s, three new logistic ships will be purchased to support them, along with a mix of Astute submarines, Type 26 and Type 45 frigates, plus the yet-to-be-designed all-purpose light frigate. Many of us wait with bated breath on that one. The Royal Marines will also be available to use the carrier’s amphibious capabilities.
As far as the RAF is concerned, the announced purchase of nine P-8 maritime surveillance aircraft is welcome after the cancellation of Nimrod in 2010. While these aircraft have an important role monitoring the UK’s sovereign maritime area, they also have a vital role working with our allies to hunt submarines in the Atlantic—an activity that the UK unilaterally removed itself from fully participating in in the 2010 SDSR.
It has been said that the RAF has had a good SDSR—some might say not before time. Its pilots will fly the C35s off the two new carriers, two new Typhoon squadrons with added capability and 20 new Protector RPAS, as well as a recapitalised air transport fleet.
Lord West of Spithead
Will the noble Baroness agree that the Royal Navy and the Royal Air Force will both fly the Sea Lightnings off the aircraft carrier?
Baroness Jolly
The noble Lord and I might hope that, but that is not what the briefing that I have been to said. Time will tell.
All this paints an exciting future, but it is very much a future picture. The noble Earl the Minister will remember a question asked at the excellent Peers’ briefing on the SDSR about the timeline from 2015 to 2025, so that it is easy to follow the implementation of each capability. If it were to exist it would be hugely informative and very helpful.
I turn to personnel issues. On cuts to the Civil Service working within MoD, will the Minister acknowledge the general fall in morale? The loss of their expertise will be considerable and, once gone, it cannot be recovered. Will he confirm whether redundancy will be strategic or voluntary? With a restriction of 1% on salary increases, does this send the right message to those who are staying, when outside pay rises for the same skills are 4%? What estimate has been made of lost skills and experience, and what packages might be made available to those who would pose a strategic loss?
We face a range of threats, some state led. The return of Russia to the SDSR should come as no surprise—five years out is a long time. Some threats come from rogue players, such as Daesh and al-Nusra. Some, like cyberthreats, could come from someone's bedroom—that of a terrorist or a bored student. Cyber is real and poses a serious threat to the workings of our machinery and to civil society. I am sure that any recently purchased equipment or systems have built into their commissioning a detailed cyberdefence specification. Retrofitting is another issue; it is less straightforward and poses a far greater risk.
The commitment and realisation in the SDSR that cyber is a real and daily threat is welcome. The investment of £1.9 billion in defensive cyber over five years is to be applauded, as is the publication next year of the national cybersecurity strategy. There is a huge need to be fleet of foot in this as the picture emerges and new tools become available on the dark web. Change is the norm; it is rapid and without notice. The decision to base cyberthreat analysis and detection at Cheltenham is interesting. Where will the policy direction be determined?
Cyber is the future. We need to develop a large cohort of all manner of cyber expertise, working with operatives and with our trusted allies and partners. The recently announced Institute of Coding is a great initiative. I sincerely hope that applicants reflect the pattern in the Middle East and in India for similar courses, where more women than men apply.
During the last 20 years or so, we have seen the growth and importance of soft power alongside military hard power. I liked the “soft plus military equals smart” that was said earlier in the debate. I welcome the move to expand our presence in our embassies worldwide—an extension of deep country influence. We should never underestimate their influence and ability not only to be the face of UK plc, but also to be our eyes, ears and voices in country.
In a previous debate, I also welcomed the addition of the British Council and the BBC World Service to the SDSR. Having lived in the Middle East for some years and worked in the British Council, I have seen its activities and impact at first hand. It is the envy of many and if it did not exist we would have to invent it. I have just received a letter from the Minister and I am fairly sure that the question I am about to put to him had not been checked in that letter. If I repeat a question, then I forgive him—or perhaps he will forgive me.
Baroness Jolly
Whichever way. Can he confirm that there will be no cuts to either the British Council or the BBC World Service? How does the extension of deep country expertise dovetail with cuts to the FCO budget?
We have heard some fascinating maiden speeches—four and a half of them. We have heard the challenge from the noble Lord, Lord Hannay, on peacekeepers. I think that was unique. Noble Lords have woven most other points in and out. I welcome the positive tone of the SDSR, the commitment to 2% spend and the annual uplift announced by the Chancellor. As noble Lords have said, more needs to be done. All is not perfect. Our Armed Forces are prepared to put their lives in peril for us. We owe it to them.
Lord Touhig (Lab)
My Lords, in this debate the House is being asked to take note of Britain’s,
“role in supporting international security and stability in the light of the Strategic Defence and Security Review”.
We have heard some first-class maiden speeches from the noble Lords, Lord Arbuthnot, Lord Bruce and Lord Hain, and the noble Viscount, Lord Hailsham. Each has served with considerable distinction in the other place and I have no doubt that they will do the same here, bringing their very considerable experience to our debates and enhancing the standing of your Lordships’ House.
