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Nigel Huddleston (Mid Worcestershire) (Con)
1. What his policy is on the autonomy of prison governors; and if he will make a statement.
The Lord Chancellor and Secretary of State for Justice (Michael Gove)
Our prison system needs reform, and, in particular, we need to give governors greater freedoms to innovate to find better ways of rehabilitating offenders.
Nigel Huddleston
In December, the outgoing chief inspector of prisons said that he was concerned about Islamic extremism in prisons. In some prisons, including in Long Lartin in my constituency, the Muslim population is as high as 40% of inmates. What additional powers or support are the Government giving to tackle religious extremism?
Michael Gove
My hon. Friend makes an important point. Radicalisation in prison is a genuine danger not just in England, but across the European Union. That is why we have charged a former prison governor, Ian Acheson, with reviewing how we handle not just the security concerns, but the dangerous spread of peer-to-peer radicalisation in our prisons. It is also the case that, in appointing a new chief inspector to follow on from the excellent work of Nick Hardwick, the experience of Peter Clarke in this particular area will count very much in his favour.
Keith Vaz (Leicester East) (Lab)
I welcome the steps that have been taken to tackle radicalisation in prisons, but the problem exists once people come outside prisons. In a previous report of the Home Affairs Committee, we talked about the need to monitor people when they come outside. Will the Secretary of State ensure that there remains that connection with the Home Office, so that those who have had lessons or initiatives to do with counter-radicalisation are able to continue with them when they get outside?
Michael Gove
Absolutely. I make it my business to talk regularly to the Home Secretary about this issue, as we share the concerns of the right hon. Gentleman. I also know that the Under-Secretary of State for Justice, my hon. Friend the Member for South West Bedfordshire (Andrew Selous) and the Minister for Security, my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes) meet regularly to ensure that we do everything possible to monitor the matter. Across the House, there is a recognition that we must deal not only with violent extremism, but with extremism itself. Those who seek to radicalise and to inject the poison of Islamism into the minds of young men need to be countered every step of the way.
Sir Edward Leigh (Gainsborough) (Con)
2. What steps his Department is taking to increase value for money in its spending.
The Parliamentary Under-Secretary of State for Justice (Mr Dominic Raab)
We are determined to help eliminate the budget deficit and deliver better justice, which is why we are cutting 15% from the Ministry of Justice budget over the spending review, but finding £1.3 billion to overhaul the prison estate so that we drive down reoffending and ensure that my hon. Friend’s constituents get better value for money and better bang for their buck out of the justice system.
Sir Edward Leigh
The Ministry of Justice has faced spending cuts as deep, or deeper, than any other Department in Whitehall, and yet, despite the occasional criticism and row, I am not sure whether the public has noted any discernible reduction in the service provided by the Department. Will my hon. Friend summon in the Secretaries of State for Health, Work and Pensions, International Development and Defence and give them a verbal tongue lashing about how we can emulate the private sector and create more wealth, goods, enterprise, deregulation and lower taxation and still provide better services?
Mr Raab
I thank my hon. Friend for his insightful remarks. As a former Public Accounts Committee Chairman, he will appreciate that we have already slimmed back-office by £600 million so that we can extend rehabilitation to the 45,000 offenders on short sentences, where we have some of the highest reoffending. Now we are cutting the admin budget by 50%, but investing £700 million to modernise our courts. It shows that, whether we are talking about delays at courts or the offenders passing through them, we can drive efficiencies and deliver a more effective system.
Nick Thomas-Symonds (Torfaen) (Lab)
Given the Secretary of State’s U-turns on things such as the criminal court charge and the ban on books being sent to prisoners, may I gently suggest that a good way of saving money would be to avoid such mistakes in the first place and listen to the Labour party?
Robert Neill (Bromley and Chislehurst) (Con)
One important area in which both service can be enhanced and value for money achieved is through greater efficiency both in the courts estate and the courts system. Is my hon. Friend satisfied that the Ministry has sufficient in-house capacity to deal adequately with major issues such as court restructuring, where negotiations have to take place at high commercial contractual levels, or will he bring in outside expertise where necessary?
Mr Raab
My hon. Friend is absolutely right. I have already explained some of the back-office savings that we are making not only to deliver better value to the taxpayer but to find the savings to reinvest. He is right to say that, where we need to engage with the private sector—or the voluntary sector for that matter—to take advantage of their ingenuity and innovation, we will do so.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
Figures released yesterday by the Department show that more Ministry of Justice staff received bonuses last year than the previous year, and that the average size of bonus increased by more than 7%. Considering that the whole public sector has had a 1% pay rise cap, is this not a case of one rule for one and a different rule for another?
Mr Raab
No. I am afraid that that is not fair or reasonable to any of our hard-working public servants. There are strict rules and parameters on bonuses within the 1% pay cap and the guidance on that, but it is important, notwithstanding the savings that we have to make, especially in bureaucracy, back office and head- quarters, that we recognise outstanding performance.
David Mowat (Warrington South) (Con)
We are the only country in the world that uses taxpayers’ revenue to pay lawyers to sue our own soldiers as they return from active duty. Is that an area of saving that the Minister might consider?
Mr Raab
My hon. Friend is absolutely right that we need a balanced approach to access to justice. I will answer some specific questions about the military claims later, but he is right to say that we need to look at the rules on legal aid, and that is what we are already doing and will continue to pursue.
Andy Slaughter (Hammersmith) (Lab)
Talking of value for money, how much has the miscalculation of divorce settlements cost so far? The 2,200 closed cases will require specialist legal advice and negotiation to correct. Who is going to pay for that—the taxpayer or the people his Department has so badly let down? On the back of it, the legal press has dubbed the Under-Secretary of State for Justice, the hon. Member for North West Cambridgeshire (Mr Vara), the Minister for cock-ups. We disapprove of this scapegoating. Does not the whole ministerial team deserve that title?
Heather Wheeler (South Derbyshire) (Con)
3. What plans he has for the future of the women’s prison estate.
The Parliamentary Under-Secretary of State for Women and Equalities and Family Justice (Caroline Dinenage)
Our announcement of the closure of Holloway prison signals a new beginning in the way we treat female offenders. It reflects our commitment to hold women in environments that better meet their specific needs and support their rehabilitation, helping them towards better lives on release.
Heather Wheeler
I thank my hon. Friend for that answer. I have Foston Hall ladies prison in my constituency. Can my hon. Friend outline how the changes that are happening at Holloway will assist the prisoners and staff at Foston Hall?
Caroline Dinenage
Foston Hall is now a resettlement prison, so it is much better placed to support inmates throughout their time in prison and back out into the community. My hon. Friend will know that many female offenders have complex needs, which is why we have introduced a personality disorder pathway and a centralised case management system for female offenders. We have also ensured that family engagement workers are in place at all public sector women’s prisons, including Foston Hall.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister might know that New Hall women’s prison is quite close to my Huddersfield constituency. Does she agree that often literacy issues stop women getting back into society and leading a good life? Also, many people—women particularly—are on the autistic spectrum, but are never tested. Could more attention be paid to special educational needs in women’s prisons so that we can help women more?
Caroline Dinenage
The hon. Gentleman makes an excellent point, and we will certainly take it into consideration. I visited New Hall prison towards the tail end of last year and had a look at some of the excellent work that it is doing to help women offenders both with literacy and numeracy and with their various other complex needs.
Crispin Blunt (Reigate) (Con)
My hon. Friend will be aware, as will her colleagues, of the work of RAPT—the Rehabilitation for Addicted Prisoners Trust. She may not know that it began its work in Downview prison in my constituency when it was a category C/D male resettlement prison. That work had to come to an end when it was re-roled as a female prison back in 1999-2000. Now that the Minister is moving women prisoners to Downview, will she make sure that RAPT can restart its work as the prison reopens?
Caroline Dinenage
My hon. Friend makes an important point. So many of our female offenders come into the prison system with addictions to both substances and alcohol, and it is fundamental that that is a key part of their rehabilitative process.
Anne McLaughlin (Glasgow North East) (SNP)
On the advice of organisations such as Families Outside, the Scottish Government have been trialling community sentencing for women serving sentences of six months or less, in order to reduce reoffending. Given that early indications suggest that that is working, will the Minister commit to looking at rolling it out across the whole United Kingdom?
Caroline Dinenage
I am keen to look at the Scottish model and see what progress has been made. I am also keen to intervene earlier in women’s offending journey to make sure that the right wrap-around services are put in place to try and divert as many people as possible away from ending up in prison, because we know that every woman in prison represents a potentially broken family and children potentially taken into care.
Philip Davies (Shipley) (Con)
Given that the Minister is usually such a great champion of gender equality, may I suggest that instead of trying to turn the women’s prison estate into some kind of holiday camp, she makes sure that if a woman commits an offence, she is treated in exactly the same way as a man, and that female prisoners are treated in the same way as male prisoners? It is still the case that for every single category of offence, a man is more likely to be sent to prison than a woman. Why is a female offender who commits burglary any better than a male offender who commits the same offence?
Caroline Dinenage
I fear we may have been down this road before with my hon. Friend. I take on board his comments. Sentencing is a matter for the judiciary, but I will always defend my strongly-held belief that equality of outcome is what we are looking for in the female prison estate. At present, female prisoners are much more likely to have many complex needs and are far less likely to gain employment once they leave prison. I am seeking to tackle that.
Mr David Burrowes (Enfield, Southgate) (Con)
4. What steps he is taking to tackle the use of new psychoactive substances in prisons.
The Minister for Policing, Crime and Criminal Justice (Mike Penning)
Quite rightly, we do not tolerate drugs in our prisons and we are bringing forward tough new measures, including the new legislation on psychoactive substances, which will make possession in a prison a criminal offence, unlike the position in the rest of the country.
Mr Burrowes
I congratulate the Minister on spearheading that new legislative tool, but if the scale of harm demonstrated by a significant increase in ambulance attendances and suicides were happening in other places where there is a duty of care—hospitals, children’s homes or schools—would we not have what is needed, which is a root and branch review of how best to tackle supply and demand for drugs in prisons?
Mike Penning
We must make sure that these drugs do not get into our prisons. Psychoactive substances and drugs have been in our prisons for some time. Following a request not only from the prisons Minister, but from prison officers as well as prisoners around the country, we made sure that possession was a criminal offence. We need measures such as new sniffer dogs, which can sniff out such products, and they are in training. We must eradicate these drugs from our prisons.
Mary Glindon (North Tyneside) (Lab)
The National Offender Management Service has revealed that the amount of alcohol found in prisons in England and Wales has almost trebled since the Government took office. Will the Minister explain what urgent steps he is taking to address this serious problem?
Mike Penning
One of the ways we can deal with that is by making sure that individual governors have full control within their prisons so that they can work with their staff to make sure that not only drugs, but alcohol, which is not supposed to be in our prisons, is not there. Much of that alcohol is brewed within the prisons and we need to work hard to make sure that we eradicate that.
Mr Philip Hollobone (Kettering) (Con)
We do not tolerate drugs in our prisons, but drugs use is widespread throughout every jail in this country. Is there any realistic prospect whatsoever of a drug-free prison establishment?
Mike Penning
The Prison Service works very hard to try and make sure that we eradicate as many drugs as possible. The new legislation will help. We know that assaults on prison officers and inmates by people taking psychoactive substances have been prevalent and are a blight on our prisons. With the new legislation we will have powers that we did not have before.
Marie Rimmer (St Helens South and Whiston) (Lab)
There have been recent reports of prison officers falling ill after inhaling inmates’ legal highs. The Minister says that new legislation is being introduced, but how will we deal with the problem when present governors are retiring and leaving? We need a culture from the top to implement measures within the Prison Service. How will the Government effect that?
Mike Penning
One of the ways in which we can improve the situation for prison officers is by listening to them. They categorically asked for the ban. At the moment such substances are legal, but they will be banned once the Psychoactive Substances Bill receives Royal Assent, so from April possession in prisons will be a criminal offence. That is what prisoner officers asked for, and that is what we have given them.
Stephen Timms (East Ham) (Lab)
5. What steps he is taking to ensure that access to justice does not depend on ability to pay.
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
We are committed to ensuring that our justice system delivers faster and fairer justice for all our citizens. Reform of our courts and tribunals will bring quicker and fairer access to justice and create a justice system that reflects the way people use services today. We have also ensured that legal aid remains available for the highest priority cases, for example where people’s life or liberty is at stake, where they face the loss of their home, in cases of domestic violence, or where children might be taken into care.
Stephen Timms
The result, as the Lord Chief Justice extraordinarily reported two weeks ago, is that:
“Our system of justice has become unaffordable to most”.
Two constituents were sacked unfairly. One went to tribunal but was unable to afford legal representation and therefore lost. The other immediately gave up. With justice now available to only the well-off, does the Minister have any serious proposals to open up access to justice to ordinary people?
Mr Vara
I am grateful to the right hon. Gentleman for raising the issue of employment tribunals, because it allows me to say that this Government’s aim is to ensure that people do not have to go to court or tribunal in the first place, and therefore do not have to incur the legal expenses or experience the stress. In the case of employment tribunals—he might not be aware of this—the ACAS early conciliation service, which is free, was used by 83,000 people in its first 12 months. I very much hope that when constituents bring problems to his surgery in future, he will point them towards that free service.
Andrew Bridgen (North West Leicestershire) (Con)
Since the Government changed the criteria for access to legal aid there has been a huge increase in claims of domestic violence. Has the Minister made any assessment of the link between those two items?
Rachael Maskell (York Central) (Lab/Co-op)
The Law Society describes access to justice as being
“on the verge of a crisis”.
Funding for civil cases has fallen by 62% since civil legal aid was cut. Will the Minister carry out a full review to understand the equality impact of the changes in civil legal aid?
Jake Berry (Rossendale and Darwen) (Con)
Some of the people who would struggle the most to pay court fees are those affected by family breakdown, often in chaotic families. Will my hon. Friend update the House on what plans he has to simplify and reduce costs to access child arrangements orders, and will that include any further statutory rights for grandparents?
Christina Rees (Neath) (Lab)
We learnt this week that a district judge is suing the Ministry of Justice, blowing the whistle on the rising number of death threats and the increasingly violent claimants that our judges are having to deal with day in, day out. Given that that comes so soon after the Lord Chief Justice’s warning that judges face a rising number of challenging and emotionally charged cases, what action is the Minister taking to address these claims, or is this just another admission that his party’s failed austerity policies have made our courts more dangerous, both for judges and for victims?
Simon Hoare (North Dorset) (Con)
6. What steps his Department is taking to improve prisons’ engagement with employers; and if he will make a statement.
Stephen McPartland (Stevenage) (Con)
11. What steps his Department is taking to improve prisons’ engagement with employers; and if he will make a statement.
Stephen Hammond (Wimbledon) (Con)
13. What steps his Department is taking to improve prisons’ engagement with employers; and if he will make a statement.
The Parliamentary Under-Secretary of State for Justice (Andrew Selous)
Providing prisoners with vocational skills and employment opportunities is an important factor in preventing reoffending. The Employers Forum for Reducing Reoffending brings together employers who are willing to employ offenders, and we are working with the Department for Work and Pensions to increase the involvement of more businesses. Community rehabilitation companies also have an important role to play in helping ex-offenders find employment.
Simon Hoare
I am grateful to my hon. Friend for that encouraging answer. I am sure he would agree with me that it is beholden on as many employers as possible to offer training in prisons, so that when prisoners leave prison they are ready for employment and equipped with the required skills. I invite him to welcome the work that Cleansheet does in our prison estate, particularly in Guys Marsh in my constituency. I have seen it at first hand and it really gets people ready for work.
Andrew Selous
I thank my hon. Friend very much for his interest in this important area and am delighted to praise the work of Cleansheet and so many other organisations that try to get prisoners into work. A number of companies—Timpson, Halfords, the Clink restaurants, the Census Data Group, Aramark and many others I could mention—are rising to the challenge. We want many more to join them.
Stephen McPartland
Does the Minister agree that providing work—and the right sort of work—is the real key to an effective rehabilitation process for prisoners?
Andrew Selous
My hon. Friend is absolutely right. We have the hard evidence: if a prisoner leaves prison and goes into work, they are less likely to reoffend. We know that reoffending costs between £9 billion and £13 billion a year and creates many more victims. We can avoid that by getting more prisoners into work.
Stephen Hammond
My hon. Friend will know that access to the skills likely to be required in the working environment is key. I welcome what he said about the employers’ forum, but will he say what more the Government will do to get more employers to recognise the potential of providing those skills and of the opportunity to employ ex-offenders on release?
Andrew Selous
As a London Member, my hon. Friend may have noted that a week or so ago the Mayor of London pointed out that when employers hire ex-offenders, they report above-average commitment and loyalty; the issue is not only an important part of social responsibility, but very good business sense. London is leading the way in this area, with more joined up work between local enterprise partnerships getting extra skills funding into prisons. I want to see what is happening in London spread across the whole of England and Wales.
Gavin Robinson (Belfast East) (DUP)
In November, I raised the issue of the barrier that insurance premiums pose to employment for ex-offenders. I am pleased to say that the Minister has engaged with the issue. Does he have an update for the House?
Andrew Selous
I do indeed. The hon. Gentleman is right to pursue this matter. Recently, I have come across the issue of insurers imposing a blanket stipulation that employers should have no ex-offenders on their premises. I am not only the prisons Minister but a former chartered insurer; shortly, I will be having a meeting with the Association of British Insurers to challenge it on that issue and see whether that is really necessary. As a former underwriter myself, I suspect that it is probably not.
Jo Stevens (Cardiff Central) (Lab)
This morning, the Minister has talked about employment on release from prisons. Education and skills are crucial to an offender’s chance of making something of themselves and getting a job on release. However, the Minister has admitted, in an answer to a question from my hon. Friend the Member for Hammersmith (Andy Slaughter), that Prison Service anti-riot squads were drafted in on 339 occasions in the year to 9 December 2015—an increase of 52% on the previous year. Does the Minister accept that prison overcrowding, coupled with his Government’s cuts in resources, has led to a prison estate that is not fit for educational purpose?
Andrew Selous
First, let me warmly congratulate the hon. Lady on her new position; I look forward to debating these important issues with her in the months to come. She is absolutely right to raise the issue of education, which is a crucial part of helping get offenders into work. The Government’s whole prison reform programme is front and centre of part of the answer to try to deal with the issues of violence and disorder that she has identified: more purposeful work, better education, better outcomes, better ordered prisons.
Mr Alan Mak (Havant) (Con)
19. Hampshire’s community rehabilitation company plays a vital role in connecting prisons and offenders with local employers across the Havant constituency. Will the Minister join me in congratulating it on its work and in encouraging more employers to consider employing ex-offenders, including through job fairs run by Members of this House?
Andrew Selous
I certainly will. I warmly congratulate my hon. Friend not only on organising a jobs fair in his constituency—a very practical way in which to help our constituents find work—but on realising that it needs to be equally open to ex-offenders. He is leading the way, and I hope others will follow. I wish him well with his enterprise.
Several hon. Members rose—
Mr Speaker
Order. Before I call the hon. Member for Barrow and Furness (John Woodcock), I remind the House that the Crown Prosecution Service is reconsidering this case and a second inquest is awaited. Right hon. and hon. Members should take account of that in carefully framing their remarks on the matter.
John Woodcock (Barrow and Furness) (Lab/Co-op)
7. What assessment he has made of the coroner’s role in the case of Poppi Worthington.
The Parliamentary Under-Secretary of State for Women and Equalities and Family Justice (Caroline Dinenage)
The death of Poppi Worthington is deeply, deeply distressing and very tragic. I offer my deepest sympathies to those who loved her and those who cared for her. I am unable to comment on the decisions of the previous coroner, but I note that the new Cumbria senior coroner took steps to hold a fresh inquest as soon as he was appointed. As the Under-Secretary of State for the Home Department, my hon. Friend the Member for Staffordshire Moorlands (Karen Bradley), rightly said last week,
“there is nothing more important than keeping children safe.”—[Official Report, 20 January 2016; Vol. 604, c. 1419.]
That is why the Government have given child sexual abuse the status of a national threat in the strategic policing requirement.
John Woodcock
I thank the Minister for that answer, and the Lord Chancellor for his swift reply to my letter, which I received this morning. Our community wants accountability and wants to see improvements in services that have so tragically failed in these circumstances. So will the Minister make it clear that there is no reason why the serious case review into Poppi Worthington’s death and the Independent Police Complaints Commission’s report need be delayed pending the second inquest being carried out?
Caroline Dinenage
The hon. Gentleman is absolutely right to stand up for his constituency and fight for the truth in this way. I completely agree with him that a second inquest should be conducted as soon as possible. Both the IPCC report and the serious case review are of course independent of Government and decide their own timescales. However, I can confirm that neither is required to wait upon the coroner.
Ian Lavery (Wansbeck) (Lab)
8. What support his Department is providing to probation service workers at risk of redundancy.
The Parliamentary Under-Secretary of State for Justice (Andrew Selous)
Community rehabilitation companies are responsible for supporting any of their staff at risk of redundancy, in line with employment law. We encourage them to follow good industry practice and the ACAS guidelines. We are working closely with community rehabilitation companies to make sure that they fulfil their contractual commitments to maintain service delivery, reduce reoffending, protect the public, and deliver value for money to the taxpayer.
Ian Lavery
There is the potential for 900 probation officers to be made compulsorily redundant within just three CRCs in the very near future. These are the people who stood by the Government at the time of the transitional period into privatisation. They should not be penalised; they should be praised. Will the Minister guarantee that these professionals receive full voluntary redundancy terms and will not be booted out? They provide a very valuable service in the role provided by these private companies on the cheap.
Andrew Selous
I repeat what I said just now—we will make sure that the community rehabilitation companies comply with employment law as they are supposed to do. We closely monitor their performance in line with the contracts that they have signed. Last year, 195 extra probation officers became qualified, and we had 750 new probation officers in training. That is the largest intake of newly qualified probation officers for some considerable period.
Daniel Zeichner (Cambridge) (Lab)
9. What plans he has to improve youth custody provision.
The Lord Chancellor and Secretary of State for Justice (Michael Gove)
Our system of youth justice does need reform. Although youth offending is down, recidivism rates are high, and the care of young offenders in custody is not good enough. I know that concerns across this House can only have been heightened following the “Panorama” investigation into events at the Medway secure training centre. That is why today, in a written statement, I have appointed an independent improvement board to investigate what has happened at Medway and to ensure that the capability of G4S, the Youth Justice Board and other organisations to meet appropriate standards is sufficient.
Daniel Zeichner
The roll-out of the new minimising and managing physical restraint system has been delayed for a year. In 2013-14, there were almost 3,000 assault incidents in the children’s secure estate—a 7% increase on 2012-13, even though the number of children in custody had fallen by 20%. What is the Secretary of State doing to address this rising number of incidents and to ensure that a new, safer system is implemented?
Michael Gove
The hon. Gentleman rightly draws attention to the fact that there has been a reduction in the number of young people in the youth estate. However, as the number has reduced, so those who remain tend to be those who have been arrested for the most violent crimes and who pose the greatest difficulties for those who have to care for them and keep them in custody. It is vital to ensure that when restraint is applied, it is done so in a way that minimises risks to young people, but also ensures that safety can be restored. One of the purposes of Charlie Taylor’s review of youth justice is to make sure that the workforce is appropriately trained to restrain young people in their own interests and those of others.
Suella Fernandes (Fareham) (Con)
I recently visited Swanwick Lodge, a secure home for 10 to 17-year-olds in my constituency. Its work focuses on tackling the root causes that have led to those young people’s loss of liberty with education, substance misuse therapies and early intervention. Will my right hon. Friend describe what other measures are in place to tackle youth rehabilitation and reduce reoffending?
Michael Gove
Before my hon. Friend came into the House, she did a great deal of work to help disadvantaged children achieve better educational outcomes. She will know as well as anyone in the House that some of the children who end up in trouble with the criminal justice system have grown up in homes where love has been absent or fleeting, and where no one has cared enough to tell those young people the difference between right and wrong. The work being conducted by the Education Secretary to improve our child protection system and the work being led by the Communities and Local Government Secretary to tackle the problems of troubled families are integral to ensuring that we reduce the number of young people who fall into crime.
Helen Jones (Warrington North) (Lab)
It was obvious to those who watched the “Panorama” programme that the G4S workforce was under-qualified, under-trained and under pressure not to report incidents that should have been reported, because of the threat to G4S’s profits. Is it not now time that we recognised that the most difficult and vulnerable children in our system should not be looked after by a profit-driven organisation, but by properly trained and publicly accountable staff?
Michael Gove
I do not doubt for a moment the hon. Lady’s sincerity in caring about these young people. The allegations about what happened in Medway were of course terrible. It is also important, however, to take on board the fact that private sector organisations, including G4S, are responsible for the care of young offenders, not least at Parc in Bridgend, and have been doing an exemplary job in other areas. It is quite wrong to draw conclusions about the private sector or the public sector. What matters is getting outcomes right for children. We should not, on the back of human misery, try to carry forward a narrow ideological argument.
Richard Drax (South Dorset) (Con)
Will my right hon. Friend join me in congratulating the distinguished former soldier General Sir Rupert Smith on taking on the airborne initiative at the young offenders institution on Portland? Does he agree that getting appropriate young offenders out on to the moors for five testing days is an excellent scheme that demands our support?
Michael Gove
I could not agree more with my hon. Friend. I have to say that the capacity of cadet forces and military involvement to turn around the lives of young men who find themselves in trouble has been attested to over the years. Everything that we can do to support the Education Secretary in extending the work of cadet forces or to support General Sir Rupert Smith, a man who is a hero in my eyes, in helping to rescue the lives of young people we should do.
Wayne David (Caerphilly) (Lab)
The allegations in the “Panorama” programme on 11 January about Medway secure training centre were truly appalling. I am glad that the Secretary of State has listened to the chief inspector of prisons and to us, and will appoint an independent improvement board. I also note that the director of Medway has just resigned.
The three STCs in England—Medway, Oakhill and Rainsbrook—are run by G4S. Following a damning inspection report last year, the Rainsbrook contract was taken away from G4S. This has nothing to do with ideology, but on the basis of the evidence before us, will the Government now take away G4S’s Medway contract and ensure that G4S is not awarded any future contracts?
Michael Gove
The hon. Gentleman is absolutely right: it is because the allegations are so serious that we have to investigate them properly. The independent improvement board will both investigate what went on and ensure that children are safe. When any organisation fails in the delivery of public services, as G4S did at Rainsbrook, we will take steps to remove the contract, and a new organisation has been given that contract. Of course, if G4S has failed in this regard, then we will take all steps necessary to keep children safe.
James Berry (Kingston and Surbiton) (Con)
10. What steps his Department is taking to improve safety in prisons; and if he will make a statement.
Alex Chalk (Cheltenham) (Con)
15. What is his Department doing to improve safety in prisons; and if he will make a statement.
The Parliamentary Under-Secretary of State for Justice (Andrew Selous)
Violence in prisons has increased in recent years. The nature of the offenders who are currently in custody and the widespread availability of novel psychoactive substances have contributed to prisons becoming less safe. There is no simple single solution that will improve safety in prisons, but we are making progress. We are trialling the use of body-worn cameras and training sniffer dogs to detect NPS, but ultimately the only way to reduce violence is to give governors the tools to more effectively reform and rehabilitate prisoners.
James Berry
One threat to safety inside and outside prisons is the ability of inmates to access mobile phones. On Friday, a serving prisoner at Rochester prison was sentenced to 12 years for arranging the supply of reactivated firearms via a mobile phone from his prison cell. Random checks are only so good and prison officers do their best, but I think it is time to cut off the head of the snake and go for mobile phone jamming devices.
Andrew Selous
We already employ a number of measures. We have body orifice scanning chairs, metal detecting wands, signal detectors and blockers, and specially trained dogs. My hon. Friend is right that we need to refocus and redouble our efforts in this area, particularly in respect of the use of blockers and detectors. I assure him that the Secretary of State and I are fully engaged in this area.
Alex Chalk
The safety of young people in our prison estate was, as we have heard, called into question by the “Panorama” programme about Medway secure training centre. What assurances can be provided that the safety of young people across the prison estate, not just in Medway, is being prioritised?
Andrew Selous
My hon. Friend will have heard the answer that the Secretary of State gave to a previous question on this issue. I will not repeat that, save to say that we take this issue extremely seriously. That is why the Secretary of State commissioned Charlie Taylor, the former chief executive of the National College for Teaching and Leadership, to conduct a review of youth justice and youth custody across the piece. That will have not only safety at its heart, but improved outcomes for young people in custody.
Sarah Champion (Rotherham) (Lab)
The example of Medway shows that the use of restraint for good order and discipline can be exploited. Will the inquiry look into that issue across all prisons, because I do not think it is appropriate in this day and age?
Andrew Selous
There are occasions in custody when, for the safety of the young person and others, we have to use restraint. The chief inspector has acknowledged that the new process of minimising and managing physical restraint is an improvement, but that is the case only if it is used properly and appropriately, and not if it is abused. We are very mindful of that.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
The report by the outgoing chief inspector of prisons quoted a member of staff at HMP Wormwood Scrubs as saying that one cell was so unsafe,
“I wouldn’t keep a dog in there.”
I know that you can’t teach an old dog new tricks, but will the Minister tell us what is being done to deal with the Tory prisons crisis?
Andrew Selous
I hope that the hon. Lady would be fair enough to recognise that this Government have accepted that much of our prison estate is simply not good enough. It is too old, it is inappropriate and we cannot provide the education or work that we need to provide. That is why the Chancellor has provided £1.3 billion to build nine new prisons, in addition to the new prison that we are building in north Wales, the new house blocks that we have delivered and the two further house blocks that we are going to deliver. We want a fit-for-purpose estate where we can rehabilitate people properly.
Mr David Hanson (Delyn) (Lab)
12. What representations he has received from (a) international bodies, (b) the Council of Europe and (c) the UN on the UK’s membership of the European Convention on Human Rights.
Andrew Gwynne (Denton and Reddish) (Lab)
16. What representations he has received from (a) international bodies, (b) the Council of Europe and (c) the UN on the UK’s membership of the European Convention on Human Rights.
The Parliamentary Under-Secretary of State for Justice (Mr Dominic Raab)
I have met many of our international partners, from the Council of Europe Commissioner for Human Rights, Nils Muižnieks, to the United Nations High Commissioner for Human Rights, Prince Zeid. The Secretary of State for Justice has met many others, including Secretary-General Jagland of the Council of Europe. Those meetings are important opportunities to reinforce Britain’s proud tradition of promoting freedom and discuss how the Government intend to strengthen it both at home and abroad.
Mr Hanson
I am sure that if it was just the Labour party saying, “Don’t scrap the human rights act,” the Minister could roll with it, but when the Minister met Prince Zeid, did Prince Zeid say that the Government’s proposals would be
“damaging for victims and contrary to the country’s commendable history of global and regional engagement”
and that
“many other states may gleefully follow suit”?
Is it not important that we listen to the United Nations?
Mr Raab
The right hon. Gentleman is absolutely right that we should listen to all our international partners. I can tell him that Prince Zeid did not say that to me at all. When we have those meetings, they are a good opportunity to discuss the reality of our plans for reform. I made it clear that our forthcoming Bill of Rights proposals are based on staying within the convention. I explained the kind of abuses that we want to be rid of under the Human Rights Act and some of the challenges that successive Governments have had with the Strasbourg Court. That allows us to contrast our common-sense reforms with some of the baseless scaremongering coming from some of our critics.
Andrew Gwynne
But the UN special rapporteur on torture, Mr Juan Mendez, has warned that the Government’s plot to replace the Human Rights Act with a Tory Bill of Rights is “dangerous, pernicious” and would set
“a very bad example to the rest of the world”.
Is he not right?
Mr Stewart Jackson (Peterborough) (Con)
Since when was it the practice of foreign legal and other entities to decide the views of this Parliament, and to traduce its sovereignty and the electoral mandate we have to introduce a British Bill of Rights? It is a tragedy that the European convention on human rights, which was founded by British jurists, has been distorted by perverse decisions such as trying to give an axe murderer the vote, which we have rejected. Is it not time that we got on with our manifesto commitment to a British Bill of Rights?
Mr Raab
My hon. Friend is absolutely right and makes his point in his characteristically powerful way. I would point out that the Labour Government had problems with how the Strasbourg Court operated. They did not implement prisoner voting—I do not remember the right hon. Member for Delyn (Mr Hanson) calling for it to be implemented when he was a Minister—and nor did they implement the Abu Qatada judgment.
Victoria Prentis (Banbury) (Con)
Will the Minister confirm that human rights have been part of our law in this country under the common law for many years, and that they will continue to be so after the repeal of the Human Rights Act, perhaps in a more modern and codified way?
Mr Raab
My hon. Friend is absolutely right. We have a long tradition and pedigree of respecting human rights, dating back to Magna Carta and before that. We protected human rights in this country before the European convention, and certainly before Labour’s Human Rights Act. We shall continue to do so proudly in the years ahead.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
The Minister is yet to issue his consultation on the repeal of the Human Rights Act and its replacement with a British Bill of Rights, but it is eight weeks until the Scottish Parliament is dissolved and goes into purdah—it is the same with Northern Ireland and Wales. Will he give an absolute guarantee that he will not squash out Scotland, Northern Ireland and Wales from this important consultation by issuing his proposal before, or worse still during, the election purdah period? Will he give that absolute guarantee?
Mr Raab
There will be no squashing out of any of the devolved Administrations. We are already in detailed soundings. When we come to our consultation, there will be full consultation with all the devolved Administrations. There are clear rules and Cabinet Office guidance on purdah, and we will be mindful of them.
Mr David Nuttall (Bury North) (Con)
Another perverse decision of the European Court of Human Rights was on prisoner voting. Will the Minister please confirm that there are absolutely no plans to change our laws on prisoner voting?
Joanna Cherry (Edinburgh South West) (SNP)
When Nils Muižnieks, the Council of Europe Commissioner for Human Rights, visited the United Kingdom last week, he said that the repeatedly delayed launch of the consultation on the repeal of the Human Rights Act is
“creating an atmosphere of anxiety and concern in civil society and within the devolved administrations”.
Will the Minister tell us exactly when the consultation will be published?
Mr Raab
As the hon. and learned Lady knows, I met Nils Muižnieks last week to talk through these issues, and there is absolutely no cause for anxiety. We will introduce proposals for full consultation in the near future—those proposals are going well—and she will hear more shortly.
Joanna Cherry
The commissioner also said:
“My impression is that the debate over the HRA in Westminster is not a true reflection of concerns outside England”.
Does the Minister appreciate that the impact on the devolved Administrations of an attempt to repeal the Human Rights Act would likely provoke a constitutional crisis?
Mr Raab
The hon. and learned Lady is absolutely right that the debate within the Westminster bubble, particularly the shrill scaremongering, is not reflective of wider public opinion outside the House, which is clearly and consistently in favour of a Bill of Rights to replace the Human Rights Act, including, she will note, in Scotland.
Mr Speaker
Last but not least, patience from Pudsey is duly rewarded. I call Mr Stuart Andrew.
Stuart Andrew (Pudsey) (Con)
14. What steps his Department is taking to prevent female offenders reoffending.
The Parliamentary Under-Secretary of State for Women and Equalities and Family Justice (Caroline Dinenage)
I want fewer women in the criminal justice system, which is why, in partnership with the Government Equalities Office, we have made £200,000 of grant funding available, to add to the £1 million already invested to support local pilots for female offenders. This is where multiple agencies work together and intervene earlier to help address the complex reasons why women offend and assist them in turning their lives around.
Stuart Andrew
Does the Minister agree that more needs to be done to steer vulnerable women away from crime and reoffending? I am aware that the Department is looking at this as part of a whole-system approach, but will she update the House on how it is progressing and what more is being done to tackle the issue?
Caroline Dinenage
Yes, the whole-system approach I have outlined demonstrates our commitment to divert as many women as possible away from custody by addressing the causes of offending, which left unchecked often spiral into prison sentences, family breakdown and children in care. That is why we will announce the successful bids for the pilot later this week.
Stephen Phillips (Sleaford and North Hykeham) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Lord Chancellor and Secretary of State for Justice (Michael Gove)
I have already had occasion in the House to offer my thanks and gratitude to Nick Hardwick, the outgoing chief inspector of prisons, and to Paul Wilson, the outgoing chief inspector of probation. Their expertise will not be lost to the criminal justice system, however, because, as I am delighted to announce today, I will be appointing Nick Hardwick as the new chair of the Parole Board. He will succeed the current chair, Sir David Calvert-Smith, who is due to leave at the end of March. I thank him for his service.
Stephen Phillips
The courts Minister, my hon. Friend the Member for North West Cambridgeshire (Mr Vara), will know that last year I wrote a report on former service personnel in the criminal justice system that recommended, among other things, training for members of the Bar, solicitors and judges to deal with this cohort—albeit a small cohort—of offenders. What steps is my right hon. Friend taking to ensure that court staff—those actually employed in the courts—receive appropriate training to deal with these individuals?
Michael Gove
My hon. and learned Friend, who is a distinguished veteran as well as an outstanding silk, makes an important point. He produced an excellent report on offenders who have been in the armed forces. Court staff are trained to deal with the specific needs of veterans, and we are aware that there are particular needs, which might relate to post-traumatic stress disorder and associated mental health concerns, to which court staff need to be sensitive.
Andy Slaughter (Hammersmith) (Lab)
I commend the Secretary of State for his appointment of Nick Hardwick to the Parole Board. I am sure he will be just as forensic there as in his current role.
Exactly a year ago, my right hon. Friend the Member for Tooting (Sadiq Khan), with his usual prescience, said that the new criminal legal aid contracts were
“making a pig’s ear of access to justice”
and should be abandoned. Will the Secretary of State confirm the press reports that he is about to do just that?
Michael Gove
I thank the hon. Gentleman for his praise for Nick Hardwick. I believe he is the right person to discharge this role precisely because he has spoken without fear or favour and has been an honest critic who has followed where the evidence has led him. I am sure he will appreciate the bipartisan support for his appointment.
We have had to reduce the spend on criminal legal aid to deal with the deficit we inherited from the last Government, but this country still maintains more generous legal aid than any other comparable jurisdiction.
Andy Slaughter
An hour ago at the Justice Select Committee, the Master of the Rolls described the fee increases affecting civil litigants of small businesses as a desperate way of carrying on based on hopeless research. He laughed when asked by the hon. Member for Cheltenham (Alex Chalk) if anything in the Government’s argument stood up to scrutiny.
Michael Gove
I can hear, borne like music upon the zephyrs, words from my hon. Friend the Member for Cheltenham (Alex Chalk) suggesting that, for once, the hon. Gentleman may be misinformed about what precisely happened in the Select Committee. But putting that entirely to one side, one of the biggest barriers to justice, as the Master of the Rolls and others have pointed out, is costs. Action needs to be taken to reduce costs in civil justice. It is not enough simply to say that the taxpayer must shoulder the burden. We need reform of our legal system to make access to justice easier for all.
David Rutley (Macclesfield) (Con)
T2. I know that my hon. Friend regards access to justice as a clear priority. With that in mind, and given the large area of north-east Cheshire that will be without easy access to a court under the proposals in the current consultation, can he tell the House what progress is being made in considering the Macclesfield proposal for a single, combined Macclesfield justice centre?
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
I thank my hon. Friend for the meeting we had and for the justice centre report that he and his constituent presented to me. He will be aware that we are giving serious consideration to that report and, indeed, to the 2,000-plus submissions made in the consultation, to which we will respond soon.
Alex Cunningham (Stockton North) (Lab)
T3. Women’s Aid published a report last week entitled “Nineteen Child Homicides”. It tells the story of 19 children and two mothers killed by known perpetrators of domestic abuse in circumstances related to unsafe child contact. How will the Department work with Women’s Aid and others to ensure that no further avoidable child deaths take place where perpetrators of domestic abuse have been allowed contact through the family court?
Michael Gove
We take concerns about child safety extraordinarily seriously, and I know that my colleague the Minister responsible for family law has been in touch with charities that work in this sphere in the past. We will make sure that we pay close attention to that report.
Craig Tracey (North Warwickshire) (Con)
T6. Does my hon. Friend share my anger and that of my constituent Carol Valentine, whose son Simon was tragically killed while serving his country in Afghanistan, at law firms such as Leigh Day, which are heavily involved in actions against veterans and serving members of our armed forces? What action can the Government take to close down this industry, which is causing so much unnecessary distress to our armed forces and their families?
The Parliamentary Under-Secretary of State for Justice (Mr Dominic Raab)
We do share my hon. Friend’s concerns. He will be aware of the Prime Minister’s announcement on Friday. The professionalism of our armed forces is second to none, but we cannot have returning troops hounded by ambulance-chasing lawyers pursuing spurious claims. The Justice Secretary has asked me to chair a working group with the Minister for the Armed Forces to look at all aspects of this—no win, no fee; legal aid rules; time limits for claims; and disciplinary sanctions against law firms found to be abusing the system—so that we prevent any malicious or parasitic litigation from being taken against our brave armed forces.
Louise Haigh (Sheffield, Heeley) (Lab)
T4. Can the Minister confirm how many times contract breaches at G4S establishments have occurred under contracts with his Department and what amount in fines has been incurred by G4S in respect of those breaches?
The Parliamentary Under-Secretary of State for Justice (Andrew Selous)
I do not have the detailed information that the hon. Lady has asked for, but if she will allow me, I will write to her with the details.
Wendy Morton (Aldridge-Brownhills) (Con)
T8. My hon. Friend is aware of the serious problems associated with radicalisation in our prisons. Can he update the House on what steps are being taken to tackle it?
Andrew Selous
I understand my hon. Friend’s proper interest in this subject. As the threat evolves, we evolve our response. I can tell her that we are strengthening the training for new prison officers to ensure that they are able to tackle criminal activity in whatever form it takes within prisons. As the Secretary of State said earlier, he has asked the Department to review its approach to dealing with Islamist extremism in prisons, and we await that report shortly.