The debate could not have come at a more important time: less than 24 hours ago we began air strikes against ISIL in Syria. The defence of our country and Britain’s international role in fighting probably the most evil of terror groups to inhabit our world is very much on the minds of our fellow countrymen and women. At the outset I pay tribute to the brave men and women of Britain’s Armed Forces who, day in, day out, put their lives on the line to defend our freedom and our way of life. In my eyes and, I am sure, in the eyes of many others, they have no equal. Now that the decision to engage in Syria has been taken, no matter whether we agreed with this action or opposed it, we have to get behind our forces, giving them and their families our full support.
It would be easy to stand at this Dispatch Box and tear into the strategic defence review. It has many shortcomings and we considered some of these in the debate following the Statement on 23 November, and a number of noble Lords have shared their concerns today. It would be easy to make party political points and hit out at the Government over the review. However, that is not my aim or intention. Today, of all days, we need to be a united country and a united Parliament.
There are still many unanswered questions about the review. Britain is a maritime trading nation and keeping open the world’s sea lanes for trade and commerce is vital to our economic well-being, yet our Navy is small, stretched and lacks sufficient vessels. There is also concern that we have too few personnel to man our ships. The SDSR told us that Britain will increase the size of its frigate fleet in the long term. Will the Minister say what is meant by “long term”? Is it five years or 10 years? How long is it? If he has answered that in the letter I received 20 minutes ago, I hope he will forgive me for asking the question again. We are told that there will be a new class of lighter, flexible, general-purpose frigate by the 2030s. Can the Minister put some more meat on the bare bone of this plan, or is it another of those “long on promises and short on specifics” that characterise much of the review?
The size of the Royal Air Force is at an all-time low, when monitoring submarine incursions in or near our territorial waters is increasingly important. The SDSR tells us that we will buy Boeing P-8 maritime patrol aircraft to perform the task that was once done by Nimrod. Can the Minister say when Britain will have a fully operational independent capability to do this? I am told that it will be 2020. Is that correct?
In the case of the Army, the SDSR sets out a plan to form two new strike brigades, with 5,000 personnel, capable of rapid deployment. When will that take place? My reading of the review suggests that it will be 10 years before the rapid strike brigades can be deployed. I return to a question that I asked the noble Earl on 23 November, to which, probably because of pressure of time, he did not answer. Is it true that our Special Forces have shrunk by 40% due to restructuring and reduced numbers? The noble Lord, Lord Robathan, said in his speech last night that the pool of talent for the Special Forces has been shrunk by cuts, a point to which he returned today. He said that the Army is half the size it was when he joined 40 years ago, adding that it was difficult, if not impossible, to increase the size of the Special Forces further without dropping standards, and that that would make them no longer special and no longer capable of the task asked of them. That comes from a former soldier and Defence Minister. The noble Earl might care to reply to that when he responds.
If we look at the size of the Army, the review makes it clear that the Government will continue their policy of filling the gap in the number of full-time soldiers by increasing the reserves. The SDSR tells us:
“We will continue to grow our Reserves to 35,000”.
Can the noble Earl tell us when this will be achieved? What of this comment from his noble friend Lord Attlee, speaking in the debate on the reserves in October, who said:
“I still think that the plan for volunteer reserves is deeply flawed—in particular, in trying to suggest that volunteer reservists will be identical to their regular counterparts”.?
He went on:
“They may be interchangeable and they can certainly be interoperable, but they are never going to be the same. There is simply not enough time for training to get to that level of proficiency”.—[Official Report, 22/10/15; col. GC 59.]
Is the noble Earl, Lord Attlee, wrong when he tells us that the shortfall in regular soldiers is to be filled by less well-trained reservists who will never get to the level of proficiency we demand of our regulars? I am sure the House will be interested in the Minister’s response.
In our debate on the reserves, the Minister recognised the importance of retention. Can he update us today on this matter? Can he tell us the rate of recruitment and retention? In October he said that we had “turned a corner” on this matter about a year ago. How far around the corner are we? Just a handful of the 90 pages in this review mention the Armed Forces at all. There are still many questions but time prevents me asking them.
Finally, I will say something about the SDSR telling us that Britain is,
“the world’s leading soft power”.
The Government have acknowledged the importance of soft power with an £85 million investment in the BBC World Service to support initiatives in Russia, North Korea, the Middle East and Africa—a point that was made by the noble Lord, Lord Chidgey. Although we recognise the BBC to be one of the UK’s significant cultural exports, can the Minister indicate whether the Government have given any consideration to recommendations made by the Select Committee on Soft Power?
Many BRIC and Scandinavian countries shape their foreign policies around explicit soft power goals; for example, China has opened 327 of a projected 1,000 Confucius Institutes, encouraging philosophical understanding of its civilisation; and Finland sends monitors to join the Red Cross in Ukraine, not just for humanitarian aid but specifically to get closer to the people and to understand their wishes and needs. Worryingly, the Select Committee report concluded that Britain is weakening rather than bolstering its soft power institutions. Especially following the events in Syria, it is essential that the Government begin to make soft power central to any foreign and defence policy thinking. I would be grateful for the Minister’s views on this. Perhaps he could tell us a little more about what might be done other than the planned investment in support of the BBC.
I am sure the whole House will agree that it is the first duty of any Government to look to the care and well-being of their citizens, and that must begin with the defence of our nation. So when the Government come to Parliament with a document such as this, setting out their plans for our strategic defence and security, it is only right that it is given the most careful scrutiny. That has been done all around the Chamber today.
The Minister of State, Ministry of Defence (Earl Howe) (Con)
My Lords, we have had a detailed and extremely well-informed debate, benefiting, as ever, from your Lordships’ experience and expertise on defence matters. I congratulate my noble friend Lord Attlee on having introduced it so expertly. I congratulate also most warmly the four maiden speakers, each of whom in their own way has shown how maiden speaking should be done. Time has been tight but we have covered a great deal of ground.
I begin by reminding noble Lords of the context in which our discussions have taken place. We are living in dangerous and difficult times. The threats we face are growing in scale, complexity and diversity. In the past year alone we have seen a newly aggressive Russia using proxies to menace the borders of Ukraine. We have seen the Daesh death cult export the horrors it has perpetrated in the Middle East across the globe, from the beaches of Tunisia to the streets of Paris. We have also seen a great migration spilling across Europe’s borders and into the Mediterranean due to the effects of growing instability in the Middle East and Africa.
Such threats do not just pose a danger to us directly but undermine our entire international rules-based system on which our values of tolerance, the rule of law and freedom depend. Yet in the face of these dangers, we will not retreat to our shores. Instead, we will continue protecting our people, projecting our influence and playing a central role in supporting global security and stability.
Our strategic defence and security review, published last week, strengthens our defence in three ways. First, it gives us the means to match our ambition. This Government have prioritised defence and security over many other areas of public spending. We have made a commitment to meet the NATO 2% target. We have put in place £2 billion of the joint security fund, which will see the defence budget rising in real terms by 3.1% in this Parliament. On top of that, we are meeting our UN target by spending 0.7% of gross national income on development. Additionally, we are increasing our investment in our security and intelligence agencies, and in counterterrorism. That money allows us to take the full spectrum of measures needed to tackle the causes and consequences of the threats that we face: tackling the poisonous ideology of Islamist extremism; refocusing our aid budget to support fragile and broken states; and preventing conflict across the world.
However, our SDSR is about hard as well as soft and smart power. There will continue to be times when we need to employ armed force to counter aggression. That is why, in the past year, we have been acting around the world, whether policing Baltic skies to deter Russia’s expansionism or using our Brimstone and Hellfire missiles to degrade Daesh in Iraq. Following yesterday’s vote in Parliament, we will be doing more in Syria. We are determined to stand shoulder to shoulder with our allies and strike at the heart of the terrorist lair.
This brings me to my second point. Our SDSR gives us the might to deliver, at home and overseas. Our Armed Forces are now increasing, not reducing. We have an equipment budget that has risen by £12 billion to £178 billion over 10 years, and we are using it to establish a potent new expeditionary force. It will be able to deploy 50,000 people, rather than the 30,000 we previously planned. It will give us two new strike brigades and be equipped with: more F35s, and earlier; more Typhoon squadrons; nine new maritime patrol aircraft; new frigates and the two fully-crewed aircraft carriers; and more ISTAR and more cyber, along with £2 billion more on special forces. At the same time, we are guaranteeing our continuous at-sea nuclear deterrent by replacing our four nuclear submarines. Lastly, we will be keeping our capability on the cutting edge by launching a new defence innovation initiative next year.
Thirdly, our SDSR recognises that we must work with allies and partners to deliver our national security goals and tackle global threats. Of course, we have always worked with partners but, in the past, this happened far more by instinct; tomorrow, it will happen by design. At the heart of this new approach is our commitment to NATO, the cornerstone of our defence. As well as meeting our 2% commitment, we will be leading NATO’s new high-readiness Spearhead force in 2017 and at next year’s Warsaw summit, we will be pushing to ensure that the alliance delivers the military capability and investment agreed in Wales.
Besides NATO, the UK will be leading the joint expeditionary force of seven like-minded nations. On Monday, we signed a memorandum of understanding giving our forces the green light to train and operate together. We are also strengthening the institutions on which our rules-based international order depend, notably by doubling our peacekeeping contribution to the United Nations. But bilateral relationships are as significant as multilateral ones so we will be enhancing our special relationship with the United States; working with France as part of the combined joint expeditionary force, which stands up next year; and expanding our DA network, forging new friendships while bolstering our alliances around the world.
My noble friend Lord Attlee asked me a number of questions. First, he asked where we are with eLoran, an issue also raised by the noble and gallant Lord, Lord Boyce. As part of our work to improve the resilience of our precision navigation and timing systems, we are studying a variety of technologies. However, the need for a readily available and highly precise system with worldwide coverage is likely to mean that our requirement for resilient global navigation satellite systems will endure. I will write to my noble friend and the noble and gallant Lord if I can provide further information on that issue.