Alan Brown (Kilmarnock and Loudoun) (SNP)
T5. It is worth repeating the damning indictment of this Government given by the Lord Chief Justice just two weeks ago:“Our system of justice has become unaffordable to most”.Will the Secretary of State take heed of those comments and also follow the Scottish National party lead by committing to the abolition of tribunal fees?
Michael Gove
I take very seriously everything that the Lord Chief Justice says, and that is why I am delighted to be able to work with him on a programme of courts reform, which should make access to justice swifter, more certain and cheaper. Of course it is important that we learn from different jurisdictions, but even as we look to Scotland from time to time to see what we can learn from the development of the law there, it is also important that from time to time those charged with what happens in Scottish courts should look at the tradition of English justice, which, as a Scotsman myself, I would have to acknowledge has certain superior elements.
James Morris (Halesowen and Rowley Regis) (Con)
T9. Does the Minister agree that improving the mental health of prisoners should be a top priority and specifically that when a prisoner is released from prison with a known mental health condition, there should be close liaison between the prison authorities, local GPs and local health services to put a care plan in place?
Andrew Selous
My hon. Friend is absolutely right, and I pay tribute to his long interest and great expertise in this particular issue. He will probably know that local commissioning groups in England and local health boards in Wales are responsible for services in the community. NHS healthcare staff in prisons are responsible there. It is their job to make sure that services provided in the prison are followed through in the community. We go to great efforts to make sure that happens.
Carol Monaghan (Glasgow North West) (SNP)
T7. Will the Secretary of State meet his colleague the Immigration Minister to explain that the Minister’s Bill, which would allow migrant families to be evicted without even a court order, is contrary to the rule of law and the right to a fair hearing, and must be urgently reconsidered?
Michael Gove
I enjoy meeting both the Home Secretary and the Immigration Minister, and this Government would never do anything that was contrary to the rule of law, but we must ensure that we safeguard our borders. It is an issue of profound public concern that immigration across the European Union is not being effectively controlled. Our Home Secretary is in the lead in taking the measures necessary to keep our borders secure. I would have thought it would be in the interests of every citizen of the United Kingdom to stand behind her in that fight.
Michael Fabricant (Lichfield) (Con)
T10. Further to the question asked by my hon. Friend the Member for North Warwickshire (Craig Tracey), does my hon. Friend agree that people in this House will find it despicable that two firms and possibly more are actively seeking—soliciting, in fact—people in Iraq to make spurious and bogus claims against our servicemen overseas? Will he reject reports in newspapers that we still intend to give legal aid to these appalling claims?
Mr Raab
My hon. Friend will have heard my earlier remarks. I am concerned about the way in which the system operates. It is important to say that there is accountability for any wrongdoing, but that does not mean giving lawyers a licence to harass our armed forces. We will look at every angle, including the point about legal aid that he made, as well as no win, no fee, and, of course, disciplinary powers against lawyers who try to abuse the system.
Conor McGinn (St Helens North) (Lab)
In 2012, the Minister’s own Department spent £1.7 million refurbishing St Helens courthouse to accommodate civil and criminal proceedings in the same building, declaring that it was efficient and logical. Are we to assume therefore that considering the closure of the same courthouse just four years later is illogical and inefficient, or would the Minister like to rule that out today?
Amanda Solloway (Derby North) (Con)
Following the question from my hon. Friend the Member for Halesowen and Rowley Regis (James Morris), what steps are being taken to ensure that all prisoners with mental health issues are dealt with safely, appropriately and compassionately?
Andrew Selous
I am glad that my hon. Friend has raised this issue again. Whenever a prisoner comes into prison, they immediately have a full health assessment. That health practitioner has the ability to refer on to the prison’s in-reach mental health services. Furthermore, through our liaison and diversion services, we now have either learning disability or mental health nurses available at police stations and in courts, so we can start the mental health treatment right at the beginning of the journey into the criminal justice system.
Greg Mulholland (Leeds North West) (LD)
I hope that the Secretary of State, who takes a keen interest in this issue, will meet me and Brake to discuss my Criminal Driving (Justice for Victims) Bill. May I gently point out that the consultation on this started on 6 May 2014 —a very long time ago, and we are not expecting to hear anything back from the right hon. Gentleman until later this year?
Michael Gove
I am grateful to the hon. Gentleman for the persistent and effective way in which he has continued to campaign for a change in the law. We had the opportunity to meet MPs from many parties to discuss the case for change. There was widespread agreement that change was needed, but no agreement about precisely what change. We will get back to him in due course.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
Given the significant rate of reoffending, would it not be better to focus on improving rehabilitation rather than simply on incarceration, especially in relation to short-term prison sentences?
Michael Gove
My hon. Friend makes a powerful point. Few know more about what happens in our courts than he does as a result of his work as a barrister. Yes, it is important to put an emphasis on rehabilitation, but it is also important that we give all our citizens the security of knowing that those people who pose a real threat to us are incapacitated behind bars and receiving the punishment they deserve for the most heinous crimes.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Last week the Public Accounts Committee heard from the chief executive of the Infrastructure and Projects Authority. He was asked what three projects kept him awake and worried him most, and the courts programme was one of them. We can add that to the list: to the tagging and translation services fiascos, and the concern that has been expressed about the big probation and prison programmes. Does the Secretary of State fear that his Department cannot cope with all this change?
Michael Gove
I look forward to having a cup of cocoa with the gentleman concerned to help him sleep more easily at night, as I manage to do.
Philip Davies (Shipley) (Con)
The Secretary of State made his name in the Department for Education as someone who would take on vested interests, but he has gone native in record time as Secretary of State for Justice. That includes hanging on every word that is said by the Howard League for Penal Reform—the NUT of the justice system—and reappointing Nick Hardwick. When will he get back his mojo and put the victims of crime at the heart of what he is doing? Come back Ken Clarke, all is forgiven!
Michael Gove
I am not sure that Labour Members would agree with the suggestion that I have become a sandal-wearing, muesli-munching, vegan vaguester. I think that they would probably say that I am the same red-in-tooth-and-claw blue Tory that I have always been. It is because I am a Conservative that I believe in the rule of law as the foundation stone of our civilisation; it is because I am a Conservative that I believe that evil must be punished; but it is also because I am a Conservative, and a Christian, that I believe in redemption, and I think that the purpose of our prison system and our criminal law is to keep people safe by making people better.
Mr Speaker
We have learnt about the Secretary of State’s personal domestic habits, his political philosophy and, apparently, his religiosity to boot, and we are all greatly enriched as a consequence.
Diana Johnson (Kingston upon Hull North) (Lab)
On 4 November, the Prime Minister agreed to meet my constituent Tina Trowhill to discuss the baby ashes scandal. My constituent had already had a very helpful meeting with the Under-Secretary of State, and I wonder whether she will now help me to secure the meeting to which the Prime Minister agreed. May I enlist her support?
The Parliamentary Under-Secretary of State for Women and Equalities and Family Justice (Caroline Dinenage)
We are very clear about the fact that what happened at Emstrey—and, sadly, at other crematoriums in England and Wales—must never happen again. In December, as the hon. Lady will know, we launched a consultation which will end in March. However, I shall be more than happy to make that representation on her behalf.
Mr Speaker
We are running very late, but the hon. Gentleman has not had a question, and I should like him to have one.
Kevin Foster
Thank you, Mr Speaker. I greatly appreciate that.
The Minister will be aware of the strength of representations from Torbay about the proposal to close Torquay magistrates court. What progress is being made in the consideration of that proposal, and in the making of a decision to keep justice local in the bay?
Transatlantic Trade and Investment Partnership
(8 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Sir Edward Garnier (Harborough) (Con)
I rise to carry out my duty as the Member of Parliament for Harborough and present a petition on behalf of a number of my constituents who disapprove of and object to the negotiations between the European Union and the United States in respect of the Transatlantic Trade and Investment Partnership. The petition states:
The petition of residents of the UK,
Declares that the EU and the US should stop negotiating the Transatlantic Trade and Investment Partnership; further that the Comprehensive Economic Trade Agreement between the EU and Canada should not be ratified; and further that an online petition on this matter was signed by 330 residents of Harborough.
The petitioners therefore request that the House of Commons urges the Government to put pressure on the EU and its Member States to stop negotiations on the Transatlantic Trade and Investment Partnership and not ratify the Comprehensive Economic Trade Agreement.
And the petitioners remain, etc.
[P001670]
William Mead: 111 Helpline
(8 years, 9 months 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
Heidi Alexander (Lewisham East) (Lab)
(Urgent Question): To ask the Secretary of State for Health if he will make a statement about NHS England’s report on the death of William Mead and the failures of the 111 helpline.
The Secretary of State for Health (Mr Jeremy Hunt)
This tragic case concerns the death of a one-year-old boy, William Mead, on 14 December 2014 in Cornwall. While any health organisation will inevitably suffer some tragedies, the issues raised in this case have significant implications for the rest of the NHS, from which I am determined that we should learn. First, however, I want to offer my sincere condolences to the family of William Mead. I have met William’s mother, Melissa, who spoke incredibly movingly about the loss of her son. Quite simply, we let her, her family and William down in the worst possible way through serious failings in the NHS care that was offered, and I want to apologise to them, on behalf of the Government and the NHS, for what happened. I also want to thank them for their support for, and co-operation with, the investigation that has now been completed. Today NHS England published the results of that investigation—a root cause analysis of what had happened. The recommendations are far-reaching, with national implications.
The report concludes that there were four areas of missed opportunity on the part of the local health services, where a different course of action should have been taken. They include primary care and general practice appointments made by William's family, out-of-hours telephone conversations with their GP, and the NHS 111 service. Although the report concluded that they did not constitute direct serious failings on the part of the individuals involved, if different action had been taken at those points, William would probably have survived.
Across those different parts of the NHS, a major failing was that in the last six to eight weeks of William’s life, the underlying pathology, including pneumonia and chest infection, was not properly recognised and treated. The report cites potential factors such as a lack of understanding of sepsis, particularly in children; pressure on GPs to reduce antibiotic prescribing and acute hospital referrals; and, although this was not raised by the GPs involved, the report also refers to the potential pressure of workload.
There were specific recommendations in relation to NHS 111 which should be treated as a national, not a local, issue. Call advisers are trained not to deviate from their script, but the report says that they need to be trained to appreciate when there is a need to probe further, how to recognise a complex call and when to call in clinical advice earlier. It also cites limited sensitivity in the algorithms used by call-handlers to red-flag signs relating to sepsis.
The Government and NHS England accept these recommendations, which will be implemented as soon as possible. New commissioning standards issued in October 2015 require commissioners to create more functionally integrated 111 and GP out-of-hours services, and Sir Bruce Keogh’s ongoing urgent and emergency care review will simplify the way in which the public interacts with the NHS for urgent care needs.
Most of all, we must recognise that our understanding of sepsis across the NHS is totally inadequate. This condition claims around 35,000 lives every year, including those of around 1,000 children. I would like to acknowledge and thank my hon. Friend the Member for Truro and Falmouth (Sarah Newton), who—as well as being the constituency MP of the Mead family—has worked tirelessly to raise awareness of sepsis and worked closely with UK Sepsis Trust to reduce the number of avoidable deaths from sepsis. In January last year I announced a package of measures to help to improve the diagnosis of sepsis in hospitals and GP surgeries, and significant efforts are being made to improve awareness of the condition among doctors and the public, but the tragic death of William Mead reminds us there is much more to be done.
Heidi Alexander
No one who watched the courageous interviews that Melissa Mead gave this morning could fail to be moved by this tragic case. I pay tribute to Melissa and her husband Paul, who have fought to know the truth about their son’s death and who are now campaigning to raise awareness and improve the care of sepsis. It is right that we should express our sorrow at what has happened, and the Health Secretary was right to apologise on behalf of the NHS. They key now is to ensure that the right lessons are learned and that action is taken. As the Secretary of State noted, the report found a catalogue of failures that contributed to William’s death, including four missed opportunities when a different course of action should have been taken. I want to press the Health Secretary on those areas.
First, the report states that William saw GPs six times in the months leading up to his death, but that none spotted the seriousness of the chest infection that cost him his life. Ministers were warned about poor sepsis care back in September 2013, when an ombudsman’s report highlighted
“shortcomings in initial assessment and delay in emergency treatment which led to missed opportunities to save lives.”
Will the Secretary of State tell us what action was taken following that report? Why was it only in December 2015, more than two years later, that NHS England finally published an action plan to support NHS staff in recognising and treating sepsis?
Secondly, the report found that the NHS 111 helpline failed to respond adequately to Melissa’s call. It concluded that if a doctor or nurse had taken her call, they would probably have seen the need for urgent action. The replacement of NHS Direct, which was predominantly a nurse-led service, with NHS 111 means the service relies on call-handlers who receive as little as six weeks’ training. So when will the Health Secretary review the training call-handlers receive, and will he consider increasing the number of clinically trained staff available to respond to calls?
The report says the computer programme that call-handlers are using did not cover some of the symptoms of sepsis, including a drop in body temperature from very high to low. Does the Health Secretary have confidence that the 111 service is fit to diagnose patients with complex, life-threatening problems who may not always fit the computer algorithm call-handlers have to rely on?
Finally, may I ask the Secretary of State what he is doing to raise awareness of the symptoms of sepsis so that treatment can begin as quickly as possible? I know this is an issue that Melissa and Paul feel particularly strongly about and we owe it to them to implement the recommendations of the NHS England report and do all we can to ensure the failures in this tragic case are never, ever repeated.
Mr Hunt
I hope I can reassure the shadow Health Secretary on all the points she raised.
First, there has been a sustained effort across the NHS since September 2013 to improve the standard of safety in the care we offer in our hospitals. An entirely new inspection system was set up that year. It has now nearly completed inspections of every hospital, and it has caused a sea change in the attitudes towards patient safety. Sepsis is one of the areas that is looked at. In particular it is incredibly important that when signs of sepsis are identified in A&E departments the right antibiotic treatment is started within 60 minutes. That is not happening everywhere, but we need to raise awareness urgently to make that happen, and that inspection regime is helping to focus minds on that.
On top of that—I will come to the issues around 111, and I agree that there are some important things that need to be addressed—a year ago I announced an important package to raise awareness of sepsis. It covers the different parts of the NHS. For example, in hospitals a big package on spotting it quickly has been followed from December 2015, with NHS England publishing the cross-system sepsis programme board report, which is looking at how to improve identification of sepsis across the care pathway.
The hon. Lady is right to raise the issue of faster identification by GPs. That is why, in January 2015, I announced that we will be developing an audit tool for GPs, because it is difficult to identify sepsis even for trained clinicians, and we need to give GPs the help and support to do that. We are also talking to Public Health England about a public awareness campaign, because it is not just clinicians in the NHS, but it is also members of the public and particularly parents of young children, who need to be aware of some of those tell-tale signs.
So a lot is happening, but the root cause of the issue is understanding by clinicians on the frontline of this horrible disease, and it does take some time to develop that greater understanding that everyone accepts we need. I can reassure the hon. Lady, however, that there is a total focus in the NHS now on reducing the number of avoidable deaths from sepsis and other causes, and that is something the NHS and everyone who works in it are totally committed to.
With respect to 111, there are some things that we can, and must, do quickly in response to this report, but there is a more fundamental change that we need in 111 as well. One thing we can do quickly is look at the algorithms used by the call-handlers to make sure they are sensitive to the red-flag signs of sepsis. That is a very important thing that needs to happen. NHS 111 has in some ways been a victim of its own success: it is taking three times more calls than were being taken by NHS Direct just three years ago—12 million calls a year as opposed to 4 million—and nearly nine of out 10 of those calls are being answered within 60 seconds.
When it comes to the identification of diseases such sepsis, we need to do better and to look urgently at the algorithm followed by the call-handlers. Fundamentally, when we look at the totality of what the Mead family suffered, we will see that there is a confusion in the public’s mind about what exactly we do when we have an urgent care need, and the NHS needs to address that. For example, if we have a child with a high temperature, we might not know whether they need Calpol or serious clinical attention.
The issue is that there are too many choices, and that we cannot always get through quickly to the help that we need. We must improve the simplicity of the system, so that when a person gets through to 111, they are not asked a barrage of questions, some of which seem quite meaningless, and they get to the point more quickly and are referred to clinical care more quickly. We must simplify the options so that people know what to do, and that is happening as part of the urgent emergency care review. It is a big priority, and this tragic case will make us accelerate that process even faster.
Dr Sarah Wollaston (Totnes) (Con)
I join colleagues from across the House in sending deepest condolences to William’s parents. I welcome the Secretary of State’s response that he will put into action the recommendation from today’s report. May I draw out one aspect that has not been touched on so far, which is the comment in the report that out-of-hours services did not have access to William’s clinical records, and that had they been able to do so they would have seen how many times a doctor had been consulted, and that that would have been a clear red flag? Will he reassure me that that matter will be addressed across the NHS, so that all services have access to patients’ clinical records—of course with their consent?
Mr Hunt
My hon. Friend is absolutely right. There is so much in this report, but we must not let some very important recommendation slip under the carpet, and that is one of them. We have a commitment to a paperless NHS, which involves the proper sharing of electronic medical records across the system. We have also instructed clinical commissioning groups to integrate the commissioning of out-of-hours care with the commissioning of their 111 services to ensure that those are joined up. It is a big IT project, and we are making progress. Two thirds of A&E departments can now access GP medical records, but she is absolutely right to say that it is a priority.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Like others, I add my condolences to the family. It is hard to imagine anything worse for a family to face. Like many deaths in the NHS, it is always sad to look back and see that it was a catalogue of missed opportunities and errors. One thing I should like to pick up on is the fact that young children are very hard to assess. It is quite hard for a doctor to assess them when they are actually seeing them; they can be running round one minute and then keeling over half an hour later. It is particularly hard to pick up clues about their health over the phone. When NHS Direct services were started throughout the UK, they were based in local out-of-hours GP centres, which meant that the nurse could just pass the phone and say, “Can you come and chat, because I am not sure.” We had rules in our local one that if a young child was involved, they got a visit from our mobile service. Instead of such cases being put through call centres, I hope that the Secretary of State will agree in this review to have some dissemination back to a local system, so that these cases can be accelerated easily to a clinician.
Mr Hunt
I agree with the broad thrust of the hon. Lady’s remarks. Of course she speaks with the authority of an experienced clinician herself. In this case, the tragedy was that there was actually a doctor who spoke to the Mead family on the night before William died, and he did not spot the symptoms. It is not simply a question of access to a doctor, but ensuring that doctors have the training necessary. However, as she says, dealing with cases such as this can be very difficult. The doctor’s view on that occasion was that, because the child was sleeping peacefully, it was fine to leave him until morning when, tragically, it was too late. Other doctors would say that that is a mistake that could easily have been made by anyone, which is why the report is right to say that it is about not individual blame, but a better understanding of the risks of sepsis. She is right in what she says. As we are trying to join up the services that we offer to the public, it is a good principle to have one number that we dial when we need advice on a condition that is not life-threatening or a matter for a routine appointment with a GP, and 111 is an easy number to remember. However, we need to ensure that there is faster access to clinicians when that would count, and that those clinicians can see people’s medical records so that they can properly assess the situation.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
As chair of the all-party group on sepsis, may I also pay tribute to the Mead family, who are now campaigning to ensure that no other child suffers in the same way as William? The Secretary of State has taken a great deal of interest in the UK Sepsis Trust and the work that it has been doing with the APPG. He will know that we are pressing for a campaign similar to the F.A.S.T campaign for strokes, as early diagnosis can save lives. Will he now consider very seriously funding such a campaign for sepsis, because there are thousands of deaths that could be prevented by a campaign that makes everyone aware of the signs of sepsis?
Mr Hunt
I am happy to undertake that the Under-Secretary of State for Health, my hon. Friend the Member for Battersea (Jane Ellison), will look urgently into whether such a campaign would be right. I can reassure my right hon. Friend that the package that we put together and announced last January did contain what most people felt was necessary, but we can always look at whether more needs to be done. I commend her for her campaigning on the issue of sepsis. On a more positive note, when the NHS has decided to tackle conditions such as MRSA and clostridium difficile, it has been very successful. In the past three years, the number of avoidable deaths from hospital-acquired harms—the four major ones—has nearly halved, so we can do this. We should be inspired by the successes that we have had to make sure that we are much, much better at tackling sepsis.
Mr Ben Bradshaw (Exeter) (Lab)
One reason why the number of calls to 111 has trebled is that people find it impossible to get to see their GP. As well as the shocking failings of this family’s GP, is it not the case that the Government were warned of the consequences of abolishing the popular and successful NHS Direct and of replacing it with a non-clinician led service? Will the Secretary of State look personally at the performance of 111 in the south-west, which has been bedevilled by failings ever since it was set up?
Mr Hunt
I gently say to the right hon. Gentleman that when 111 was set up it had the support of the Opposition. The shadow Health Secretary at the time looked at the risk register. The number of calls has increased dramatically partly because demand for NHS services has increased dramatically. That does not mean to say that there are not important things that need to be improved. We need to look honestly at what went wrong. The 111 service was one of the four areas where we should have done better. I am happy to look carefully at what is happening with 111 in the south-west. One improvement is that, in many areas, we are integrating the commissioning of 111 with the Ambulance Service, and that is something that happens in the south-west. On the whole, that has been a positive experience, but I know that there have been problems in the south-west, and I am happy to look further at them.
Mr Robin Walker (Worcester) (Con)
May I associate myself with those who have paid tribute and expressed condolences to the Mead family? Given the seriousness of this case, which we learned about today, what more can the Secretary of State do to reassure us about the clinical input and expert oversight of the NHS 111 service and its methods?
Mr Hunt
All 111 services have clinicians present at call centres, so it is about not the availability of clinicians, but the speed with which they are involved in cases where they can make a difference. It is also about the training of those clinicians so that they can recognise horrible infections such as sepsis quickly. It is a combination of things. The important thing here is that if we are to give the public confidence in a simpler system where they have a single point of contact—albeit a phone line or a website—they need to be confident that if they are not immediately speaking to someone who is clinically trained they will be put through to such a person if it is necessary. We have not earned that confidence yet, which is why it is so important that we learn lessons from what happened in this tragic case.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
I was the Minister who set up NHS Direct, and one of the first cases that caused us to review the algorithms was a meningitis case. May I therefore say to the Secretary of State that just looking at the algorithms used by call-handlers will not be sufficient? It is clinically exceptionally difficult, and his review is too limited to address the problem.
Mr Hunt
I understand what the right hon. Lady is saying, and of course I would listen to her because of her experience, but I reassure her that that is not the only thing that we are doing; we are doing lots of other things. The report makes many recommendations, one of which is to look at the algorithms that the call-handlers use to make sure that they are more sensitive to some of the red-flag signs of sepsis, meningitis and other conditions. There are lots of other recommendations. They include earlier access to clinicians where appropriate, and recommendations on the training of clinicians in the out-of-hours service, the training of GPs and the training of people in hospitals. So we will be undertaking a much bigger body of work as a result of this review.
Chloe Smith (Norwich North) (Con)
I welcome my right hon. Friend’s commitment to support CCGs to commission the 111 service and the out-of-hours service together where appropriate. He may be aware of some concerns in Norfolk about our out-of-hours service. What else is he doing to recruit, retain and support GPs in providing the round-the-clock care that people clearly need?
Mr Hunt
I have said before at this Dispatch Box that successive Governments of both parties have under-invested in general practice, and that is part of the reason why it takes too long for many people to get a GP appointment. It is why we have said that we want to have about 5,000 more doctors working in general practice by the end of this Parliament. That is an important part of what we want to do.
The other side is improving our offer to the public. When you have a child with a fever, and you are not sure, and it is the weekend, very often you have a choice between an out-of-hours GP appointment, a weekend appointment at your GP surgery, calling 111 or showing up at an A&E department. It is just confusing to know the right thing to do. If we are to improve standards of care, we need to standardise safety standards across the NHS, including for spotting potential sepsis cases, and that means a much simpler system.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
My hon. Friend the Member for Lewisham East (Heidi Alexander), the shadow Secretary of State for Health, commented on the concerns expressed in the report about the quality and effectiveness of the tools at the disposal of call-handlers at the 111 service. How many other cases have been misdiagnosed by the 111 service?
Mr Hunt
We believe from the independent case note analysis that has been done across the NHS, not just for sepsis but for hospital deaths, that there are around 200 avoidable deaths every week. That is something we share with other health systems; it is not just an NHS phenomenon. It is why we are asking hospitals to publish their estimated avoidable death rates, and we are having an international summit on that next month.
We think there are about 12,000 avoidable deaths from sepsis every year, and that is as a result of a combination of different parts of the NHS—GP, hospital or the 111 system—not spotting the signs earlier. That is what we are determined to put right.
Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
Looking across the NHS at how we ensure that learning and behaviour change, can the Secretary of State update the House on how the hospital payment system is changing to incentivise new diagnosis and better outcomes?
Mr Hunt
My hon. Friend is right to say that we are doing that for hospitals. When I talk about 200 avoidable deaths every week, that is hospital deaths, not deaths as a result of problems in the 111 service. It is much harder to quantify avoidable deaths outside hospital, but we are determined to do that, and we are going further and faster than any other country that I am aware of as part of our commitment to make the NHS the safest system anywhere in the world.
Clive Efford (Eltham) (Lab)
The Secretary of State said that the report was
“far-reaching, with national implications.”
I have to say that this should have been a statement, not an urgent question. The right hon. Gentleman did not answer the question about the number of misdiagnoses on the 111 system. He needs to give more detail. The report suggests that other deaths of young children may be associated with misdiagnosis by 111. How many other cases are under investigation?
Mr Hunt
No one could have done more than this Government to tackle the issue of avoidable deaths across the NHS. It is much harder to identify when a death was avoidable when it happens outside hospital. As part of our work on reducing the number of avoidable deaths in the wake of what happened at Mid Staffs, we are looking at how we could improve primary care generally. Our first priority is to reduce the number of avoidable deaths in hospital and to learn from reports such as this one when they point to improvements that need to be made in the 111 service.
Victoria Atkins (Louth and Horncastle) (Con)
I join in the condolences that have been expressed in the House. By way of tribute to Mr and Mrs Mead’s campaign to raise awareness of sepsis and its symptoms, I wonder whether each and every parent can take a small but practical step today and google the symptoms of sepsis so that we know when things are not right with our children and are better armed to tackle doctors when we are not getting the answer that we need. I did exactly that this morning after hearing Mrs Mead’s very moving interview on the radio.
Mr Hunt
I thank my hon. Friend for that important intervention. If we are going to deal with the 1,000 tragic sepsis deaths among children every year, it needs a sustained effort from all of us, not just the NHS. I will take away the action of looking at what Public Health England is doing to raise public awareness. The Minister for Public Health, my hon. Friend the Member for Battersea (Jane Ellison), will look at what health visitors can do to boost awareness of sepsis, but in the end we all have a responsibility to understand the symptoms better.
Peter Kyle (Hove) (Lab)
Last November, I contacted the Minister because the South East Coast Ambulance and 111 service carried out a trial that failed through poor governance, putting patients at risk. It turned out that the Department for Health heard about this only after Monitor contacted it. Is not his Department becoming reactive and simply not proactive enough to tackle these issues before they end up becoming statements and urgent questions in this House?
Mr Hunt
Not at all. I gently urge Opposition Members not to fall into the trap of trying to make political capital when tragedies such as this happen. In the wake of the Francis report on Mid Staffs, this Department has done more than any Government have ever done to improve the safety of care in the NHS. If you take the four most common harms—urinary tract infections, venous thromboembolisms, pressure ulcers and falls—the number of deaths in hospitals has fallen by 45% in the past three years. We are making sustained progress in improving the level of safety and care in the NHS, but we are never complacent, which is why are taking so seriously the report issued today.
Kevin Hollinrake (Thirsk and Malton) (Con)
This is a tragic case, and our thoughts today are with the Mead family. Reluctance to prescribe antibiotics due to the dangers of antimicrobial resistance played a key part in this tragedy. Does the Secretary of State agree that this is a significant global problem, and we need to commit significant investment to it?
Mr Hunt
I am grateful to my hon. Friend for raising that issue, which has not been raised so far this afternoon. He is right. We have a pressing global need—not just a UK need—to reduce the inappropriate prescribing of antibiotics. That is why training of clinicians is so important. In the case of sepsis, not only is the prescribing of antibiotics appropriate but it is essential and it is essential to do it quickly. We need to make sure that, as we train GPs to reduce their prescribing of antibiotics so that we do not develop the resistance to antibiotics that could be so disastrous for global health, they do not avoid prescribing them when they are absolutely essential.
Diana Johnson (Kingston upon Hull North) (Lab)
The Health Secretary said that NHS 111 was a victim of its own success. I agree with what my right hon. Friend the Member for Exeter (Mr Bradshaw) said, which is that it is used because it is so difficult to see a doctor. On 2 January, the Hull Daily Mail reported that Hull Royal Infirmary was telling people not to come to A and E but to use services such as NHS 111. In the light of the findings of this investigation, which have national implications, does the Secretary of State agree that there should be more clinicians at NHS 111?
Mr Hunt
I do agree that we need more clinicians in primary care. We also need to invest in secondary care, which is why the hon. Lady has a new A&E centre opening in Hull, which I am sure she welcomes. We need more clinicians in primary care so that we can deal with these issues more quickly, before people need hospital care and to spot conditions such as sepsis. This Government are investing £10 billion in the NHS annually in real terms in order to step up the improvement in the services that we offer.
Nic Dakin (Scunthorpe) (Lab)
So will the Secretary of State put a higher proportion of clinicians in 111?
Mr Hunt
We will certainly look at whether we need to have more clinicians in 111. We do have clinicians available in 111. My own view is that it is the separation of the out-of-hours services and the 111 service that is at the heart of the problem that we are looking to deal with, but as part of the review we will look at the availability of clinicians in 111.
Greg Mulholland (Leeds North West) (LD)
I, too, add my condolences to the Mead family. I can only imagine their anguish at having been told “not to worry” and that this was “nothing serious”. There was a catalogue of failures, not just with 111. Is consideration being given to the decision by GPs not to take William’s heart rate, as clearly should have happened? Is there in any sense a reluctance to refer young patients to the acute sector? If that is the case, advice to GPs needs to be changed.
Mr Hunt
I can reassure the hon. Gentleman that we are looking at all these things. As with the issue of the prescribing of antibiotics raised by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), of course we want GPs to avoid inappropriate referrals to secondary care, but it is vital that where a referral is needed, it happens. We see this not just in cases of sepsis, but in cases of cancer. It is vital that we get better at catching cancers earlier if there is to be a successful outcome to the treatment, so the hon. Gentleman is absolutely right. That will be looked at.
Jenny Chapman (Darlington) (Lab)
I commend the shadow Secretary of State on securing this urgent question. Earlier, the Secretary of State said that he felt that people had confidence in 111 because of the high call volumes, and that those had increased. I do not think that is the case. Confidence in 111 is shaky at best and this case could well shatter that confidence even further, unlike the confidence that we all felt in NHS Direct when we had young children. What is he going to do to make sure that as well as listening to the people whom he has mentioned already, he involves patients in determining what they need in 111 to give them back the confidence that we need them to have in order to avoid some of the pressure on the rest of the service?
Mr Hunt
The hon. Lady is right about the importance of involving patients when such tragedies occur, and I said in my response to the urgent question how grateful I was to the Mead family for their co-operation. One of the things the report identifies as important is earlier involvement and more listening to parents and families in such situations. I caution the hon. Lady against a blanket dismissal of the service offered by 111. There are many clinicians and call-handlers who work extremely hard and who deal with about a million calls a month, and the vast majority of those cases have satisfactory outcomes. But does that mean that there are not significant improvements that we need to make to that service? No, it does not. Of course there are things that need to be done better and we must learn the lessons from this terrible report.
Rachael Maskell (York Central) (Lab/Co-op)
My thoughts, too, are with the Mead family today. The diagnosis of conditions, including sepsis, must be carried out by those with the highest level of clinical skills. Triage by algorithms is unsafe. Can the 111 system be put back into the hands of highly trained clinicians, those trained to drill down in diagnosis, instead of non-qualified staff?
Mr Hunt
I think that is a misrepresentation of what happens with 111. There are clinicians in every 111 call centre. There are not physically enough doctors and nurses to have doctors and nurses answering every single call, and indeed the advice from the clinicians in the NHS responsible for the 111 service is that that would not be appropriate. If we are to do the triage that the hon. Lady talks about, what matters is that where a clinician needs to be involved, they are involved more quickly than happened in the current case. That is the lesson that this Government are determined to learn.
Points of Order
(8 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Andy Slaughter (Hammersmith) (Lab)
On a point of order, Mr Speaker. During Justice questions, I was alarmed to see the hon. Member for Cheltenham (Alex Chalk), who is in his place, dissenting from a quote I ascribed to him from the Justice Committee this morning. I now understand why: the quote was correct, but it was uttered by my right hon. Friend the Member for Delyn (Mr Hanson), not the hon. Member for Cheltenham. Having known and liked the hon. Gentleman for many years, I am anxious to correct that error, while noting that it shows his independence of thought that I could have credited him with the quote, and his magnanimity in trusting me to set the record straight.
Mr Speaker
It is very good to note that the hon. Gentleman has been both gracious and willing to admit to error. We are deeply obliged to him, none more so than the hon. Member for Cheltenham (Alex Chalk). Honour is served.
Mr Jamie Reed (Copeland) (Lab)
On a point of order, Mr Speaker. I would be grateful for your advice on how we can determine the Government’s policy on a time-sensitive issue. Following the flooding in my constituency at the beginning of December, I wrote to the Prime Minister asking him to formally apply for funding from the European Union solidarity fund. Applications to this fund must be made within 12 weeks of flooding taking place. As it was time-sensitive, I also submitted a named-day written question to the Foreign and Commonwealth Office, asking if the FCO would make it its policy to apply for funding. On the last day before the House rose for Christmas, the Foreign Office replied that it would not be able to answer in time. On 20 January, however, I finally received an answer from the FCO, saying that that was not its responsibility and that the matter was one for the Department for Communities and Local Government. It took more than a month for the FCO to tell me that it was not its responsibility.
On the same day, 20 January, I received a letter from the Department for Environment, Food and Rural Affairs, saying that the Prime Minister had forwarded to it my original correspondence, but that it was not a matter for DEFRA. Why would the Prime Minister transfer my correspondence to a Department that does not have responsibility for the matter at hand? Since my original correspondence, six weeks have passed and my constituency and many parts of Cumbria are again flooding today. We are coming closer and closer to the deadline for applications to the European fund. If I was unkind, I would suggest that the behaviour of the Government appears to have been to delay my query until it was too late to apply for assistance. Can you advise me, please, how an individual Member of this House can scrutinise Government policy if the Government will not tell us what it is or if they do not have one?
Mr Speaker
I thank the hon. Gentleman for his point of order and for giving me notice of it. It appears that he has received a most unsatisfactory response from the Government to his written question and to his correspondence on a matter which is clearly of urgent interest to his constituents. Although it is for the Government to decide which Department has lead responsibility for a matter, it is clearly important to parliamentary scrutiny and to public accountability that the Government are clear and consistent on where responsibility lies. What the hon. Gentleman said will have been heard on the Treasury Bench and will, I trust, be conveyed to the relevant Ministers. If he wishes to pursue the specific matter of the unsatisfactory response to his parliamentary question, he may wish to write to the Chair of the Procedure Committee, the hon. Member for Broxbourne (Mr Walker), because his Committee monitors these important matters. I hope that that will serve the hon. Gentleman for now and be a useful guide to Members across the House.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
On a point of order, Mr Speaker. This is a point of order about the rights of Back Benchers to be heard in this Chamber. You will know that some of us are very good attenders at business questions on Thursdays. Last Thursday, contributions from the Front Benches took 25 minutes. I know you are very generous and we carry on with our questions, but the predominance of all three Front Benches went on for a very long time, which squeezes the genuine Back Bencher. On the Labour Benches, we genuine Back Benchers are fighting for space all the time against the Front Benchers who are also Back Benchers part-time. Perhaps you could have a word. Also, I have never known such nasty, acrimonious jousting as there was between the two Front Benches last Thursday. It was not funny and it was not nice.
Mr Speaker
I note what the hon. Gentleman says about never having witnessed such unpleasantness in exchanges. I have never witnessed, in nearly 19 years in the House, the hon. Gentleman being squeezed by anybody; he almost invariably gets in. However, I take on board the very serious point he makes. Although I do not think that in the end Members are squeezed if they have the time to stay, because the record shows that I almost invariably let business questions run until everybody has had a chance to contribute, which was not always the practice in the past, I do accept that Members have time constraints and might have to go elsewhere to attend to other duties, including, of course, constituency and parliamentary duties. It is therefore important that they should not have to wait an excessive period of time.
My own view is similar to that of the hon. Gentleman. I think that the exchanges between the Front Benches do take too long, and they have recently started to take longer, not only on account of the involvement of the Scottish National party, which is a very legitimate and proper involvement, but because the exchanges between the Government and the official Opposition Front Benches are taking too long. Front Benchers have now been duly chided, and not just from the Chair, but, very importantly, by an hon. Member who will in May have had 37 years’ uninterrupted service in the House—namely, the hon. Gentleman. I hope that message will be duly heeded, starting this Thursday. I will have the point in mind as I hear the shadow Leader of the House and the Leader of the House. I hope that is helpful.
The Minister for Small Business, Industry and Enterprise (Anna Soubry)
Thirty-seven years!
Mr Speaker
Well, it seems only yesterday that the hon. Gentleman entered the House, and he scarcely seems old enough to have been here for 37 years, but it will nevertheless be a fact in May. [Interruption.] Man and boy, indeed.
Profit-sharing and Company Governance (Employees’ Participation)
(8 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I beg to move,
That leave be given to bring in a Bill to make provision about the entitlement of employees to benefit from profits made by their employers in certain circumstances; to require a company to allocate one seat on its board to an employee representative; and for connected purposes.
If an employee works hard for a company and helps it succeed and make a profit, surely the owners should share a little of that profit with them and with other employees. The best companies already do that. Indeed, the best companies also want their staff involved in decision making at the highest level, using their knowledge and expertise to help plot company strategy and keep senior management on their toes.
In truth, Britain has a productivity and fairness problem. Despite numerous initiatives, we are behind our main competitors in terms of productivity, while inequality continues to grow. Changing the way companies work—how they take key decisions and who is involved in them—is essential for sorting those problems out. We lag behind the rest of the G7 and most of the G20 in how productive our economy is. Indeed, between 2010 and 2014, annual average labour productivity was lower in Britain than in any other G20 or G7 country. While executive pay has shot up in recent years, the incomes of the rest of the workforce have struggled to keep pace, even with historically low inflation.
Part of the solution involves sharing a little more of the power and profits of big business with staff at all levels. Companies such as John Lewis share some of the profits they make with all their staff, giving the most junior as well as the most senior direct incentives to work even harder, think imaginatively and go the extra mile. Employees also get to help choose the board, again giving staff direct responsibility for selecting those at the very top whose decisions they will have to follow. Ensuring that the concerns of staff are heard at the top table is particularly important, as staff depend on a stable business for their livelihood. Absent owners or disengaged shareholders may have other priorities.
In countries such as France and Germany, this “shared capitalism” is a stand-out feature of business practice. Companies such as Deutsche Bank have staff on their German board who play an important and positive role. In France, firms with 50 or more employees benefit from up to 5% of profits being shared with all staff except recent arrivals. Indeed, French Governments of all political persuasions, right and left, have a long history of encouraging profit sharing among French companies; I understand that laws on profit sharing have existed in France for more than 50 years, requiring a mandatory profit-sharing scheme to be negotiated with French employees. Companies in France can choose to distribute rewards, either as a flat rate to employees, in proportion to wages, in proportion to the hours worked in the previous year, or through a scheme based on a combination of those principles. Arguably, the prevalence of profit sharing makes an important contribution to higher levels of productivity in France. Between 2010 and 2014, France had a level of productivity per hour almost double that of the UK.
Having employees on boards is the norm in many other successful countries. For example, in Denmark, France, Finland, Norway, Sweden and Germany at least one director is elected by the employees. In Norway—favoured by some for being outside the European Union—once a business has 30 employees, one director has to be chosen by the workforce. In Sweden, another key UK ally, once a company has 25 employees, around a third of directors have to be workers in the business. IKEA, that staple of the British high street, has worker directors on its Swedish board. In France, private companies with 1,000 or more employees, or 5,000 or more if they are worldwide, must have at least one or two staff on the board, while a third of all board members for state-owned companies are elected by the staff. In Germany, a third of the supervising board in companies with 500 or more employees are staff, but that rises to half in companies with more than 2,000 employees.
For a long time, this country has been happy quietly to endorse having workers on boards, so long as they are overseas businesses. EDF, France’s leading nuclear energy company, which is in the process of being handed the keys to Hinkley Point, has a board in which one third of members are elected by its workers. Indeed, as a French company, EDF also has a profit-sharing scheme. Deutsche Bahn, which runs much of our rail network through its subsidiaries, has six directors elected by its staff. Even though both companies are key players in British markets, particularly in England, English workers in those companies do not get to vote for board members; it is only German and French staff who do. In short, if German, French and Swedish workers are good enough to sit on a company board, is it not time that British and English workers were given their chance, too?
A number of companies operating in tough markets in the UK have demonstrated that employee directors work. John Lewis is one, and FTSE 100 company First Group is another. Mick Barker is the employee director of First Group. He has been a railway man for 39 years and is employed as a train driver for First Great Western. He serves on its board and various other key bodies. Indeed, First Group encourages its operating companies across the UK and north America to elect employee directors to their boards so that, in its words,
“the views and opinions of staff are represented at the highest level”.
In the UK, concerns about high levels of executive pay and falling workers’ wages have led to some debate about broadening the membership of the remuneration committees of big companies to include staff. Indeed, the Department for Business, Innovation and Skills considered reforming remuneration committees in 2011, but sadly nothing happened. Analysis by the House of Commons Library suggests that if a French-style profit-sharing system was introduced in the UK, corporate household names could be allocating to their staff an extra £500 to £1,200 a year once profits have been declared. Those are not huge sums of money to those at the very top of those businesses, but it would help to reward better the collective hard work required for any business to succeed.