My noble friend Lord Attlee also asked me about the Vanguard class of SSBN and whether the intention was to run that on longer than originally intended. As set out in the 2010 SDSR, we have assessed that we can safely manage and maintain the Vanguard boats until successor submarines are introduced into service in the early 2030s. He asked me about extending the role of the Type 45 to include ballistic missile defence. As the White Paper sets out, there will be a programme of exploratory work around the BMD role for the Type 45, but it is too soon to speculate any further at this stage. My noble friend also asked about the new general-purpose frigates. As set out in the White Paper, the exact requirements for any general-purpose frigate will reflect other decisions taken as part of the national shipbuilding strategy to be announced next year.
My noble friend also asked about the two armoured infantry brigades and whether that means we will be down to two armoured regiments. The design of the armoured infantry brigades, so that they meet the Army’s revised structure as announced in the SDSR, is being considered as part of new work being undertaken by Army HQ, so is work in progress. He questioned whether the two infantry battalions which are to be reconfigured for defence engagement would have sufficient capability—I think he said they would not have the capability of even a light-role battalion. That is not correct. As current world events demonstrate, the ability to build the CT capacity and fighting power of regional partners will be a vital aspect of the UK’s future national security. The exact size and shape of these battalions will become clear as the concept develops, but these are exactly the kind of stimulating, challenging and relevant roles required to retain our most skilled and ambitious soldiers. As regards the 10,000 military personnel available to assist the civil authorities, my noble friend was correct in saying that this would be via well-established procedures for providing military assistance to civil authorities, with the military working in support of the police.
My noble friend Lord Fairfax, who I am delighted to see back on our Benches, made several very well-put points. I can tell him that the UK will lead a very high readiness joint task force from next year. The planning assumptions in the SDSR increased our ambition for the Army, and our plan is to deploy a war-fighting division as required. There is a strong emphasis in the document, as he will have observed, on innovation, and a substantial innovation initiative will be announced in the coming weeks.
If my noble friend Lord Lyell will forgive me, I will write to him about how the force of 50,000 will be made up, but it is important to emphasise that the Army is able to deploy a division now with sufficient notice, which could consist of an armoured infantry brigade, 3 Commando Brigade and 16 Air Assault Brigade, as well as forces from other nations. Joint Force 2025 is about improving capabilities to enable us to deploy a division from a wider range of Army formations more quickly.
I can tell the noble Lord, Lord Bilimoria, that there are no plans to reduce the numbers of Gurkhas in the British Army. The noble Lord, Lord Hannay, asked me about the provision of UN peacekeepers. The number of service personnel serving at present as UN peacekeepers is 291, of whom 276 are currently in Cyprus. Up to 370 additional personnel could be assigned to peacekeeping duties in South Sudan and Somalia, but I will write to him on the question of the baseline. However, as for equipment, I hope it will be a reassurance when I say that any UK forces deployed on UN duties will be trained and equipped, as normal, to the extremely high standards that we have always had in this country. The noble Earl, Lord Stair, questioned whether the figure of 82,000 includes the reserves. No, it does not. The reserves will be on top of the 82,000, with a total of 35,000. Manning levels have been increased—not by a great deal, but the corner has been turned.
A number of noble Lords devoted their remarks to matters relating to soft power. I will not elaborate hugely on what the SDSR contains on that subject, although I am the first to acknowledge the integral importance of UK development assistance to long-term security and prosperity. Our commitment to spend 50% of overseas aid on the states most important to national security will undoubtedly focus on south Asia, the Middle East and Africa.
The noble Lord, Lord Touhig, asked me about Special Forces numbers. It has been the practice of successive Governments not to comment on the size of the Special Forces, but I re-emphasise to the noble Lord that we are investing £2 billion in new equipment for Special Forces, which I hope will be an encouraging sign of the emphasis that we place on the role that they play for this country.
The noble Lord, Lord Chidgey, asked me about access to the World Service FM broadcasts. If I may, I will write to him on that topic, as I will to the noble Baroness, Lady Jolly, on both the World Service and the British Council.
The noble Baroness, Lady Smith, focused her remarks on morale and whether the Armed Forces are now large enough to cope with the tasks that are required of them. I simply say that, by deliberately planning for the Armed Forces to do more and improving their productivity, which is undoubtedly what we are doing, we will better reflect the current demands on the force, and we will configure better to meet the demands of multiple, smaller and more geographically dispersed operations. We have also built in the agility to reconfigure the force to respond to a higher priority challenge, should it arise. However, we are the first to recognise the risk of overstretch and of damage to morale, so her points were very well made and are well taken.
The noble Lord, Lord West, spoke about the 2% figure for NATO. The 1.7% figure that he cited is an external estimate of the defence spend for 2020-21, not now. I would say that comparing defence spending now with 2010 is not appropriate, because before 2014 we spent considerable amounts on operations such as that in Afghanistan. We now spend less, but with no impact on our capability.
The noble Lord, Lord Anderson, asked about funding for the military involvement in the Ebola outbreak in Sierra Leone. The net additional cost of Operation Gritrock in Sierra Leone was in fact met by DfID.
The noble and gallant Lord, Lord Boyce, perhaps understandably, spoke, as he sometimes does, about the size of the Royal Navy fleet. We will indeed maintain a destroyer and frigate fleet of at least 19 ships. We will look to increase that number by the 2030s. The fleet will be supported by a very capable and renewed tanker fleet, and a fleet of up to six patrol vessels will support our destroyers and frigates in delivering routine tasks and enhancing our contribution to maritime security and fisheries protection. Altogether, this means that not only will our fleet grow for the first time since World War II, but its high-end technological capabilities will allow it to provide a better contribution and to retain a first-class Navy up to 2040 and beyond.
The noble Lord, Lord Touhig, asked about the flexible general purpose class of frigate, which I mentioned earlier. Our plan to commence in 2016 a concept phase assessment for an additional light frigate, which may result in a different type of frigate that satisfies the requirements of the Royal Navy, will proceed shortly. We believe that if the design and concept is worked through, it will be attractive to the export market. A combination of the modern Type 45 and the new anti-submarine warfare variant, the Type 26, should be sufficient in the mean time to provide protection to the deterrent and maritime task group. It is envisaged that the general purpose frigate will be able to conduct a wide range of other maritime security-related roles around the world, and thus take some pressure off our high-end warships.
The noble Lord, Lord West, asked about HMS “Ocean” and bemoaned the fact that it is going to be decommissioned in 2018. This is not in fact a bringing forward of the decommissioning date; it will continue in service as planned well into this Parliament, but, as part of the SDSR process, the decision was taken not to extend the 20-year lifespan that she originally had. We need, indeed, her personnel to man the new carriers.
My noble friend Lord James spoke powerfully about the need for a capability for home defence. I can tell him that that is foremost in our thoughts; my right honourable friend the Prime Minister recently announced that up to 10,000 trained Armed Forces personnel would be available to assist in any major incident within the UK. The SDSR also includes our work to provide closer military border force co-operation and better maritime surveillance. It is important to understand in this context that we have a cross-government approach to meeting our maritime surveillance task; the Royal Navy and UK Border Force provide different capabilities, which are suitable in different situations.
The right reverend Prelate the Bishop of Portsmouth focused some of his remarks on the plan to reduce the civilian workforce. It is too soon to say how those will play out. Further efficiencies will need to be found beyond our existing change programmes; we will undertake a series of studies that will identify opportunities for more innovative and flexible ways in which to work, including through better technology and moving work to different locations. The reduction in MoD civil servants will include many personnel in change programmes that are already under way, including the final draw down of British forces in Germany.
I will, of course, write on those issues that I have not had time to cover—
Lord Howell of Guildford
The report has a great deal to say about the Commonwealth network from both a trade and a security point of view. My noble friend has not mentioned that, and it may be difficult to do so now in the last few seconds. Will he ensure that when we debate the Commonwealth on 17 December he, or a fellow Minister, will be properly and well briefed in that aspect, because it is central to the future of this country?
Earl Howe
I share my noble friend’s emphasis on the importance of the Commonwealth. I shall ensure that his words are registered in the right quarters as regards our debate on 17 December.
Our message here is clear—the danger may be increasing but so, too, is our determination to counter the threats that we face. Our SDSR ensures that we have the means and might to match our ambition; it guarantees that, whatever challenges lie ahead, the UK will remain at the forefront of international efforts to preserve our security and stability for many years to come.
Earl Attlee
My Lords, I am grateful to all noble Lords who have contributed to this debate, especially the Minister for answering it. I agreed with almost all noble Lords, although I think that some of them need to research the existence of the Fleet Air Arm. I remembered during the debate that I had forgotten to raise one particularly obvious point but, fortunately, no other noble Lords raised it, so I can keep it for another event. In the mean time, I beg to move.
Overseas Territories Joint Ministerial Council
(9 years ago)
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The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, with the leave of the House, I shall repeat a Statement made in another place earlier today by my honourable friend James Duddridge, Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs. The Statement is as follows:
“I thank the honourable Member for Foyle, Mark Durkan, for his Urgent Question, which gives me an opportunity to talk about the excellent work of the Overseas Territories Joint Ministerial Council. The meeting formally concluded late last night, but in reality it will carry on today with a number of bilateral meetings across Whitehall, including with me.
The Joint Ministerial Council is the highest political forum established under the 2012 overseas territories White Paper. It brings together Ministers, elected leaders and representatives from the overseas territories for the purpose of providing leadership and shared vision across the territories.
At this year’s meeting, we discussed a large range of subjects, including child safeguarding, economic development, financial services transparency, climate change, sustainable energy, education and skills and the challenges of providing healthcare in small jurisdictions. We also discussed sports participation by the overseas territories, pension arrangements with the Department for Work and Pensions, governance and security. We had a very full communiqué, establishing how we would work together over the coming year. It has been very successful and I look forward to further meetings later today, following up on some of the commitments made last night”.