That would neither add to business costs, nor undermine pay differentials between skilled and unskilled workers, or between founder and recent employees, but it would offer an incentive to all to co-operate together to support business success and achieve higher returns for both staff and owners alike. As the Institute for Public Policy Research has noted, if every private sector company in the UK with 500 or more employees had a profit-sharing scheme, over 8 million people in 3,000 British firms could benefit from hundreds of pounds a year extra.
Company law needs to change to reflect modern Britain. Employees’ crucial stake in the success of their employer needs recognition in law. It is about strong businesses, better rewards for staff, higher productivity and a less unequal country. The Bill is a step towards those ambitions, and I commend it to the House.
Question put and agreed to.
Ordered,
That Mr Gareth Thomas, Chris Evans, Meg Hillier, Mr Steve Reed, Mrs Louise Ellman, Mr Adrian Bailey, Rachael Maskell, Stephen Twigg, Mr Mark Hendrick, Stephen Doughty, Kate Osamor and John Woodcock present the Bill.
Mr Gareth Thomas accordingly presented the Bill.
Bill read the First time; to be a Second time on Friday 11 March, and to be printed (Bill 124).
CHARITIES (PROTECTION AND SOCIAL INVESTMENT) BILL [LORDS] (Ways and Means)
Resolved,
That, for the purposes of any Act resulting from the Charities (Protection and Social Investment) Bill [Lords], it is expedient to authorise:
(1) the charging of fees; and
(2) the payment of sums into the Consolidated Fund.—(Mr Rob Wilson.)
CHARITIES (PROTECTION AND SOCIAL INVESTMENT) BILL [LORDS]: PROGRAMME (No. 2)
Ordered,
That the Order of 3 December 2015 (Charities (Protection and Social Investment) Bill [Lords] (Programme)) be varied as follows:
(1) Paragraphs (4) and (5) of the Order shall be omitted.
(2) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion two hours before the moment of interruption on the day on which those proceedings are commenced.
(3) 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 that day.
(4) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.—(Mr Rob Wilson.)
Mr Speaker
I remind the House that at the end of the Report stage, I am required to consider the Bill, as amended on Report, for certification. My provisional certificate is available on the “Bills before Parliament” website and in the Vote Office.
Charities (Protection and Social Investment) Bill [Lords]
(8 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:29 - The House divided: - Ayes: 236 / Noes: 280 - Question accordingly negatived.
16:43 - The House divided: - Ayes: 196 / Noes: 280 - Question accordingly negatived.
“Decision of the Commission to issue a warning under section 75A to a charity trustee, trustee for a charity or a charity. | The persons are—any of the charity trustees of the charity; and (if a body corporate) the charity itself. | Power to quash the decision and (if appropriate) remit the matter to the Commission.” |
Anna Turley (Redcar) (Lab/Co-op)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
New clause 2—Disposal of assets—
“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.”
New clause 3—Power to make representations—
“(1) A charity may undertake political campaigning or political activity in the context of supporting the delivery of its charitable purposes.
(2) A charity may campaign to ensure support for, or to oppose, a change in the law, policy or decisions of central government, local authorities or other public bodies.”
New clause 4—Power to hold hearings on fundraising regulation and charity activity—
“(1) The Commission has the power to hold public hearings with representatives from charities, charity trusts and other relevant bodies on fundraising regulation and charity fundraising activities.
(2) Representatives appearing at the public hearings specified in subsection (1) are protected by legal professional privilege.”
This amendment requires the Charity Commission to hold annual hearings on fundraising regulation and the workings of charities and provides participants with the protection of legal professional privilege.
New clause 5—The Charity Commission as primary guarantor of the regulatory system for fundraising—
“(1) Section 69 of the Charities Act 2006 (Reserve power to control fund-raising by charitable institutions), which inserts section 64A into the Charities 1992 Act (Reserve power to control fund-raising by charitable institutions) is amended as follows.
(2) In subsection (1) for “Minister” substitute “Charity Commission”.
(3) After subsection (8) insert—
“(9) The Charity Commission shall report annually to the Minister on the exercise of its powers under this section.
(10) On reviewing the annual report or if the Secretary of State considers the Commission is not effectively exercising its function as guarantor of the regulatory system the Minister may himself exercise the powers under this section.””
This amendment makes the Charity Commission the primary regulator of charities fundraising activities, requires the Charity Commission to report annually to the Cabinet Office on its regulation of charitable fundraising, and allows the Government to intervene in this regulation as a last resort.
Amendment 9, in clause 1, page 1, line 12, at beginning insert “Subject to subsection (3)”.
Amendment 8, page 1, line 12, leave subsection (2) and insert—
‘(2) The Commission may issue a warning to a charity trustee, a trustee for a charity or a charity in any way it considers appropriate but may not publish a warning to a wider audience.”
Amendment 10, page 1, line 15, at end insert—
‘(2A) If the Commission decides to publish a warning under subsection (2) it must do so in a manner which does not identify the charity, or charity trustee, in relation to which the warning is issued.”
Amendment 11, page 1, line 16, after “give” insert “at least 14 days”.
Amendment 12, page 2, line 6, leave out subsection (b) and insert—
“(b) such advice or guidance that the Commission considers may assist the charity to remedy the conduct which gave rise to the warning, as referred to in (a) above.”
Government amendment 2.
Amendment (a), line 10 at end add—
‘( ) If the Commission publishes notice that a warning has been withdrawn under subsection (2), the notice must state the reasons for the withdrawal.
( ) No record of a warning withdrawn by the Commission should be held on the Register of Charities.”
Government amendment 3.
Amendment 1, in clause 9, page 10, line 2, at end insert—
‘(22) Before this section comes into force, the Secretary of State shall lay a report before Parliament on the impact of the extension of the disqualification framework on—
(a) people with criminal records who are trustees of, or employed by, charities, and
(b) charities which work with, or employ, ex-offenders.
(23) The report shall include, but not be limited to—
(a) an assessment of the number of people employed by charities who will be affected by the extension of the disqualification framework to cover senior management positions,
(b) an assessment of the number of people who are trustees of, or employed by, charities who will be affected by the extension of the list of specified offences for which people will be automatically disqualified from being a trustee of, or a senior manager in, a charity,
(c) an assessment of the impact of the new disqualification framework on former offenders who are seeking, or intend to seek, employment in the charitable sector, including on their recruitment, retention, career prospects and long-term rehabilitation and resettlement,
(d) an assessment of the impact of the new disqualification framework on former offenders who are currently employed in the charitable sector, including on their retention, career prospects and long-term rehabilitation and resettlement,
(e) an assessment of the impact of the new disqualification framework on people with criminal records who are trustees or employees of charities which are partners in, or are contracted by, community rehabilitation companies (CRCs) and its impact on the successful running of those organisations,
(f) an assessment of the effectiveness of the existing waiver process provided for under section 181 of the Charities Act 2011,
(g) an assessment of the impact of the new disqualification framework on the number of applications for waivers to the Charity Commission,
(h) a description of how the working group set up by the Charity Commission on the waiver process will be constituted, how it will be resourced, what timelines it will be working to, its working method and intended outputs, and how it will work in consultation with people with criminal records and charities that work with, or employ, ex-offenders,
(i) a description of the criteria the Charity Commission will adopt in considering applications for waivers, and the weight it will attach to the views of the trustees of the charity or charities concerned,
(j) a description of how the waiver process will operate in relation to prospective candidates for senior management positions in charities, including the timescales for decisions and mechanisms to ensure that ex- offenders do not suffer indirect discrimination as a consequence of delays in assessing applications for waivers while a competitive recruitment process is underway,
(k) an assessment of the impact of the new disqualification framework on the resources provided by the Charity Commission to administer the waiver application process.”
This amendment would require the Secretary of State to lay before parliament a report on the impact of the extension of the disqualification framework on people with criminal records who are trustees of, or employed by, charities, and on charities which work with, or employ, ex-offenders before the section came into force.
Amendment 13, in clause 10, page 10, line 7, after “person” insert “or persons”.
Government amendment 4.
Amendment 14, page 10, line 35, leave out
“(either generally or in relation to the charities or classes of charity specified or described in the order)”
and insert
“, as defined by the Commission in a specific document to be published after consultation and renewed”.
Amendment 15, page 11, line 33, after “conduct” insert “both relevant and serious”.
Government amendments 5 to 7.
Anna Turley
It is a pleasure to speak today on behalf of Her Majesty’s Opposition about this, my first Bill. The Committee process has been excellent, and I welcome this opportunity to revisit the Bill and talk again about some of the issues that were raised.
The main objective of the legislation is to provide a strong regulatory framework to support the charity sector and its trustees. In particular, it aims to strengthen the Charity Commission’s arm by giving it more powers to regulate charities. That is an important objective, which we support, but we are clear that the right safeguards must be in place. The Charity Commission is the guardian of public trust and confidence in charities. On the whole, it does an excellent job, particularly in the context of the assault on its budget over the past six years. It is important for the integrity of the charitable sector that the commission should have the tools to do its job properly, and for that reason we support many of the Bill’s provisions.
However, as with any regulator, it is vital to ensure that the commission’s powers are subject to appropriate safeguards. Unfortunately, some of new powers for the regulator introduced by the Bill lack such safeguards and therefore leave scope for the commission to overreach itself. That threatens the independence of charities and the integrity and reputation of the commission, and it could fundamentally change the relationship between the commission and the charity sector.
Our concerns are shared by the sector, its advisers and more widely—the Charity Law Association, for example, has said that the new powers in the Bill need to be balanced by appropriate and proportionate safeguards. It points out that the new powers will apply not only in rare cases of deliberate abuse but to all charities and their many hundreds of thousands of well-meaning volunteer trustees.
A group of sector umbrella bodies, including the Directory of Social Change, the Association of Chief Executives of Voluntary Organisations, the National Council for Voluntary Organisations and the Charity Finance Group, have all expressed serious concerns about the lack of safeguards. The Joint Committee of the House of Lords and House of Commons that scrutinised an early draft of the Bill called for necessary safeguards to be included, and, of course, we pushed for those in Committee.
The Minister may point out, as he did in Committee, that the Charity Commission has a statutory obligation to act proportionately. We acknowledge that, but experience has shown that, sadly, that is not enough. In a recent High Court case involving the commission and the Joseph Rowntree Charitable Trust, the Lord Chief Justice referred to “ludicrous time limits” imposed by the commission in a regulatory situation; he said he could understand why it was felt that the Charity Commission had behaved in an extremely high-handed manner in that case.
The commission should, of course, have the power to do its job, but sensible limits should be imposed on how it exercises its powers. Our amendment would redress the balance.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I congratulate my hon. Friend on her excellent speech. I am a trustee of many charities; one of the concerns that those of us who work in the charitable sector have had for a long time is the weakness of the Charity Commission. Usually, its legal department is terrified of a case ending up in the High Court. I support the Bill: we need a strong commission that can do its job as it has not been able to do it for many years.
Anna Turley
My hon. Friend is absolutely right; that is why we support the Bill and the powers it gives to the Charity Commission. My hon. Friend is also right in talking about what is sometimes a lack of clarity and a confusion, which can be costly. We are really keen to get clarity on the grey areas, boundaries and improper balances in the Bill. It is really important that we get those on the record while the Bill has yet to be enacted and before we end up with costly processes in the High Court.
I turn specifically to new clause 1 and amendments 9, 8, 10, 11 and 12, which apply to clause 1, which relates to the Charity Commission’s new power to give warnings.
The Bill introduces a new power for the Charity Commission to issue official warnings to a charity or a charity trustee. The explanatory notes say that the power is intended to be used when the risk of an impact on charitable assets and services is relatively low, but the new power could have a far-reaching impact on charities that receive a warning. The Bill gives the commission complete discretion about publicising a warning. That could have serious reputational implications for the charity involved: the public, the media and funders may well not distinguish between a low-level issue giving rise to a warning and something much more severe. It is important that we consider the issue in the context of the high profile media issues raised recently. After all, official warnings issued by other regulators indicate a serious and high level of concern; under the Bill, the commission can issue a warning on the strength of a low-level breach of trust or just a breach of duty by a charity trustee. Indeed, it is our understanding that it intends to use the warning power in low-level cases.
As all hon. Members know, reputation is paramount for charities and charity trustees. The adverse publicity resulting from a warning could lead to a choking off of donations, grant funding and corporate sponsorships, leading to a closure of services and, potentially, to redundancies. A warning can be used as a trigger for further regulatory action; clause 2 makes a change to the circumstances in which the commission can take significant protective measures in relation to charities so that the failure to remedy an alleged breach of trust or duty specified in a warning is automatically a trigger to more serious action. That seems a startling implication for a power intended to be used in low-level cases and makes it all the more important that there should be safeguards around the exercise of the power.
Our amendments address those concerns in four ways. First, through amendment 9 and 8, they would limit the commission’s scope to publish the warning to a wide audience. The charity and its trustees would receive the warning, but no wider publicity would be involved. The warning would ensure that the charity took the commission’s concerns seriously, but would have no adverse effect on its reputation. If the charity failed to comply with the warning, the commission could take more significant regulatory action at that stage, and that might attract publicity. Low-level concerns, however, would not be publicised, to ensure that the commission’s action was proportionate and did not seriously impact—potentially fatally—a charity for a relatively minor error.
Peter Kyle (Hove) (Lab)
It has been stated numerous times that the Charity Commission often sees itself as a partner in trying to improve and work with charities. Would not the method that my hon. Friend is describing be one more of partnership, using the expertise of the Charity Commission to improve and tackle the challenges that charities face in the front line? That is a much more collaborative approach, aimed at delivering outcomes for the beneficiaries, rather than a public bust-up, which could damage the Charity Commission, charities as a whole and the individual charity concerned.
Anna Turley
My hon. Friend makes an extremely important point. It is clear that when the Charity Commission works in terms of its role of supporting, encouraging and giving guidance to charities, it is extremely effective. Particularly given the pressures on its finances, expecting it to undertake a wide range of enforcement in this manner is potentially quite costly.
Alternatively, amendment 10 would allow the commission to make details of the warning public without referencing the charity, or a charity trustee, by name. This would allow the commission to publish a warning anonymously if it felt that it held important lessons for the wider charitable sector, but without the consequent impact on the charity.
Secondly, under amendment 11 the commission would be obliged to give the charity adequate notice of its intention to issue a warning. The Bill states that
“the Commission must give notice”,
but there is no specified notice period. That means that there is nothing to stop the commission giving less than 24 hours’ notice of its intention to issue a warning, which would give the trustees, who are very often hard-pressed volunteers, and any charity staff almost no time to respond. This is a serious risk. In the High Court judgment that I mentioned, it is understood that charity trustees were given less than 24 hours to respond to the commission, prompting the Lord Chief Justice, as I said, to describe the time limits as “ludicrous”.
This concern has already been raised by the Joint Committee that reviewed an earlier draft of the Bill. It recommended that a reasonable minimum notice period to make representations on a draft warning should be made clear in the Bill. The Government’s response to the Joint Committee’s report accepted that a recipient should have the opportunity to make representations on the warning for the commission to consider before it is published. In our view, this requires the inclusion of a minimum notice period in the Bill, and that is what our amendment seeks to achieve. The Government may argue that there could be circumstances where the commission has such serious concerns that it must act swiftly and without notice. In such cases, the commission should exercise some of its other regulatory powers designed for more serious concerns, some of which may be used without advance notice. We have been told that the warning power is not intended for such serious cases.
We also propose a small amendment, amendment (a), to Government amendment 2 on the proposed power to withdraw or vary a warning. Our amendment is designed to help reduce any reputational damage to a charity that might result from the inappropriate issuing of a warning. It is absolutely right and fair that if the warning was subsequently found to have been incorrectly given, then it should be publicly revoked and any damage sought to be undone.
Thirdly, amendment 12 seeks to ensure that it is absolutely clear in the Bill that the commission will not be able to use its warning power to direct charities. It is not appropriate for the commission to be able to direct charity trustees on how to act. It is very clear from the Charities Act 2011 that the commission is not able to act as a charity trustee except for very limited exceptions. In a small range of circumstances, the commission can issue statutory directions to charities, but these are rightly subject to very strict safeguards. It seems that the Government agree with this principle. In responding to the consultation on the extension of the Charity Commission’s power that was a precursor to the Bill, the Government specifically decided not to extend the commission’s powers to make directions outside a formal statutory inquiry. If the commission could use the warning power as a way to direct charities, it would be able to give directions via the back door. This is a fundamental shift in the delicate balance of the relationship between the commission and charities, and it should not be allowed.
We would welcome some clarification from the Minister on this point, as there seems to be confusion in the sector about it. We understand that the commission does not regard the warning power as giving it the power to direct charities, yet the explanatory notes to the Bill imply the opposite, stating:
“Where the Commission considers it disproportionate and unnecessary to open an inquiry purely for the purpose of making a direction, issuing an official warning could be an alternative way of making it clear to a charity that they should take action.”
Confusion over a similar issue gave rise to the High Court case that I mentioned, prompting the Lord Chief Justice’s comments about the commission’s actions. Our amendment makes it clear that while a warning can be used to give advice or guidance to a charity—which can often be very positive, as my hon. Friend the Member for Hove (Peter Kyle) said—in order to remedy the conduct that gave rise to it, it absolutely cannot be used to direct the trustees to take action.
New clause 1 would allow for the issuing of a warning to be appealed to the Charity Tribunal. I have already explained the potentially significant consequences that the issuing of a warning has for a charity. The Charity Tribunal is a low-cost forum that was established in the Charities Act 2006 especially for charities wishing to challenge the commission. In the absence of an express right of appeal, charities affected by a warning are able to challenge it only via judicial review. Judicial review is expensive, complicated, and time-consuming. It is a completely inappropriate option for a mechanism that is intended to address low-level non-compliance. The Charity Tribunal was introduced precisely so that charities would not have to rely on costly judicial review proceedings to challenge the commission’s decision making. There is no good reason, and I am afraid none was forthcoming in Committee, as to why it should not be possible to appeal an official warning to the Charity Tribunal. It is illogical that the exercise of the warning power should be more difficult to challenge than the exercise of the commission’s more extensive regulatory powers, which can be appealed to the Charity Tribunal.
The Minister for Civil Society (Mr Rob Wilson)
It might be helpful if I clarify one of points that the hon. Lady raised about the power to direct. An official warning is not the same as a direction power. I am aware of the potential confusion regarding the explanatory notes that she mentioned. If it is helpful to her, I would be happy to ensure that the explanatory notes are updated to make it absolutely clear that the warning power cannot be used to direct charities.
Anna Turley
That is very helpful indeed. I really appreciate the Minister being so quick and forthcoming with his clarity on that, which will give the sector a lot of reassurance.
I now move on to our new clauses 2 and 3. New clause 2 seeks to replace a clause that was put into the Bill during its passage through the other place but removed in Committee. I pay tribute to our noble Friends in the other place who successfully added the clause to the Bill. As with so much legislation at the moment, we are finding them to be great defenders of social justice and fairness.
New clause 2 would support trustees in carrying out their existing duties by ensuring that they can adhere to their charitable aims and objectives, and it would protect them from being compelled to undertake an action at odds with their charitable purposes. As we have always made clear, especially in Committee, the provision is particularly relevant to housing. It aims to protect charities and housing associations if the Government mandates them to sell their charitable property under the right-to-buy proposals.
Labour Members want those who desire to be homeowners to achieve their aspiration. While the number of homeowners has fallen by more than 200,000 under this Government, the number rose by more than 1 million under Labour between 1997 and 2010. I want to be clear that we support people’s aspiration to own their own home.
Kelvin Hopkins (Luton North) (Lab)
I agree with what my hon. Friend is saying, but the level of owner-occupation is declining because house prices have risen way beyond the ability of most people to afford them. Is not the real problem the need to have decent social rented housing, and should we not keep all existing social housing in the public sector to make sure we can house people properly?
Anna Turley
My hon. Friend makes an extremely important point. We know that home ownership is falling and, as he says, the real crisis is in social housing. The purpose of new clause 2 is to protect what social housing we have and maintain it in the hands of the charitable sector and housing associations that own it, as well as to ensure that it is used for its intended purpose, not sold off for profit.
The problem our new clause seeks to address is that of compulsion. This is about the fundamental rights and the position in law of housing associations and charities. The independence of the charitable sector from Government is an important strength of British civic society, and one that must be cherished. We do not support the right of a Government to direct a charity, against its independent will and contrary to its charitable purposes, to dispose of its assets according to the Government’s desire. That is an infringement of the independence of charity, community and voluntary sector organisations. For many housing associations, it goes against the very grain of their founding purpose.
Housing associations, many of which are charities, provide 2.5 million homes for 5 million people on affordable rents. Many enable vulnerable people, or those with disabilities or care needs, to live independently. Other properties are for shared ownership, to help those on lower incomes to buy their homes. These aims are in the charitable DNA of housing associations and are not for the Government to tamper with.
The unintended consequences of the right-to-buy proposals for housing associations could undermine charity law that goes back centuries. In essence, the proposals will allow the assets of independent charities, and even the bequests of individuals or philanthropists—for example, the Peabody Trust, which has built and bequeathed housing to ameliorate the conditions of the poor and needy—to be seized. Housing associations currently build 45,000 homes a year. Ideally, they would like to build 120,000 homes. That aim may be undermined if they are forced to sell off their stock.
Housing associations often lever in private finance on the basis of assets they already own in order to meet their wider charitable objectives and to manage their assets effectively. Right to buy will force housing associations to sell properties. It will give them less control over such decisions. Importantly, in relation to this Bill, it will make it more difficult for them to meet their charitable purposes.
Furthermore, any diminution of the housing stock could harm housing associations’ borrowing powers. The National Housing Federation has said:
“With a nation in the throes of a housing crisis, it is key that housing associations are in full control of the assets against which they borrow to build homes.”
Labour, as well as many housing associations around the country, has always said that the extension of right to buy to housing associations, through the Housing and Planning Bill, is unworkable and wrong. It will lead to a severe and irreversible loss of affordable homes at a time when they can never have been more needed, because the Government have no genuine plan for one-for-one, like-for-like replacement. Historically, only one in 10 homes sold have been replaced under the right to buy.
Kelvin Hopkins
Even those who support the sale of council houses and of housing association properties say that if the subsidy came directly from the Treasury, that would be very different from making housing associations and local authorities pay for the subsidy out of their assets.
Anna Turley
My hon. Friend is absolutely right. It has been apparent throughout the proceedings on the Housing and Planning Bill that there is a black hole in the plans to fund the whole proposal.
There are currently 2 million people on waiting lists due to the dearth of homes on affordable rents for low earners. Our new clause 2, which protects housing associations from being compelled to sell off homes, would prevent the further reduction in the supply of affordable social housing. Too often, history has shown that right-to-buy homes are resold. Many homes are rapidly rented out by private landlords at the full market rent, which serves to drive up market prices and increase poverty through higher housing costs, as well as reducing the housing stock available on affordable rents. All of that goes against the charitable objectives of most housing associations.
In summary, we are concerned that the Government want to interfere with the duties of charity trustees to put their beneficiaries first and to comply with their fundamental charitable purposes in how they manage their assets. Housing associations can already partake of right-to-buy options for their tenants where that accords with their charitable objectives. The problem arises where that conflicts with their objectives and trustees’ duties risk being overridden by the Government, which is simply not acceptable. That is what the new clause seeks to prevent.
New clause 3 would enshrine in legislation the right of charities to undertake political campaigning activity. We are clear that this is a direct attempt to challenge the unfair and poorly applied Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014, commonly known as the gagging Act. Campaigning is an important part of democracy and civil society. One of the fundamental principles of a thriving and healthy democracy is that individuals and organisations can speak out on the issues they care about.
Mark Field (Cities of London and Westminster) (Con)
On new clause 2, the hon. Lady made a case about charities’ ancient rights. She will be well aware that the ancient rules, going back 400 years to the time of James I, were very much against charities involving themselves in politics. I accept that there have been changes in charity law more recently, but it seems rather perverse that she prays in aid ancient charitable rights in relation to new clause 2, but is happy to ride roughshod over them in new clause 3.
Anna Turley
On the contrary, it was the gagging Act that rode roughshod over the historic rights of the charity sector to defend and campaign on the causes that charities fundamentally exist to tackle.
Peter Kyle
My hon. Friend makes an incredibly powerful point. This is about freedom of speech for everyone—every citizen and every organisation in this country—but it is also about making sure that the disempowered, both individuals and communities who lack a voice, have advocates that can speak in as unencumbered a way as is humanly possible and with the ferocity that those in our society who lack a voice deserve.
Anna Turley
My hon. Friend is absolutely right. He pays tribute to the charities that do some of the most important work with the most excluded. Such people need a voice and are often those who suffer the consequences of bad policy making in this place. Charities often have to pick up the pieces of such policy making.
Susan Elan Jones (Clwyd South) (Lab)
I am slightly mystified by some of the comments about so-called political activity. We are talking about basic advocacy. We only have to go back to the end of the first world war to see the Royal British Legion campaigning for jobs for veterans and so on. We are not talking about party political campaigning. That is what the voluntary sector objected to in the 2014 Act.
Anna Turley
My hon. Friend is absolutely right. As she has ably demonstrated, charities have a long-established role in educating, informing the public, campaigning and securing positive social change throughout our history.
Wendy Morton (Aldridge-Brownhills) (Con)
Use of such terms can seem a little bizarre, but does the hon. Lady not agree that charities can already make representations, including to us as Members of this place? One of the big things about charities is that they have a special ethos that drives their work and activities. I therefore cannot understand why we should support new clause 3.
Anna Turley
It is quite clear that the charitable sector felt that the 2014 Act prevented them from being able to pursue exactly the aims that the hon. Lady sets out. We in this House share many things in common with the charitable sector, not least the effort to build a better society, so it is absolutely right that we should work together in partnership to build better policy making and to shape the kind of society that she cares about. Our new clause has not come out of thin air. We are reacting to a very bad piece of legislation, about which the sector feels extremely strongly. We want to continue to protect the sector.
Wes Streeting (Ilford North) (Lab)
Part of the problem is the use of the word “political”. Before the introduction of the gagging law, there was no provision for charities to engage in party political activity—activity in favour of a political party—and CC9, the Charity Commission’s guidance document on campaigning for charities, is clear about that. What problem does my hon. Friend think the Government were trying to solve when they introduced the gagging law? I do not think there was any such problem.
Anna Turley
My hon. Friend is absolutely right. I think the problem was that the Government felt challenged. From the outside, they were happy to talk about being the most open and transparent Government ever, but once in power, they pulled up the drawbridge and were nervous about the challenge they faced from the sector on key issues such as badgers and the bedroom tax.
Mark Field
No one minds scrutiny. We are very happy to have bodies that want to engage in political lobbying, but they should not be charities. Charities have certain benefits, including tax benefits. Bodies that wish to be party political, biased advocates are perfectly able to be so if they are companies or other corporations. The point is that the charitable sector brings with it a range of benefits, not least in terms of taxation, that should not be abused for party political purposes.
Anna Turley
Would not the right hon. Gentleman agree, therefore, that for a charity that is picking up the pieces left by diseases such as cancer or heart failure, it is a better use of taxpayers’ money to lobby for better investment in prevention and research and development?
Robert Jenrick (Newark) (Con)
I am sorry to relive arguments that were heard in Committee, but the only example that was given to the Committee of the so-called chilling effect or of a charity being prohibited from carrying out activities by the so-called gagging law was that of the Badger Trust. That organisation was explicitly party political. The chief executive officer, Dominic Dyer, sent out an email using the charity’s email system to all its members, who may have had any party political affiliation or none, saying that he had contributed to the Labour party’s rural manifesto, that it was wonderful, that they should turn up at the launch of the manifesto, that they should take part in an anti-Cameron rally and, presumably, that they should vote Labour. The hon. Lady said that she supported that kind of behaviour, which was illegal. Surely Members from all parts of the House can agree that such behaviour is wrong. New clause 3 should be defeated because it would give the green light to that sort of extremely negative behaviour.
Anna Turley
I am surprised that the hon. Gentleman has a problem with negative behaviour—I am afraid that it is a fact of life. Having looked at the evidence from the Charity Commission on that case, I still struggle to see what was wrong with the situation. I am very happy to continue that conversation with the Charity Commission.
The hon. Gentleman says that that was the only evidence given. More than 160 charities signed a letter to the Government ahead of the general election saying that the legislation should be scrapped, including Save the Children, the Salvation Army, Oxfam, Greenpeace, Age UK and Amnesty International. The charity sector is up in arms.
Susan Elan Jones
Surely the big problem that people had was that they did not like the idea of dodgy lobbyists giving money to dodgy politicians. It was not about victimising groups such as the Salvation Army. The hon. Member for Newark (Robert Jenrick) says that it was just the Badger Trust that was affected. If he had heard what the Countryside Alliance said at the all-party parliamentary group on civil society and volunteering about what it thought of the gagging Act, he would accept that a wide variety of groups are affected.
Anna Turley
My hon. Friend makes an extremely important point about the strength of feeling in the sector.
Martin John Docherty (West Dunbartonshire) (SNP)
I share the concerns of the hon. Member for Clwyd South (Susan Elan Jones). Does the hon. Member for Redcar (Anna Turley) agree that the gagging Act would have limited even the calls for the creation of the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly, which were led by the Church of Scotland, which is a registered charity in Scotland? Without new clause 3, it will not be possible to have an impact like the one that the Scottish Parliament has had on the so-called unwritten constitution of the United Kingdom.
Anna Turley
The hon. Gentleman makes an important point and I thank him for that contribution. I will make some progress, because I am conscious that many Members want to speak.
Not only should charities have the right to campaign, but they are often best placed to provide important insights that can inform and improve policy making. They are often the ones on the frontline who see the gaps in provision, the duplication of services and the inefficiency and waste, and who spot the best ways of solving or, better still, preventing problems. Many charities can make a bigger impact with their limited resources through campaigning than through service delivery alone.
Campaigning often saves taxpayers money in the long term, as issues can be addressed at their roots, rather than in the aftermath, which can be costly. For example, as I just mentioned, many charities provide fantastic care for patients with long-term conditions such as cancer, but is it not better for them to push for more effective treatment, more awareness of the symptoms and more support for diagnosis through campaigning? So much of that happens as a result of good policy making by politicians. That is why charities must seek to shape it.
Maggie Throup (Erewash) (Con)
I fear that under new clause 3, the hard-earned money that people donate to charities would be spent on political campaigning, rather than the initial cause to which they donate, such as true medical research. That is why the new clause is flawed.
Anna Turley
I am surprised that the hon. Lady presumes to know what people want to happen when they donate money. Many people who donate money to large charities such as Crisis and Shelter are very aware of the high-profile public campaigning that they do and of the pressure that they put on all of us in this House. That is to be commended. Many people support the powerful voice that such charities have in the community.
Kelvin Hopkins
To reinforce that point, many people support and donate to such charities precisely because they campaign.
Anna Turley
I completely share my hon. Friend’s view and am grateful for his supportive intervention.
Charities themselves have set out their concerns, including the fact that the scope of the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 is very broad. They are concerned that the legitimate day-to-day activities of charities and voluntary organisations that engage with public policy will be caught by the rules and that a number of regulated charities, voluntary organisations and other groups will be substantially affected. They feel that the Act is incredibly complex and unclear, and that it will be difficult for charities and other voluntary groups to understand whether any of their activities will be caught, giving rise to the risk that campaigning activity will be discouraged.
Charities also feel that the 2014 Act gives substantial discretion to the Electoral Commission, creating an unnecessary and burdensome regulatory regime and possibly leaving charities, voluntary organisations and the Electoral Commission open to legal challenge. The legal opinion provided to the National Council for Voluntary Organisations by election law experts suggested that the rules were so complex and unclear that they were
“likely to have a chilling effect on freedom of expression, putting small organisations and their trustees and directors in fear of criminal penalty if they speak out on matters of public interest and concern”.
The 2014 Act stopped charities campaigning—they say so themselves—and caused unnecessary cost and confusion, according to a report by the Commission on Civil Society and Democratic Engagement, which looked at its effect on last year’s general election. Drawing on evidence from UK charities and campaign groups, the commission found that charities were faced with confusion about
“the ambiguity of the definition of regulated activity.”
The commission states that as a result of that,
“many activities aimed at raising awareness and generating discussion ahead of the election have not taken place.”
A representative of the World Wide Fund for Nature told the commission:
“I think the Act has created an atmosphere of caution within parts of our sector. It has also wasted time in terms of analysis of it, explaining it to Trustees, staff etc. It is not…a piece of legislation we need.”
Greenpeace told the commission:
“We were meant to be participating in a huge cross-NGO campaign, but all apart from a couple of the organisations ended up not campaigning during the general election period leaving us with not enough partners to run the campaign.”
The Salvation Army stated:
“As we are not traditionally a campaigning charity we were not in danger of exceeding the top limit. However, we were wary of supporting causes that could be considered coalition campaigning because we felt the administrative cost would be excessive and we couldn’t control the level of spending.”
The Commission on Civil Society and Democratic Engagement also found that voluntary groups undertaking Government contracts regularly faced threats to remain silent on key Government policies. Many neglect to speak out on issues that are plaguing society, for fear of losing funding or inviting other unwelcome sanctions.
Anna Turley
I am afraid that I am nearly at the end of my speech, so I will finish.
The lobbying legislation looks to many in the sector too much like another deliberate and shameless act by a Government who are too scared to debate their record or to be open to scrutiny and challenge. The health of our democracy depends on people’s right to campaign on the issues they care about. The 2014 Act was an attack on our democracy. It limits the rights of charities to fight for important causes. It has left expert organisations that have a vital contribution to make to public debate unsure whether they are allowed to speak out. We seek to protect the right of charities to have a loud and respected voice in our democracy. I commend new clause 3 to the House.
Sir Edward Garnier (Harborough) (Con)
I congratulate the hon. Member for Redcar (Anna Turley) on her first speech from the Dispatch Box in the Report stage of a Bill. She gave a thorough explanation of her case on behalf of the official Opposition, although I am not entirely sure that I agreed with all of it. No doubt she gave it a lot of thought. She certainly gave us the benefit of her views.
I will not follow the hon. Lady up and down the badger setts of England and Wales, if that is all right with her, but I will speak to amendment 1, which stands in my name. I will do so, with the greatest of respect, in a slightly less aggressive way than her, although there is nothing wrong with aggression when one has something decent to say. I must declare an interest, as is indicated on the Order Paper, because I am a patron of Unlock, the charity that seeks to help people with convictions, and a trustee of the Prison Reform Trust. Both positions are unpaid.
I became interested in prison issues, the rehabilitation of offenders and so on when the Prime Minister, then the Leader of the Opposition, appointed me in the middle of the last decade as shadow Minister with responsibility for prisons and probation. As a consequence of that appointment, I visited about 65 of the 140 or so prisons, young offender institutions and secure training units throughout England and Wales. It became apparent to me—it was not a new idea, in that others had discovered it previously—that one of the things that contributes to the high levels of reoffending among those people who have been sent to prison and come out again, particularly among youngsters, is that they do not have a job or somewhere settled to stay, and that they have, to put it loosely, relationship problems. If we can do something to help people to form strong, stable relationships with families, partners or others, and if we can find them somewhere stable to stay and live, and if we can help them to get training or work, the chances that they will reoffend and go back to prison are very much reduced.
As a consequence of the voyage of discovery that I went on from 2005 or so until I was appointed shadow Attorney-General in 2009, I wrote a paper called “Prisons with a Purpose”. I hope that the Secretary of State for Justice—I see his Parliamentary Private Secretary, my hon. Friend the Member for Newark (Robert Jenrick), sitting in his place to my left—is picking up many of the ideas that I and my right hon. Friend the Member for Arundel and South Downs (Nick Herbert) pushed forward in that period of opposition.
I suppose it is not a surprise that I have become attached to the Prison Reform Trust and to Unlock, but in speaking to my amendment 1, which is long—it is set out on page 5 of the amendment paper—I invite the Government to have a little think about the disqualification or waiver procedure that applies to people with criminal records, either in so far as they may be trustees of charities that have an interest in looking after ex-offenders, or in so far as they may be employees of those charities.
I hope that the framework of the amendment is clear in itself but, if I may—I will be as quick as I can because I know that my right hon. Friend the Member for Cities of London and Westminster (Mark Field) and other right hon. and hon. Members wish to catch your eye, Madam Deputy Speaker—I hope he and the House will forgive me if I take a little time in setting out what I intend to do. I should confess at the outset that I am very grateful to the Prison Reform Trust in assisting me in preparing for today’s debate.
The purpose of my amendment is to require the Secretary of State to lay before Parliament, before clause 9 comes into force, a report on the impact of the extension of the disqualification framework on people with criminal records who are trustees of, or who are employed by, charities that work with or employ ex-offenders. I intend to urge the Government to provide us with further clarification of the impact of the extension of the disqualification framework on people with criminal records and charities that work with or employ ex-offenders. The amendment also provides an opportunity for the Minister to outline in more detail how he and his Department intend to conduct the review of the waiver process to ensure that people with criminal records who are existing employees or charitable trustees, or who are seeking or intend to seek employment or a trusteeship in a charity, are not unfairly discriminated against.
Clause 9 and the policy behind it are entirely worthy and understandable. We clearly do not want people who are engaged in terrorism to be using charities to move money around or to hide their outrageous behaviour; that is not controversial, but one problem might be the unintended consequence of the clause on people whom the Government may not want to impact. One has only to read out clause 9(5) to realise that someone who comes within
“Part 1 of the Terrorist Asset-Freezing etc Act 2010…or…the Al-Qaida (Asset-Freezing) Regulations 2011”
is not someone whom we want to be involved in charities. That is not a problem, but I am concerned about the unintended consequence of that perfectly understandable and worthwhile clause.
Mark Field
We probably know more about Roman law than trust law from our time at university, but as I recall, it was indeed in 1602 and thereafter, during James I’s time, that charitable heads came into play. That is not unimportant to the debate. There has been a lot of radical change quite recently, which has upset the very essence of what charities should be about, as my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) pointed out.
Sir Edward Garnier
Clearly, I need to take my right hon. Friend around with me in a knapsack, particularly when I am speaking in the Market Harborough Conservative club. He is just the chap they want to hear more from.
To return to the serious point we are discussing, a longer period to enable charities, the Charity Commission and the Government to work out how best to move forward with the clause 9 provisions would be to the advantage of all. That would enable us to get rid of any glitches and look out for any Heffalump traps that may be lying there for the unwary.
My hon. Friend the Minister was very kind and met me in his Department with his officials on Tuesday 19 January. It came across to me that he was in listening mode and that the Government are very likely to move towards me to some extent. If he does, that would be very helpful. If he is able to say so on the Floor of the House, that would be even more helpful. That would enable me to do what I promised him and not press my amendment to a Division. I am here to try to produce clarity and better legislation. If he and I can do that together, in partnership, then everybody goes home happier.
I would like to touch briefly on a number of the paragraphs in my amendment. There are 11 areas specified. I appreciate that the Government have tabled their own amendment, which to some rather limited extent alleviates some of my concerns, but to be honest with my hon. Friend the Minister, the Government will need to go a little bit further than amendment 3 if all the concerns the charities I speak for, or have some connection with, are not to have their worries continue.
Subsection 23(a) deals with the first problem area:
“the number of people employed by charities who will be affected by the extension of the disqualification framework to cover senior management positions”.
For reasons of time only, I will not set out extensively the arguments that apply here, but we are concerned about an absence of detail so far expressed in Committee or in any other public pronouncements made by the Government in relation to this particular impact. I urge the Government to do a bit of work to see how many people employed by charities will be affected by the extension of the disqualification framework insofar as it relates to senior management positions.
Subsection 23(b) relates to
“the number of people who are trustees of, or employed by, charities who will be affected by the extension of the list”.
Again, will the Government please have a think about this and recognise that it is not a negligible problem? This is not just a whinge from a trustee of the Prison Reform Trust. This is quite an issue, which needs to be thought about. The impact of clause 9 needs to be considered in co-operation with the charities and the Charity Commission, so we can get this right for the long term.
I will provide just one example in relation to paragraph (b): a glitch caused by an unwitting failure to consider the Rehabilitation of Offenders Act 1974, as reformed in 2014. Under the 2014 amendments to the 1974 Act, rehabilitation periods for a convicted person were to some extent reduced. For example, an individual convicted of a sexual assault is sentenced to three years in prison. Assuming the individual does not reoffend, that conviction will become spent seven years after the end of the sentence. However, they will remain subject to the notification requirements indefinitely, with a right to review after 15 years. Under the Bill as currently drafted, the individual would automatically be disqualified from being a trustee for at least 15 years and potentially for the rest of their life. Under the 1974 Act, as amended, once an individual has been convicted, if they remain conviction-free for a defined period of time they are legally recognised as being rehabilitated. That is just a simple discrete example of where the Government, the Charity Commission and the charities sector need to get together and see how best to move forward.
Subsection 23(c) relates to
“the impact of the new disqualification framework on former offenders who are seeking, or intend to seek, employment in the charitable sector, including on their recruitment, retention, career prospects and long-term rehabilitation and resettlement”.
I made this point in general at the outset of my remarks. The one thing we, as people interested in reducing recidivism, need to concentrate on is getting people back to work, or getting people into work—of course, many people in prison have never been in work. If we want to get them back or into work, we need to reduce the barriers to that as sensibly as we can.
Subsection 23(d) relates to
“the impact of the new disqualification framework on former offenders who are currently employed in the charitable sector, including on their retention, career prospects and long-term rehabilitation and resettlement”.
That is the same point, but with a different shade.
Subsection 23(e) deals with
“the impact of the new disqualification framework on people with criminal records who are trustees or employees of charities which are partners in, or are contracted by, community rehabilitation companies (CRCs) and its impact on the successful running of those organisations”.
In line with Government policy under the coalition Government in the previous Parliament, community rehabilitation companies have been set up. They are contracting with charities to deliver rehabilitation and probation services. It would be a pity if good policy was undermined by making it much more difficult for ex-offenders to work with more recent offenders in order to rehabilitate them. Again, we need to think very carefully and collectively about that.