Lord Collins of Highbury (Lab)
My Lords, the latest issue of Private Eye reported that, in the tax year 2013-14, there were 11,000 property purchases in the UK using tax-haven companies. Confirming that this issue was discussed, the Minister said that we need to open up beneficial ownership so that criminal assets can be seized before they are moved out of the reach and jurisdiction of the UK Government. This morning, the Minister spoke only of an agreement to create central registries, and did not mention the words in the final communiqué about “similarly effective systems”. Has there been agreement from all overseas territories with financial centres to create central registries, or have some agreed only to “similarly effective systems”? If so, which ones?
Baroness Anelay of St Johns
My Lords, this is clearly a work in progress, and progress has been made. I have seen the flow chart showing where red and orange have gone to green, and progress has been achieved. The noble Lord asked about similarly effective systems. It may be that in some of the jurisdictions a centrally-held register is not seen as the best way forward. However, we have made clear that, in working in partnership with the overseas territories, it is important to have good governance and transparency. As my honourable friend said this morning, the discussions that have taken place over the past two days have been set out in the communiqué, and all the territories with financial services sectors agreed to hold beneficial-ownership information in their respective jurisdictions via central registers or similarly effective systems. We then said that we would give the highest priority to discussing how to take that forward, and I hope that we will then be in a better position to give the exact details that the noble Lord requests.
Lord Wallace of Saltaire (LD)
My Lords, a number of houses in Windsor, Maidenhead, Kensington and Chelsea and various other safe Conservative seats in or around London are empty, either permanently or for much of the year. I have heard the Conservative Benches talking about this scandal, so this is a matter of great interest to the Conservative Party as well as to others. We were told after the G8 summit that the Prime Minister intended to establish publicly accessible central registers for beneficial ownership of companies in overseas territories and elsewhere. We appear not yet to have achieved central registers, nor even that our law enforcement and security agencies will have access to such central registers. How slowly does the Minister expect further progress to be made, and when can we at least ensure that the security services and police will have access to central registers in what are British sovereign territories?
Baroness Anelay of St Johns
My Lords, progress is being made on gaining access for the National Crime Agency to information that is held. It is important that we continue to do that work in co-operation with the overseas territories. We have been making progress, and I shall give some examples, which may help the noble Lord, Lord Collins, as well. Gibraltar will implement a central registry of company beneficial ownership in line with the EU fourth money laundering directive. Bermuda already has a central register. The British Virgin Islands have agreed to bring all beneficial ownership onshore, and the Cayman Islands are introducing a centralised platform. Montserrat will implement a central register with the information publicly available—though, I recognise, on the payment of a fee. Fruitful discussions have taken place on developing a timely, safe and secure information exchange process to increase our collective effectiveness for the purpose of law enforcement, in which, whatever our party or none, we all have an interest.
Lord Naseby (Con)
My Lords, in asking this question, I declare an interest as a member of my family works in the Cayman Islands. Is my noble friend aware of how welcome paragraphs 9, 12 and 16 are? Paragraph 12 states:
“It is not appropriate to refer to British Territories as ‘tax havens’”.
Furthermore, will she confirm in relation to paragraph 16 that “beneficial ownership information” is only,
“for the purpose of law enforcement”,
and nothing else?
Baroness Anelay of St Johns
My Lords, my noble friend is right to refer to the fact that the overseas territories involved in discussions about beneficial ownership are international financial centres, which is an appropriate way to describe them. My noble friend is right to point out that paragraph 16 refers to,
“technical dialogue between the Overseas Territories and UK law enforcement authorities on further developing a timely, safe and secure information exchange process to increase our collective effectiveness for the purposes of law enforcement”.
Lord Hannay of Chiswick (CB)
My Lords, will the Minister confirm that I was right in noting that in the long list of subjects that was covered by the council in its discussions in the past few days, there was no reference to the possible effect on the overseas territories of a vote to leave the European Union, which would presumably have extremely important implications for them as far as aid, trade and the movement of people are concerned? Will she say whether this matter was discussed and whether the Government are helping the overseas territories to understand what the implications would be? Will she say whether the Government of Gibraltar really appreciate and understand that if this country were to vote to leave, Gibraltar will leave too, however it votes, and that its border with Spain will become an external border of the European Union, not an internal border?
Baroness Anelay of St Johns
My Lords, I assure the noble Lord, Lord Hannay, as I have done during the passage through this House of the European Union Referendum Bill, that we take responsibility for advising Gibraltar of the impact of its membership of the EU—through the fact that we are a member—and of its rights and responsibilities and the consequences that flow from them. I have also made it clear that we work in partnership with Gibraltar and that Gibraltar will be taking its own decisions about how to implement the European Union Referendum Bill. I am sure we will be further able to discuss with Gibraltar the broader issues about trade and the other matters to which the noble Lord referred.
With regard to the impact on other overseas territories, the noble Lord makes a very interesting point, and I shall certainly take it back.
Lord West of Spithead (Lab)
My Lords, our nation, with the overseas territories, controls the largest area of ocean and EEZs of any nation in the world. Has there been any discussion about the protection of those huge areas and the development of their economic potential for the countries themselves and our nation?
Baroness Anelay of St Johns
I am very glad that the noble Lord raises this point, particularly as COP 21 is under way at the moment. He is right that the overseas territories include some of the most remote and biologically interesting places on earth, and contain more than 90% of our biodiversity. I assure him that that is why these matters were under discussion and why the UK Government made a commitment to protect these unique and diverse areas from being damaged. We have made that clear in the past, and we aim to designate the largest contiguous no-take MPA in the world around Pitcairn in 2016. We are working with the Ascension Island Government to protect 50% of their waters from fishing activities, and we are also working with South Georgia, the South Sandwich Islands, the British Antarctic Territory and the British Indian Ocean Territory. This is a vital matter for those overseas territories.
Baroness Northover (LD)
My Lords, following on from my noble friend’s question, can I probe a little further? The Minister mentioned one or two overseas territories which were publishing registers, but could she say whether all overseas territories are participating in the central registers, and what is the timetable for doing this? Obviously the next stage is to make sure that these are public.
Baroness Anelay of St Johns
My Lords, discussions are ongoing about whether those registers will be public. Of course, some overseas territories feel that that is not appropriate to them. These discussions are continuing, but we have made great progress. We do not put a deadline on this, because the overseas territories have their own elected Governments; therefore we work in partnership with them. We do not dictate to them but work with them.
Baroness Hooper (Con)
My Lords, in the past, representatives of the overseas territories have accompanied Ministers in their attendance at international meetings and conferences; I know that from my own experience, particularly in the Department for Education. However, it has been pointed out to me that at the recent and current meetings in Paris on climate change, no representation from the overseas territories was invited by the Government. Given what the Minister has said in reply to the previous question and that the overseas territories are likely to be greatly affected by climate change, is that not a mistake, and what is the Government’s policy on this for the future?
Baroness Anelay of St Johns
My Lords, our policy has been very firmly to engage the interests of the overseas territories in our discussions on climate change. I can say that with some confidence simply because it is one of my ministerial duties at the Foreign Office to be in charge of our participation in the COP 21 process. Therefore I have been involved in the soft diplomacy, which has involved my working with the small island developing states, not only in this country but when I have visited New York and attended ministerial week there. My noble friend is right to say that the overseas territories do not as of right have the opportunity to attend a vast range of international meetings because they are not sovereign nations, but they are able to attend the summit occasions by invitation. On this occasion I assure her that they have been fully involved in discussions beforehand, and I believe—although I do not have a record of this—that they submitted their views to the association of small island developing states when they came to their conclusions.
Welfare Reform (Northern Ireland) Order 2015
(9 years ago)
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Lord Freud
That the draft Order laid before the House on 26 November be approved.
Relevant documents: 16th Report from the Secondary Legislation Scrutiny Committee, 11th Report from the Joint Committee on Statutory Instruments
The Minister of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, the order will ensure that the people of Northern Ireland, at the request of their Executive, can benefit from the welfare reforms enabled by the Welfare Reform Act 2012 in Great Britain.
The UK Government have no intention or desire to legislate on an ongoing basis for welfare in Northern Ireland. Welfare is devolved to Northern Ireland and will remain so. The enabling Act time-limits the Government’s power to legislate so that an order cannot be made after 31 December 2016.
The legislative approach we are taking has arisen at the request of the Northern Ireland Executive and the Assembly has granted its consent. The content of the Order in Council broadly corresponds to the 2012 Welfare Reform Act, which was debated at length and in great detail in this House. It introduced a number of changes to ensure that work pays, that the most vulnerable in society continue to receive the support they need, and that taxpayers’ hard-earned money is spent responsibly. These principles underpin the Welfare Reform Act 2012 and are the same principles that underpin the Order in Council before the House today.
The Order in Council is based largely on the Assembly’s Welfare Reform Bill that fell at its final stage in May of this year. It includes the reforms made in Great Britain by the Welfare Reform Act 2012; the various flexibilities agreed between the Northern Ireland Department for Social Development and the Department for Work and Pensions; the amendments agreed during the passage of the Assembly Welfare Reform Bill; and provisions that allow for Northern Ireland Executive-funded top-ups.
This order is a fundamental part of the agreement reached last month. As part of that agreement, the Government are committed to delivering welfare reform in Northern Ireland. We would, of course, have preferred not to take this approach. I assure noble Lords that the Government are taking only the action necessary to ensure that welfare reform is no longer an issue undermining the political process in Northern Ireland. We believe that this is the only way to resolve the welfare reform impasse in Northern Ireland.
As I have said, welfare is a devolved matter in Northern Ireland. However, it has in principle maintained parity with Great Britain, meaning that benefit claimants have been able to avail themselves of the same rates of benefit as those in the rest of the United Kingdom. However, as a result of the failure to implement welfare reform, the system in Northern Ireland is becoming increasingly different from that operating in the rest of the United Kingdom. This difference is not sustainable and will cause particular problems in the delivery of people’s benefits. Once Great Britain moves entirely to the new system based around universal credit, Northern Ireland will need to create and maintain its own, separate system and meet the significant costs of the IT needed to support it.