Subsection 23(f) deals with
“the effectiveness of the existing waiver process provided for under section 181 of the Charities Act 2011”.
Charities have significant concerns regarding the effectiveness of the existing waiver application process and the ability of the Charity Commission to administer the additional applications that will result from the introduction of the new framework without any additional resources. In the past six years, the Charity Commission processed only six waiver applications. The Government suggest that this shows it is effective in granting waivers but that fails to recognise the disproportionately low numbers of waiver applications compared with the number of trustee positions and the estimated number of people with unspent convictions for existing disqualifying offences. Once one has expressed the point, I hope its obviousness becomes clear to the Government. Again, the charities I speak for, the Charity Commission and the Government need to sit around a table and thrash out how best to deal with that. As we say, six to 12 months is not long enough for that to be achieved.
Subsection 23(g) deals with
“the impact of the new disqualification framework on the number of applications for waivers to the Charity Commission”.
It must follow, surely, that the extended disqualification framework is highly likely to increase the number of waiver applications, not simply as a result of the extension but of an increased awareness of the framework that will inevitably flow from the production of guidance and general awareness raising. The Government, however, have not provided any assessment of a likely increase in waiver applications as a result of the extension of the disqualification framework. More troubling is that the Minister has confirmed that no additional resources will be provided to the Charity Commission to administer the waiver application process. The obvious inference is that the process will slow down and become more sclerotic. I hope it will not, but let us discuss the matter and iron out the problem in advance.
Wes Streeting
I am grateful for the opportunity to reaffirm some of the concerns expressed in Committee that have not been addressed, but which will be addressed by the amendments tabled by my hon. Friend the Member for Redcar (Anna Turley).
I have had a long association with several different charities in a professional context, as a member of staff, as a volunteer and as a donor, whether through a regular standing order or money in the tin. Going back to earlier comments, I think that people know what they are signing up to when they support charities, whether it is a charity’s campaigning effectiveness or its direct work with beneficiaries. We ought to pay tribute to the remarkable work that our large and diverse voluntary sector does, from the largest to the smallest of charities.
In my constituency, we have a variety, from Barnardo’s, headquartered in Barkingside, through to smaller branches, such as the Barkingside branch of the Royal British Legion. There are also other charities such as Hopes and Dreams, set up by volunteers to help children with life-threatening or life-limiting conditions to enjoy experiences that enrich their lives at a difficult moment for them and their families. These are remarkable people doing remarkable work.
It is disappointing, therefore, that the voluntary sector, particularly in recent times, has been in the headlines for the wrong reasons and for what I would describe as the misdemeanours of the few, however large and significant they might be. It is also disappointing to hear the unnecessary condemnation of far too many. Hon. Members and others in the media have used intemperate language to bash a charity sector that does a remarkable amount of good and which should be cherished and celebrated, not derided and denigrated.
Like my hon. Friend the Member for Redcar, I am concerned that the warnings mechanism in the Bill does not carry a right of appeal. When I was a chief executive of a charity, had I received a warning from the Charity Commission for any aspect of our work, I would have taken it very seriously, and I would have expected trustees to take it very seriously too, yet we have heard in Committee and on Report today that the commission may issue warnings for what are relatively minor infringements—I even hesitate to use the word “offences” —of guidance. There is a difference between best practice and regulation. Of course, we expect charities to uphold the letter of the law, but there is also a great deal of best practice out there, and we should not necessarily be slapping warnings on charities for falling short of best practice, when a more informal route might result in a better outcome.
I particularly welcome the new clause dealing with the disposal of assets. In Committee, we talked about the origins of the Government’s proposals around what might be described as the disposal of assets. We were talking about the seizure of assets, particularly in relation to their proposals for housing associations and right to buy. I am happy that housing associations and the Government are moving forward on the basis of agreement, but we should be in no doubt about how the Government reached that position: not through negotiation or evidence-based argument, but through threats, bullying and the cajoling of housing associations, with the threat that if they did not comply and work with the Government on right to buy, the latter would simply legislate for it. To me, that seems to go against the very essence of the Charitable Uses Act—sometimes referred to as Elizabeth’s law—which was referred to earlier. Indeed, I must apologise to the right hon. Member for Cities of London and Westminster (Mark Field): it was, in fact, an Act of 1601, and I would not want people to review the record and find that they were inadvertently misled on this issue.
Sir Edward Garnier
Is the hon. Gentleman angling for an invitation to the Market Harborough Conservative club?
Wes Streeting
What a kind invitation. Were the Conservative majority in Harborough slightly more marginal, I would be happy to visit on many occasions, but will have to pass this time and focus on matters closer to home and my majority.
Going back to the Charitable Uses Act of 1601, there is a long established principle that donations, bequests and legacies given to charities really ought to be used for the purpose that their donors intended. What my hon. Friend the Member for Redcar has set out in new clause 2 would give people the confidence that they could donate to charities or leave bequests to them knowing full well that independent charities would not be compelled
“to use or dispose of their assets in a way which is inconsistent with their charitable purposes.”
I therefore strongly endorse new clause 2, and I am glad she has tabled it for discussion this afternoon.
The final area I want to focus on is campaigning. As someone who has been a charity campaigner—both professionally and through my voluntary contributions to the work of charities—this is an issue I feel strongly about. As I said in my earlier intervention, I am still at a loss to understand the problem that the gagging law was trying to solve, because Charity Commission guidance has always been clear that charities cannot campaign for party political purposes and certainly cannot use charitable funds for the purposes of party political campaigning. It would therefore be completely unlawful for a charity to say around a general election, “We completely disagree with the Conservative party’s policy on x, and would therefore encourage you to vote for one of the other parties,” or, “The Labour party policy on y is inconsistent with the views of the charity, and therefore you should vote for another political party.”
What has always been perfectly in order and, I would argue, desirable is for charities to be an effective voice for civil society and to ensure when policy is up for debate, whether during our deliberations in this House, in one of the devolved Parliaments or Assembly, or in local authorities up and down the country, that they can draw on their wisdom and experience, and the evidence base they gather—through desk research, commissioned research or, more often than not, their direct experience of working with their beneficiaries—to make sure that decision makers are well informed.
That is a real benefit to our democracy, and I am afraid that the cries from those on the Government Benches—that this change has not had a chilling effect—are simply untrue and unfounded. Whereas the Conservative party is usually found in this Chamber arguing against red tape, the gagging law has had completely the opposite effect. Indeed, I am aware of campaigners and finance officers in charities having to sit there with their spreadsheets prior to the last general election and try to calculate whether something would be a constituency spend or a national spend, whether a collaboration with other charity partners would be workable within the law or where spending would be apportioned. I am afraid that the gagging law has imposed real and unnecessary burdens on charities. If people are concerned about how charities are spending their money, they should certainly be more concerned about the amount of time and money they might spend complying with unnecessary Government regulation than they should ever be concerned about whether they are sending briefings to Members of Parliament or asking parliamentary candidates to sign up to specific pledges or causes.
It really sticks in the throat that lots of Members of Parliament are very happy to turn up to photo ops at their party conferences or out in their constituencies with the Guide Dogs or children at a local youth club, or to go along and see all the great work an animal rights charity does—they are happy to issue press releases and enjoy the photographs—but when those charities come back to talk about the impact of their voting record or public policy they have supported or might consider supporting, suddenly this is considered a huge inconvenience or, even worse, people want to argue that it is illegal.
Mark Field
It is a pleasure to speak after the hon. Member for Ilford North (Wes Streeting). I do not agree with everything he had to say, but one thing I do have in common with him is a great love of London as a whole. I love walking through London, and it was only last summer that I went to Barkingside for the first time. I realised how important Barnardo’s was at the time—certainly in Victorian times, when it was a little Essex hamlet. I also saw the new housing development on that very site, which will clearly make a big impact, with some social housing—and, I suspect, possibly a bit of private housing, probably to help fund it. That development will be a real asset in the community that he represents.
I also thank the hon. Member for Redcar (Anna Turley), who spoke from the Front Bench, for her contribution. I remember a similar instance in opposition many moons ago—about 10 years ago—when I was speaking on the National Lottery Bill. I thought we had tabled an excellent set of sensible amendments that the House would surely take on board. I should not disappoint her too early on, when there are another two hours and 11 minutes of debate left, but I suspect that she might not get her way. Both Labour Members who spoke are from the 2015 intake, and they spoke eloquently. I would like to acknowledge from the Government side my sympathy for the hon. Lady, who has had to get involved in the major issue of the steelworks in Redcar. We must all have a huge amount of sympathy for her. Having to navigate that issue as a local constituency MP as well as doing day-to-day work here in Westminster must be incredibly difficult.
I have a little bit of sympathy with some of what the hon. Lady said, despite our rather fierce earlier exchanges. I believe it to be almost axiomatic in public life that once organisations such as the Charity Commission are set up, corporatised and granted ever-burgeoning budgets and staffing, they see their mission as expanding their empire of influence. This Bill has been a salutary example, in part at least, of the operation of such tactics. Problems have been identified that have long since been addressed and largely solved by the passion, commitment and the graft of volunteers, quietly—often informally and unpaid—working in their communities.
To take one apposite example, the extent of the local charitable activities of many of this nation’s leading independent schools has been transformed over the past decade, let alone the last generation. Yet rather than welcoming, heralding and trumpeting the success of the big society, which is what I think this amply represents, we risk promoting big bureaucracy in the shape of the Charity Commission. We must resist some of the amending provisions, especially new clauses 2 and 3, which we will doubtless debate further, and I want to take the House on a short journey within a stone’s throw or two from here.
Paul Flynn (Newport West) (Lab)
Will the hon. Gentleman acclaim that the greatest triumph of the big society was the work of its poster-girl, Camila Batmanghelidjh, from the kids society?
Mark Field
As a matter of fact, I believe it was called Kids Company, not kids society. She was an individual who had worked with a number of politicians. There are issues that I am sure should rightly be addressed by Select Committees and others about what precisely happened in regard to Kids Company.
I was about to take the House on a short journey from this Chamber to the site in Tothill Street where the Harris Westminster Sixth Form centre stands. Since its foundation in 2014, this academy has been the focus of substantial collaboration and co-operation with Westminster School, one of the oldest foundations in this country, which is even closer at hand in the curtilage of Westminster Abbey. That co-operation includes teaching classes with small intakes in subjects such as Latin, Greek and German. For over a decade, the school has routinely offered science outreach and summer school partnerships to several local maintained schools.
As the local MP for the past 15 years and an erstwhile president of the St Andrew’s youth club, the oldest youth club, on Old Pye Street, I know it has played a massively important role in the local community. Many people live in social housing, so the club was a magnet for young boys and girls—initially just boys in the 1860s, but girls in more recent times—not just from the immediate Westminster area, but from further-flung places south of the river, too. I was well aware that when the club lost funding from the local authority, it was Westminster School that stepped into the breach, providing cash and gym apparatus. I suspect that scores of other local charitable organisations could tell similar stories about the time, money and equipment quietly donated by the Great School, which has been an integral part of the local fabric since 1179.
Charitable status, as Members have pointed out, rightly depends on what the charity in question is established to do, rather than on a Charity Commissioner’s subjective analysis of public benefit. Here I agree with much of the thrust of what was said by Opposition Members. While we all appreciate that charitable status confers financial and reputational benefits, I strongly believe that the Charity Commission is not the appropriate means of prescribing how independent schools or other organisations should satisfy the public benefit test.
Indeed, it appears that for party political reasons, independent schools, rather than other charitable bodies, are in the sights not just of many MPs—dare I say, particularly on the Opposition side—but of leading lights in the Charity Commission. Surely a more sensible approach, one that avoids any accusation of political and particularly party political bias, would be to work on some non-statutory guidance to these organisations about the anticipated nature of their public benefit engagement.
We should also recognise that many independent schools do not have the capacity or the financial resources to sponsor academies—some lack the playing fields, drama, arts and music facilities, commonly assumed to be the norm in private schools. In truth, there is still plenty of co-operation and sharing going on between independent and nearby maintained schools—a healthy, informal co-operation, which stands to be undermined by any proposal to define levels of contribution or to extend the public benefit, as we have understood it in the past. It is worth saying that it takes two to tango: there is little that independent schools can do if the state sector head at the nearby school refuses an offer to work together. It is surely invidious to place burdens of the sort proposed if the independent school in question does not have the ability to achieve the Charity Commissioners’ objectives.
I shall not detain the House. We are having an interesting debate, and in truth I share some of the concerns expressed by Opposition Members that part of this legislation purports to solve problems that many charitable organisations and independent schools in particular have by their own efforts done much over the years to alleviate. Indeed, some of what is set out in the Bill betrays worrying assumptions that underlie an outdated sense of “groupthink” that besets the Charity Commission. I very much hope that, in its wisdom, the House will today reject some of the amendments, particularly new clauses 2 and 3 if they are pressed to the vote. Failing that, I trust that the Government Whips will achieve the same ends.
Martin John Docherty (West Dunbartonshire) (SNP)
It is an honour to speak in the debate. I hope not to detain the House too long. Let me first congratulate the right hon. Member for Cities of London and Westminster (Mark Field) on mentioning the late noble King James VI, given that the only charitable organisation that still exists from his reign is, of course, ScotsCare—based here in London and doing fantastic work.
Concerns have been raised in Scotland about the possible impact of this Bill because of the myriad issues it raises relating to the governance of charities across these islands. I am sure that these concerns will be shared by Northern Ireland Members, too. The right hon. Gentleman mentioned the burgeoning budgets of the Charity Commission for England and Wales, but between 2007 and 2015, its budget was cut by 48%, so let us scotch that myth straightaway.
No one should be in any doubt that in the space of the last 18 months civic society has been rocked by the recommendations of the Etherington report, and this crisis of trustee leadership that has brought us to this very point. To be clear, the level of trustee oversight in national organisations leaves a sour taste in the mouth—not just of those in this Chamber, but more importantly of those who have volunteered as trustees in the majority of charities across these islands.
It is telling that the organisations that have caused the most concern are the so-called national charities with well kent faces that have been held in high regard. What is the impact on the organisations so far investigated? It is limited, yet the impact on the majority of small charity trustees has been profound. They find themselves labelled in the mire of mismanagement, which has led us to this point, as they have been sullied by the bad practice and lack of due care.
Some may say that these small and medium-sized organisations will not be impacted by this legislation, yet we fail to recognise the profound impact this period will have on their ability to recruit, retain and develop their volunteer trustees. It is commendable that many Members in this Chamber are themselves trustees. The Minister for Civil Society, who is no longer in his place, noted that point, and I commend him for it. However, merely being an MP should not qualify someone to be a trustee through default of their position, as it were.
I am sure that the Members to whom I have referred are well versed in their areas of interest—notably the issue of ex-offenders, about which they have spoken eloquently today—but I am also sure that some Members, especially those who were elected at the most recent general election, were asked at the time of their election whether they wished to join various charities as trustees or directors merely on the basis of their predecessors’ having undertaken such a role. I believe that that in itself exposes a misguided approach to trustee recruitment, although it must be said that it is taken by only a small number of charitable bodies, and appears to have been adopted mainly by the larger organisations.
Maggie Throup
I oppose new clause 3, because it seeks to alter fundamentally the way in which charities have historically operated in this country. I believe that, in creating a formalised political role for charities in our society, we risk undermining their ability to work independently for the common good, and diminishing their standing in the eyes of the public. I have serious doubts about the need for the new clause, on both a moral and a practical basis. In my view, the status quo already allows charities to lobby Governments in a constructive way, while remaining politically impartial.
Serious concerns have been raised about the additional cost of political campaigning, and the potential impact that the new remit may have on a charity’s abilities to raise funds. We ourselves are acutely aware of the fact that even a very localised campaign can be extremely costly. Extending the scope of charities to allow them to campaign for or against a law, policy or decision at any level of government would inevitably incur a significant amount of additional cost, and I think that the money would be better spent on fulfilling the charities’ original aims and objectives.
Peter Kyle
Does the hon. Lady not agree that the way in which a charity collects and spends its money in order to deliver its charitable mission on behalf of its service users is the preserve of its trustees, and that it is not for us to decide such operational or, indeed, moral matters in the House of Commons? It is certainly not for us, as individual Members of Parliament, to dictate to charities how they should spend their money and deliver their charitable aims; that is up to the trustees.
Maggie Throup
I understand where the hon. Gentleman is coming from, but I believe that new clause 3 will encourage charities to go down that route and, perhaps, stray from their original intentions, however well-meaning they may be, thus inadvertently—not intentionally, I admit—misleading the public. I fear that the inclusion of the new clause could conceivably allow us to reach a point at which a large cancer charity, for instance, spent more on lobbying national and local government than on investment in research on and development of new cancer drugs. I think that that is what the hon. Gentleman was alluding to, but I disagree with him. For me, this raises a number of major issues.
The first issue is the impact on donations. Charities rely heavily on public donations to fight for their specific cause or issue. The Charities Aid Foundation estimated recently that in 2014 alone, £10.6 billion was donated by the British public to a vast array of good causes. By politicising charities, we risk donors turning away from charities whose cause they support because they do not necessarily share the charity’s political agenda or party alignment.
Secondly, the new clause would serve to allow larger national charities, which already dedicate significant resources to lobbying Members in this place, to strengthen their influence over Government policy and decision making. That would be to the detriment of smaller, often local, charities, of which we all have many examples, which would be further marginalised from the decision-making process because they simply could not afford to compete for airtime.
There is also a third point. Like many others, I would be deeply concerned if those charities that are very much a cornerstone of our society—the Royal British Legion, Macmillan, Age UK and the NSPCC, to name but a few—suddenly became vulnerable to infiltration from those who wanted to push a specific political agenda or to use the charity to criticise or support the Government of the day, rather than running it as a force for good.
I am sure hon. Members will agree that we do not really need any more politicians. Yes, it is only right and proper that charities should play their role in shaping our society by seeking to influence Government, nationally and locally, but they also have much more to offer society without widening their scope into out-and-out political campaigning—or, as some might call it, the dark arts. That is why I will be voting against the new clause this afternoon.
Susan Elan Jones
It is a great pleasure to speak in today’s debate. We often have wonderful debates in this place about what Britishness is about and what our culture is about. I actually think that the voluntary sector in this country represents the best of British—that is, the best of English, Welsh, Scottish and Northern Irish. As politicians, we do not always say thank you, but our starting point today as we consider the Bill should be to say a very big thank you to our hard-working and diverse voluntary sector in this country.
We should also remember that most charities in this country are relatively small. They operate in communities, and it is not our job in this place to be a pain in the neck for the 900,000-plus trustees of charities around the country who give their time voluntarily to make management and governance decisions, or for the charities’ many volunteers. The motivation of those people is undoubtedly to do good in our society and in our country.
We cannot, of course, forget the exceptions—the horror stories—including the dreadful death of Olive Cooke, who appears to have been hounded by 90 charities sending her 460 letters asking for donations in the course of one year. Nor can we forget the undercover Daily Mail report on what appeared to be severe malpractice in the call centre from hell. And nor should we forget the case of Kids Company and all the abuses that went on there. Incidentally, those abuses could and should have been dealt with by the Government and by the Charity Commission under its existing powers. We see those cases as exceptions, but they are nevertheless important and it is right that we are having this discussion today in Parliament.
Members on both sides of the House will see elements of voluntary activity in their own political traditions, and we can certainly develop some sort of empathy with different parts of the voluntary sector. We on this side of the Chamber can look to the labour movement, the co-operative movement, the working men’s and women’s organisations and a whole range of other bodies, but I know that the Minister for Civil Society, the hon. Member for Reading East (Mr Wilson), will also be moved by Edmund Burke’s notion of the little platoons. What I ask today is that he does not overburden those well-behaved little platoons in our country with red tape when it is not needed. Most of us would agree that where regulation is needed, the sector itself generally does that job best. I, for one, would give a warm welcome to the fundraising preference service, which will deal with some of the totally unacceptable abuses of practice in fundraising.
Wendy Morton
I join the hon. Member for Clwyd South (Susan Elan Jones) in thanking the many charities that do fantastic work and that we often speak about in this place. We all have many examples that we have often shared with each other.
I welcome the Bill, and it is a privilege to speak today, having spoken on Second Reading and served, with other Members, as the Bill passed through Committee. I believe that it strengthens the powers of the Charity Commission and that those powers are welcome. It will strengthen and improve the relationship between the Charity Commission, charities, trustees and, importantly, the public. The Bill is, indeed, called the Charities (Protection and Social Investment) Bill.
For me, the Bill is about achieving a balance between scrutiny and accountability and trust, responsibility and respect, particularly in the wake of the handful of sad, and often tragic, stories that emerged during the course of last year, one of which has already been mentioned, the collapse of Kids Company.
I am, however, a firm believer that this must be proportionate, as I said on Second Reading. I think of some of the small charities in my constituency, such as Rosie’s Helping Hands, the Aldridge youth theatre—we often do not think of it as a charity, but it is—and, on our doorstep, St Giles hospice. Such charities are often led by the local community and by local people. Local people contribute their time, effort and energies as well as their money, and they give something back to the local community.
I want to speak against some of the amendments, particularly new clause 3 on the power to make representations and amendment 8 on warnings, which I will deal with first. The Bill is at its heart about transparency and restoring trust in the eyes of the public. That is why I feel that the power for the Charity Commission to place on record where warnings have been given is important, and that is why I will vote against amendment 8.
New clause 3 is about the power to make representations, which we have had a lively debate on in Committee and again today. We should remind ourselves of the following two points. First, deliberate abuse of charities has been found to occur only very rarely. The vast majority of charities do good work and are reputable organisations; we must never forget that. We must also remember that charities can, and do, make representations already, often very successfully. As I have said before, all of us as Members of Parliament receive representations from many charities during the course of our work. But there is a difference between non-political campaigning to raise awareness of a particular issue, even if the aim is to change policy or legislation, and what is being proposed in this new clause. I firmly believe this Bill is about strengthening the public’s trust in charities, and for me the idea of enshrining in legislation through this new clause the right to undertake political campaigning activity completely undermines that.
Wendy Morton
I am normally very generous in giving way, but I have almost come to the end of my speech, so I will conclude.
New clause 3 risks moving what is fundamentally the apolitical activity of a charity to something that becomes completely politicised, and that goes against the grain.
Peter Kyle
I am extremely grateful to be called to speak in this debate and to follow the hon. Member for Aldridge-Brownhills (Wendy Morton). I was not able to intervene on her just now, but I want to make the point that, while she was talking about political activity and campaigning in her eloquent speech, which reached out to all parts of the House in many regards, she failed to mention party political campaigning, yet all campaigning is political. Political activity is not always the preserve of party politics. That point has been lost in the debate so far.
Many Members have blurred the boundaries between party political activity and political activity. All social intercourse between different communities, and people within communities up and down the country, is political exchange and should be celebrated. Our new clause seeks to protect the long-standing tradition that charities can engage in political processes within their communities and also seek to influence party politics, but not actually become part of a party political process.
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend is making an important point. All of us as Members of Parliament will from time to time be contacted by charitable organisations that seek to influence policy makers and policy informers to change the laws of the land. For example, it would not be outwith the role of an organisation like Shelter to campaign for MPs to get changes to homelessness policies that we might be debating. That is political.
Peter Kyle
That is an important point, and it has been illustrated well in this debate. The right hon. and learned Member for Harborough (Sir Edward Garnier) spoke eloquently about the co-operation he has had from, and the work he has done with, a charity of which he is a trustee, Unlock. Indeed, his speech was clearly intricately prepared, probably with the support of Unlock. I do not see that as party political at all, because all of us in the House today benefited from his work with Unlock. That illustrates the point that engaging with politicians does not necessarily mean engaging in a party political act. I am grateful for his speech and for his interaction with, and support from, the charity Unlock.
I support new clause 1 and amendments 8 to 12. There are three fundamental benefits to our society from charities and the role they play. The first is that often they can get to hard-to-reach groups. Through their methods and the way they have evolved over time, many charities can work with hard-to-reach pockets of our society that other organisations struggle to reach, which is an incredibly important part of their work.
Paul Flynn
Charitable ends can never be justified by uncharitable means. Terrible revelations were made last summer by the Daily Mail and The Mail on Sunday, to their great credit—I do not say that very often—about the abuse of the means that charities were using to achieve their ends. We all strongly support such charitable ends, but those charities engaged in the fierce fundraising that goes on among charities and that is becoming even fiercer. One charity spends an astronomical amount— £20 million—on fundraising to get the money in. Understandably but wrongly, certain charities fell into the trap of using means that were thoroughly unjustified and in too many cases abused their donors.
We heard from my hon. Friend the Member for Clwyd South (Susan Elan Jones) about a terrible case, though it should be pointed out that the relatives of Olive Cooke have pointed out since that her death had no connection with the pressure that was put on her and was due to other reasons. But there have been other cases of people who were suffering from dementia being plagued by repeated phone calls, letters and pressure on them. We have considered the case of chuggers. Highly respectable charities were using chuggers to accost people in the street and offer them a deal. That was fine for the charities because they got a huge amount of money in, but it was a very poor deal for donors. Of the donations they give for the first full year, virtually none goes to the charity. Such deals are very poor value for the donors.
As a senior member of the Public Administration and Constitutional Affairs Committee, I have been asked to speak today by the Chair of that Committee, who tabled new clauses 4 and 5. The Committee was shocked by the evidence we had. We saw that all the charities were in confessional mood. They were penitent and agreed that they had overstepped the mark. As members of the Committee with supervisory roles over the charities sector, we were tempted to call for new regulations, but we decided unanimously that we did not want to cage the entire charity movement in a new prison of regulation that would limit their powers of innovation.
Charities have clearly poisoned their own well. So many people have turned not only against the charities involved when that scam was announced last year, but against the whole idea of charity giving, so we want to make the point powerfully in new clauses 4 and 5, which seek to introduce reforms. We are strongly behind the Charity Commission. If it is to do a bigger job, it must have the money restored—30% of its funding was taken away from it. The Committee’s message, which will be in our report on Kids Company that comes out on Monday, is that charitable ends can never justify uncharitable means.
Mr Rob Wilson
Before getting into the detail of the proposed amendments, I would like to make a few quick points that frame the Government’s position in this afternoon’s debate. I reiterate the really important point that the overwhelming majority of charities are well run, and they are run by hard-working, dedicated people whose motivation is to help others and do good. They perform a vital role and we should never forget that. The protections and strengthened powers that we have set out will protect public trust and confidence for the vast majority, and that is the reason behind the Bill. As a result of the engagement and scrutiny by Members of both Houses, the Bill has most certainly been improved in a number of places. I would like to put on the record my thanks to all those involved in those improvements.
Let me turn to new clause 1. I thank the hon. Member for Redcar (Anna Turley) for her explanation of the new clause. We think that judicial review is more appropriate than a specific right of appeal to the charity tribunal in the case of an official warning. In cases of low or medium-level misconduct or mismanagement, a right of appeal to the tribunal would be disproportionate.
Furthermore, the Charity Commission has said that such a right of appeal to the tribunal would render the power unusable. It anticipates many appeals being made as a means of frustrating the regulatory process. The resources required by the commission to defend tribunal proceedings would be disproportionate to the issues at stake in official warning cases, which are, by their nature, low and medium-level. There is no point giving the commission a power that it would not use.
Judicial review is a well-established means of ensuring that genuine wrongs are put right. Unlike the tribunal system, it discourages unmeritorious cases and those who calculate that delay through litigation is the best tactic to avoid robust regulation. Furthermore, costs are usually awarded against the losing party, providing a financial disincentive to those who might otherwise pursue a weak case.
Some Members have raised concerns about the potentially harsh implications, including adverse publicity, for charities in receipt of an official warning. Let me say this in response: charities exist for the public benefit and should therefore be accountable to the public. One of the Charity Commission’s statutory duties is to promote that, which is why the official warning power will be an important new tool in relation not only to promoting charities’ compliance with their legal obligations, but to improving charities’ public accountability. The concern about adverse publicity is an attempt to avoid accountability to donors, beneficiaries and the general public.
Some have suggested that the warning power would allow the Charity Commission to direct charities. Let me be absolutely clear that it will not. The warning must specify the breach and may provide guidance on how the charity can rectify it, but the decision on how the breach is to be rectified is a matter purely for the charity’s trustees. Others have said that the trustees run the risk of significant regulatory action without a right of appeal, but I disagree. Were the commission to escalate from a warning to a statutory inquiry, the opening of the inquiry would be subject to a right of appeal to the charity tribunal, as would the use of any inquiry powers.
Finally, the Joint Committee that undertook pre-legislative scrutiny of the draft Bill agreed that, provided the power is framed in the right way and with the right safeguards, judicial review was the appropriate means of challenge, rather than an official warning. That was also the view in the other place and we agree, so I cannot accept new clause 1.
I will now speak to amendments 8, 9, 10, 11 and 12, tabled by the hon. Member for Redcar. I group the amendments in that way because all of them, except amendment 9, would serve to weaken a number of important provisions relating to the warning power. However, I will lay out my arguments against each amendment in detail.
Let me start with amendment 9, which seeks to bind the commission’s power to issue a warning to a requirement to notify the charity and charity trustees. I absolutely agree that that is a sensible and proportionate provision, which is why it is already required under the existing drafting of clause 1. Amendment 9 is therefore superfluous.
Amendment 8 seeks to stop the Charity Commission from publishing a warning to a wider audience than just the charity and its trustees. Similarly, amendment 10 would also restrict transparency and accountability by requiring the commission to publish warnings only in such a manner that did not identify the charity or trustees involved. I am afraid that I cannot agree with those proposed changes: charities exist for the public benefit and must be accountable to the public for their work.
The Charity Commission’s ability to publish an official warning will enhance transparency, which is entirely in line with the commission’s objectives of increasing charities’ accountability and promoting public trust and confidence.
Mark Field
Given my earlier contribution, the Minister may recognise that I am slightly concerned about the notion of the Charity Commission having a view at all. Surely the important things are what Parliament has to say and the establishment of the objectives of any particular charity. We should all have concern about the notion of the Charity Commission imposing its will over the objectives of a charity.
Mr Wilson
My right hon. Friend need not worry about the Charity Commission imposing its will on charities; there are many safeguards, including the referral to a charity tribunal, to make sure that that does not happen. Ultimately, the Charity Commission relies on the support of the sector itself to make sure that it can function properly.
The commission already publishes details of its non-inquiry compliance cases when it is in the public interest to do so, and it does that without a specific statutory power. When the regulator has to intervene and issue an official warning, it is right that that should be placed in the public domain, although it should be made clear that when the issue that gave rise to the warning has been addressed, it should be archived after a period. The commission has a published policy on how it reports on its regulatory work, and it is available on gov.uk. The commission would need to update the page with regard to official warnings, so that there would be a clear policy. Charities can and do make representations to the commission about the publication of particular information.
Amendments 8 and 10 would undermine the increased transparency and public accountability of official warnings, turning them into an ineffective tool without real impact. Amendment 11 seeks to limit the Charity Commission’s ability to issue a warning, so that it could do so only after a minimum notice period of 14 days. On the surface, that would ensure that, in all cases, the trustees had sufficient time to consider the notice of intention to issue a warning and co-ordinate any representations that they might wish to make.
I am sympathetic to the aim of ensuring proper notice, but I believe that that should be addressed in the Charity Commission guidance. It is already clear that if the Charity Commission decides to issue a warning, it must give notice of its intention to the charity and the trustees. The warning power may be appropriate in some circumstances when the commission needs the flexibility to act more quickly than 14 days. Following debate in Committee, the Charity Commission has recognised the concerns raised and it has reassured me that it will normally apply a minimum notice period of 14 days. That will be made clear in its forthcoming guidance, which will be published ahead of these powers coming into effect.
Finally, I believe that the changes proposed by amendment 12 are unnecessary as they aim to remedy a problem that does not exist in the current draft form of clause 1. It is already clear that any remedial action that the Charity Commission may suggest in response to a warning does not amount to a direction. The Government have been consistently clear that the commission could not use the official warning power to direct charities, and I am happy to reiterate that position again for the record. What the power does enable the commission to do is provide advice and guidance to the charity on how it can remedy a breach that has been identified in the warning. This gives the offer of support to a charity so that issues can be resolved in a timely and adequate manner. It will also help charities to understand in more detail what processes or actions led to the issuing of a warning and what type of conduct could avoid this in future. I hope that I have laid out in detail to the House and to the hon. Member for Redcar why I do not support her amendments to clause 1.
I turn to Government amendment 2, which relates to clause 1. Previously, the power to issue a statutory warning did not include a provision that would specifically enable the Charity Commission to vary or withdraw an official warning once it had been issued. Amendment 2 rectifies that. Withdrawal could be necessary if it came to light that the warning should not have been issued in the first place or, in some cases, where the charity has addressed the issues set out in the warning. The power to vary a warning would likewise enable the commission to do so where the issue has been partly addressed by the charity, if the commission considered that to be appropriate. This is a sensible amendment and I commend it to the House.
Amendment (a) is unnecessary, because where the Charity Commission does withdraw a warning it will, as a matter of policy, set out the reasons for doing so when it notifies the recipient of the warning and publicises the withdrawal. I am sympathetic to the aim of the second part of the amendment, but do not support it. There could be a host of reasons why a warning is withdrawn, and some of them may warrant the details remaining on the public record for a period of time. The inclusion of this amendment could lead to unintended consequences that are detrimental to charities and to the commission. If a warning is withdrawn, there may still be press articles or other information referring to it, but if a member of the public then went to the register of charities, as the official source of information, they would find no mention of it there. In some cases, it may be better to keep a record of the warning there but explain that it has been withdrawn. The commission has already said that it would address these matters in guidance, which is the right place to consider them in detail. On that basis, I see no need for amendment (a).
The hon. Member for Ilford North (Wes Streeting) expressed concern that official warnings should not be used to force people to follow good practice. I agree. The explanatory notes make this clear, saying:
“Failure to follow good practice could not automatically be considered to constitute misconduct or mismanagement.”
I hope that helps the hon. Gentleman.
I now turn to the disqualification powers in clauses 9 and 10. Government amendments 3 and 4 are relatively modest, but we consider them to be necessary to ensure the proper operation of clauses 9 and 10. Clause 9 extends the effect of automatic disqualification to the most senior executive roles in a charity—that of chief executive officer and, where there is one, chief finance officer. In our discussions with the Charity Commission on this provision and how it would operate in practice, it became clear that there was a risk that a person employed by a charity who did not exercise any management function could be caught by the clause as it stands. This may be the case in a small charity that employs only one or two operational staff who may report directly to the board but do not perform management functions since those are fulfilled by the trustees. In those circumstances, the employee ought not to be caught by the disqualification provision as they are not involved in the management of the charity. Our amendment 3 ensures that this will be tightened up through drafting. Government amendment 4 makes exactly the same provision in relation to the power of the Charity Commission to disqualify under clause 10. I hope that hon. Members agree that these are sensible provisions to add to the Bill.
I am extremely grateful to my right hon. and learned Friend the Member for Harborough (Sir Edward Garnier) for tabling his amendment as it gives me the chance to provide some reassurance on the record. He is a strong supporter of and advocate for charities involved in the rehabilitation of ex-offenders, which is an extremely commendable cause. Charities and the voluntary sector play a significant role in the support and rehabilitation of ex-offenders, and we should recognise and encourage their important contribution to reducing reoffending and helping former offenders to reintegrate into society.
I want to ensure that the Bill’s provisions do not have an undue impact on that very important work.
The disqualification provisions are important. Although the existing system has worked well, it needed to be updated. The Bill seeks to extend the disqualification provisions as an important way of protecting charities from individuals who might seek to abuse their position of trust, whether for personal financial gain, to abuse beneficiaries or for some other purpose.
Peter Kyle
Will the Minister join me in congratulating the charity Unlock on working with the right hon. Gentleman? That partnership between a party politician and a charity produced a fantastic speech. He made some very important points, and that is clearly having an impact on legislation on the Floor of the House of Commons. Is that not to be welcomed?
Mr Wilson
I can see the trap that the hon. Gentleman is setting for me, and I am not going to walk into it. I have further comments to make on the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act, but I thank him for his attempt, lame though it was.
Some people who are currently trustees or senior managers will be caught by the extension of the disqualification provisions. Although the number of waiver applications is likely to increase, we do not think that a significant number of people will be affected by the changes. I would be surprised if it ran to more than the low hundreds, based on the commission’s experience under the existing disqualification regime.
I recognise the concerns that have been raised by my right hon. and learned Friend, and I am happy to commit to producing a report on our assessment of the impact of the disqualification changes. I will deposit it in the Library of the House before the commencement of the automatic disqualification provisions in clause 9. I cannot promise that we will cover every point listed in amendment 1, but I will ensure that we provide a very detailed assessment, as he has requested.
I want to ensure that the disqualification powers in the Bill protect charities from individuals who present a known risk, while at the same time providing for the rehabilitation of offenders and a way back into charity trusteeship or senior management on a case-by-case basis. That strikes me as both fair and proportionate.
Sir Edward Garnier
I thank my hon. Friend for his very welcome assurances. I much look forward to the discussions that will follow this debate, as do those I have been speaking with and for today.
Mr Wilson
I thank my right hon. and learned Friend for those kind words. We will certainly work very closely with those organisations.
Amendment 13 seeks to empower the Charity Commission to disqualify several trustees in cases of collective failure. In Committee, I explained that the Charity Commission already has the power to act in such circumstances and, indeed, has done so in cases relating to systemic governance issues. There is no reason why the Charity Commission could not take action against all the trustees of a charity where it was appropriate, proportionate and in accordance with the principles of best regulatory practice to do so. For that reason, I do not support amendment 13.
Amendment 14 would give the Charity Commission the job of consulting on and publishing guidance on how it assesses “unfitness” in relation to the power to disqualify, as set out in clause 10. We discussed a similar amendment in Committee and, although I agree with its intended effect, I do not believe that it is necessary. When the Bill was introduced in the other place, the Charity Commission published a well-received document setting out its initial thoughts on how it would exercise the disqualification power. The document highlights the broad categories that the commission would consider, namely honesty and integrity, competence and credibility. It gives various examples of the sorts of specific conduct that it would take into account. I explained a number of those examples in Committee and do not propose to repeat them today.
The Charity Commission has further committed to develop and consult on its initial thinking in draft guidance on how it would operate the power to disqualify. All of that will happen before the power to disqualify is commenced. As with any commission guidance, it will be kept under regular review to reflect changes in legislation or tribunal findings. On that basis, I do not see that amendment 14 is necessary.
Amendment 15 was previously proposed in Committee by the hon. Member for Redcar. The Charity Commission already considers only conduct that is “relevant and serious”. If it were to take account of other conduct, I would expect any resulting disqualification order to be thrown out by the charity tribunal on appeal. Besides that, the amendment should not be passed because the inclusion of the words “relevant and serious” in condition F would pose potential unintended consequences.
Including those words in the disqualification power could cast doubt on all the Commission’s other powers that do not contain them. The exercise of those other powers, such as the power to remove a charity trustee or the power to direct a charity, already depends on conduct that is both relevant and serious, even though those words are not included in the criteria for exercising the powers. I do not want there to be the risk that the other powers could be interpreted as not requiring relevant or serious conduct in order to be exercised. Although I understand and sympathise with the aims of amendment 15, I hope the House will understand why I do not believe that it is necessary and how it could inadvertently reduce the bar for the exercise of the commission’s other powers, which I would not support.
Amendment 5 is another relatively modest Government amendment that was suggested to us by rehabilitation charities. As I said in relation to the amendment tabled by my right hon. and learned Friend the Member for Harborough, we are keen to work with rehabilitation charities to ensure that the Bill does not undermine their important work.
To make a disqualification order against a person, the Charity Commission will have to meet one of six conditions, from A through to F, alongside a number of other things. Condition B is that the individual has been convicted outside the UK of an offence against a charity or involving the administration of a charity which, had it happened in the UK, would have automatically disqualified the individual. As it stands, the commission can take into account only an overseas conviction that is not spent under the law of the territory where the conviction took place. It was pointed out to me that it would be fairer and more proportionate if the limitation related to the UK rehabilitation period for an equivalent UK sentence, rather than the rehabilitation period of the overseas jurisdiction. I agree that that would be more proportionate, and amendment 5 makes the necessary change.
My right hon. Friend the Member for Cities of London and Westminster (Mark Field) ingeniously managed to speak about independent schools. He made an important point about the variety of ways in which independent schools provide public benefit. There is not one single way to achieve public benefit and the Charity Commission would certainly not direct any independent school that there was.
New clause 2, proposed by the hon. Member for Redcar, represents an attempt to reinsert a provision that the Government removed in Committee. Let me explain why the Government oppose it. It was described by several peers in the other place as sending a signal of opposition to the Government’s plans to legislate to extend the right to buy to tenants of housing associations. That message has been received, considered and responded to. Extending the right to buy to tenants of housing associations is a manifesto pledge on which the Government were elected and are committed to deliver. It will mean that up to 1.3 million more families in England get the chance to own their own home while at the same time ensuring the replacement of housing stock.
We listened to the concerns raised. Rather than legislating to implement the policy, we reached a voluntary agreement with housing associations which will implement the policy while protecting the independence of housing associations.
Mark Field
It is important that the Minister reflects that that was a manifesto commitment—even some of us on the Government Benches had concerns about it, but it was a manifesto commitment. It was rightly brought up in the Housing and Planning Bill, and it is disrespectful to the House, and a dangerous precedent, when one Bill is used to undermine another Bill that is part and parcel of a manifesto commitment. That also happened in the previous Parliament on the boundary changes, when a measure in an entirely different bit of legislation was used to oppose that policy. The House of Lords is abusing its position if it thinks it can do that in that form.
Anna Turley
To take up that point, the right to buy affects charities, and we are debating charities legislation. The right to buy affects the ability of housing associations to control their assets, which is a fundamental change to the balance of the relationship between their role and the Government’s ability to tell them what to do. That is why we have debated it today.
Mr Wilson
The Opposition are obviously entitled to propose whatever amendments they want as long as they are in order, but the problem is not just that new clause 2 is completely unnecessary; it would also be damaging, although I am sure that that was not the hon. Lady’s intention.