The order means that Northern Ireland’s welfare system will be placed back on track. A legacy welfare system that makes people dependent on benefits is no more sustainable in Northern Ireland than it was in Great Britain. The order will provide real benefits to people in Northern Ireland by helping to tackle worklessness and delivering real economic benefits.
The order provides the legislative framework to implement these reforms in Northern Ireland, including: replacing DLA with the PIP, which helps towards additional living costs caused by a long-term health condition or disability and is based on how a person’s condition affects them, not on the condition they have; reforming contributory benefits so that they align with universal credit conditionality, including introducing a claimant commitment as a condition of entitlement; time-limiting ESA to underline the principle that, with the right support, claimants are expected to return to work; introducing tougher penalties for benefit fraud; and bringing in a benefit cap to ensure that those on benefits face the same choices as people in work. It reflects the agreements with the Northern Ireland Executive to make provision for agreed Northern Ireland-specific welfare-related administrative flexibilities and top-ups.
It is important to remember why the order is necessary. It is not intended to diminish Northern Ireland’s devolution settlement. The legislative approach that we are taking has arisen at the request of the Northern Ireland parties, and the Assembly has given its consent. The order reflects the draft Northern Ireland (Welfare Reform) Bill, which has been debated at great length in the Assembly over the past three years. Accordingly, the order includes a number of amendments that reflect the will of the Assembly, including an 18-month limit for higher-level sanctions and discretionary payments.
The order is about delivering the fresh start agreement. It is about supporting hard work and aspiration, and creating the right incentives for people to fulfil their potential and create a safe, secure and self-sufficient life, supported by, but independent from, the state. It is about making sure that spending on welfare is sustainable and fair to the taxpayer, while at the same time protecting the most vulnerable. Building an economy based on higher pay, lower taxes and lower welfare is right for the UK and right for Northern Ireland. I commend the order to the House.
Lord McAvoy (Lab)
My Lords, I am grateful to the Minister for outlining the order to the House and for his brevity. Before we get to the order, it is important to be mindful of the events that have led up to this point and the context of this debate.
It is now almost a year since the Stormont House agreement was finalised. Those negotiations made substantial progress on some of the most contentious issues, including flags and parades, while also seeking a way forward on matters such as welfare reform and the devolution of corporation tax. The agreement marked a turning point but, as your Lordships will be all too aware, during the last year, particularly in the past 12 weeks, it appeared that there was a genuine risk not just that the devolution settlement might collapse but that we might see a return to direct rule for the first time in almost a decade. It is to the Government’s credit that they have worked hard to come up with this agreement and, in doing so, they have our full support in bringing it forward.
Lord Newby (LD)
My Lords, I briefly echo the comments of the noble Lord, Lord McAvoy. In some respects, of course, this is an imperfect way of dealing with these very important changes. But the key point is that it is a way of dealing with them. They will now be able to be implemented in a way that is impossible to see via any other route. They do, as the noble Lord, Lord McAvoy, said, unlock other important developments in Northern Ireland. Therefore, we on these Benches welcome the order.
Lord Freud
I thank both noble Lords for the way they have approached this as something that we need to do to help the process in Northern Ireland and allow that country to function.
It is worth picking up just a handful of points before I close. The noble Lord, Lord McAvoy, indicated, I think, that he did not necessarily approve of some of the Government’s welfare measures. However, let me explain how the current Welfare Reform and Work Bill will work in the Northern Ireland context. As part of the fresh start agreement, the Northern Ireland Executive recognised the importance of addressing welfare reform more broadly and not just the 2012 measures. The legislative consent Motion passed by the Assembly made this clear. So if required, we will introduce a further order to implement the relevant provisions of the Welfare Reform and Work Bill for the same reasons that we are introducing the order currently before the House: to provide Northern Ireland with a fit-for-purpose welfare system that takes parity as its starting point.
The noble Lord, Lord McAvoy, mentioned the transitional provisions of the order, which allow the Secretary of State to exercise the vast majority of regulation-making powers in the first instance. In effect, this means that the Secretary of State has the power to introduce regulations until that power is handed back to Northern Ireland.
On the noble Lord’s point about some of the changes, the Northern Ireland Bill included a number of specific amendments which were agreed to help ensure that the reforms could be implemented. The Government remain convinced that the proposals introduced in Great Britain remain right for Great Britain. In Northern Ireland, we have agreed administrative flexibilities to allow payments to be made more frequently and for the rent element to be paid directly to landlords. This recognises the devolved nature of welfare and the ability for there to be different administrative arrangements in Northern Ireland. It will be up to the Northern Ireland Executive to work out their exact administrative procedures. The universal credit system in Great Britain also allows for us to make these alternative payment arrangements, which will be used where appropriate.
I emphasise again that this order fulfils a vital commitment made as part of the fresh start agreement and it has the support of the Northern Ireland Assembly. It does not diminish the devolution settlement but supports the future of devolution in Northern Ireland and paves the way for the introduction there of a modern, reformed welfare system. I commend the order to the House.