Many of the rules that apply to charities’ investments in, and their disposal of, assets, derive from case law that has been built up over hundreds of years. Proponents of the new clause argue that it reflects the existing case law, but I simply do not accept that. A simple statutory provision such as the new clause cannot hope to reflect the accumulated detail of case law derived from many hundreds of judgments.
Case law already requires charities to use and dispose of their assets in a way that supports the delivery of their charitable purposes. That provides flexibility for certain circumstances that a statutory provision cannot provide. For example, how would the new clause affect compulsory purchase orders in relation to charity land? How would it affect the existing rights of more than 1.4 million housing association tenants under the preserved right to buy or the right to acquire? How would it affect the exercise of Charity Commission powers such as its power to direct charity property in the course of a statutory inquiry? There are simply too many questions about the measure to which we have not had satisfactory answers either this afternoon or during the course of the Bill’s proceedings.
New clause 2 would give the Charity Commission a new and very broad role in policing the use and disposal of charity assets. That is inconsistent with our current aim of helping the commission to focus on its core regulatory activities.
New clause 3, which is also in the hon. Lady’s name, is at best unnecessary and at worst damaging. Charity law already sets out clear rules on what charities can and cannot do in relation to campaigning and political activity. I explained those in detail in Committee and do not propose to do so again today. New clause 3 might seek to reflect existing law, but it does not. In a similar way to new clause 2, new clause 3 attempts to include in a statutory provision the existing case law. That seriously risks changing the boundaries of what is permitted.
New clause 3 would allow charities to undertake political campaigning or political activity, but does not define what that means.
Would it, for example, allow partisan political campaigning? If that were the case, it would represent a real shift in the law and I would strongly object to that. In particular, I think the public would be very surprised and disappointed to see charities taking part and campaigning on a party political basis. Existing case law does not allow charities to engage in political campaigning to such an extent that it calls into question whether in fact they are a charity or, rather, a political campaigning organisation. Again, it is not clear to me that new clause 3 would incorporate that crucial limitation, potentially opening up charitable status to organisations with a political purpose.
Wes Streeting
I can only think that the Minister has not been listening to the debate this afternoon or in Committee. He is, once again, deliberately muddying the waters between legitimate campaigning and party political activity. Is the Minister not trying to defend a pattern of Government behaviour of clamping down on any scrutiny or opposition, whether in this place, the House of Lords, the charities sector or the trade unions?
Mr Wilson
What the hon. Gentleman says is quite extraordinary. We had this debate in Committee. It was quite clear, from the reaction to the concerns about the Badger Trust, that the hon. Gentleman and those on the Opposition Front Bench agreed that party political campaigning was actually a good thing. Even today that has been repeated, with regard to the Badger Trust. The hon. Member for Redcar disagrees with the Charity Commission finding that it was party political.
In Committee, my hon. Friend the Member for Newark (Robert Jenrick) gave us a very strong warning about new clause 3, which sums it up well and bears repeating. He asked us to look across the Atlantic to America, where charities can engage in party politics and support political candidates, and where wealthy philanthropists can set up organisations with blurred aims. He said we should be careful what we wish for. I agree with that sentiment entirely. The new clause would risk setting us off down a very slippery slope of involving charities in party politics. For that reason alone, I strongly encourage the House to oppose it.
On fundraising, I am sure all hon. Members will be aware of the poor fundraising practices uncovered over the summer. They present a real risk to levels of public trust and confidence in charities. I asked Sir Stuart Etherington to review how fundraising had been regulated in the past and to suggest improvements. The Government accepted his recommendations for a new, stronger self-regulatory body, backed up by the statutory powers of the Charity Commission. This new fundraising regulator is currently being set up by Lord Grade of Yarmouth and his chief executive Stephen Dunmore. The new regulator will establish the fundraising preference service, which will give people who feel overwhelmed by the sheer volume of requests they receive a simple way to opt in. I am grateful to the working party, led by George Kidd and supported by the NCVO, which has already started to draft proposals on how the FPS will work in practice.
As I made clear in Committee, this place owes it to the generous British public to ensure that they are not coerced or bullied into giving their hard-earned money to charity. It is because of this that we brought forward Government amendments in Committee that would enable the Government to step in and compel charities to register with the self-regulator should they fail to do so voluntarily and in significant numbers. Should this still prove insignificant, the Government would have the power to mandate the Charity Commission with the regulation of fundraising.
I truly hope that I and my successors are not put in a position to have to resort to those reserve powers, and that charities seize this last chance to make an independent self-regulatory system work. If self-regulation does fail, however, we need to make sure that we are equipped to step in quickly with effective statutory regulation. In that respect, I warmly welcome Opposition Members’ support for the Government’s approach to addressing fundraising regulation. I give particular thanks to the hon. Member for Redcar for her supportive comments on Second Reading and in Committee.
I thank my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) for his work as Chair of the Public Administration and Constitutional Affairs Committee. His Committee has played an important role in investigating the poor fundraising practices we saw last summer. I welcome the Committee’s report, which was published yesterday, and I will give it careful consideration before responding fully in due course. As it highlights, the public rightly expect the highest standards from our charities. Like the Committee, I believe that charities should get a last chance to put their own house in order to restore public trust and confidence.
Lady Hermon (North Down) (Ind)
The Minister will know that people in Northern Ireland give generously to charities. Regrettably, the Bill has been designated as exclusively English. If constituents of mine are oppressed by requests from charities, can they legitimately complain to the Charity Commission and the new regulatory body?
Lady Hermon
The Minister does not seem to grasp the point. There are national charities across the UK, of which Northern Ireland is a part. Thousands of people voted in the referendum on the Good Friday agreement—the Belfast agreement—to remain part of the UK. The donors and supporters of national charities, such as the Salvation Army, the Royal National Lifeboat Institution and others, are also in Northern Ireland, so the first port of call should be here, not Northern Ireland.
Mr Wilson
The hon. Lady makes her case strongly, and it is absolutely right that she should do so here in the UK Parliament. I hope that she will also make her case strongly to the devolved Administration, which many people in Northern Ireland wanted, and got as a result of the actions of subsequent Governments.
New clause 4 would fundamentally change the division of responsibilities between the new fundraising regulator and the Charity Commission. If we were to propose that the commission hold public hearings on matters of charitable fundraising, this would effectively amount to a form of statutory regulation. The commission does not believe that it currently has the resources effectively to exercise the power to hold hearings on fundraising, as suggested in the new clause. It can, in theory, already hold hearings in relation to statutory inquiries under section 46 of the Charities Act 2011, but it does not do so because it would not be an effective means of undertaking its casework. Unlike with other powers in the Bill, the commission does not ask for this ability.
I understand that my hon. Friend the Member for Harwich and North Essex may have intended in new clause 4 to offer to witnesses giving evidence to the Charity Commission in public hearings on charity fundraising the protection of not having their evidence used against them in other proceedings, rather than legal professional privilege. Legal professional privilege protects the lawyer-client relationship and is not what I think he is looking to achieve. However, the proposed hearings would be proceedings undertaken by the commission, not proceedings in Parliament, so parliamentary privilege would not be appropriate, either. The reserve power to regulate fundraising in section 64A of the Charities Act 1992 is a power to make secondary legislation that is necessary or desirable or in connection with regulating charity fundraising. If the commission were to assume statutory responsibility for the regulation of fundraising and this included holding public hearings, we would need to consider, at that point, what protection for witnesses would fall within the scope of the power.
My hon. Friend’s new clause 5 would prematurely task the commission with becoming the primary regulator for fundraising activities. The Government have provided for this already, but through the stronger reserve powers we introduced in Committee. We would also risk undermining public confidence, if self-regulation were to fail while under the oversight of the commission, particularly if the solution to that failure was statutory regulation by the commission. We would also need to do a lot more detailed thinking about whether, and if so how, witnesses could or should be protected by an equivalent to parliamentary privilege, which is what I think he might have been seeking with the new clause.
However, I completely agree with the finding of the Select Committee on Public Administration and Constitutional Affairs that
“It would be a sad and inexcusable failure of charities to govern their own behaviour, should statutory regulation became necessary.”
Perhaps I can reassure hon. Members that, under the reserve powers in the Bill, it would be possible for the Charity Commission to be given statutory responsibility for the regulation of fundraising, but to deliver that through a third party such as the fundraising regulator. New section 64C(2) of the Charities Act 1992, as introduced by clause 14, already specifically enables that.
Martin John Docherty
I am sure the Minister recognises the comments that the hon. Member for North Down (Lady Hermon) made in relation to Northern Ireland, which I also raised during the general debate in relation to fundraising. This legislation should not impact on the right of the Scottish Parliament to legislate on fundraising for charities. Will the Minister reiterate that here on the Floor of the House?
Mr Wilson
The representatives for Scotland were at the fundraising summit recently. This is a devolved matter, and it is up to them what rules they set for Scotland. They do not have to follow; this is an England and Wales Bill, which does not affect Scotland. It is therefore up to the Scottish regulator how they wish to proceed.
I maintain that it is important to keep a clear division between statutory and self-regulatory powers to ensure better regulation of fundraising. The best way to achieve that is to support the new fundraising regulator and, if it should fail, make a decisive and clear move to statutory regulation. Should self-regulation fail, the Government will not hesitate to intervene, which could include tasking the Charity Commission with the regulation of fundraising. However, we think it is too soon to commit the Charity Commission to an enhanced statutory role in fundraising, so I hope my hon. Friend the Member for Harwich and North Essex will understand why I do not support his new clauses 4 and 5.
Let me turn finally to Government amendments 6 and 7. It would not be fair to ask the taxpayer to carry the cost of fundraising regulation if it is the result of a failure by charities to protect the public from their own poor practices. Government amendments 6 and 7 would therefore enable the fundraising regulator or the Charity Commission to charge fees to those it regulates for that purpose. Many of the charities signed up to and paying for the old system of self-regulation were those that followed best practice, and there was a problem of free riders. To guard against that risk, the Etherington review suggested that any charity with fundraising expenditure beyond a certain level should be subject to a levy, requiring the large and medium-sized fundraising charities to pay for regulation.
Should the Government need to compel charities to register with the charity fundraising regulator, it is important that the fundraising regulator is able to levy fees for registration. That is exactly what amendment 6 would enable. Government amendment 7 deals with fees, should the reserve power be exercised for the Charity Commission to regulate fundraising. It would ensure that regulations could provide for the Charity Commission to charge fees across the range of bodies that it would regulate as the fundraising regulator.
I hope my explanations suffice to convince hon. Members that these amendments are an important part of the backstop to self-regulation and will help to ensure the effective regulation of fundraising in future, but I would of course be happy to provide more detailed responses. The main point is that I hope that these amendments are not needed and that charities will support the new, tougher self-regulatory system being established under the leadership of my noble Friend Lord Grade of Yarmouth. I commend these Government amendments to the House.
Anna Turley
For the sake of colleagues, I will be brief. I thank everybody for their contributions this afternoon. There is a wealth of experience from the charity sector in the Chamber, which has added a richness to the progress of the Bill.
Let me turn straight to new clause 1. Although I do not share the Minister’s view that judicial review will be more cost-effective—that may be the case for the Charity Commission, but perhaps not for charities that are appealing, many of which will not be able to afford to go to judicial review—I am willing to work with the Charity Commission, the sector and the Government to monitor the use of warnings outside of primary legislation. Therefore, I do not wish to press new clause 1 to a vote, although I wish to test the House on new clause 3 and amendment 8, because I do not feel our concerns have been met on either issue. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 3
Power to make representations
“(1) A charity may undertake political campaigning or political activity in the context of supporting the delivery of its charitable purposes.
(2) A charity may campaign to ensure support for, or to oppose, a change in the law, policy or decisions of central government, local authorities or other public bodies.”—(Anna Turley.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Mr Speaker
Consideration completed. I will now suspend the House for about five minutes in order to make a decision about certification. The Division bells will be rung two minutes before the House resumes. Following my certification, the Government will be tabling the appropriate consent motion, copies of which will be available shortly in the Vote Office and will be distributed by Doorkeepers.
Mr Speaker
I can now inform the House of my decision about certification. For the purposes of Standing Order No. 83L(2), I have certified that the Charities (Protection and Social Investment) Bill [Lords] relates exclusively to England and Wales on matters within devolved legislative competence, as defined in Standing Order No. 83J. Copies of my certificate are available in the Vote Office. Under Standing Order No. 83M, a consent motion is therefore required for the Bill to proceed. Does the Minister intend to move the consent motion?
Mr Speaker
Even a nod from a Whip would suffice, but instead we have the full throttle of ministerial words. The House is greatly privileged and the occasion, I feel sure, will not be forgotten.
The House forthwith resolved itself into the Legislative Grand Committee (England and Wales) (Standing Order No. 83M).
[Natascha Engel in the Chair]
The Second Deputy Chairman of Ways and Means (Natascha Engel)
I remind hon. Members that although all Members may speak in the debate, only Members representing constituencies in England and Wales may vote on the consent motion.
Lady Hermon
On a point of order, Ms Engel. I make this point of order with a heavy heart, but I feel duty-bound to do so. When the certification process was introduced and debated before the Christmas recess, the indication was that when the Mace was moved and we sat in the Legislative Grand Committee, a Minister would be called upon to move the consent motion and then a debate would commence. It was disappointing last night that there was no effort by the Minister to open a debate about why the consent motion was being moved. As I find this happening again today, I seek clarification from the Chair as to whether it is appropriate now to consistently adopt a routine of a Minister moving a motion without further debate.
The Second Deputy Chairman
The hon. Lady is aware that it is up to the Minister to move the motion formally or to speak to it, but she is perfectly entitled to speak in the debate now, if she so wishes.
Lady Hermon
Thank you very much, Ms Engel. I am grateful for that clarification, even though my vote, if we were to vote, would not count in the same way as that of every other Member of this House would count. This is a serious constitutional issue, particularly for those from Northern Ireland.
After years of horrendous violence in Northern Ireland, we had the Good Friday agreement, otherwise known as the Belfast agreement, and we voted in our thousands that Northern Ireland would be part of the United Kingdom unless and until we voted ourselves out of the United Kingdom. That is not going to happen any time soon. My constituents elected me at the general election to represent them fully in this House.
In response to an intervention earlier, the Minister confirmed that there is a Charity Commission for Northern Ireland. However, the Charity Commission for Northern Ireland has only devolved responsibilities. The point that I was making to the Minister was about national charities across the United Kingdom, such as the National Trust. When constituents of mine and those right across Northern Ireland—where we have the Giant’s Causeway, which is owned by the National Trust, and Castle Ward and various other wonderful properties across Northern Ireland—join the National Trust or renew their membership online, their membership fees go straight to the headquarters of the National Trust. The fact that we have a devolved Charity Commission for Northern Ireland does not give it national reach.
The point I am making to the Minister is that we have national charities in Northern Ireland—I have mentioned the Salvation Army and the RNLI, for example—that have their headquarters in England, so will he kindly and generously do my constituents, and indeed all the people of Northern Ireland, the courtesy of explaining why this Bill is designated as exclusively English-only? That is what I would like to hear him explain.
Sir Edward Leigh (Gainsborough) (Con)
I can reassure the hon. Member for North Down (Lady Hermon) that the Procedure Committee, of which I am a member, is looking at what is happening with this procedure and will report back to the House. It shall be noted that these are matters of great interest, but recently when I have sat in on consent motions for these sorts of debates under English votes for English laws, I have noted that nothing is said at all. It is incumbent on us to draw up procedures that actually make a difference and have a purpose. The problem with EVEL is that, because the Conservative Government have an overall majority, no Bill will be changed one iota in this Parliament as a result of EVEL. Because all the other parties are opposed to EVEL, if the Conservative party does not have a majority after the next general election, the procedure could be abolished in an afternoon. The Committee will be looking at these procedures very carefully and—of course, I cannot speak for its other members—will want to be reassured that the procedures under EVEL are actually changing something.
Matthew Hancock
I will respond briefly to the comments of the hon. Member for North Down (Lady Hermon). She asked why the Bill has been designated as an England and Wales Bill, and that is because it relates in its entirety to England and Wales. On her point about a charity that covers the whole United Kingdom—it hardly behoves me to reiterate, passionately and fulsomely, the Government’s support for the United Kingdom, which we share—regulation of the activities of charities in Northern Ireland is devolved. I cannot speak to, and I do not have responsibility for, the activities of the Charity Commission for Northern Ireland, which regulates the activities of charities in Northern Ireland. Likewise, this section of the debate ensures that there is consent for this legislation among the MPs whose constituencies will be covered by it. The reason I did not speak at the start of this procedure is that, given that the Bill is so clearly restricted to activities that take place in England and Wales, it is plain and obvious that it is therefore an English and Welsh Bill for these purposes.
Lady Hermon
I am grateful to the Minister for allowing me to intervene. I want to make the point—I am sorry to repeat myself—that we have legislation going through the House today that will give increased powers to the Charity Commission based in England. However, were the Charity Commission based in England to take action against a national charity of which my constituents are members and supporters and to which they are contributors and donors, my constituents would be directly affected by its actions in relation to that particular charity. Am not I therefore entitled, as of right, to represent the views of my constituents in this House?
Matthew Hancock
Of course the hon. Lady is entitled to represent the views of her constituents, which is precisely what she has been doing in the stages of the Bill, but it is also right that English and Welsh MPs can have their say on the Bill. I point out that were her constituents involved in a similar way in a charity that was headquartered in France, Germany, America or anywhere else in the world, that charity would of course be regulated by its home regulator in the same way as a charity based in England. It is a consequence of the devolution of charities law, and the actions of support for and regulation of charities, to Northern Ireland that this is an issue not for Northern Ireland but for England and Wales, and therefore, under the EVEL procedures, this is self-evidently an England and Wales Bill.
Lady Hermon
I do not want this to become a one-way conversation, but I have to say that I do not think the people of Northern Ireland would be flattered to be compared to France. I have listened studiously to Government Front Benchers reassuring the House that theirs is a one nation Government. I invite the Minister to come to Northern Ireland and meet those who have contributed to charities in Northern Ireland. He can explain to them face to face why, given that the Government claim to be a one nation Government, Northern Ireland MPs in some cases do not count—apart from Sinn Fein Members, of course.
Matthew Hancock
It is self-evident that if the issues in the Bill relate to England and Wales, as they do, the Bill should, in the view of the Government, be certified as an England and Wales Bill. It is a consequence of devolution that those representing England and Wales should be able to have their vote on a Bill that relates only to England and Wales.
To respond to the point made by my hon. Friend the Member for Gainsborough (Sir Edward Leigh), I should say that it is inconceivable that anybody would unwind these provisions in any future Parliament, given that they protect English and Welsh voters from having legislation imposed on them without the will of the majority of Members with constituencies in England and Wales. The reaction of those who could then be overruled by others who had their own devolved Assemblies and Parliaments would be quite savage.
Simon Hoare (North Dorset) (Con)
On a point of order, Madam Chairman. Like my hon. Friend the Member for Gainsborough (Sir Edward Leigh), I am a member of the Procedure Committee. We were very clear in our deliberations that Mr Speaker would make a ruling as to whether legislation fell within these protocols or not, but that he would not be expected or required to give the raison d’être as to why he made the ruling.
I may be out of order, Madam Chairman, in raising this as a point of order, but having listened to this exchange, I feel somewhat as if the authority of the Chair, and the decision that Mr Speaker has taken, is now being challenged. Critically, that seems to be undermining what we thought was an important principle —namely, that the authority of the Chair should be such that neither a challenge to nor an explanation of his or her ruling would be required or expected.
The Second Deputy Chairman of Ways and Means (Natascha Engel)
I thank the hon. Gentleman for that point of order. I remind the House that we are discussing the consent motion, rather than the rights and wrongs of EVEL. I have allowed the debate—it has been a rather two-way exchange—to go on a little because we are right at the beginning of the EVEL process; this is certainly my first time in the Chair during a Legislative Grand Committee, and it is only the third time that this has happened. However, as the hon. Gentleman said, the Procedure Committee is looking at the EVEL process in the round. The hon. Member for North Down (Lady Hermon) should really make a submission to that Committee. It would be good if we could now move on to discuss the consent motion or put the question.
Matthew Hancock
All I would say is that the decision on the consent motion is, quite rightly, Mr Speaker’s.
The Second Deputy Chairman
I remind hon. Members that if there is a Division on the consent motion, only Members representing constituencies in England and Wales may vote. That extends to expressing an opinion by calling out aye or no when the question is put.
Question put and agreed to.
Sir Edward Leigh
Further to the point of order made by my fellow member of the Procedure Committee, my hon. Friend the Member for North Dorset (Simon Hoare), it is terribly important that the Speaker is not dragged into controversy. May I gently point out that when the Government initiated these consent procedures we were told that they were to be rare? There is absolutely no point in stirring up bad feeling in Northern Ireland and Scotland, because it does not make a blind bit of difference to the result of any Division or to any part of any Bill. I hope that the Government are listening and that they will use this procedure as rarely as possible.
The Second Deputy Chairman
I thank the hon. Gentleman. That point has been noted.
The occupant of the Chair left the Chair to report the decision of the Committee (Standing Order No. 83M(6)).
The Deputy Speaker resumed the Chair; decision reported.
Third Reading.
Matthew Hancock
I beg to move, That the Bill be now read the Third time.
Charities are at the very heart of our society and have held that important place for many generations. The vast majority of charities are run well by selfless people whose motivation is to help others. By way of example, I was struck by the incredible way that charities and the local community mobilised after the devastating floods that took place in Cumbria in December. Cumbria Community Foundation set up a flood relief fund to help all those affected. The fund has already raised well over £4 million, alongside Government contributions. It has involved hundreds of local charities, voluntary organisations, businesses and individuals raising funds to support the appeal. National Citizen Service graduates in Carlisle have helped renovate a local youth club damaged by the floods. We owe a great debt to such charities and the volunteers who freely give their time to make a difference. We celebrate the work of this example just as we celebrate our hospices, universities, housing associations, community fundraisers, global research institutes, and the many, many other charities, from the most local to those with worldwide reach. We salute their effort, their time and their generosity, and the joy that they give in the service of others.
This Bill will help to protect that vast majority of charities from the tiny minority that would seek to abuse the benefits of charitable status and risk undermining the public’s trust on which charities as a whole rely.
Lady Hermon
I am genuinely grateful to the Minister for allowing me to intervene on him again. In the light of the fact that he has emphasised on a number of occasions that responsibility for charities is a devolved matter in Northern Ireland, and given the changes introduced by this legislation, will he kindly confirm that, if he has not already done so, he will make it a top priority to get on the telephone to his counterpart in the Northern Ireland Assembly to say, “Right, this is what we’ve done at Westminster—perhaps you should think of making these changes in Northern Ireland.”
Matthew Hancock
Absolutely—we will certainly make contact with the Northern Ireland Assembly to ensure that we can have exactly that communication, not least because the Bill will support charities that want to engage in social investment, which many can benefit from. It provides a new way for charities to maximise the impact of their investments.
The Bill will also better support regulation of practices for fundraising, which have been found wanting. We all know of and support charities that, week in, week out, do brilliant work in our constituencies. I want to ensure that the regulatory framework for charities continues to support charities like these while supporting the work of the Charity Commission in robustly bearing down on the few bad apples. This Bill will do just that. I will touch on some of the things that I hope, through its passage, we will be able to deliver.
Extending trustee disqualification will better protect charities from individuals who present a known risk. Like many Members during the passage of the Bill, I struggle to conceive how it could ever have been considered appropriate for a convicted terrorist or money launderer, for example, to be involved in running a charity. These changes are long overdue. However, I agree with my right hon. and learned Friend the Member for Harborough (Sir Edward Garnier) that, in extending disqualification, we must take extra care not to undermine the vital work done by charities involved in the rehabilitation of offenders. I am confident that the waiver process will allow those who have changed their ways a route back into charity trusteeship or senior management. I hope that the commitments given by my hon. Friend the Minister for Civil Society will provide a degree of further reassurance.
When the National Audit Office reviewed the Charity Commission and reported on it in 2013, it recommended that the Government look at gaps and weaknesses in the regulator’s powers. We have done so, and the Bill addresses those gaps and weaknesses. We should however be clear that the Bill provides only one element of the change that is needed.
The Charity Commission was established in 1853 to take on a number of the court’s functions in relation to charities. At the time, misconduct in charities was a source of public concern, and that led to the founding of the commission. If we fast-forward 150 years, we can see that the Charity Commission’s role is in many ways much the same—focused on ensuring public confidence in charities.
We all want strong, effective, independent regulation of charities. The Charity Commission is making great strides towards that under the strong, clear-eyed and sure-footed leadership of its chairman, William Shawcross, and chief executive, Paula Sussex. They are driving the transformation of the commission into a modern, effective and efficient regulator. However, such a change can happen only with the full commitment and support of the charity commission’s staff, and I pay tribute to them for their hard work, which too often goes unrecognised.
The extensions to the commission’s powers in the Bill have been carefully thought through. Following public consultation, pre-legislative scrutiny and the Bill’s passage through the other House and this place, we have a much-improved Bill. As a result, the commission will be equipped with the tools that it needs to tackle serious misconduct and mismanagement in charities, and to do so effectively and efficiently. I am also reassured by the range of safeguards that accompany the powers, some of which have resulted from consultation and scrutiny.
It is important to stress that most charities will not experience any direct impact from the new powers in the Bill, because most charities are, quite rightly, never on the receiving end of the Charity Commission’s powers. However, ensuring that the regulator can act quickly and effectively against serious abuse will support public trust and confidence in all charities.
On public trust and confidence, I now turn to fundraising. It is clear to me that poor fundraising practices had the potential to undermine public trust and confidence in charities. Sadly, there is already evidence of reduced trust. We acted quickly by commissioning the Etherington review last summer. I am very grateful to Sir Stuart and the cross-party panel of peers who supported him. Sir Stuart recognised the serious risk to public trust in the charity sector generally, and the need for change in the fundraising practices of some charities. His review marks a watershed moment.
I welcome the support from Labour Members for our measures on fundraising. This is something on which we all agree there is a need for change. It really is the last chance for self-regulation. Under the leadership of Lord Grade of Yarmouth, it will have every chance. I very much hope that all across the charity sector are willing and able to embrace that. I do not want to have to resort to statutory regulation, but we will if we must. We now have the reserve powers to do so in case they are needed.
I welcome the important contribution on fundraising published yesterday by the Public Administration and Constitutional Affairs Committee, under the chairmanship of my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), who has followed the proceedings on the Bill closely. We will need to consider carefully the report and recommendations before responding fully, but we completely agree with the central finding that it would be a sad and inexcusable failure of charities to govern their own behaviour should statutory regulation become necessary.
On the new social investment power, the Bill will help charities that want to get involved in this exciting new area of finance for charities. We are committed to growing social investment as a sustainable source of finance for charities and other social ventures. The UK is a world leader in this respect, and the social investment power will help charities to play a bigger role.
I am pleased that there is a review provision in the Bill. After three years, it will enable Parliament to look back at the provisions and their impact. I hope that that will be a happy occasion.
The Bill and the improvements it will bring would not have been possible without a huge amount of hard work by many people. I particularly pay tribute to my hon. Friend the Minister for Civil Society and my noble Friend Lord Bridges of Headley for their sterling work in piloting the Bill through. Charity law can be fiendishly complex; they have not only grasped such complexities, but clearly and succinctly explained them to Members of both Houses. They have met a wide range of stakeholders to discuss all aspects of the Bill, and they have introduced amendments to improve it. I also thank my officials from the Cabinet Office and the Charity Commission who have supported the Bill’s passage.
I thank my hon. Friend the Member for St Albans (Mrs Main) and the hon. Member for Leeds North East (Fabian Hamilton) for their chairmanship of the Public Bill Committee. I thank the hon. Member for Redcar (Anna Turley), the noble Baroness Hayter of Kentish Town and Opposition Members for their broad support for the Bill. It would be fair to say that we have not agreed on everything, although the rows have tended to be about things that are not in the Bill. We have the shared aim of protecting charities and ensuring that the Charity Commission has the right powers independently and effectively to regulate charities. The debates have generally been constructive and positive and are, in my view, an example of the House at its best.
Particular recognition should go to the Joint Committee on the Draft Protection of Charities Bill, which undertook pre-legislative scrutiny under the wise chairmanship of my noble and learned Friend Lord Hope of Craighead. Its pre-legislative scrutiny resulted in a number of improvements before the Bill was introduced. I thank the Law Commission for drawing up the new social investment power. Its expertise was important in getting the detail right. I give enormous thanks to all others who have contributed in any way.
Finally, I thank my noble Friend Lord Hodgson of Astley Abbotts, whose prescient 2012 review of the Charities Act 2006 identified many of the weaknesses in fundraising self-regulation that are being addressed both through the Bill and the implementation of the Etherington review more broadly. That work four years ago showed the path that we have followed and that I hope the House will approve today.
The Bill has had broad support through the long process of consultation and scrutiny. We have listened and acted when we have heard ideas to strengthen it and add additional safeguards. The Bill will support and protect the strong, independent charity sector that is so important to our way of life in Britain, and I commend it to the House.
Anna Turley
It has been an absolute privilege to serve on behalf of Her Majesty’s Opposition on the consideration of this Bill. I pay tribute to all the civil servants and Clerks of the House who have worked so hard on drafting it. I thank all the members of the Public Bill Committee, who gave up so much time to scrutinise the Bill line by line in a constructive and positive way that did the House great credit. I thank the Minister and his team for the open and co-operative approach they have taken to working with us, disappointed as I am—although not surprised, as the right hon. Member for Cities of London and Westminster (Mark Field) pointed out—that none of our amendments were accepted.
I want to place on the record my thanks to the Minister for Civil Society, which I did not have time to do on Report, for clarifying a number of points. He said that the Charity Commission is looking at the likelihood that it will give 14 days’ notice in most circumstances when issuing a warning. That was an extremely helpful clarification. It was also helpful to hear him clarify that the Charity Commission does not see itself as having a power to direct as a result of the warning. It was important to hear that it intends to notify the charity of the reasons why a warning has been withdrawn, which will allow the public record to be set straight. I was grateful for the clarification he gave on those issues.
I thank all Members who have debated the Bill both here and in the other place, in particular Baroness Hayter of Kentish Town. As ever, our noble Friends did sterling work and the Bill is all the better for their experience and expertise. Many Members of both Houses have brought a great deal of experience and knowledge of the charity sector and, as we found out today, its history in Elizabethan law to our debates, which is greatly to be commended.
Finally, I thank those whom the Bill is for: the millions of people in this country who give up their time, week in, week out, to volunteer, fundraise, donate and support in many other ways Britain’s fantastic charitable and voluntary sector. Britain is the most generous developed country in the world and we should be proud of the extraordinary things that are done by extraordinary people in the sector every single day.
There is no doubt that the charity sector has been through a rocky period in the past year. Alongside the ever-shrinking funding from central and local government, the ever-growing demand for the services and support that charities provide, and the ever-increasing public scrutiny, there has been a series of high-profile and deeply damaging cases that, although caused by the actions of a small minority, have had significant repercussions for the sector as a whole.
The sector has taken swift and positive action to respond to those cases, but it is right that, as parliamentarians, we do our bit to ensure that charities have the legislative and regulatory framework they need to enable them to fulfil their charitable objectives, and to maintain their integrity and the strong public support they enjoy. That is what the Bill seeks to do, and why the Opposition have supported it throughout its journey.
It is vital that we get the framework right and that the powers in the Bill serve to support and empower charities to thrive and flourish, and not to stifle or oppress. Charities are fiercely and proudly independent, and rightly so. They do vital work. They work with many of the most vulnerable and challenging people. Many work in the most dangerous places. Charities have to be able to take risks, innovate, shape new thinking and challenge prejudice. They must be able to find new answers to some of the biggest challenges we face in the world, when politicians too often fall short. Regulating such a sector is no easy feat. Getting the balance of regulation right is therefore critical if we are not to damage all that is good about the sector.
Throughout the passage of the Bill, the Opposition have raised a number of concerns. Although our amendments have not been taken up, we will continue to scrutinise and work with the Government to monitor them closely. There are four aspects I want to set out on Third Reading. Our concerns have not diminished, and we will continue to monitor progress.
First, on the new powers afforded to the Charity Commission, we have tried throughout the passage of the Bill to gain concessions on the new and fairly broad power for the commission to give warnings to charities. As the right hon. Member for Cities of London and Westminster said, there is a danger of self-fulfilling bureaucracies. When we put that together with reduced budgets, there is a big onus on the commission to deliver in an ever more challenging environment. Throughout the debate, the Minister has insisted that the commission’s new powers will be used proportionately. We believe that that places a substantial burden of judgment on the commission in the absence of achieving more substantial safeguards in the Bill. We hope he will be proved correct.
Warnings that are meant to deal with low-level issues could, particularly when published, have a significant effect in choking off donations, funding and sponsorship. The reputational damage to a charity could be significant or even terminal. We would have liked a right to appeal a warning through the charities tribunal. We would also have liked to prevent warnings from being published or for the charity not to be identified if the details are published. I was grateful to the Minister for his clarification that the Charity Commission will not be able to direct a charity on the back of a warning. That would have been a significant shift in the relationship and in the independence of charities. We will watch the use of those warnings with care as the powers are implemented.
Secondly, it is important to get the powers relating to the charity trustees right. We were pleased to see the amendment in the Lords that expanded the restrictions on charity positions to those on the sex offenders register but, like the right hon. and learned Member for Harborough (Sir Edward Garnier), the Opposition have concerns—we raised them in Committee—that the detail has not been sufficiently worked through as regards charities that work in the criminal justice system, and that work closely with current and ex-offenders for the purposes of their charitable aims. I welcome the Minister’s pledge to work closely to see that through.
On the fundraising powers, we believe the sector has made great strides in relation to the recommendations in the Etherington review, which we welcomed. The legislation supports that progress with improved reporting and monitoring while maintaining the self-regulation of the sector. It is absolutely right that people’s privacy is respected, that unreasonably persistent approaches are challenged, that people are not placed under undue pressure, and that vulnerable people are protected. The Bill sets standards for all of those things. We will watch that space carefully to see whether the back-up powers the Minister added to the Bill, which we support, will be required. We hope they are not.
Finally, we have tried unsuccessfully to tackle the measures on the freedom to campaign during the passage of the Bill. The Minister and I will not see eye to eye on this. As was shown by the vote today, the Opposition remain committed to the principle that the right of charities to campaign and influence the political process is a vital part of a healthy democracy and integral to the concept of civil society. As we have discussed today, charities are in the best place to identify problems in public policy, because they are often the ones picking up the pieces of political policy failures. They see the waste and the inefficiency, and they see the opportunity to prevent problems. They can achieve their charitable aims more successfully if they can help to shape the decisions that affect the people and the communities they support.
I am afraid we see before us an illiberal Government who are scared to debate their record or be open to scrutiny and challenge; a Government who have railroaded important proposals, such as tax credit changes, fracking and student grants through Parliament without proper debate; a Government who change child poverty measures and scrap targets they know they will not reach; a Government who see the Freedom of Information Act 2000 as an irritant and the Human Rights Act 1998 as an inconvenience; a Government who refuse to publish Cabinet Office papers for the first time in 50 years; and a Government who have no problem with millions of people dropping off the electoral register.
Charities are but the latest victims of a Government who ride roughshod over the legitimate views and voices of civil society. The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 was part of this fundamentally illiberal approach and a deliberate attempt to gag charities by a Government fearful of public scrutiny and accountability. It is a shame the Government did not use the opportunity we gave them today to put right that wrong.
On all those areas and many more, we will continue to hold the Government to account. We will watch the implementation of the Bill carefully, in particular the balance of power between charities and the commission. Fundamentally, we believe the Bill provides a good regulatory framework for the charitable sector, which, if used well, will enable charities in Britain not just to survive in this most challenging of times, but hopefully flourish.
Maggie Throup
I am delighted to speak today on the Third Reading of this very important Bill. The Bill will protect and strengthen the governance of our charities. As a new Member, it has been very important for me to take part in all stages of the Bill in this place. I was delighted to be a part of the Public Bill Committee. The process was a really good learning curve.
Our charities play an important role across our nation and I believe we are stronger for the extensive work they carry out. We would be much poorer as a nation if we did not have our amazing charities, and their hard-working trustees, volunteers and staff. Literally millions of generous volunteers really make a difference. Some 41% of people have reported taking part in volunteering in the past year—a massive 21 million people. We are the home of some of the world’s greatest charitable fundraisers, such as Children in Need, Comic Relief, Sport Relief and not forgetting, of course, Live Aid.
Closer to home in my constituency, I have some amazing local charities. The Canaan Trust raises money and supports the homeless. On 1 April, I will take part in its “sleep out” for the third year running. I hope we do not have snow that day to make me a complete April fool. Treetops Hospice provides care at home, rather than in hospital beds, for those at the end of their lives. Home-Start Erewash supports many local families. Community Concern Erewash provides a luncheon club and services, such as laundry and decorating, for those no longer able to do those things for themselves. Ilkeston Community Hospital League of Friends raises money for those added extras that really help patients to enjoy their stay in hospital far more than they would otherwise. The Duchess Theatre is also a charity. I have been in the audience to witness some amazing productions. They are just a few of the charities that make a huge difference to the lives of so many people across my constituency. I would like to put on record just how much their efforts and untiring work are appreciated. Their contribution is so valuable to our society.
Towards the end of last year, I started a volunteering day, which I will make an annual event. Each member of my staff took a day’s holiday and went to work with a chosen charity to find out more about it and what it contributes to the local environment. They all found it to be a fascinating experience. The charities gained from that and my staff did, too. I think some residents will also be taking part in future years. For my staff, it was not just about what they could give, but what they received. Anybody who has taken part in any sort of charitable action will know that we give a little bit, but receive so much back.
The same can be said for trustees, who play a very important role. In the past, I have been a trustee for quite a number of charities. Before being appointed a trustee, I went through a rigorous selection and scrutiny process. That is only right, as a trustee has a very responsible position.
Sadly, we have heard bad news stories recently of trustees not being as scrupulous as they should have been. This should not happen, as it reflects badly, and undeservedly so, on charities across the board, even those that are not involved. Although such occurrences are rare, we must do whatever we can to stop them happening. That is why I support the Bill and its aims to strengthen governance and give more powers to the Charity Commission to remove inappropriate trustees.
I also support the measures to protect the public from the unscrupulous and persistent fundraisers who have plagued the elderly and most vulnerable in our society. As they got older, my parents changed how they donated to charity, having been bombarded by phone calls after giving out their contact details. They managed to stop the phone calls, but it changed how they supported charities: they no longer gave out their personal details, and instead donated in cash and kind. That should not have to be the case. Such bad practice tars all charities with the same brush, so I welcome the introduction of the fundraising preference service.
I will be supporting the Bill on its Third Reading because it is good for the public, volunteers, donors, charity trustees and staff, and charities as a whole, which, whether small or large, play such an important role in our society.
Martin John Docherty
I am delighted to sum up briefly on behalf of the SNP. I hope that the hon. Member for North Down (Lady Hermon) will agree with some of what I say.
I am grateful to the Minister for clarifying the situation of fundraising in Scotland, but it still does not go to the heart of the matter, which is that the Bill impacts on charitable and civic society across these islands. I heard much about how it adds to Britain’s voluntary sector, yet it is an English and Welsh-only Bill. There is much to commend in the Bill, but let us be clear: when it comes to Scotland, it will be for the Scottish Parliament alone to legislate on these matters, as was confirmed by the Minister.
I will finish on volunteering and trusteeships. I hope that the Bill improves the situation of volunteering, which the hon. Member for Erewash (Maggie Throup) talked about, because levels of volunteering are going down. Even since the Olympic games, there have been subtle drops in levels of volunteering across all age ranges, not only in England and Wales but on the rest of these islands. We must seek to remove barriers, not just to trusteeships but to volunteering itself. I hope that the Bill is not a barrier to volunteering and that people will see trusteeships as a volunteering opportunity. At the moment, that is not happening.
Tom Tugendhat (Tonbridge and Malling) (Con)
I ask the House’s indulgence to speak about somebody who has done an amazing amount for charities. I mean Mr Henry Worsley, a colleague of mine in the armed forces—I served alongside him in Afghanistan—who sadly lost his life recently in southern Chile, having walked the most amazing route across Antarctica, only to die two days before reaching his goal. Such people set the example for our charitable sector and push the field that bit further.
In looking after the most vulnerable, needy and lonely, our charitable sector goes that much further than our state can ever go or society imagined possible. It is right that our charitable sector fills that gap. The state cannot adapt, in so many legion ways, to fill the niches, nooks and crannies left by the loneliness, the broken homes, the vulnerabilities of service personnel or the disabled, or whatever the area covered by the charity that somebody’s interest falls upon. It is great that today we are not only recognising the importance of the charitable sector, but welcoming changes that will keep it on a safe footing, on a basis of trust and understanding across England and Wales—but with a model that I hope will be copied in Northern Ireland and Scotland—because charities fulfil that role. Charities place what is best upon us.
If I may, I would like to finish very briefly with one last tribute to Henry, my friend. He really did always go that little bit further. He was the pilgrim; he went beyond the blue mountain barred with snow. Indeed, although in his last podcast he said that his summit was just out of reach, it is true now that he has taken the golden road to Samarkand. That poem would have been well known by members of his regiment, and I know that we are all thinking of his family and his friends today. I welcome the opportunity to pay tribute to him in this House.
Mr Rob Wilson
The House will be pleased to know that I intend to keep my comments brief—I had a long session a bit earlier, so I feel that I have been spoiled today.
I am grateful to all hon. Members who spoke today and who contributed their extensive knowledge and expertise to the Bill throughout its development and passage. I thank all members of the Public Bill Committee for their particularly important contributions. After getting off to a bit of a slow start, we got into some lively, engaging debates as we progressed. I also thank the Chairs of the Committee, my hon. Friend the Member for St Albans (Mrs Main) and the hon. Member for Leeds North East (Fabian Hamilton), who I again congratulate on his promotion to the shadow Cabinet, for keeping us on the straight and narrow.
I would like to single out the hon. Member for Redcar (Anna Turley) for thanks. We have not agreed on everything, as she well knows, but we have agreed on many of the Bill’s provisions and, overall, on the importance of an independent regulator for charities—with the right tools to do the job, obviously. Even where we have disagreed, our debates have been good natured and constructive—at least I thought they had been, until Third Reading.
My right hon. and learned Friend the Member for Harborough (Sir Edward Garnier) made an important contribution to ensure that we do not inadvertently damage the important work of rehabilitation charities. I agree with him and thank him for making his points so well.
I should mention the important contribution to the debate on fundraising made by my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) and the Select Committee on Public Administration and Constitutional Affairs. Its timely report yesterday highlights the need for action, but I welcome its conclusion that charities should get one last chance for self-regulation. Also on fundraising, Sir Stuart Etherington is owed a debt of gratitude for his review and report, supported by Lord Leigh of Hurley, Baroness Pitkeathley and Lord Wallace of Saltaire. Their report sets the future landscape for fundraising regulation and gives charities a chance to put things right.
I give particular thanks to my officials from the Cabinet Office and to officials from the Charity Commission who have supported the progress of the Bill throughout its development and parliamentary passage. We are very fortunate indeed to have such high-quality public servants.
I also thank all charities and their representative groups who have contributed their views on the Bill as it has been developed. I particularly single out the Charity Law Association, the NCVO and the Charity Finance Group, along with several rehabilitation charities, for their considered comments and representations. We have not accepted all their points, but the Bill has been improved as a result of their contributions. It now falls on the Charity Commission to implement its provisions in a proportionate and effective manner. I am sure that under William Shawcross’s leadership that will be the case, but of course there is provision for the Bill to be reviewed in three years’ time—something that I am sure we are looking forward to immensely.
I am sure that there are many others I have missed out who have had an important hand in this Bill and who ought to be thanked, in which case I apologise for not giving them a mention. This is a Bill that has been improved following scrutiny in its draft form and following the scrutiny of this House and the other place. It will help to underpin public trust and confidence in charities, ensuring that they continue in their place at the heart of our society. I commend this Bill to the House.
Question put and agreed to.
Bill accordingly read the Third time and passed, with amendments.
Business without Debate
(8 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Speaker
I shall take motions 5 and 6 separately on this occasion. Yes, the Clerk on duty looks duly quizzical. I fear she might quite reasonably have thought that I was about to suggest they be taken together, but there is good reason not to do so. We will indeed take them separately.
Delegated Legislation
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Representation of the People
That the draft Recall of MPs Act 2015 (Recall Petition) Regulations 2016, which were laid before this House on 15 December 2015, be approved.—(Kris Hopkins.)
Question agreed to.
petition
(8 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Sir Edward Garnier (Harborough) (Con)
I rise to carry out my duty as the Member of Parliament for Harborough and present a petition on behalf of a number of my constituents who disapprove of and object to the negotiations between the European Union and the United States in respect of the Transatlantic Trade and Investment Partnership. The petition states:
The petition of residents of the UK,
Declares that the EU and the US should stop negotiating the Transatlantic Trade and Investment Partnership; further that the Comprehensive Economic Trade Agreement between the EU and Canada should not be ratified; and further that an online petition on this matter was signed by 330 residents of Harborough.
The petitioners therefore request that the House of Commons urges the Government to put pressure on the EU and its Member States to stop negotiations on the Transatlantic Trade and Investment Partnership and not ratify the Comprehensive Economic Trade Agreement.
And the petitioners remain, etc.
[P001670]
Sutton Coldfield Green Belt
(8 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Andrew Mitchell (Sutton Coldfield) (Con)
I am most grateful to you, Mr Speaker, for granting me this debate on a matter of great importance to my constituents. My constituents will note and be honoured that you are in the Chair for this important debate.
The extraordinary and hugely controversial proposal to build 6,000 houses on Royal Sutton Coldfield’s green belt is as obnoxious to my constituents as it is unnecessary in the context of the overall Birmingham development plan. No comprehensive case has been made for this destruction of our green belt, and officials from Birmingham City Council have relied upon inertia and a feeling that resistance is futile as the best means of pursuing these ill-thought-through proposals. Nor, as the Minister will know, is this happening only in Royal Sutton Coldfield. Labour councils are pursuing similar ill-conceived proposals in Conservative constituencies outside Leeds, Manchester and Nottingham as well as outside Birmingham, in my constituency.
The people in Sutton Coldfield have spoken out in their thousands and are confident in the Government’s commitment to true localism, and in the fact that these plans run counter to the national planning policy framework as the Minister for Housing and Planning himself has confirmed in his statements about the green belt.
We have approached our various different community campaigns in Sutton with some confidence and a modest record of success. We fought the Boundary Commission’s plans to dismember our ancient royal town and ultimately secured for Sutton Coldfield one of the very few changes the Boundary Commission made in its national proposals anywhere in the country. We fought to reassert our royal status and thanks to the support of many, and most particularly the Secretary of State for Communities and Local Government, my right hon. Friend the Member for Royal Tunbridge Wells (Mr Clark), we successfully concluded this campaign here in Parliament on 12 June 2014.
Local campaigners fought successfully for our royal town council, which although not yet in perfect form will be set up before May this year. We also fought the disgraceful and destructive Labour Prescott law, which allowed in-filling and back-garden development in our royal town to be treated as brownfield land—something that the coalition Government mercifully overturned as soon as they were elected in 2010, not least following Sutton Coldfield’s trenchant campaign.
I must make it clear at this point, however, that we in Sutton Coldfield are not proponents of nimbyism. We fully understand and actively support the view that more homes must be built if future generations are to enjoy the housing opportunities that our generation has enjoyed. That is why Sutton Coldfield councillors have consistently accepted planning applications that have increased the density of housing in Sutton, most recently in the context of the vexed issue of Brassington Avenue. Indeed, we accept that were Aston Martin to choose to come to Peddimore in my constituency—which we ardently hope it will—development would take place in area D of the green belt under the current plan. We have always said that if area D were needed for economic development that would provide jobs and employment for the future, we would accept it in the greater local interest.
Equally, our green belt in Sutton Coldfield was bequeathed to us by past generations, and we should think with extraordinary care before allowing it to disappear forever under bricks and mortar. Once built on, it can never be restored for future generations. The Minister will also note that the west midlands region has less green belt than any other region of the country.
Mr Mitchell
I happily give way to my hon. Friend and parliamentary neighbour.
Wendy Morton
I am grateful to my right hon. Friend and, indeed, constituency neighbour. Is not the green belt an integral part of the beauty of our neighbouring constituencies and of all that they comprise? I know, and he knows, how much it is valued by our communities.
Mr Mitchell
My hon. Friend is absolutely right.
Throughout our campaign, there have been significant campaigning events and marches over the green belt involving hundreds of my constituents. Indeed, I have addressed meetings attended by more than 1,000 people in my constituency. Royal Sutton’s Conservative councillors have campaigned vigorously against Birmingham’s proposals. I pay particular tribute to Project Fields, led so brilliantly by a local campaigner, Suzanne Webb, and to the three councillors in New Hall whose constituents are most directly affected by these proposals, Councillors Yip, Wood and Barrie. More than 6,000 people from our town have written directly opposing the proposals; all have been ignored. Consultation processes held in holiday periods, and ill-considered comments by Labour councillors that it was all “a done deal” and protest was futile, did nothing to deter the sense of local anger and injustice.
This campaigning of ours is localism writ large. It is the “big society” made flesh. However, my constituents have been wilfully ignored by council officials—ever courteous, of course—as officials have been dispatched to inform us of their political masters’ decisions rather than consulting us, and to advise us that resistance is hopeless as this Labour-inspired juggernaut bears down upon us all in Sutton Coldfield. We have been very constructive in advancing alternative ideas, propositions and compromises, none of which has even received the courtesy of a serious response.
There are huge opportunities to maximise brownfield sites in Birmingham, and examples, too, of how to build new and fulfilling inner-city communities featuring proper infrastructure and opportunity. Such developments could make a significant contribution to Birmingham in its emerging role as a key element of the midlands engine. There are between 40,000 and 50,000 existing brownfield opportunities in Birmingham, but alas, my calls for an independent audit of brownfield land in Birmingham fell on deaf Labour ears. There are also new areas covered by the local enterprise partnership which seek house building as part of their strategy for economic growth and new jobs, but again no comprehensive audit has been carried out. There is an enormous opportunity to build as many as 8,300 homes at Brookhay—more than the entire number with which our green belt in Sutton is threatened.
Most important of all, I have put forward a compromise proposal that there should be a moratorium of between eight and 10 years while the rest of Birmingham City Council’s building plans take shape before there is any question of building on our green belt in Sutton Coldfield. That will allow us to take account of updated figures and up-to-date developments, not least the inward immigration figures for Birmingham, which, each time they are examined, vary by a multiple of the 6,000 homes with which we are threatened. This compromise proposal will allow for further consultation in 2023 based on updated figures for housing needs throughout the wider area. That might arm officials in Birmingham with serious and credible arguments for building on the green belt, but such arguments are wholly absent today.
Royal Sutton Coldfield is an ancient royal town with more than 1,000 proud years of history, and the sheer scale of the proposed destruction of our green belt is not easy to describe.
Julian Knight (Solihull) (Con)
My right hon. Friend is showing himself to be a strong advocate for his constituents and his community. I am disturbed by what I have heard in his speech but I am not surprised. Does he agree that these plans add fuel to the fire in regard to his proposal to break the city of Birmingham up into its constituent parts?
Mr Mitchell
That is perhaps a debate for another day, but I agree with my hon. Friend. He understands why such a proposal could make a considerable contribution to good local governance.
As I was saying, the sheer scale of the proposed destruction of our green belt is not easy to describe. The imposition of a colossal 6,000 homes adjacent to our town would be impossible for us to absorb. It would be a wholly inedible Labour dump of concrete, which would change forever the character of Sutton Coldfield and have huge infrastructure consequences, which have barely received the slightest official attention. For example, our local hospitals, which would undoubtedly be affected by these monstrous proposals, have not even been consulted on the plans. The effects on schools, healthcare and other amenities have hardly been considered, and the huge implications of the strain that would be imposed on our transportation systems, alongside the knock-on effect on other communities, are barely understood, let alone addressed.
The people of Sutton Coldfield have cried out against these proposals with an articulate, unanimous and mighty voice, and the Government have a commitment to hear them. We demand that the Government step in to resist these plans. We offer our compromise proposal for an eight-year moratorium on this aspect of the overall plan, and we do so in a spirit of good will for the sake of our town and of future generations. We fully understand the importance of building more homes for the future, but those homes must be built in the right place. We ask the Minister and the Government to heed our cry today, and we ask the Government to accept the case that we have made and to take the necessary action forthwith.
The Parliamentary Under-Secretary of State for Communities and Local Government (James Wharton)
I congratulate my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) on securing this debate. I also note the presence in the Chamber of my hon. Friends the Members for Solihull (Julian Knight) and for Aldridge-Brownhills (Wendy Morton), which underlines the importance with which this matter is viewed. My right hon. Friend has painted a picture with a clarity that is rarely demonstrated to such effect in debates in this place, in describing his concerns and those of his constituents. The fact that we are having this debate tonight, that he has covered so many topics and that he has spoken so clearly and forcefully on the matter serves to underline the importance of the issue locally and the importance that the Government must attach to it in considering his concerns.
I pay tribute to my right hon. Friend’s strong campaigning for the interests of the royal town of Sutton Coldfield and of his constituents, and I note his clear concern that the nearby green belt should not be lost to housing development unnecessarily or needlessly. May I take this opportunity also to wish success to the new royal town council, due to be established later this year? As we again emphasised in the run-up to last year’s general election, this Government attach great importance to the green belt. It is the way to prevent the uncontrolled sprawl of conurbations, and the unwanted merging of towns and villages proud of their special, separate identity. At the same time, as my right hon. Friend recognises, we need to build new homes as well as making full use of existing dwellings and other buildings suitable for residential use. Our national planning policy framework makes it clear that local authorities should heed its safeguards for the environment. Strong restraints and protections are in place.
About 40% of England is protected against development by designations such as green belt, areas of outstanding natural beauty and national parks. Since 2010, we have made significant progress in speeding up and simplifying the planning system, building the homes this country needs while protecting valued countryside and our historic environment.
We issued additional guidance in 2014 to remind local authorities—and indeed planning inspectors—that, in planning to meet objectively assessed local housing needs, they must still have regard to national policies such as those protecting the green belt. My right hon. Friend will appreciate that Ministers cannot comment on draft local plans that are still before the appointed inspector, but in response to his speech I would make the following general comments.
First, on housing, it is widely accepted that England has built too few homes for many years. The pace of housing development was bureaucratic and slow. This drove up prices and rents, and regional strategies imposed central Government targets. Our reforms are now delivering a substantial increase in housing provision: over 639,000 new homes built since April 2010; over 135,000 housing completions in the year to September 2015; planning permission for 242,000 homes granted in the year to June 2015, up 44% on the previous year; and the widening of permitted development to allow better use of existing buildings, which has allowed thousands of office-to-residential conversions.
The success of our reforms depends on getting up-to-date local plans in place. That includes assembling robust and objective evidence of housing needs in each area. So our framework asks each local authority to prepare a strategic housing market assessment to assess its full housing needs.
Julian Knight
My hon. Friend the Minister is making a powerful case in terms of the success of this Government’s housing policy, but will he also think upon the fact that, as my right hon. Friend the Member for Sutton Coldfield (Mr Mitchell) said, Birmingham council has not even consulted the local hospital trust, which covers hospitals in my constituency as well? That trust, the Heart of England trust, is currently suffering severe financial difficulties, and this measure may well add to them. Surely that shows that the local plan was inept?
James Wharton
My hon. Friend tempts me to repeat what I said earlier about not wanting to comment on individual plans, but there is a process through which they need to be considered. His views are very important as part of that process. He is articulating them clearly and I am sure they will be heard not just by me and all of us present in the Chamber for this debate, but much wider than that.
Mr Mitchell
Of course the Minister cannot comment on the substance of what our hon. Friend has said, but I am sure he will agree that, were it to be the case that the hospitals, already very challenged, had not even been consulted by the authority, that would indeed be very remiss and would suggest that the full duty had not been exercised by the local authority and planning inspector in their researches.
James Wharton
Articulate and nimble in his use of language as my right hon. Friend is, he tempts me to go further than I am going to on the specifics, but he makes a very important point with which I can agree in the general. Where a local body charged with delivering a public service, particularly one as important as health, has a strong view, that view should of course be made known and be part of any consultation and consideration, and if it is a view that has a particular planning impact, it should be considered as part of that process. My right hon. Friend and my hon. Friend the Member for Solihull have made their concerns in that area very clear and I will take that away from this debate, along with much else that has been said.
We expect local authorities to prepare strategic housing land availability assessments. In so doing, they have to take account of any planning constraints that indicate that development should be restricted and which may restrain the ability of an authority to meet its need. One of those constraints is the green belt.
The Government continue to attach great importance to green-belt land, which covers 13% of England—a level that has remained constant for many years now. My hon. Friend the Member for Aldridge-Brownhills eloquently set out the importance that her constituents attach to green-belt land, the difference that it makes to communities and how it makes the constituencies of my right hon. and hon. Friends such special places. I welcome her helpful contribution.
Our national planning policy framework is clear that a green-belt boundary can be altered only in exceptional circumstances after local consultation, using the local plan process. That should concentrate the minds of local authorities on ensuring that any brownfield land is put to good use first.
My right hon. Friend is absolutely right to talk about the unidentified number of brownfield sites that are likely to be found in Birmingham. From the outset, the NPPF has been clear that local authorities should encourage redevelopment on brownfield land. Our supporting guidance also advises that local plan policies should reflect the desirability of reusing brownfield land. If desired locally, a local authority can propose for adoption in the local plan its own policy to increase the take-up and prioritisation of brownfield sites. Under our plan-led system, that could be very influential locally.
Following the general election, we made the major commitment to ensure that 90% of brownfield land suitable for housing will have planning permissions for new homes in place by 2020. My right hon. Friend is right to underline the need to find out where any suitable redevelopment sites are and to study the reasons if a potentially useful site is not currently available. The Minister for Housing and Planning is keen to work with areas to develop those too. Brownfield sites differ greatly and local authorities are in a good place to assess their suitability, viability and availability, and that is something that they should do. That is why we are introducing the requirement for local authorities to compile registers of suitable, viable and available brownfield land.
This Government, while stressing the major contribution that brownfield sites can make, are clear about the priority: getting a local plan in place. Indeed, in areas where no local plan has been produced by early 2017, we have said that we will intervene to arrange for the plan to be written, in consultation with local people. That drive to complete the modernisation of the plan-led system, with all its implications for securing sustainable growth and meeting the need for homes, is a top-level commitment, which was reaffirmed when we were re-elected.
Birmingham began to review its 2005 plan in 2007, and recommenced after we abolished the top-down regional housing targets, and brought in the streamlined locally led NPPF. The current draft plan was submitted in July 2014. I note my right hon. Friend’s comments and concerns and his hope that the plan can be stopped. The Secretary of State though found it appropriate to appoint an independent person to examine Birmingham’s plan on his behalf, with power to call for more or better evidence if necessary, and to delay a decision if that proved essential.
Inspectors have a vital role in scrutinising plans impartially and publicly to ensure that they are legally compliant and sound. Only in very rare circumstances will Ministers intervene in the process. A plan will be found sound only if it is properly prepared, justified, effective and consistent with national policy in the framework. If the plan contains proposals to adjust a green-belt boundary—as here—it must demonstrate exceptional circumstances, and I hope that this debate will make it clear to Birmingham that local people want to see brownfield first, as national policy supports.
Assuming that a local plan will eventually be adopted, in whatever form it takes, may I remind hon. Members and their constituents that that does not give anyone planning permission? The plan reflects the current best estimate of how much development needs to take place, if a particular level of need is to be met. Moreover, the people of Sutton Coldfield would still have their statutory opportunities to comment and criticise whenever a planning application is made. Even if land is allocated in a local plan, planning applications can still be refused permission in response to evidenced and well-argued objections,
I can tell my right hon. Friend that the Government have heard his case loud and clear, and I would expect others with an interest in this process to have heard the comments that I and my hon. and right hon. Friends have made this evening loud and clear as well. I recognise the importance of this matter, the quality of the well-considered contributions that have been made, and I hope that, at the end of this process, we will reach a place that pleases rather more people than appears to be the case at present.
Question put and agreed to.
Draft Pensions Act 2014 (Consequential and Supplementary Amendments) Order 2016
Draft State Pension and Occupational Pension Schemes (Miscellaneous Amendments) Regulations 2016
(8 years, 9 months ago)
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The Committee divided: - Ayes: 9 / Noes: 2 - Question accordingly agreed to.
The Chair
I will call the Minister to move the first motion and speak to both the instruments. At the end of the debate, I will put the Question on the first motion, then ask the Minister to move the remaining motion formally.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
I beg to move,
That the Committee has considered the draft Pensions Act 2014 (Consequential and Supplementary Amendments) Order 2016.
The Chair
With this it will be convenient to consider the draft State Pension and Occupational Pension Schemes (Miscellaneous Amendments) Regulations 2016.
Mr Vara
May I say what a pleasure it is to serve under your chairmanship, Ms Buck? May I also extend warm congratulations to the hon. Member for Ashton-under-Lyne on her appointment? I very much look forward to working with her during the months to come.
As both the regulations and the order deal with the new state pension, it is sensible to debate them together. I am satisfied that these instruments are compatible with the European convention on human rights. The regulations deal with four topics. The first is the calculation of increments where a person has deferred their new state pension. The second is transitional arrangements for inheriting graduated retirement benefit. The third is the availability of upratings on state pension where a pensioner is living overseas. And lastly the regulations make a technical amendment to regulations relating to contracted-out occupational pension schemes.
As regards deferral of the new state pension, this provision deals with calculating the weekly increase that a person who defers their new state pension will receive when they finally claim. Specifically, it sets out how that calculation is to be performed when there is a change in the weekly rate during the deferral period for a reason other than uprating—for example, where a person is widowed and becomes entitled to an inherited amount under the transitional arrangements.
The provisions introduced by regulation 4 enable a person in the new state pension system to inherit graduated retirement benefit where their deceased spouse or civil partner is in the old state pension system—that is, they either reached state pension age or died before 6 April 2016. The survivor will be able to inherit half the deceased’s graduated retirement benefit—the same as they would have inherited under the pre-2016 rules. This protection of the old-rules inheritance will apply provided that the same conditions are met as would have applied in the old system and provided that the marriage or civil partnership existed before 6 April 2016. These arrangements mirror the transitional arrangements for inheriting additional state pension set out in the Pensions Act 2014. As graduated retirement benefit was the original earnings-related state pension, the forerunner of SERPS—the state earnings-related pension scheme—it makes sense to treat it in the same way.
The provisions introduced by regulation 4 enable the survivor of someone who reached state pension age before 6 April 2016 and deferred their old state pension to inherit a weekly pension increase or, if applicable, a lump sum payment based on the deferred graduated retirement benefit. Again, there are equivalent provisions in the Act that protect the existing inheritance arrangements for the survivors of people who deferred an old state pension.
Regulation 4 inserts a new part 7 into the State Pension Regulations 2015, providing for restrictions on the uprating of the new state pension for persons living overseas. As hon. Members will be aware, the state pension is payable worldwide, but upratings for people who are not ordinarily resident in Great Britain are generally restricted to people living in the European economic area, Switzerland, Gibraltar or countries with which there is a reciprocal agreement that provides for uprating. That has been the policy of successive Governments for the past 70 years, and these provisions extend the same policy to the uprating of the new state pension. We are, however, introducing a change in the way in which we treat deferral in overseas cases.
Under the existing arrangements, when a person who has deferred their state pension while resident in a country where upratings do not apply finally claims, they will have both the amount of their weekly pension and their deferral benefit based on the current rate of state pension in force. That applies even though pension upratings would not have been received if they had not deferred their pension. The regulations remove that anomaly for those in the new scheme so that we treat people who defer their pension consistently, regardless of where they live.
Regulation 6 addresses a procedural error in an earlier set of regulations, the Occupational Pension Schemes (Schemes that were Contracted-out) Regulations 2015, which were laid before the House on 16 July 2015. In brief, those regulations were made using the negative procedure, but they contained two provisions that should have been subject to the affirmative procedure. We revoked the statutory instrument and remade it on 16 September, minus the affirmative provisions, which are now made by regulation 6. The substantive provision is the insertion of new regulation 27A into the remade regulations. That simply carries forward an existing provision that sets out requirements relating to payment of survivor benefits where a pension scheme has converted guaranteed minimum pension liabilities into ordinary scheme benefits.
The second of the two statutory instruments that we are considering is the draft Pensions Act 2014 (Consequential and Supplementary Amendments) Order 2016. As the title indicates, the amendments are essentially technical in nature, rather than implementing substantive policy measures. I commend the regulations and the order to the Committee.
Angela Rayner (Ashton-under-Lyne) (Lab)
It is a pleasure, Ms Buck, to serve under your chairmanship in my debut in a Delegated Legislation Committee. I thank you for your kindness in allowing me to sit down throughout the proceedings. As Members will have noticed, I am not quite operating at full capacity. I had an accident over the weekend, in which I managed to fracture my elbow and damage my ribs. I am sure that that will not stop me carrying out my duty as a member of the Opposition to scrutinise the measures before us.
Angela Rayner
Absolutely—the Opposition have some fantastic Whips. As the Minister outlined, in the Pensions Act 2014, the coalition Government legislated to introduce a new state pension for persons reaching state pension age on or after 6 April this year. We are considering regulations that will implement several key features of that settlement. Several aspects of the new legislation have significant implications for future pensioners, and I will touch on some of them in my contribution.
Under the new scheme, the Government intention is that individuals who qualify for the new state pension will receive it on the basis of their contribution record. The rule that allows an individual, under the current state pension, to derive entitlement based on the national insurance record of a former spouse or civil partner will end, with some transitional protection. Although the changes are likely to affect a relatively small number of people, their impact on those who are affected may be large. Perhaps the Minister will confirm that in an extreme scenario, a woman who has no entitlement in her own right and is widowed could end up with no state pension, rather than the £115.95 she could expect to receive under the current system.
In addition to the amendments on inherited graduated retirement benefit, there are new features that will affect pensioners overseas. In the new pension scheme, as the Minister outlined, state pensions will be uprated in line with earnings only if the recipient is resident in an EEA country or in a country with which the UK has a reciprocal agreement. Furthermore, many people who receive the state pension and who live abroad may have been impacted by the Government’s temperature test for the winter fuel allowance, which was introduced for the first time this winter. The changes could result in an overlap between those who become ineligible for winter fuel allowance and those whose pensions have not been uprated.
State pension deferral is of particular significance. The option to defer one’s pension in order to receive a larger amount has been part of the system since 1948. Under the new state pension, the terms of such deferral will change, resulting in a less generous return. Given that the bulk of the measures before us today are technical, I hope not to divide the Committee, but there are a number of comments that I wish to make and questions that I hope that the Minister can answer. Let me start by making the general point that the Government’s track record in communicating pension changes falls well short of what the public would hope and expect. Recent analysis that the Department of Work and Pensions published on the new state pension makes it clear that millions of people will receive a significantly lower state pension in future. Some will be more than £500 a year worse off. The Government should be doing far more to inform those affected, especially people who are nearing retirement and therefore have the least notice or time to consider the impact.
The same is true for the regulations we are considering, especially the changes to derived entitlement and inheritance rules. The regulations apply to the new state pension that will be introduced in April, so they have come before us are very late in the day, given that they arise from primary legislation that the House agreed in 2014. Perhaps the Minister can tell us why the Government have left it until now to table these measures.
In any event, Age UK, among others, has called on the Government to do far more to contact people who are likely to be affected. In its evidence to the inquiry by the Select Committee on Work and Pensions on the state pension, it said:
“There are DWP materials highlighting credits and ways to increase the State Pension, but people need to know they may be affected. We believe the DWP should contact people with gaps in their record individually to highlight the changes and explain options…In the most extreme situation, a woman with no entitlement in her own right, who is widowed, could end up with no State Pension compared to an expected £115.95 under the current system. Most will have some contributions in their own right so will not lose this much, but they could still receive significantly less than they are expecting. Couples in this situation need to be made aware of the changes as they may be able to review their retirement plans.”
When asked how the Department was planning to communicate with those affected, the Minister for Pensions replied that we cannot foresee who is going to become widowed in future. I think it is fair to say that that is not exactly a helpful response. I would be grateful if the Under-Secretary provided clarity on what action the Government are taking to communicate these changes, in particular to those with gaps in their record who are likely to be directly affected. I believe there is a pool of people they can inform who could potentially be widowed in future.
Will the Minister also give us an estimate of who will be covered by the transitional protection? How many people does he estimate will lose out as a result of the changes in future years? In the context of those facts, what would be the cost of directly contacting individuals with gaps in their national insurance record? Does the Minister think that that cost is prohibitively expensive? While these changes are likely to affect a relatively small number of people, the impacts on those affected may be very large—the Minister may wish to expand on that, based on official estimates. That is one reason why the Select Committee, in considering the draft legislation, recommended that the Government go further in finding a solution for those women who might be seriously affected.
I will not repeat the debates that were had in the House, but if the Minister can give those women any further reassurance on the terms of transitional protection, that would be welcome. In any event, it is crucial that the Government take the issue of communication far more seriously and learn the lessons from previous instances when they failed to communicate changes effectively: most notably, of course, there is a group of women born in the 1950s who were not given proper notification of acceleration in their state pension age.
On that issue, will the Minister inform us whether the Department has undertaken any further work on transitional protection for the group of women most affected? Will he commit to provide the House with details of any modelling the Government have used when looking at different options for transitional protection; for example, for specific cohorts, such as those born between 6 April and 5 December 1953, who will be particularly affected by the acceleration? He will note that I have tabled questions on that subject, but given Ministers’ stated goal of being the most transparent Government ever, perhaps he can commit to answering them fully and publishing the relevant material before Monday’s debate on the issue.
Turning to another aspect of the regulations, many people who live abroad and receive a state pension may have been impacted by the Government’s temperature test for winter fuel allowance, which was introduced for the first time this winter, as I mentioned. Will the Minister tell the Committee how many people became ineligible for winter fuel allowance as a result of these tests? What is the overlap between those who became ineligible for winter fuel allowance and those whose pensions have not been uprated?
As well as freezing overseas pensions, the Government are freezing the savings credit element of the pension credit, as announced in the autumn statement. Will the Minister confirm that some of Britain’s poorest pensioners will be worse off as a result of this measure, and will he commit to publishing a more detailed impact assessment than has been produced to date? Exactly how many people will be worse off, and by how much? Finally, on the issue of state pension deferral, how much do the Government expect to save from the changes to the deferral? How many people have chosen to defer their state pension in this financial year, and what are the Government doing to ensure that those who defer are made aware of these changes to the deferral provisions under single tier pensions? I hope that we have some substantive answers on those points and in that spirit I look forward to the Minister’s response.
Steve McCabe (Birmingham, Selly Oak) (Lab)
It is a pleasure, Ms Buck, to serve under your chairmanship. May I clarify a couple of points with the Minster? First, I notice that the explanatory notes say that we are doing some of this because a few months ago, in July, the Government got it wrong. Is the Minister absolutely confident that he has got it right on this occasion, at least in terms of what he is trying to do? If he can offer any explanation about what he got wrong back in July, people would be interested to know.
Secondly, there are widows who could lose out under these arrangements and end up either with no state pension or a small amount of money. Will the Minister say more about how many people we are talking about and what estimates he has made? It would be a terrible pity to see this go through and find out afterwards that the Government were not sure about their figures.
On the question of divorcees, what is the rationale for saying that divorced women can no longer rely on their former spouse’s national insurance record? That is quite a big change, which could discriminate against a number of women. Will the Minister offer advice about how many people we are talking about and what led him to that conclusion?
Finally, I understand that under these transitional arrangements there will be some protection for spouses and civil partners, but not for people who cohabit. Given that, under all the other social security legislation, if people are cohabiting that counts towards their entitlement, why has the Minister decided to pick on that particular group in relation to pensions? I am not sure why we are not opposing this, but before we have a vote it would be helpful to know how many people we are talking about. This seems to be a whole series of regulations. I did not get a single figure from the Minister during his two-minute explanation to the Committee on how many people are affected by what he is planning to get through today.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
It is a pleasure, Ms Buck, to serve under your chairmanship. The changes to the rules on derived and inherited rights are a complex part of the reform package. In its evidence to the inquiry by the Work and Pensions Committee aimed at understanding the state pension, Age UK called on the Government to ensure that those who could be worse off due to the reforms are a priority for communications. As been referred to, communications have been a big issue in many pension matters in the past few years. A priority for communications should be to reach groups who may have planned their retirement income based on the current system but could be worse off due to the reforms. Particularly for women, the loss of derived and inherited rights to the basic pension could reduce entitlement. In the most extreme situation, a woman who is widowed with no entitlement in her own right could end up with no state pension, compared with an expected £115.95 under the current system.
Most women will have made some contributions in their own right, so they will not lose that much, but they could still receive significantly less than they expected. Couples in that situation need to be made aware of the changes so they can review their retirement plans. The Department for Work and Pensions said that as part of its communication activity, it is targeting specific groups such as the self-employed and those with low qualifying years, who may be at risk of failing the minimum qualifying period, as well as those impacted by the changes to the derived entitlement and inheritance rules. The experience of communication regarding the increase in the state pension age suggests that it is reasonable to question whether the Department should not go further and, as recommended by Age UK, directly contact individuals with gaps in their national insurance record.
Like the Labour spokesperson, we remain concerned over the whole WASPI—women against state pensions inequality—issue. There was a debate a number of weeks ago in the Chamber, when the House divided and expressed its opinion clearly by 158 votes to zero. What is parliamentary democracy if the Government feel they can ignore the will of the House? Finally, on frozen pensions, we remain concerned that those who have an entitlement to a UK pension are being denied their full rights. If we do not get sufficient answers this afternoon, the Scottish National party will oppose these measures.
Mr Vara
My thanks to the three contributors to the debate. I will try to address as many of their questions as possible. I will start by clarifying a point in the argument about women who might have no entitlement to pension. Under the transitional arrangements, a woman may still inherit a proportion of her late spouse’s additional state pension or half of his protected payment, depending on when he reached state pension age.
I was asked why my Department has left it until now to introduce these measures. I hope the Committee will appreciate that time is needed to develop legislation underpinning the new state pension, and to secure parliamentary time for debating and making the necessary legislation. It has been suggested that Government should do more to inform those affected by the changes to entitlement. The Government are always looking for the channels and media that work best. People sometimes assume that direct mail is the right approach, but experience has shown that is not necessarily the case. We have undertaken direct mail exercises in the past, and evidence suggests that other communication channels can be as or more effective.
My Department conducted a test in 2014 issuing 6,000 personalised letters with the aim of encouraging people to ask for a state pension statement, and only 79 requests for a statement resulted from that mailshot.
Steve McCabe
I understood that the Department’s justification for not notifying people was that it had been given some advice around data protection. In those circumstances, what are the other communication methods that the Minister referred to?
Mr Vara
I am sorry to state the obvious but, other than writing letters, there are social media, emails, articles in newspapers and other publications. There are a variety; I list only some of them. Sadly, the hon. Gentleman does not seem to have moved into the 21st century and still seems to think that everybody should get a letter through their letterbox. Times have moved on and he needs to move with them.
Steve McCabe
The point, which the Minister may have missed, is that if his Department has genuinely been given information about data protection and that has limited the number of letters it can send to people, what information has he had about emails and social media? He can stand there and pretend he is in the 21st century, but how many emails and other examples of social media has he used with individual people and what data-protection advice did he get before he did so?
Mr Vara
I do not think anyone in the Committee would expect me to give precise numbers about how many emails have been sent out by a specific Department. If I may remind the hon. Gentleman, his original question was what are the forms of communication. That is the question I answered. If he now wishes to change the question and say he wants specific numbers, because he is not happy with the answer I gave, I think the Committee will be sympathetic to the response that I cannot give the precise number of emails that have been sent out.
Ian Blackford
This is a massively important point. Anyone who is involved in an occupational pension scheme or any other type of scheme, will be used to getting annual letters telling them exactly what their entitlements are. Given the importance of this, the Government must communicate with all potential pensioners in a fair and reasonable manner. That means that the DWP has a duty to inform such people by letter—that would be the established practice. I cannot for the life of me understand why the Minister is hiding behind data protection. The Government have a duty to make sure that people prepare adequately for their pension. The Government must take that responsibility and communicate effectively.
Mrs Maria Miller (Basingstoke) (Con)
I thank the Minister for giving way and for being generous with his time. Can he inform the Committee of historic response rates to the sort of letter that he is talking about? Is it equivalent in some way? What advice has he been given on how to improve response rates through the use of new media, such as the social media to which he referred?
Mr Vara
I do not have the precise details to hand, but I can say that it is an accepted fact that many people now use the new form—the technological advances of the 21st century—for communication purposes. We fought a general election less than a year ago in which the modern form of communication was used by politicians across the political divide. If it were the case that that was ineffective, and people were not taking note of that, we as politicians who aspire to lead and represent our constituents would probably have resorted to the old system. The fact is that the new, modern communication does work and that is why every single person in this Committee resorts to it.
As I said earlier, when DWP conducted a test in 2014 issuing 6,000 personalised letters with the aim of encouraging people to ask for a state pension statement, only 79 requests for a statement resulted from that mailshot. I think that answers the questions more than anything else.
Angela Rayner
May I try to help the Minister? In my contribution, I was referring to the fact that we have to learn the lessons from the past. Since becoming the shadow Pensions Minister, it is clear to me—and my mailbox makes it clear—without going into the issues of the WASPI campaign and women in the 1950s, that people do not feel that they are being communicated to in the most effective way. I urge the Minister to take all opportunities—written, social media, magazines, telephone—to do so. Whatever way he does it, it needs to be done, because of the implications for some of these people. It is not acceptable for the Minister to say, “Well, it may not affect them because they may not be a widower”. Something needs to be done to improve communication to people who are affected by these measures.
Mr Vara
I take on board what the shadow Minister says. Following the Pensions Act 2011—I know we are not dealing specifically with that issue—millions of people did get a letter, and the letters were sent out according to the details that were held by Her Majesty’s Courts and Tribunals Service.
Sammy Wilson (East Antrim) (DUP)
First, will the Minister accept that using social media for the target group that we are talking about is probably one of the most inappropriate ways, since the people coming up to retirement age who require this information are the least likely to use it?
Secondly, rather than put the onus on the people who might need information about their pension, would he accept that perhaps the information should be given to them? Surely DWP knows where there are gaps and where people are likely to be disadvantaged by the changes. Should they not be notified by the Department, rather than the Department requesting them to make contact?
Mr Vara
There is no one specific form of communication that my Department will be looking at. We recognise the various forms of communication that exist in the modern world and we will seek to use some of those as we feel they will best target the relevant people. I take on board what the hon. Gentleman says, but it is important to recognise that there is no single form of communication that we use. We recognise that in the modern world there are various forms and communicate accordingly.
Ian Blackford
This is a massively important point. We all understand that social media is a wonderful tool—the Minister has referred to what was done in the election campaign and so on—but we are talking about the fundamental right that people have to a pension. People have paid national insurance; they deserve to be told by DWP what they are going to get. That is not a message to be delivered by social media, it is a message that should be delivered by letter. That is the right thing to do, and the Government must do it.
Mr Vara
May I put on record, since we are talking about how my Department ensures that people know about the changes, as well as all the items I have just mentioned, the “Know the Facts” communication campaign focused on building awareness for those aged 55-plus, who will be the first to reach state pension age after the new state pension is introduced? That campaign encouraged people to get a personalised statement. Between September 2014 and October 2015, nearly half a million statements were issued. In the current phase of the campaign we are looking at specific groups who may need more detailed information, including people who have been contracted out, have been self-employed, may have a low number of qualifying years, or may be affected by changes to the rules on deriving an inherited state pension.
A range of products is available to help people understand the impact of the changes. These include factsheets, infographics, videos, calculators and content for PensionTube, a YouTube channel dedicated to pensions. The campaign advertising also encourages people to engage with material online, and there is a range of supporting materials on www.gov.uk. We have in place extensive stakeholder communications with third-party organisations and have held stakeholder forums, produced a toolkit for stakeholders and continue to issue weekly stakeholder bulletins. We do communicate with the relevant people outside, we will continue to do so, and we will continue to make sure that people are appreciative of the message. I commend the regulations and the order to the Committee.
Question put.
Draft Producer Responsibility Obligations (Packaging Waste) (Miscellaneous Amendments) Regulations 2016
(8 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rory Stewart)
I beg to move,
That the Committee has considered the draft Producer Responsibility Obligations (Packaging Waste) (Miscellaneous Amendments) Regulations 2016.
It is a great honour to serve under your chairmanship, Mr Streeter. I will provide a quick overview of the regulations. Packaging really matters. We produce nearly 10 million tonnes of packaging every year, and Britain is now doing quite well at recycling packaging. We were down at about the 20% level, but we drove that up to 64.6% in 2013, which is good. To put that in context, household recycling rates are still hovering around the low 40% range.
While recycling is important, it is also important to understand that packaging does some good. For example, it extends the life of a cucumber by about 11 days and doubles the life of meat. Resealable packages prevent stuff from drying out. I saw the importance of packaging directly in Afghanistan, which has amazing apricot production, but is completely unable to access international markets because it has no packaging industry that is able to develop safe packages so that apricots are not damaged during transport.
Although packaging is intrinsically important—it is good for preserving food and for preventing waste—the recycling of packaging also has incredible potential for the British economy. Recycled plastic, paper, glass and metal from packaging can be used for everything from chairs to car parts and construction materials. Glass, above all, is an amazing and almost infinitely recyclable material. It is difficult to get exact costs for the financial damage of packaging waste, but it is worth bearing in mind that councils spend nearly £798 million a year cleaning up litter, about 30% of which is packaging in some form or another.
The regulations will do four things. First, they will remove the requirement to produce operational plans. Secondly, they will change the approving body for packaging waste. Thirdly, they will change sign-off arrangements and, finally, they will create a one-stop shop. I will go through those changes briefly.
When packaging recovery notes were set up in the early 2000s, a requirement to produce elaborate operational plans was imposed on every company. Over time, we discovered that there were some good things about those operational plans and some things that were perhaps less good. We aim to keep the good things by retaining some conditions, but we are getting rid of those things that, frankly, turned out to be largely bureaucracy and paperwork.
Vast operational plans have been produced, and the first problem with them, of course, was that as the PRN system is a market-based system in which people trade their packaging waste, the operational plan system was more of a central planning system in which companies were expected to predict how much plastic and aluminium they would produce by the end of the year. That was a bit foolish, because they were trading waste throughout the year, so the actual amount of waste was determined by market mechanisms, not the plan produced at the beginning of the year.
We also discovered through extensive surveys conducted over nearly 15 years that, unfortunately, people were not really reading the operational plans and the relevant agencies were not making full use of them—they were very thick documents—so we have gone for a simplified system. The conditions on which we are going to insist are those that really matter to most plans. The first condition is making sure that information is gathered accurately. The second is making sure that, when PRNs are traded, that happens in a way that does not hinder the operation of the market. It is possible at the moment for a company, if it is feeling nervous, to buy a huge number of PRNs and effectively to distort the market, so we are trying to ensure that the compliance conditions do not allow that. The final condition is making sure that companies have the financial resources to have staff on their team with the relevant expertise to work out how to deal with packaging. Those are the three key conditions.
Secondly, we are changing the approving body. At the moment, the approving body tends to be the Department for Environment, Food and Rural Affairs, or the equivalent in the devolved Administrations. We are passing that responsibility down to the agencies. In England, the responsibility will transfer from DEFRA to the Environment Agency; in Scotland, it will transfer to the Scottish Environment Protection Agency; and in Wales, it will transfer to Natural Resources Wales. A similar process will occur within the Northern Ireland Administration.
Thirdly, we are changing the sign-off arrangements. At the moment, we are in the slightly absurd position that the chief executive of Tesco him or herself must sign off on the PRNs every year. Such businesses have immense packaging teams involving experts on packaging and recycling, so we will allow them to delegate the authority to sign off away from the chief executive’s desk and down to the part of the team that actually deals with packaging from day to day.
Finally, we are setting up a one-stop shop so that businesses operating in Wales, Scotland or Northern Ireland will not have to jump through two hoops to get their PRNs signed off, for example by Natural Resources Wales, and then by the Environment Agency. A sign-off by Natural Resources Wales will be sufficient to qualify for trading across the rest of the United Kingdom.
The Government consider that the changes will reduce costs on businesses—not by an enormous amount, but significantly. Over a 10-year period, we think that they will save about £20 million. Above all, this is not just about financial savings; it is pragmatic and common sense. The measure brings a greater focus, and makes the whole process less burdensome and more efficient to ensure that we achieve what I think all of us on both sides of the House want: an increase in the quality and quantity of our recycling of packaging. I commend the statutory instrument to the Committee.
Alex Cunningham (Stockton North) (Lab)
It is a pleasure to serve under your chairmanship for the very first time, Mr Streeter, and to have the opportunity to share my thoughts on the regulations, which appear to lack any element of controversy, although that, of course, does not minimise their significance. The Minister spoke of packaging as important for both its planned use and its recycling value, but the management and disposal of packaging waste and batteries can result, among other things, in the production of greenhouse gases and, if not handled correctly and effectively, further environmental consequences through the impact of landfill.
I agree that those greater considerations are often not at the forefront of the minds of consumers or indeed producers—or at least not as often as they should be, especially if we are to meet legally binding reuse and recycling targets of 65% by 2025 and 75% by 2030. EU analysis of recent trends suggests that further progress on resource efficiency is possible and that that might bring major economic, environmental and social benefits, which the Minister talked about. Stronger measures to close the loop and create a circular economy by transforming waste into a resource are an essential part of the necessary increases in resource efficiency.
As the Government’s impact assessment notes, without intervention, recycling levels would be insufficient. Placing some—only some—of the cost burden in the hands of packaging handlers and producers, as well as battery producers, helps to focus their minds on cost, and that is mitigating some of the environmental impacts to bring about a more efficient outcome. That all builds into the broader picture of employing economic incentives to entice producers into putting greener products on the market while supporting recovery and recycling schemes for their packaging, batteries and so on.
It is worth noting, however, that the stated aim of the regulations is to reduce the burden of producer responsibility obligations on businesses. The Government’s impact assessment notes that the current regime imposes costs on businesses that could be reduced without affecting its overall impact. I am clear that any reduction in burden for businesses must be achieved by improving the effectiveness of the schemes and must not come at the expense of the success of the new regulations. With that in mind, I welcome the Minister’s outlining of what steps the Government are taking to ensure that the removal of the requirement for operational plans to be submitted—a standard indication of best practice in many sectors—neither weakens the regulator’s role in ensuring that producers meet their obligations, nor undermines its role in monitoring performance.
Operational plans have traditionally been employed as a mechanism to ensure that schemes consider how they will meet a set of identified obligations and ultimately provide a framework within which regulators can monitor performance. Will the Minister therefore explain in a little more detail how regulators will be expected to monitor performance in the absence of operational plans? Will he also provide further details on future reporting standards in the absence of operational plans, such as the need for accurate data reporting and transparency? I know that he alluded to that briefly in his speech.
We are aware of the huge budget cuts suffered by the Department and the additional strain that the recent disastrous floods have placed on resources, but there is a cost associated with the changes made by the regulations. Will the Minister explain what additional funding the Environment Agency, the Scottish Environment Protection Agency and National Resources Wales will receive when they become the appropriate authorities responsible for granting approval for such schemes, rather than the Secretary of State? Let us not forget that budgets are already stretched across the Department and its various agencies, and that there are now hundreds of people fewer to do the work than before, which requires more from those people who remain in post.
None the less, the streamlining of the approval process across Great Britain and Northern Ireland is to be welcomed, especially because companies now will not have to apply for approval in both territories. However, easing the regulatory burden in this manner still causes potential headaches. With the creation of several appropriate authorities, the need for cross-border consistency is paramount if the regulations are to be successful in balancing the cutting of red tape against achieving improved outcomes. Will the Minister give us further particulars of the steps that are being taken to ensure that we achieve that consistency?
To refer back to the Government’s impact assessment again, doing away with the requirement for operational plans in the packaging sector is estimated to produce a saving of some £5 million over 10 years. The saving in the batteries industry alone, once requirements for operational plans and annual approval are removed, is put at around £300,000 over the same period. These are not insignificant savings and they are to be welcomed if they can drive higher rates of recycling and lower levels of waste while encouraging more companies to take a socially responsible approach. However, we must ensure that the consequences of any such actions, intended or otherwise, are properly considered before a decision is made so that we prevent progress towards meeting targets from being undermined. I look forward to hearing the Minister’s response.
Mr Geoffrey Robinson (Coventry North West) (Lab)
It is a pleasure to serve under your chairmanship, Mr Streeter. May I compliment the Minister on an admirably economical exposition of his proposals today and, more specifically, on disregarding whatever official brief had been provided for him, which made his speech more intelligible and enjoyable?
I will not detain the Committee for long, but with all such reorganisations, there is a danger that they become a new form of delay, or a new bureaucracy to replace the old. The hon. Gentleman is a relatively new Minister, but he has already established something of a reputation and he will not want that to be marred in any way.
My hon. Friend the Member for Stockton North talked about the savings to be made and the greater efficiency of the accelerated process, which we are all aiming at. We will be able to use the overall savings as a way by which to monitor the reorganisation, but could we also have some more specific figures—just in very simple terms—about the effectiveness or otherwise of the reorganisation that the Minister is about to carry through? Often we are plunged into reorganisations that are ill thought through and that get us in a bigger mess than what we set out to solve in the first place.
I thought that the Minister seemed a little complacent about the extent of our success at recycling waste. I think that our recycling levels are still notoriously bad compared with some of our better European neighbours, although I would love the Minister to correct me on that, if he can do so. I do not think that we should be complacent in any way, but if he could tell us how far we are behind the best exemplars in this particular sphere, I am sure that the Committee would be interested.
Rory Stewart
Let me deal briefly with the two challenges that have been set. First, I take on board the points about examining the effectiveness of the compliance and comparing European rates with the British one. To take that last point first, it is absolutely true that we have a lot to learn from other countries, and not only outside the United Kingdom, but even within the United Kingdom. Wales, for example, is doing interesting stuff on getting a single, unified recycling system across the nation, and that is something that we would like to see, particularly for household waste. It is also true that the United Kingdom’s approach to packaging waste is very different from that in Belgium or Germany. We have created a market, effectively by trying to incentivise companies such as Tesco to reduce their packaging waste through attaching a cost to that waste and then allowing them to decide how to act, whereas some continental European countries simply take a much stronger legislative approach that involves compulsion.
That said, we are about mid-table at the moment, and our rate of 64.5% is pretty good in European terms. Germany and France have higher rates, but they have much more expensive systems. It is difficult to compare apples and oranges, as their systems are compulsory, rather than market-based, and they are achieving their rates through huge public expenditure that we do not incur. However, we are considering the PRN system carefully, and we will be taking the matter forward through the circular economy discussions in Europe to find out whether there are things that we can learn. Our gut instinct will probably be to encourage other European countries to follow our lead, but I agree that we in Britain should never be too complacent, and we have a lot to learn from other people.
Mr Robinson
Although those countries have more expensive systems, the point is the net effect. Is that paid for by the higher rates that they achieve? How do the Scandinavian countries fare, particularly Denmark and Sweden? There seems to be a little complacency about how the artificial market that we have constructed is working.
Rory Stewart
That is a deep and important question. It goes back all the way to the design of the scheme in the mid-1990s, when the decision was made to create a market-based system rather than a compulsory one. Our view is that we have the right balance at the moment between recycling rates and costs. It would put a huge burden on businesses and the public purse if we were to adopt a compulsory system, but I would be comfortable about sitting down with the hon. Gentleman outside this room and having a more fundamental discussion about the market-based system.
We are, however, here to talk about not the market-based system itself, but issues such as operational plans and how they are implemented. Moving on to the challenges rightly made by the hon. Member for Stockton North, I welcome the fact that he is taking on board three out of four of the changes: having a simple, single port of call; ensuring that the system is delegated down to the appropriate level within the company; and ensuring that the change of approving body goes through.
On the removal of operational plans, the central question is what we are trying to achieve. Obviously, we are trying to drive up our packaging recycling rates. We have moved away from an operational plan system to a compliance system because, unfortunately, although the operational plans sounded good in theory, we discovered that people were not reading or updating them, and they were not a very useful tool for monitoring how people did packaging recycling. Ultimately, 80% of the operational plans did not represent useful information for achieving what we want—to increase the packaging recycling rate.
We believe that moving to a compliance system will allow the Environment Agency to take a more risk-based approach and will, above all, allow it to use more intelligently the market system that I have just been debating with the hon. Member for Coventry North West so that it can examine the data provided and the number of PRNs being traded, and ensure that we are achieving targets as they are set. We have heard a lot about that, for example in relation to aluminium this year. We do not believe that the operational plans are the correct way to achieve that.
That brings me to the challenge from the hon. Member for Coventry North West about how we will check that the system is working. There are two ways to do so. First, through my colleagues at DEFRA, who proposed the regulations and are working closely with the industry. The second point is that, to be honest, those in the industry with which we are working, from the packaging industry through to Tesco, are not quiet lambs who will go gently into a system that they believe to be bureaucratic, wasteful and not effective at achieving targets. One reason why we have introduced the changes is that we have had a lot of active, energised conversations with the industry over 10 or 15 years. I would expect those people to keep pushing hard. If they do not feel that they are achieving the savings that they want and the recycling rates that we need, they will come back to us in a tough way.
Alex Cunningham
Before the Minister concludes, I also asked questions about the how the management of the scheme by the new responsible body will be resourced and the consistency of implementation across the nation.
Rory Stewart
Those are two separate questions. Consistent implementation across the nations will be key, because what we are doing with the one-stop shop is to ensure that if England signs off on something, Scotland is prepared to accept that standard. To achieve that, we must ensure that our agencies work closely together, and we are working closely with the devolved Administrations.
The hon. Gentleman’s first point was about ensuring that the agencies are properly resourced when signing off on PRNs. Our current assessment is that they are properly resourced, and that the agencies are the right body to carry out that role. We have had long conversations with the agencies about taking that forward. However, I absolutely take note of that point, and we need to watch the situation carefully over the next three to five years to ensure that the job is being done properly.
We have had a distinguished turn-out of Committee members from both sides of the House, whom I thank for coming along. I am grateful for Members’ comments and questions, and I commend the regulations to the Committee.
Question put and agreed to.
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Energy BILL [ Lords ] (First sitting)
(8 years, 9 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
The Committee divided: - Ayes: 5 / Noes: 12 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 12 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Chair
Before we begin consideration of the Bill, I have a few preliminary announcements, as I recognise that it may be the first Public Bill Committee for a number of Members. First, please switch electronic devices to silent—I will just check that I am doing as I instruct. Tea and coffee are not allowed in the room during sittings.
Today, we will first consider the programme motion on the amendment paper and a motion to enable the reporting of written evidence for publication. Then we will begin line-by-line consideration of the Bill. In view of the time available, I hope we can take those motions formally without debate.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 26 January) meet—
(a) at 2.00 pm on Tuesday 26 January;
(b) at 11.30 am and 2.00 pm on Thursday 28 January;
(c) at 9.25 am and 2.00 pm on Tuesday 2 February;
(d) at 11.30 am and 2.00 pm on Thursday 4 February;
(e) at 9.25 am and 2.00 pm on Tuesday 9 February;
(2) the proceedings shall be taken in the following order: Clauses 1 and 2; Schedule 1; Clauses 3 to 73; Schedule 2; Clauses 74 to 84; new Clauses; new Schedules; remaining proceedings on the Bill;
(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 9 February.—(Andrea Leadsom.)
Resolved,
That subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Andrea Leadsom.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room.
Clause 1
The OGA
Question proposed, That the clause stand part of the Bill.
Dr Alan Whitehead (Southampton, Test) (Lab)
Good morning, Mr Bailey. It is a pleasure to serve under your chairmanship in this Committee.
The first clause of the Bill is about the very existence of the Oil and Gas Authority. In truth, it is a rather odd construction: it is a regulator, but at the same time it is a limited company, albeit one that does not have to use the word “limited”. Essentially, it is a private company with one shareholder—the Government. Presumably, therefore, the Government may sell their share whenever they wish. The OGA’s members, officers and staff are not, as we see elsewhere in the Bill, to be regarded as civil servants, but they do have access to civil service pensions. The OGA is quite an anomaly in the world of regulators.
My understanding of how regulators work across the board is that they have to perform a function that is clearly equidistant between Government, industry and other arrangements. In this instance, the set-up of the OGA does not appear to conform exactly to that principal definition of what a regulator should be. Why was it decided that this should be the formulation of the OGA? It is rather different from the precedent for regulators. An unworthy suggestion could be made that the OGA has been set up as it is to take it off Government books, although as far as staff of the OGA are concerned it will put them, at least in some instances, back on Government books again. However, I am sure that that is not the sole or the main purpose in deciding to set the OGA up in this particular way.
I would be very interested to hear from the Minister why this structure was chosen and what advantages it is thought to provide. Does she think any particular difficulties might arise from the Government company structure that the OGA is to have, and if so, can they be satisfactorily resolved by other aspects of the OGA’s construction?
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
Mr Bailey, it is a great pleasure to play a role in the Committee scrutinising this very important Energy Bill, and I thank all hon. Members for being here this morning. I hope we are going to have some very interesting discussions.
Sir Ian Wood published his review on 24 February 2014. It concluded that the UK continental shelf is a very different and more complex operating environment now than in the past. The review proposed four key recommendations, which the Government accepted in full at the time of publication and reconfirmed in our response published on 16 July 2014. The four key proposals were: first, the adoption of a cohesive tripartite approach between the regulator, the Treasury and industry in developing and implementing a new shared strategy called maximising economic recovery UK, or MER UK; secondly, the establishment of a new arm’s length regulator; thirdly, the introduction of a suite of additional regulatory powers for the new regulator; and fourthly, the development and implementation of new sector strategies on issues such as exploration and decommissioning cost reduction.
The Department of Energy and Climate Change is making strong progress in implementing the recommendations of the Wood review. In particular, the principle of maximising economic recovery of offshore UK petroleum was established in the Infrastructure Act 2015. We also took a power in that Act to charge a levy to fund the OGA. As the hon. Gentleman knows, the OGA was initially established as an Executive agency but will become a Government company as a result of this Bill. Classification as a Government company will enable the OGA to have operational independence from Government and will provide a more suitable platform and the regulatory certainty that the industry requires to invest in exploration and production activity. It will also allow the OGA the necessary operational freedoms to recruit high-calibre individuals in a competitive employment market.
To be very clear, there are very well known precedents for Government companies, including the Prudential Regulation Authority, the Financial Conduct Authority and the Highways Agency. The Government-owned company is a private company under the Companies Act 2006, limited by shares, with the Secretary of State for Energy and Climate Change as the sole shareholder. The Secretary of State will appoint the chair and a non-executive director to the board. Of course as the hon. Gentleman knows, the OGA has a new independent chief executive who is already making strong progress. We absolutely support the establishment of the OGA in the terms in which it has been set up.
Dr Whitehead
I thank the Minister for that explanation of the set-up of the OGA, but I have to say that the Wood review did not at any point, as far as I can see, refer to the idea that the OGA should be a Government company with a single shareholder. Indeed, as the Minister correctly points out, Wood set out at some length what the activities and scope of the OGA should be—but perhaps that is a debate for another occasion. The issue now is the structure of the OGA in relation to its duties, to the industry and to the question of continuing to maximise the output and return of the North sea. It seems to me that a fairly carefully defined body is required to undertake that regulation.
Sir Ian Wood talked about an arm’s length organisation that would be able to stand between the various interests and make sure that those interests worked collaboratively rather than competitively in securing the success of the North sea. I wonder whether the OGA as constructed will be able to do that in the way that Sir Ian envisaged and all of us in this House want. It is true that, in the past, a few—I emphasise: only a very few—Government agencies have had this construction. I should like to know why the proposed construction is uniquely good for the arrangements of the OGA, in so far as the requirements that Sir Ian Wood set down for the role of the regulator are concerned. What thought have the Government given to other ways of constructing the regulator so that it could provide the best arm’s length arrangement for the industry?
Andrea Leadsom
I have to disagree with the hon. Gentleman. It was a clear recommendation of the Wood review that a step change was needed in Government stewardship and regulation of the UK continental shelf, and this required a new independent body with a strong CEO and greater independence from Government to focus fully on maximising economic recovery. As an arm’s length body, the OGA will be in a much better position to play a strong role in catalysing, encouraging and facilitating actions and agreements within and between operators, and between operators and Government, to ensure the success of the tripartite MER UK strategy. It is simply not true to say that this was not part of Sir Ian Wood’s recommendations; I think it was very much a part of those recommendations. The alternative, as the hon. Gentleman will be aware, is that the OGA continues to operate as an Executive agency, and that of course would not have the same extent of separation from Government as Sir Ian Wood envisaged.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Dr Whitehead
I beg to move amendment 7, in clause 2, page 2, line 9, at end insert—
‘(2c) The Secretary of State shall, within one year from the date of this section coming into force, undertake an assessment of the fitness for purpose of the OGA’s powers in relation to relevant activities, and shall lay before each House of Parliament a report of the findings.”
This amendment would require the Secretary of State to undertake an assessment of whether the OGA’S powers are fit for purpose within a year of this section coming into force.
Dr Whitehead
Amendment 7 seeks to reflect the newness of the concept of what the OGA is undertaking regarding the North sea. This regulator has previously existed as an Executive agency, as the Minister quite correctly says, and was essentially given authority under the Infrastructure Act; nevertheless, it will be operating in very new circumstances for a regulator.
Unlike some previous bodies, the OGA is not being set up at the same time as the emergence of a specific legislative structure or the development of a new industry. It is coming into an industry that is three quarters of the way through the operational history of North sea exploration, extraction and associated activities. It comes in with a number of new challenges, which include the maturity of the North sea basin and the need for different forms of working for future extraction, such as the sharing of infrastructure facilities and agreements on how the North sea can best be developed in its more mature phase. My central point is that the OGA arises at that new stage in the life of the North sea and the challenge is to get the arrangements right for the future.
A structure has been put in place that is substantially in line with many of the recommendations of the Wood review and seeks to get the best out of an admittedly difficult series of processes. My concern is whether, in setting up the powers and arrangements for the OGA, we have found the best way forward. We will perhaps know that only as the OGA gets under way. Although I do not believe that, with regulators in general, one should pull the plant up by its roots to see if the roots are growing, I think it is important when establishing a new agency to carry out an initial appraisal of its fitness for purpose and ability to achieve what we all want, as well as to inform how best to undertake its activities.
The purpose of the amendment is not to secure regular reviews of the agency’s activities. I suspect the Minister may have one or two things to say about the status of regular reviews. Labour Members believe the Government amendments on regular reviews are about right. There is a different case to be made for the initial scoping of the purpose of the OGA and how it has been transferred from idea to purpose to action. An initial appraisal of whether we have got that right ought to be undertaken in the next year.
It is vital that we get this right, because of the importance of the North sea having a successful future. An initial review would greatly enhance the faith that people will place in the OGA’s ability to regulate activities in the North sea properly. Does the Minister think that that is a good idea in principle? If she does, would she be willing to accept amendment 7 or a similar amendment to inform the activity of the OGA over the next few years?
Andrea Leadsom
Amendment 7 would add a new requirement for the Secretary of State to undertake an assessment of whether the OGA’s powers are fit for purpose within one year of clause 2 coming into force. The provision should be read in conjunction with clause 17, to which I have tabled my own amendments to overturn the amendments made in the other place. My amendments reinstate the original wording of clause 17 to require the Secretary of State to carry out a review of the OGA’s performance and functions on a no more than three-yearly ongoing basis
Amendment 7 returns to the notion that a review of the OGA’s powers should be carried out within one year of the Bill coming into force. Moreover, it would seek a much wider review than that specified in clause 17, covering all the OGA’s powers. I remain of the view that the amendment is not necessary and risks damaging the OGA’s effectiveness. The hon. Gentleman puts it very well when he says he does not want to pull the plant up the roots to see if it is growing, and I fear that that is exactly what would happen.
For such a wide-ranging review to be undertaken within one year, it would have to begin almost immediately, diverting significant OGA and Government resources from the urgent task at hand. It would also leave no time for the OGA to operate within the powers that it will have, making it difficult to reach any view on whether they are effective. It would also cut across Sir Ian Wood’s recommendations, which remain crucial. Government and industry have made it clear that, more than ever, we need a robust and well resourced regulator to support the North sea oil and gas industry. It is crucial that the OGA is given the space it needs to fulfil that role as a new regulator with new powers. The amendment risks stifling the OGA and creating uncertainty over its functions at a time when it needs to be resolutely focused on providing urgent support to industry, so I hope that the hon. Gentleman will be content to withdraw his amendment.
Government amendments 2 and 3 overturn Opposition amendments made in the other place and reinstate the original wording of clause 17 to require the Secretary of State to carry out a review of the OGA’s performance and functions on a no more than three-yearly ongoing basis. There is broad consensus that measures are needed to ensure that the OGA remains well equipped to address the diverse challenges faced by the oil and gas industry, and that its role and scope, particularly in relation to carbon dioxide and storage, is appropriate, sufficient and regularly evaluated. As such, the Government introduced provisions requiring a review of the OGA’s effectiveness in exercising its functions, as well as a review of the fitness for purpose and scope of such functions. However, as I said, Opposition amendments made in the other place require an initial review to take place no later than one year after the Bill comes into force, and then annually for subsequent reviews. These time periods were reduced from the three-year periods that the Government had introduced.
I have already set out how a mandatory annual review would be an incredibly onerous process for the Government, the OGA and industry, and is likely to have myriad unintended consequences. It would require the almost continuous evaluation of the effectiveness of the OGA, with very little time to implement the recommendations from each review. Reviews would be extensive, needing to cover both statutory and non-statutory functions, and an assessment of effectiveness against external factors, such as changes in the regulatory landscape, operational practices across the UK continental shelf, and environmental and economic factors. All of this would be required as part of the review to enable the Secretary of State to produce a report setting out the findings of the review, which is to be laid before Parliament. This would create significant resource burdens for the OGA and the Government and risk obstructing the work of the OGA. The process would be inefficient and would therefore risk producing an ineffective review. It would weaken the ability of the OGA to act as an independent regulator free from Government intervention. It would also create a review process significantly out of step with those to which other regulators are subject.
It is worth noting that other mechanisms will be in place to ensure that the OGA is held to account for its performance and functions. It will publish, on an annual basis, a refreshed five-year business plan and an annual report and accounts. The need for an arm’s length body charged with effective stewardship and regulation of the UK continental shelf was a central recommendation of the Wood review. I believe the original three-year review periods introduced by Government must be reinstated to avoid conflict with that recommendation.
Callum McCaig (Aberdeen South) (SNP)
I look forward to serving under your chairmanship, Mr Bailey. It is incredibly important that we establish the OGA, as dealt with in clause 1, and we wholeheartedly support the OGA having the powers that it requires to fulfil its role of securing maximum economic recovery. That principle is enshrined in the Wood review, which was conducted some 18 months ago, albeit in a climate where the price of oil was considerably higher than it is now and the challenges facing the sector were likewise considerably different.
The Scottish National party supports amendment 7. The principle that the Secretary of State should look at the OGA to see whether it has the required powers is fundamental, given the change in circumstances. That said, we are content to support the Government amendments. The principle of establishing the OGA, and looking at it after a year, is sound. However, once that has been done, the OGA should be looked at on a three-year rolling basis. The Minister has made a sensible case not to over-burden the OGA with regular reviews and we support that. In conclusion, the SNP will support both the Labour and Government amendments.
Dr Whitehead
I thank the Minister for her response to my explanation of why the amendment is useful for the longer term operational strategy of the OGA. However, I gently suggest that she may have slightly misunderstood my earlier comments. I am certainly not saying that the OGA should be reviewed on an annual basis. I share the Minister’s concerns that were that to be the case, it could well stifle the OGA’s activities.
That is an operational point: how can the OGA best operate over a period of time and how can we make sure that it has the wherewithal to do so? It would have a negative effect to put its operations continually under the microscope, and could stifle its ability to do what we hope it will do best, as far as the future of the North sea is concerned.
We have to look back through the legislation to see exactly where the construction of the OGA comes from. The whole question of strategy arises from the amendment of the Petroleum Act 1998 by the Infrastructure Act to provide the principal objective. Interestingly, that measure refers to “collaboration among”—not regulation between—“the following persons”, and lists some consequences of the principal objective, including the
“development, construction, deployment and use of equipment used in the petroleum industry”.
In other words, under that objective, there is a fairly close relationship between the petroleum industry and the OGA.
That is a particular way of proceeding, and it is what is in the legislation, but it may not, as it turns out, be the best way for the future operation of the OGA. The authority could be carrying out its ongoing activities wonderfully, but be stifled by the way in which its powers and objectives have been set up. The review seeks not to run regular speed checks as the OGA goes down the road in the early stages of operation but to look at whether the vehicle in which it has been designed to travel is the best one. It would at the very least be prudent to take the opportunity to consider the situation one year into the OGA’s operation, to ensure that we have got it right, and it could be useful for the authority’s future, whereas longer-term review methods, undertaken too regularly, could cause operational problems.
I am happy to withdraw the amendment. I hope, however, that the Minister will consider carefully how the OGA has been set up. Can we be certain that the authority will be as fit for purpose in the future as we think it is today, and might there be mechanisms for reviewing that as the OGA undertakes its operations?
Andrea Leadsom
I think that the hon. Gentleman and I agree in principle—clause 17 was introduced because of the need for regular review—but we disagree about how soon the review needs to take place. It would be unsettling for the industry that supported the establishment of the OGA if within a year everything could change, so I feel that one year is too short a time. I am grateful to the hon. Gentleman for withdrawing the amendment.
Dr Whitehead
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 ordered to stand part of the Bill.
Schedule 1
Transfer of functions to the OGA
Dr Whitehead
On the OGA’s functions regarding the disposal of gas by flaring, what does the Minister think is the best arrangement for the regulation of flaring and for ensuring that it is undertaken in the safest and most environmentally acceptable way, and in a way that is most conducive to the overall purpose of a platform? The schedule states:
“The OGA’s consent is required for natural gas to be disposed of (whether at source or elsewhere)…by flaring, or by releasing it unignited into the atmosphere”,
and so on.
The schedule also states:
“This section applies to all natural gas of the United Kingdom, whether obtained there or in territorial waters, or in areas designated under the Continental Shelf Act 1964”,
which suggests that the proposed new section applies to the flaring of all natural gas in the United Kingdom, whether onshore or offshore. I might not have read the provision entirely correctly, but if it does apply to all natural gas flaring in the United Kingdom in general, then the role of the Environment Agency in looking at how such flaring works might need to be added to the schedule, given the agency’s proper interest and indeed expertise, in particular in respect of the environmental considerations of flaring that under the schedule as drafted appear to be deputed entirely to the OGA.
I do not seek to overturn the schedule, because it is an important part of the process of getting the OGA under way, but that particular part of the proposed new section appears to be a lacuna on how the function is undertaken. Has the Minister considered, formally or informally, the role of the Environment Agency in the process? Might a function onshore also apply to a function offshore? I seek clarification from the Minister, so we may be as clear as possible that where flaring is undertaken it is done so with the best possible safety and environmental safeguards. Safeguards should also have a relationship to the purpose of the exploration or extraction in the first place.
Andrea Leadsom
I am grateful to the hon. Gentleman for raising the issue. As he is aware, although the Wood review looked only at offshore oil and gas, it acknowledged that there were synergies between offshore and onshore. We agree that there are such synergies. In particular, the licensing regimes, technologies and necessary regulatory expertise are all similar. We therefore decided that the OGA will take on a larger range of regulatory functions than originally envisaged by the Wood review.
The clause and the schedule provide for the transfer of DECC’s functions in relation to oil and gas to the OGA, covering offshore oil and gas licensing and regulation, but not health and safety or environment; onshore oil and gas licensing and regulation for England, but not health and safety or environment; carbon capture and storage; and gas storage and unloading. We will transfer the powers that at present lie with the Secretary of State and are exercised by the OGA as an Executive agency. As we have just discussed, an Executive agency has no separate legal identity and so exercises powers that are conferred on the Secretary of State. For the OGA to carry out its functions, the powers will therefore need to be transferred to it as a Government company through legislation.
The Secretary of State’s regulatory functions in relation to the environment will not be transferred, but will stay with DECC. The regulation of health and safety is undertaken by the Health and Safety Executive, and that will remain so. Powers will need to be transferred to the OGA so that it can fulfil its remit. Those include powers to award petroleum licences, issue consents for related activity and regulate third party access to upstream petroleum infrastructure.
With regard to the hon. Gentleman’s particular point, venting is agreed to under licence, but that is determined by safety reasons. Those functions will be under licence to the OGA—so it will take on some of those licensing functions.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bailey. May I press the Minister for a bit more detail on why the offshore safety directive regulator will remain within DECC under the proposals? In other countries, where an oil and gas authority—or similar—has been set up, that part has also been outsourced to a separate, independent regulator.
Andrea Leadsom
As we have made clear, these were very specific recommendations of the Wood review—namely, that there needs to be tripartite co-operation between the industry, the regulator and the Government. In the UK, health and safety and environmental functions are taken on by independent regulators. Careful thought was given to where the boundaries should lie, and therefore health and safety and the Environment Agency will continue to have roles to play.
Question put and agreed to.
Schedule 1 accordingly agreed to.
Clause 3
Transfer of property, rights and liabilities to the OGA
Question proposed, That the clause stand part of the Bill.
Dr Whitehead
I feel puzzled about some of the arrangements that are set out in these clauses, particularly the transfer of staff to the OGA from DECC, which is referred to in clause 4. It states:
“The Secretary of State may make… transfer schemes under which persons who hold employment in the civil service of the State become employees of the OGA”
—in other words, they are not civil servants. Under the clause, the Secretary of State may make a scheme that
“may (in particular) include provision that is the same as, or similar to, the provision made by the Transfer of Undertakings (Protection of Employment) Regulations 2006”.
That is puzzling, given that, in the way the arrangements have been set out in the clause, transfer of staff to the OGA is surely covered by TUPE regulations, and the terms and conditions should, certainly for a period, be similar to those that staff enjoyed under their previous arrangements.
To put in legislation that the Minister may make an arrangement similar to the provisions under TUPE suggests that the Minister has an opportunity at least to stray from TUPE provisions with regard to transfer of staff. I would welcome an indication from the Minister that my reading of the clause is perhaps a little over-suspicious and that the intention is to hold to TUPE as closely to possible on transfer of staff. That is obviously very important to an entire group of staff who have previously been employed by DECC and are now essentially, moving into uncharted waters in terms of their terms and conditions and future security of employment. Indeed, that is precisely why TUPE was put in place in the first instance. I would therefore welcome a statement by the Minister that she does not intend to try to drive a broad interpretation through the clause, to water down or, indeed, avoid the provisions of TUPE for staff undertakings.
There is also a small puzzle about the status that a staff transfer under clause 6 gives the pensions of those who are transferred. That is a little singular because, although the clause sets up the OGA as separate for the purpose of staff employment, the pension arrangements mean that the employees of the OGA are to be treated, for the purpose of paragraph 1 of the Public Service (Civil Servants and Others) Pensions Regulations 2014, as persons to whom the scheme applies. So staff who have transferred out of employment by DECC and into employment by the OGA—a Government company, as we have established, and nothing to do with the civil service—will nevertheless have access to civil service pension arrangements.
Personally, I welcome that idea—certainly the security that the staff who are transferred from employment by DECC will have in their future pension arrangements. It seems to me to be a very positive step for those staff; but of course the OGA will employ staff in the future who have never worked for DECC and will be entirely subject to whatever terms and conditions apply when they take up employment with the OGA. Nevertheless, under the clause, those people who come into the service of the OGA will also have access to civil service pension arrangements, whatever their pension arrangements prior to their coming to the OGA. Under those circumstances, I imagine that a number of staff would transfer in to civil service pension arrangements as they come to work for the OGA, having never previously worked for DECC.
That is not about individuals who had pension arrangements with DECC and retain them, but about people who gain new pension arrangements as they come to work for the OGA. It puzzles me a little, as I said, about the final status of those staff in relation to the civil service as a whole. They are not civil servants, but they are civil servants for the purposes of pensions. They may have never been civil servants, but they sort of become civil servants in retirement. Is that a constructional problem that the Minister considers may lurk behind this arrangement, good though I think it is for current staff? Does she think it needs any further examination to resolve it, so that there can be a clear line of employment, pension rights and pension arrangements subsequently?
Andrea Leadsom
I welcome the hon. Gentleman’s questions and I can assure him that it is our intention to leave staff pretty much unchanged. The legal advice on the application of TUPE was uncertain as to whether this qualifies as a relevant transfer, so, to ensure that TUPE-like protection is afforded to staff, a transfer scheme is required. As a result of the transfer of functions, civil servants currently employed by the OGA as an Executive agency of DECC, who perform relevant functions, will be required, unless they object, to transfer along with those functions to the new Government company. The purpose of the transfer scheme is to provide the same or similar protection to that afforded by the TUPE regulations. I hope that that reassures the hon. Gentleman.
I can also tell the hon. Gentleman that, in line with the handling of all machinery of Government-like changes and TUPE transfers, staff are not able to opt out of the transfer. However, for any individuals who might wish to return to a civil service Department, a provision is normally made for a period of 12 months after the transfer date to allow them to apply for another civil service position.
On the hon. Gentleman’s second, important point about pensions, clause 6 allows civil servants who transfer to the OGA continued access to either the principal civil service pension scheme or the new Alpha pension scheme, which was introduced in April 2015, and, in some cases, both schemes, depending on the date they joined the civil service and their anticipated date of retirement. It also ensures that non-civil servants who are recruited by the OGA in future will have access to the Alpha scheme.
The hon. Gentleman asked why we are allowing new joiners to have access to the civil service pension scheme. I am glad that he welcomes it, but he nevertheless asked whether that complicates things. I can tell him that the Department has used such an approach before. For example, the Energy Act 2013 added the Office for Nuclear Regulation to schedule 1 of the Superannuation Act 1972. The benefit of allowing new joiners to have access is that it will avoid having a two-tier workforce whereby new joiners work alongside existing employees, but with different pension benefits, and of course it encourages the recruitment of staff to the OGA.
Dr Whitehead
I thank the Minister for that clarification. Although I appreciate that these matters are complex as far as TUPE is concerned, I welcome what I think I heard was the intention to stick as closely as possible to TUPE—
Dr Whitehead
—in circumstances where there might be some grey areas as far as TUPE is concerned. I trust that the close operation of TUPE will be a considerable comfort to the people who transfer out of DECC, and a comfort in terms of continuity of service as far as future employees and pensions are concerned.
Question put and agreed to.
Clause 3 accordingly ordered to stand part of the Bill.
Clauses 4 to 7 ordered to stand part of the Bill.
The Chair
Before we come to clause 8, let me say that it is unseasonably warm in here, and if any Member wishes to remove their jacket, please feel free to do so.
Clause 8
Transportation and storage of greenhouse gases
Question proposed, That the clause stand part of the Bill.
Andrea Leadsom
The clause, which was added to the Bill by the Opposition in the other place, rewrites the OGA’s principal objective to maximise the economic recovery of UK petroleum, as originally introduced by the Government, in three significant ways. First, it removes the Wood review’s central premise to maximise the economic recovery of UK petroleum within part 1A of the Petroleum Act 1998, replacing it with an objective to maximise the economic return of UK petroleum. Secondly, it imposes on the OGA an obligation to retain oversight of the decommissioning of oil and gas infrastructure. Thirdly, it imposes an obligation on the OGA to secure oil and gas infrastructure for reuse for the transportation and storage of greenhouse gases.
As we have discussed, the OGA has important functions in respect of decommissioning and the storage of carbon dioxide. However, the change to the principal objective that was advanced by the Opposition in the other place is damaging, self-defeating and unnecessary. It is damaging because not only does it introduce significant uncertainty about the principal objective, but it could also be interpreted as requiring industry to meet substantial and uncapped capital expenditure to secure and maintain infrastructure—potentially indefinitely—prior to decommissioning and until such time as a carbon capture and storage project is ready to use it. Our oil industry is understandably concerned about the significant liabilities and costs that that would impose at a time when it is already facing profound challenges.
The clause is also self-defeating, because it would be likely to damage the prospects of carbon storage facilities being developed in the North sea. By removing the OGA’s focus on maximising economic recovery, we risk degrading its ability to provide the support to industry that is so urgently needed, and that in turn risks the premature decommissioning of the UK continental shelf, which would result in a loss of assets, infrastructure and skills, including those that could help to promote the longevity of the industry through carbon storage projects.
The clause is unnecessary because the Government tabled substantive, meaningful amendments in the other place to reflect the OGA’s important functions in respect of decommissioning and CCS. Measures in the Bill will ensure that the OGA will have a strong role on decommissioning to ensure that costs are controlled, and that the reuse of assets, including for CCS development, is given full consideration before decommissioning is decided upon or takes place. The Government have also brought forward amendments to ensure that the OGA must have regard to the storage of carbon dioxide and how that may assist delivery against climate change targets when carrying out its functions. The Government have also made it clear that the petroleum-related information that the OGA will have powers to acquire includes that which is relevant to the storage of carbon dioxide.
Crucially, this approach is sensitive to the current economic landscape of the North sea. It strikes the right balance and does not dilute the OGA’s focus on maximising economic recovery. It is worth underlining to hon. Members that the Carbon Capture and Storage Association has strongly welcomed the Government’s amendments to ensure that the CCS industry is given due consideration and that it can access the information that it needs.
It is essential that we restore the OGA’s focus on maximising the economic recovery of oil and gas from UK waters at a time when the industry urgently needs a regulator with a laser-like focus on that objective. The OGA is already working closely with the Government and industry to do all that it can to support the North sea. It is focused on delivering key pieces of work in 2016 with the aim of making the basin more attractive to investment, including stimulating exploration in both frontier and mature areas, making new seismic data freely available, introducing regional development plans to protect key hubs and infrastructure, and progressing a technology strategy to make new fields more viable. We must support the OGA’s crucial mission to protect our domestic energy mix and support hundreds of thousands of jobs, but that can be achieved only by supporting and restoring to the Bill the OGA’s principal objective to maximise economic recovery. I hope that I have provided hon. Members with a logical reason why the clause should not stand part of the Bill and that they understand why I will vote against it. It is my strong desire to see clause 8 removed from the Bill.
Clive Lewis (Norwich South) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bailey. This is my first time as a member of such a Committee and as a shadow Front Bencher.
I thank the Minister for her statement on clause 8. Since the clause deals with the question of maximum economic recovery, I need to start by opening up the question of what that actually means. The term “maximum economic recovery” was introduced by the Wood review in 2014. The first full statutory stage of implementing that review was carried out via the Infrastructure Act 2015, which inserted a new part 1A into the Petroleum Act 1998. Section 9A(1) of part 1A defines the “principal objective” as “maximising the economic recovery”, but it does not actually set out what MER means. Section 9A(2) requires the Secretary of State to formulate a strategy for maximum economic recovery. Offshore licensees are obliged to act in accordance with the strategy. For licensed operators, acting in accordance with maximum economic recovery is easy: they simply follow the strategy as opposed to the underlying principal objective.
To know how “maximum economic recovery” will be defined, we need to look at the Secretary of State’s strategy, but we do not know exactly what the strategy is, since as yet it is only a draft. It is called, “Maximising Economic Recovery of Offshore UK Petroleum: Draft Strategy for Consultation”. The final strategy is not due to be published until April, so to understand what “maximum economic recovery” is, all we have is that draft strategy, which sets out a series of conditions for operators that, taken together, can be understood to express “maximum economic recovery”. In the draft strategy, the Secretary of State describes the OGA as
“an independent, expert regulator and asset steward, empowered and equipped to bring industry together to drive common purpose and good outcomes for all”.
Who exactly is “all”? It also states:
“All of this will deliver a regulator and asset steward with a clear focus, real expertise of the sector and the remit to work collaboratively with companies to deliver the best outcomes for both the industry and the UK tax payer.”
The Bill and the Acts that go with it—including the Petroleum Act 1998, as amended by the Infrastructure Act 2015—seek to make the principal objective a best overall outcome for everyone, and that will be achieved via the OGA. As the UK continental shelf is on the downhill slope of its productive life, the interdependence of different installations and infrastructure in the UK upstream oil and gas industry is such that if each relevant person seeks only to optimise their financial position, the performance of the industry as a whole—its ability to extract the most of what is realistically possible from the basin—is likely to be sub-optimal.
The key question for the draft strategy to answer is how and to what extent businesses are to be induced to compromise their interests for the greater good. We all understand that there is a need for a body like the OGA—that is why there has been broad support for it and for the Wood review—but I return to the draft strategy, which describes the OGA as an “expert regulator and asset steward”. It is an unusual hybrid. Its job is far more than that of a mere regulator overseeing industry that can be broadly left to make its own decisions. Will it have to intervene deeply in some of those decisions? It will be empowered to sit in meetings between companies that are usually commercial rivals.
In fact, the OGA is much more like an asset steward, seeking a highly proactive role in the management of the UKCS. One quote from the Wood review is especially illustrative, because it states that a licence holder will be
“required to act in a manner best calculated to give rise to the recovery of the maximum amount of petroleum from UK waters as a whole, not just that recoverable under their own licences.”
That is a long way beyond mere regulation.
In light of the collapse of the oil price, the OGA is in some ways more like an insolvency practitioner that has come to extract the last bits of value from the UKCS and manage the process as effectively as possible, and that is the context of clause 8. It is clear that the OGA’s stewardship role is its critical function, with its regulatory role very much secondary to that. In fact, the OGA bears no resemblance at all to any other regulator, which is why we want to include carbon capture and storage as part of its principal objective. CCS is a crucial element of the long-term value that can be yielded from the UKCS.
The UK has the opportunity to become a leading global player in the CCS sector. We have abundant offshore CO2 storage capacity in depleted oil and gas fields, and that is in combination with enhanced oil recovery and storage in deep saline rock formations beneath the North sea and the eastern Irish sea. Experts estimate that geological formations beneath the UK section of the North sea can store almost 80 billion tonnes of carbon dioxide, which is more than enough to meet the needs of UK CCS projects for the next century. That advantage is made even greater when coupled with the fact that many of the UK’s largest carbon emitters—power and industrial facilities—are already clustered together around major estuaries, such as at the Humber, Teesside and Merseyside, which are close to offshore storage capacity in the North sea and the eastern Irish sea. Many of those very energy-intensive industries have no long-term viability without CCS if the UK is to have a chance of reducing its greenhouse gas emissions.
Callum McCaig
On Second Reading, there was a lot of discussion of the clause and the founding principles of the OGA. For the SNP, it is mission critical that the OGA focuses on maximum economic recovery above all else.
I take issue with the contention of the hon. Member for Norwich South that the OGA will act as an insolvency practitioner. That is insensitive and unrealistic, and I do not believe it reflects the true future of the North sea, if it is marshalled correctly. Marshalling these enormous resources is vital. Academic and industry experts suggest that there are up to 24 billion barrels of oil and gas to be extracted from the North sea. This is by no means a sunset industry.
The potential for the supply chain and operators to explore new technologies that will enhance oil recovery, and explore and develop smaller more marginal fields is the future of the industry. The oil and gas to be extracted in the world will come from more marginal fields. The expertise that we have in the UK, particularly in the north-east of Scotland, will be truly world leading.
We are hugely supportive and recognise the economic potential of carbon capture and storage and decommissioning, but we are content that the Bill as it stands deals with those issues. I welcome what has been introduced in that regard and the discussions in the House of Lords that led to it. However, I come back to the first point. What is the OGA there to do? It is there to focus on maximum economic recovery of oil and gas, and that is what it must be allowed to do.
Andrea Leadsom
I am grateful to the hon. Members for Norwich South and for Aberdeen South. Like the hon. Member for Aberdeen South, I reject the suggestion by the hon. Member for Norwich South that somehow the OGA will be an insolvency practitioner. That is absolutely not the case. Sir Ian Wood’s proposal is based on maximising the economic recovery, which is what we want to do. We see the industry as an ongoing success story for the United Kingdom, with more than 350,000 jobs throughout the supply chain. It creates enormous benefit to the economy and we hope that it will continue to do so for decades to come. The OGA is absolutely not an insolvency practitioner.
I also agree with the hon. Member for Aberdeen South that, given that more than 20 billion barrels of oil and gas are potentially left in the North sea, it is not a sunset industry. We need to be clear about that. The OGA is both the regulator of an ongoing success story—we want to get the costs of production down and to encourage new exploration and we want the sector to continue to thrive—and an asset steward, as the hon. Member for Norwich South rightly pointed out, with an important role in the strategy for maximising economic recovery.
The strategy is out for consultation. We have worked closely with industry, through industry workshops and close co-operation between the OGA, industry and the Government, to define maximising economic recovery. We hope to provide the Government response to the consultation as soon as possible. It is important to be clear that the OGA is the asset steward and the regulator for an ongoing success story.
I will try to reassure the hon. Member for Norwich South about the OGA’s role in CCS. The OGA will be responsible for issuing carbon dioxide storage site licences and for approving carbon dioxide storage permit applications. We expect the OGA to have subsequent involvement in monitoring, review and possibly enforcement activities as set out in the regulations, which are transposed from the requirements in the EC directive on geological storage of CO2. The OGA is proactively considering the role of CCS in the technology and decommissioning strategies that it is developing. The Wood review acknowledged the potential benefit of CCS to the UK continental shelf and, as recommended, the OGA will work closely with DECC to examine the business case for using depleted reservoirs for carbon storage.
Under MER UK, CO2-enhanced oil recovery is being considered by the OGA as part of its wider enhanced oil recovery work. CO2-EOR could make a substantial contribution to lowering the cost of CCS projects as well as benefiting North sea revenues and jobs. However, more analysis is needed on the timing of future CCS projects and how that could affect CO2-EOR development, and on the viability of redeveloping abandoned fields as CO2-EOR projects. The OGA will collaborate with the CCS industry to foster innovation in EOR technologies.
As the hon. Gentleman may know, the OGA’s planned work includes advancing the next tranche of EOR technologies, developing a framework for their economic implementation and developing a CO2-EOR strategy and five-year plan this year. I hope that that gives him some reassurance, but, again, I urge Members to vote against the clause
Clive Lewis
I thank the Minister and my hon. Friend the Member for Aberdeen South for their input. I emphasise that I meant no insensitivity to the industry or to the people of Scotland—or to the people of the UK. It was just a frank, realistic assessment of the economic and industrial situation.
We support the clause because, instead of having a strategy whose primary goal is to maximise the quantity of petroleum profitably extracted from the North sea, we should have one that maximises the return on investment—investment in infrastructure, for example—in the North sea. If and when activity such as CCS can be carried on economically in the North sea, the OGA should be given the job of promoting that as well. The OGA’s powers to push the industry to collaborate are extensive and we applaud some of the points that the Minister made previously. However, it clearly makes sense for the OGA also to think about the wider uses and potential reuses of the infrastructure, information and skills that are there, which other industries could deploy on the UKCS later, and CCS is a clear example of that.
The clause would, first, simply ensure that the OGA keeps its eye firmly on CCS and builds into that policy. Secondly, it is clear that some of the biggest players on the UKCS are still making profits and paying out dividends—Royal Dutch Shell and Total certainly are. Fluctuations in the price of oil are normal, and it is likely that the price will go back up at some point, although it is not wise to make predictions as to when.
Thirdly, the industry has yielded huge profits in the past to companies and individuals—Sir Ian Wood, of Wood review fame, is reportedly a sterling billionaire. As we know, there was no long-term state investment in a sovereign wealth fund that would have helped us achieve the kind of energy transition we now need. To borrow a phrase, we did not fix the roof while the sun was shining, and it could be argued that Governments of all political stripes are guilty. However, the OGA’s creation is an opportunity to think long term and to escape from the short-termist, cash-in mentality of the past. The Opposition therefore seek to defend the clause.
Question put, That the clause stand part of the Bill.
Dr Whitehead
I beg to move amendment 8, in clause 9, page 6, line 17, at end insert—
“Environmental considerations and climate change
The need for the OGA to address environmental considerations and to facilitate the pursuance of section 1 of the Climate Change Act 2008 in relation to relevant activities.”
This amendment would require the OGA to have regard to environmental considerations and climate change when exercising its functions.
The Chair
With this it will be convenient to discuss amendment 9, in clause 9, page 6, line 17, at end insert—
“Hierarchy of matters relating to decommissioning
The need to re-use North Sea infrastructure for carbon capture and storage projects and marginal field extraction, where economically viable, to be considered prior to the decommissioning of such sites.”
This amendment would require the OGA to have regard to the hierarchy of matters relating to decommissioning when exercising its functions.
Dr Whitehead
We now turn, in the sequence of clauses, to the matters to which the OGA must have regard. The Bill lists those as minimising future public expenditure; security of supply; and the storage of carbon dioxide—I believe that that provision was inserted in another place, and I am pleased that it remains in the Bill. The OGA must also have regard to collaboration, innovation and the system of regulation. There are therefore a number of key directions to the OGA about how it goes about its stewardship of the North sea and its regulation of the industry.
The amendments seek to add a couple of additional items to the list of matters to which the OGA should have regard. This is not about departing wildly from the list in front of us, but about how the OGA operates in its wider sense—that is, not only its stewardship of the industry and the North sea, but its proper concern with what is happening and will happen as far as North sea exploration and development is concerned, in the context of the wider concerns to which the UK should have regard. The two definitions that we wish to add to the list develop and round off that particular mission requirement for the OGA.
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)
I look forward to serving under your chairmanship, Mr Bailey.
While the environmental considerations of climate change are vital, of course, we do not feel that this is the forum to deal with them. It is the Government as a whole, and DECC in particular, who should be dealing with this and who carry the responsibility. As such, we will not pursue this.
Andrea Leadsom
As the hon. Member for Southampton, Test pointed out, clause 9 provides a non-exhaustive list of matters to which the OGA must have regard when exercising its functions, so far as is relevant. These include, for example, the need to maintain a stable, predictable system of regulation that encourages investment and the development and use of facilities and other things needed for carbon storage.
Amendment 8 seeks to require the OGA, when exercising its functions, to have regard to the need to address environmental considerations and to facilitate the pursuance of section 1 of the Climate Change Act 2008 in relation to relevant activities. The European offshore safety directive requires the separation of licensing and environmental functions, and to require the OGA to have regard to environmental considerations risks breaching the requirements of that directive.
Climate change is, of course, of great importance, but the OGA’s primary role and focus will be to deliver MER UK. It would not be right to impose obligations on the OGA relating to environmental considerations in respect of which it does not have expertise and is not required to have expertise. It is important that our climate change objectives and environmental regulations are furthered by the experts in the field. The expertise on climate change will remain with the Secretary of State for Energy and Climate Change. Likewise, environmental regulation in relation to offshore oil and gas will remain with the Secretary of State and, onshore, it will remain with the Environment Agency and with the Scottish Environment Protection Agency and Natural Resources Wales in the relevant jurisdictions in Great Britain.
It is right that, once established, the OGA will be bound by environmental law and therefore in the exercise of its functions it will by default have regard to environmental issues. It already has existing close working links with the environmental regulators and these will continue. However, I do not think it is right or necessary to impose on the OGA obligations to consider environmental considerations and climate change. Both of these are matters that would require a change in the core expertise of the OGA if it were to properly fulfil them. In addition, we can foresee circumstances where these obligations might conflict with the requirement on the OGA to maximise economic recovery. The objectives are not incompatible at policy level, in that we will need significant oil and gas in the transition to a low-carbon economy.
I am grateful to the hon. Member for Southampton, Test for reassuring the Committee that his party accepts that there is a future for the North sea basin and they do not wish to shut it down. I am sure that all hon. Members in the Aberdeen area will be delighted to hear that those 350,000 jobs would remain safe in Opposition hands and that it is not their intention to precipitately close down the North sea industry. Nevertheless, in particular circumstances each consideration in relation to the environment and climate change could point to a very different course of action if the Opposition amendments were made, creating a very difficult position for an arm’s length body to manage. That would be very unfortunate for the OGA, leaving it facing an impossible dilemma between two incompatible statutory obligations. I hope that Members are convinced that we already have enough powers to ensure that these important matters are given appropriate consideration.
Clause 10 also gives the Secretary of State the power to give the OGA directions on matters of public interest. The environment and climate change are clearly matters of public interest and the powers in the clause may be exercised if it proves necessary.
Turning to amendment 9, I suggest that we all agree that the economically viable reuse of North sea infrastructure for carbon capture and storage projects and marginal field extraction, as an alternative to decommissioning, is of great importance. I am grateful to the hon. Member for Southampton, Test for his clear examples of precisely why Sir Ian Wood drew up his strategy for the OGA to be not just a regulator but an asset steward. He pointed out some of the clear challenges when lots of small operators in small fields try to share infrastructure, and so on. That highlights the OGA’s need for the proposed asset stewardship powers.
Indeed, consideration of reuse of infrastructure already plays an integral role in the decommissioning approval process, and amendments tabled by the Government in the other place would reinforce that requirement by creating a statutory basis for the alternatives to decommissioning that would have to be considered by industry, the Secretary of State and the OGA. When a decommissioning programme is submitted, the current process requires any person who wishes to decommission relevant infrastructure to demonstrate that the potential for reuse has been fully examined, as set out in Department of Energy and Climate Change guidance on decommissioning under the Petroleum Act 1998.
Further, clause 74 and schedule 2 to the Bill will place a requirement on industry, the OGA and the Secretary of State to ensure that alternatives to decommissioning, such as reuse or preservation, are considered. Requirements to consider reuse of infrastructure will include considering purposes other than the original one—carbon capture and storage, for example.
It is also worth noting that the measures enjoy the support of both the oil and gas industry and the Carbon Capture and Storage Association. It is expected that the OGA will facilitate discussion among all parties to the decommissioning process, to ensure that all options for viable reuse are explored.
I recognise the intention behind the amendment, but I do not consider it to be necessary, as its objective has already been given effect by previous provisions, which ensure that viable reuse of infrastructure for purposes such as carbon capture and storage and marginal field extraction is brought to the forefront of the decommissioning process. They make sure we do not miss the important opportunities that those measures present to develop such industries.
I hope that hon. Members will accept my explanation of why the amendments are unnecessary, and will not press them to a vote.
Philip Boswell
Amendment 9 is essential both for the future of carbon capture and storage and to enable the more marginal fields to be harvested by smaller operators, which the Scottish National party sees as increasingly vital for the future of the industry. The hon. Member for Southampton, Test and the hon. Member for Norwich South spoke of previous short-termism in the industry and the need for a longer term vision, as pointed out in the Wood report. We completely agree with that and see that there is a requirement for a more holistic view with respect to management of oil and gas collection and transport infrastructure. We therefore support the amendment.
Dr Whitehead
I thank the hon. Member for Coatbridge, Chryston and Bellshill for clarifying the SNP’s position on amendment 9. His support underlines why this is necessary for the longer term stewardship of the North sea. We are looking a little higher than the immediate issues that face the North sea, important though those are, and trying to ensure that, whatever may come its way and whatever its mix of jobs, production and facilities, it has a fully viable future. As we mentioned on Second Reading, although there are a lot of known knowns, unknown knowns, unknown unknowns and so on about the future of the North sea, what we do know is precisely the point that the hon. Gentleman made a moment ago—namely, it will be a future of smaller fields and, through collaboration and careful planning, of maximising best use of infrastructure for those fields to maintain their security and perhaps to start to develop different uses for the North sea, which in the very long term will provide substantial security and jobs and a vital national function for the UK.
The amendments are not about trying to cut off particular routes for the OGA—or, indeed, over-prescribe what the OGA should have regard to. I was disappointed that the Minister sought to suggest that the amendments should not be supported because they would require the OGA to do things beyond its remit and for which it would not have resources. The OGA would not be required by anything in the amendments to move beyond its overall resources or function, but they frame what the OGA needs to look at generally in regard to its business of stewardship. That of course means that the OGA has to look at its overall business within the context of its overall resources, and there will be things that the OGA will not be able to do, or be able to do only in conjunction with other bodies. Indeed, as the Minister pointed out, clause 10 gives the Government the power to undertake direction where necessary, if the Government consider there are particular circumstances wherein the OGA should do more or enter into areas of activity that it has not entered previously. That power is already there, and there are powers in the Bill for the Government to fund those additional activities as necessary.
The amendments are not about the daily management of the OGA and how it can go about its business. As the Minister rightly set out, there are already provisions in the Bill for allowing that management to be undertaken in conjunction with Government direction and OGA function. However, the fact that that is separate from the clause that precedes it points strongly to the idea that having a framework within which the OGA works is the best way to start the process of how the OGA functions on a daily basis for the future. Essentially, that is all these amendments seek to do—point the OGA in particular directions and inform its thought process and general decisions with regard to particular activities. They do not require the OGA to do anything particular in its daily activity, nor do they require it to acquire a whole series of new skills and arrangements as it goes about its task. They simply suggest that a framework should be put in place, after which the Government, particularly under clause 10, can look at whether the OGA in its daily operations is doing what they thought it should do in the first place.
Dr Whitehead
I beg to move amendment 10, in clause 10, page 6, line 31, at end insert—
“(aa) Are necessary in order to inform the OGA’s role in developing and promoting carbon storage;
(ab) Are necessary to meet the terms of the Climate Change Act 2008 or European or international obligations on climate change”
This amendment would allow the Secretary of State to give direction to the OGA if the Secretary of State considers that these are necessary to inform the OGA’s role in developing and promoting carbon storage and/or to meet the terms of the Climate Change Act 2008 or any international obligation on climate change.
We now move to the area that the Minister alluded to in the debate on clause 9 on “Matters to which the OGA must have regard”: directions in relation to national security and public interest, which the Government may give to the OGA in the exercise of any of its functions. The clause lists various circumstances in which directions may be given. They are drawn fairly widely in that the directions
“are necessary in the interests of national security, or...are otherwise in the public interest.”
However, although the clause gives the Secretary of State fairly wide powers to provide directions to the OGA, it does not include the issues to which we adverted in the discussion on the previous clause, which is the question of what happens to the OGA’s role in developing and promoting carbon capture and storage, and how the OGA meets the terms of the Climate Change Act 2008.
Clause 10 could be strengthened by clarifying the circumstances in which direction might be given, bearing in mind that the issues are wider and more long term than those on which the Bill currently provides guidance to the OGA. It is now rather more important to include in the Bill guidance and clarity on where directions are necessary, given what occurred on the previous clause, where, despite our best endeavours, the matters to which the OGA must have regard stayed as they were, with what I suggest is a less than perfect regard for what we might call wider horizon issues as far as the OGA’s function is concerned.
The amendment explicitly underlines the directions
“to inform the OGA’s role in developing and promoting carbon storage”,
and states that they are necessary
“to meet the terms of the Climate Change Act”.
That provides the right boundaries and the framework in which those Government directions might be undertaken. That is why we have tabled the amendment.
Energy BILL [ Lords ] (Second sitting)
(8 years, 9 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
The Committee divided: - Ayes: 7 / Noes: 11 - Question accordingly negatived.
Dr Alan Whitehead (Southampton, Test) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. Before lunch, I had more or less said what I was going to say on amendment 10—news that I realise will be greeted very warmly by all Committee members. I will disappoint everyone only slightly by reiterating the importance of the amendment, particularly in the context of our earlier decisions on the issues to which the Oil and Gas Authority should have regard.
Two of those issues are covered by the amendment, which clarifies the matters on which the Secretary of State may provide directions. The amendment would provide a satisfactory way of bringing the wider issues we discussed this morning properly and collectively into the scope of clauses 9 and 10, which deal with basic working guidance for the OGA. For that reason, I hope the Minister will look kindly on the amendment, even if it is not worded as well as it might be, so that we can make some progress.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
It is a great pleasure to serve under your chairmanship, Mr Davies. Amendment 10 would amend clause 10 in part 1 of the Bill, which deals with directions that the Secretary of State may give the OGA. The clause gives the Secretary of State the power to direct the OGA as to the exercise of its functions if the Secretary of State considers that the direction is in the interests of national security or otherwise in the public interest. The intention is that the power should be used very rarely, in order to give the OGA the independence it requires to fulfil its role.
The amendment would create a specific power to issue directions that are necessary to inform the OGA’s role in developing and promoting carbon storage. That is unnecessary, since the Secretary of State’s powers to give directions to the OGA as to the exercise of its functions already applies to those functions. Similarly, directions that the Secretary of State considers necessary to meet the terms of the Climate Change Act 2008 would clearly be in the public interest, and therefore clause 10 already provides for such directions to be made.
If anything, the amendment limits the scope of the Secretary of State’s ability to issue directions in those areas by limiting them to what is necessary. For example, if the amendment were accepted, it would not be possible to issue a direction that was highly desirable but not necessary for meeting the terms of the 2008 Act.
The OGA is deliberately not an environmental regulator. Environmental regulation will continue to sit within the Department of Energy and Climate Change, which has the expertise and experience in this field. However, there are synergies between the two forms of regulation and the existing strong relationships between the OGA and DECC will continue.
I want to make clear that the OGA’s functions, including its objective to maximise economic recovery, are compatible with our climate change obligations. We are fully committed to delivering on our domestic, EU and international climate change targets. Under this Government, the UK is making good progress towards our EU 2020 renewable energy target, and we have already surpassed our interim targets covering 2013 and 2014. I hope that the hon. Member for Southampton, Test is content with my explanation of why the amendment is unnecessary and will withdraw it.
Dr Whitehead
I am not sure that the Minister has guided us fully as to what clause 10(1) actually says. The amendment would, in effect, add paragraphs (c) and (d) at the end of the subsection. Subsection (1) as it stands states:
“The Secretary of State may give directions to the OGA as to the exercise by it of any of its functions if the Secretary of State considers that the directions—
(a) are necessary in the interests of national security, or
(b) are otherwise in the public interest.”
Those two considerations then stand by themselves in terms of what powers are given to the Secretary of State to direct the OGA.
The amendment would add some guidance on issues that might otherwise be obscure but would not cut across that wider guidance on things that are necessary in the interests of national security and the public interest, to give greater comprehensivity of functions where it might be unclear what the OGA should look at. Certainly in my reading of how the clause and the amendment work together, the amendment does not cut across subsection (1)(a) and (b); it merely adds to the completeness of subsection (1) in areas that might otherwise be unclear.
I am not sure that the argument that the amendment may cause things that might otherwise be done not to be done has a great deal of substance. Indeed, if that is the defence against this amendment, I feel it is something we ought to press. I would certainly need rather more comprehensive assurances from the Minister that the issues raised in the amendment could be accommodated in subsection (1)(a) and (b) in a way that they are apparently not. If that is not forthcoming, I fear we will have to divide the Committee.
Andrea Leadsom
All I can say to the hon. Gentleman is that the powers of direction given to the Secretary of State in the areas of public interest and national security have a very broad definition. By specifying particular examples, we would run the risk of narrowing that very broadly defined set of powers, so I fear that I cannot accept the hon. Gentleman’s amendment.
Dr Whitehead
I thank the Minister for that response, which I am sure was meant in a spirit of conciliation. However, it does not go as far as we would like, so we will divide the Committee.
Question put, That the amendment be made.
Dr Whitehead
I beg to move amendment 11, in clause 13, page 8, line 44, leave out subsection (3).
This amendment, together with amendments 12 and 13 would require the amount of income the OGA raised by fees and charges to be kept by of the OGA and used to reduce the amount of income raised by the levy on licence holders.
The Chair
With this it will be convenient to discuss the following:
Amendment 12, in clause 13, page 9, line 1, leave out subsection (4).
This amendment should be read together with amendment 11.
Amendment 13, in clause 14, page 9, line 38, after “period” insert
“minus the income derived from fees under section 13”.
This amendment should be read together with amendment 11.
Amendment 14, in clause 14, page 10, line 15, leave out subsection (6).
This amendment, together with amendment 15, would require the OGA to keep the income from the levy on licence holder, rather than pay it into the consolidated fund.
Amendment 15, in clause 14, page 10, line 17, leave out subsection (7).
This amendment should be read together with amendment 14.
Dr Whitehead
I should draw hon. Members’ attention to the fact that this is going to be a little obscure. It could be long and obscure, medium-length and obscure or short and obscure—it depends how the debate goes. I want to do what is best by the Committee, so if it thinks that short and obscure is the best way to proceed I am happy to do that, although hon. Members may find the exposition rather more obscure than short. [Laughter.]
The amendments relate to what the OGA is required to do in regard to its income and expenditure and the way it may charge fees and obtain income from a levy on licence holders. The understanding during the discussions, particularly with the industry, about how the OGA would be set up was that while the OGA itself would be run essentially from a levy on industry, the industry would have assurances about the extent of that levy. Indeed, one can look at assurances in the Bill. The extent of the levy would essentially be balanced by what the OGA would get through in terms of running costs. In theory, the levy on industry would effectively fund the OGA for its activities. If the OGA were to be profligate with its expenses and the way it went about things, in theory that levy could get a little larger, but the industry, which is clearly under considerable financial pressure because of what is happening in the North sea, felt positively that paying a modest levy for the OGA to work well in partnership with it and on its behalf in the North sea was worth it, provided that levy could be put into clear context.
There are powers in these clauses to enable the Secretary of State to ensure that that is the case as far as possible. The Secretary of State can exercise a power, as set out in clause 14(2), to ensure
“that the total amount of licensing levy which is payable in respect of a charging period does not exceed the sum of…the costs incurred by the OGA…and…the costs incurred in respect of that period by the Lord Chancellor in connection with the provision of Tribunals to consider appeals against decisions of the OGA”.
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)
I rise to speak to amendments 11 to 15. The Scottish National party would welcome the powers for the OGA to levy charges for services such as attending or carrying out tests or inspections on applications, storage, samples or information. We recognise that the licence holder levy is an important piece of funding infrastructure for the OGA. We recognise that subsection (4) of the clause provides for the Secretary of State, with the agreement of the Treasury, to do exactly what Labour’s amendments suggest. Nevertheless, we would be happy to support the Labour amendments if they went to a vote. We also recognise that subsection (7) of the clause actually provides for the Secretary of State, again with the agreement of the Treasury, to do exactly what Labour’s amendments suggest, but we would still be happy to support these amendments on the basis that they would guarantee that the funds raised by the OGA are kept by OGA.
Andrea Leadsom
I love the analogy of the penny arcades. I have spent many an hour on those myself, and I know the frustration they can bring. I can assure the hon. Member for Southampton, Test that that is not the case here, and I would gently point out that to suggest this is to misunderstand what is intended.
The amendment are designed to allow the OGA to keep the proceeds of fees and charges made under clauses 13 and 14 and to subtract that from the levy, but in accordance with Government policy that the user pays, the OGA will be funded by the industry through fees—for licences and consents, for example—and through the levy. These are separate income streams to recover the costs of the OGA in carrying out certain functions.
Clause 14(2)(b) specifically provides
“that no levy is payable in respect of costs incurred in the exercise of functions—
for which fees are charged under section 13”.
The prospect about which the hon. Gentleman is concerned of somehow charging double will not arise. It is standard practice for legislation to provide that income paid to a body such as the OGA is paid into the Consolidated Fund, hence the wording of the clauses. However, the Bill also contains provisions that provide that this does not apply if the Secretary of State, with the consent of the Treasury, directs otherwise. That will enable income paid to the OGA to be retained by it and not transferred to the Consolidated Fund. We have reached such an agreement with the Treasury, so levy income will be retained by the OGA, and we are considering the position on fees.
The key point for the hon. Gentleman to note is that while we have the agreement to enable the OGA to retain levy income, the clauses need to remain because theoretically that agreement could be revoked at some point. That is not to say that we anticipate that it would be, but that is the purpose of the clauses being there. I hope that hon. Members will appreciate that the proposed amendments, while absolutely genuinely intended to solve a problem, are in fact unnecessary. I hope the hon. Gentleman will not press them.
Dr Whitehead
I am not minded to divide the Committee on this. We are trying collectively, I hope, to arrive at a position where what goes into the OGA is what the OGA uses to run its activities, as the Opposition have suggested. It is important that a very clear line of accountability ensures that that happens so that the industry has confidence in the OGA in the future.
I am a little concerned about subsection (4). Clearly, we have a Secretary of State who is honourable and straightforward and a Treasury that can consent to an honourable and straightforward view that she may take about directing the circumstance outlined in subsection (4) to come about. However, it still worries me that the lever that allows that to happen is in the Bill, but the actual process is not.
I therefore make the caveat that that requires that no one at any stage attempts to rob—not to put too fine a point on it—some of the funds for other purposes by not otherwise directing, not coming to an agreement or by otherwise interfering with the process. That possibility is still there.
I am greatly reassured by the Minister’s suggestion that agreement with the Treasury has already been obtained on how this will work. That appears to be a very solid way forward. However, if this goes seriously wrong over the long term, further guidance, either in secondary legislation or primary legislation may be necessary to put it right. With the assurances I have received, I am not minded to press the amendment to a Division. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 13 ordered to stand part of the Bill.
Clause 14 ordered to stand part of the Bill.
Clause 15
The licensing levy: regulations
Question proposed, That the clause stand part of the Bill.
Dr Whitehead
I merely wish to ask the Minister to give a little further expatiation on what payments and financial assistance might mean as far as the OGA is concerned. The Bill gives the Secretary of State the power to make payments and provide financial assistance to the OGA. I presume that the payments or financial assistance will be from the public purse and not in the form of additional levies or arrangements that might fall on industry, but that is not entirely clear in the Bill. I assume that payments or financial assistance might be undertaken if the OGA had particular cost circumstances, which could not otherwise be covered by the arrangements we have just talked about: the levy and fees.
There is no clarity in the Bill about what the circumstances might be and how they might be determined before the Secretary of State decides to make those payments or provide financial assistance. It would be helpful if the Minister provided more detail on how and in what circumstances those things might happen. In what form would assistance be granted—I presume, with the agreement of the Treasury to make it available?
Andrea Leadsom
As the hon. Gentleman points out, clause 16 provides a general power for the Secretary of State to make payments and provide financial assistance to the OGA. The power is not restricted to specific functions of the OGA and therefore payments may be made at the Secretary of State’s discretion to fund any of the OGA’s functions. As well as covering statutory functions, it will cover functions contracted out.
The OGA will be funded through a levy on holders of certain energy industry licences and fees, for which industry will pay for carrying out particular services. The Secretary of State might need to provide funds to the OGA to cover any unforeseeable events. That is the purpose of the clause.
For reassurance, I can tell the hon. Gentleman that one would not want some unforeseen circumstance to result in the failure of that Government company. Nevertheless, as accounting officer, the chief executive of the OGA is personally responsible and accountable to Parliament for the organisation and quality of management in the OGA, including its use of public money and the stewardship of its assets.
The chief executive has specific responsibility for ensuring that the OGA operates in accordance with the guidance in the Cabinet Office’s “Managing Public Money”. The OGA is also required, promptly and without delay, to disclose to DECC any information regarding the OGA that is likely to have a material, financial, reputational or otherwise adverse effect on the delivery of the OGA’s purposes and duties.
In essence, this is a general permission for the Secretary of State to support the OGA in the event of unforeseen circumstances. While there is a clear intention that that will not be the case—that the industry will pay for the services it uses and so on—nevertheless, because it is a Government company, it must be important that, in the event of something unforeseen, there is the ability to provide emergency financial assistance.
Dr Whitehead
May I prevail further on the Minister’s good offices on the status of the OGA as a Government company? That company could become insolvent. The point at which the company would have to cease trading on grounds of insolvency could well be before the Secretary of State has been able to exercise these powers. Or can the Minister say that this company could not become insolvent because there would be an automatic infusion of funds to keep it solvent so that it could continue trading?
If that is not the case, due to the unusual structure of the OGA, we could face circumstances where the OGA would be unable to trade but not necessarily have access to funds, grants or assistance to enable it to trade. At that point, we would be in the odd situation, for the first time in the history of regulation in the UK, of having an insolvent regulator. What would regulation consist of at that point, bearing in mind the restrictions on how the funding for the OGA might come about? Where we would stand with the security of the regulator at that point is anybody’s guess. Could the Minister provide reassurance on that point?
Andrea Leadsom
The important point is that clause 16 is designed to enable the Secretary of State to avoid exactly the kind of scenario that the hon. Gentleman describes, so I hope that he and his hon. Friends will support it.
Question put and agreed to.
Clause 15 accordingly ordered to stand part of the Bill.
Clause 16 ordered to stand part of the Bill.
Clause 17
Review of OGA and guidance from Secretary of State
Amendments made: 2, in clause 17, page 12, line 7, leave out “one year” and insert “three years”.
This extends the maximum period after which the first review of the OGA’s performance is to take place from one year to three years.
Amendment 3, in clause 17, page 12, line 12, leave out “one year” and insert “three years”.—(Andrea Leadsom.)
This extends the maximum period after which subsequent reviews of the OGA’s performance are to take place from one year to three years.
Clause 17, as amended, ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Julian Smith.)
Westminster Hall
(8 years, 9 months ago)
Westminster HallRead Full debate Read Hansard Text
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Onshore Oil and Gas
(8 years, 9 months ago)
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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Kevin Hollinrake (Thirsk and Malton) (Con)
I beg to move,
That this House has considered the potential role of UK manufacturing in development of onshore oil and gas.
It is a pleasure to serve under your chairmanship, Mr Howarth. Shale gas exploration is a key issue in my constituency. Exploration licences have been granted to five operators in Thirsk and Malton, covering the vast majority of my patch. I receive dozens of letters and emails about fracking every week and I care passionately that, if it goes ahead, it is to the great advantage, not disadvantage, of my constituents.
As a local man, I understand why so many local residents worry that the peace and tranquillity of North Yorkshire, including the stunning North York moors, will be disturbed, and why they feel that their lives may never be the same again. I do not believe that that will be the case. As long as fracking is conducted in a balanced and measured way, the advantages for our local and national economies far outweigh the disadvantages.
David Simpson (Upper Bann) (DUP)
I congratulate the hon. Gentleman on obtaining this important debate. On his point about constituents who have concerns, how do we bring people along and convince them that there is no issue? What job of work needs to be done?
Kevin Hollinrake
I thank the hon. Gentleman for his intervention. That is a key issue, which I will come to later on in my speech.
The environmental reasons for moving from coal to gas are compelling. Global carbon dioxide emissions will be found to have declined in 2015, principally owing to reduced coal use in China and the US, and the Intergovernmental Panel on Climate Change and the US Environmental Protection Agency both credit the majority of the US reduction directly to the move from coal to shale. The World Health Organisation recently declared a state of emergency on air quality in many countries. It estimates that the cost of air pollution to the EU alone is a staggering £1 trillion and the human cost is even more dramatic: in 2010, about 600,000 premature deaths in the European region were caused by air pollution.
According to a report by the Health and Environment Alliance, coal-fired power stations are responsible for the following effects on UK citizens: 1,600 premature deaths; 68,000 additional days of medication; and 363,000 working days lost. Diesel cars and coal-fired power stations must become things of the past.
Geopolitically, domestically produced shale can help us develop a more effective foreign policy. Despite growing turmoil in the middle east, UK energy prices are falling in the markets, at the fuel stations and for our domestic energy. Traders can clearly see that the west is developing independent sources of energy and the British Geological Survey estimated that 10% of the predicted UK reserves could meet our gas energy needs for 40 years.
As with North sea oil and gas, fracking could lead to a new industrial supply chain. In 2014, 375,000 people benefited from employment and tax revenues of £2.1 billion resulted from the North sea oil and gas industry. Reports by the Institute of Directors and Ernst and Young indicate that shale gas could provide 64,000 jobs and £33 billion of domestic investment. Domestic is the most important word. This opportunity could spawn tens of thousands of jobs, and good jobs, too.
In my constituency, we have many world-class engineering businesses and a first-class training organisation called Derwent Training Association, which specialises in training top-quality light and heavy electronic and electrical engineers. Such businesses can be the innovators of the future, taking the industry forward and making it cleaner and more efficient. For example, it is possible to convert methane to hydrogen—a CO2-free fossil fuel—and the University of Strathclyde has established the UK centre for hydraulic fracturing to develop quieter, more energy-efficient equipment.
Shale would offer significant opportunities for many UK industries. It is estimated that it would require 12,000 km of steel, worth £2.3 billion. Recycling of waste water by domestic businesses would also be required and that would be a £4.1 billion opportunity. Other opportunities include rig building and environmental monitoring. Our chemicals industry could also be a big winner by capitalising on cheaper natural gas liquids often found alongside shale deposits.
If the UK could demonstrate the success and environmental credentials of shale gas, we could export our knowledge, skills and technologies to other countries in Europe and further afield, just as we did with conventional exploration. We must not repeat the mistakes of offshore wind, where we are the market leader in generation but lack any significant supply chain.
In the future, power generation will be centralised, cars and home heating—probably using air source heat pumps—will be electric and battery storage will be commonplace. Some people will argue that a new fossil fuel is a backward step that will prevent the energy industry from innovating. I disagree. Yes, renewables should be part of the future, but subsidies will only hold back their efficacy. I think that we should have reduced subsidies more progressively, as has happened in the US, but the Government had little choice given the wild and unmanaged overspend overseen—or probably not seen at all—by the previous Secretary of State.
Let us think of the technology sector. Deep Blue is the computer best known for defeating world chess champion Garry Kasparov on 11 May 1997, but a modern smartphone is 30 times more powerful than Deep Blue and made without Government intervention or subsidy. Should not the Government simply set the parameters for CO2 emissions and air quality and then let industry deliver the solutions? Is that not a better solution than paying homeowners unsustainable amounts of money to put solar panels on their roofs?
Of course, we can contemplate welcoming a new industry only if it is compatible with daily life in North Yorkshire. Last autumn, I paid a visit at my own expense to Pennsylvania to speak to local people, the US regulators, academics, protestors and operators about the impacts of the shale gas industry on the economy, the community and the environment. I did not see significant and widespread industrialisation of rural areas, but we do need to learn from early regulatory failures and carefully plan for the industry’s cumulative impacts.
We need a single regulator to make sure that there is a clear line of accountability. We need independent regulation and monitoring at every stage and, crucially, a rolling five-year local plan to co-ordinate activities. We need a local plan for fracking, covering a five-year roll-out and detailed solutions for key concerns. We also need traffic plans for the movement of heavy industrial equipment. Heavy industrial plant connected with shale gas, such as compressor stations and refineries, needs to be located in areas used to hosting industrial chemical sites.
We need minimum distances to settlements and schools and minimum distances between sites to prevent the industrialisation that many people are concerned about. We also need to consider the impact on other important parts of our local economies and, of course, the visual impact on our countryside, so we need buffer zones around our national parks and areas of outstanding natural beauty.
In an age of computer-generated imagery and simulated time-lapse photography, we can and must paint the picture for the public on how we can carry out fracking safely and discreetly, or risk years of delays owing to public concern. The effects on the economy and on job creation locally in Pennsylvania were positive, and I met various supply-chain businesses that were clearly thriving.
We must look at the whole picture. We cannot afford to ignore this opportunity. Under this Government, the economy is doing well and unemployment has come down, but we would benefit from having a clean, low-cost, low-carbon, home-grown energy source that supports domestic businesses, creates local, well-paid jobs and makes our economy and our nation strong by generating energy for generations to come.
Angela Smith (Penistone and Stocksbridge) (Lab)
As always, it is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Thirsk and Malton (Kevin Hollinrake) on securing this important debate on the role that manufacturing can play in the unconventional gas extraction industry.
This is not really a debate about whether the UK should develop a shale gas capability. The House has rightly focused on the need for a robust regulatory framework for such an industry, and it will no doubt continue to debate such important issues, but this morning’s debate is much more pragmatic. The question before us is clear: if the shale gas industry is going to develop within the clear regulatory framework agreed by the House, how do we best ensure that UK manufacturing can exploit to the maximum the supply-chain opportunities made available by that nascent industry? That pragmatic point is what is important to people up and down the country who have traditionally depended on manufacturing jobs to maintain their prosperity, living standards and family life. At its heart, this is about a debate that understands the importance of manufacturing to the UK economy.
In the US, which has had a shale gas industry for some time, one of the biggest winners has been the chemicals industry. Shale gas production in the US has seen feedstock costs reduce significantly, giving the chemicals sector a major competitive advantage over manufacturers in the EU and Asia. Shale gas ethane from the US is much cheaper than that from the EU, which is produced from naphtha, a refined form of crude oil. Cheaper energy, combined with cheaper feedstock, has kick-started investment in the US chemicals industry, attracting $138 billion of investment so far and funding 225 new projects.
In the UK, the chemicals industry is already a major exporter, with about £25 billion of exports. Yearly, it adds almost £9 billion to the UK’s GDP, as well as underpinning much of the manufacturing sector, including steel. In terms of competition, the chemicals sector could benefit greatly from a new source of domestic feedstock. It would benefit from lowers costs and, importantly, from shorter, more secure supply lines.
There should also be opportunities for many UK-based manufacturers in other sectors to supply an emerging shale gas industry. A report by Ernst and Young estimates that more than 39,000 indirect jobs could be created by UK shale gas extraction. It also suggests that the total spend involved in bringing UK shale wells into production would be £33 billion by 2032, which would include £17 billion on specialised equipment, such as high-pressure pumps and mixers. I note with interest that EEF has said that, although the majority of pumps are currently manufactured outside the UK, with some assembly done here, there is significant potential to increase UK production. However, if UK manufacturing is to benefit, it will be necessary to build the case for investment in those things, and that is my first ask to the Minister.
This is, however, not just about pumps; it is also about the sand that will be required for the fracking process. That will come from existing quarries and could generate a £2 billion spend in the UK from 2016 to 2032. This is also about the cement, for which there could be a nearly £1 billion market, and that cement could come from the UK’s four cement manufacturers. We cannot afford to dismiss that potential.
For me, as a south Yorkshire MP, however, the most exciting prospect lies in the opportunities the shale gas industry could create for steel manufacturing. Steel is in crisis. A global slump in demand, contractions in the oil and gas industry and the dumping of cheap, subsidised steel on global markets by the Chinese have combined with high energy costs and unsustainable business rates to create a debilitating sense of volatility in the industry. I acknowledge entirely that the industry must respond positively to the challenges it faces, but if UK steel is to develop a positive way out of its difficulties, it needs Government support.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
My hon. Friend is making a good case in relation to the UK steel industry, but the shale industry could help other integrated industrial sectors in the wider economy to develop, and one of those is carbon capture and storage. In a world where fossil fuels are getting cheaper, we should be using pots of funds originally used for renewables for CCS, and the Government should review their decision to get rid of it. In addition, non-conventional gas such as syngas, which comes from coal gasification—there are still tons of coal in the Durham coalfield under the North sea—could be less than 50% of the price of conventional gas. Those two pillars could lead to an industrial renaissance in some areas.
Angela Smith
I completely agree with my hon. Friend on both those points. On CCS, it is difficult for the Government to make progress on gaining public acceptance for the shale gas industry, and part of the argument against the industry has always been the emissions and the problem of using fossil fuels into the foreseeable future. CCS is one of the key ways we can deal with that issue and that argument. If there is to be a long-term future for any fossil fuel, the Government must think again about their abandonment of CCS technology.
We need to understand that the nascent shale gas industry offers one of those rare opportunities to create new demand for steel—something we badly need at the moment—and a new sense of hope that there is a positive future for one of our foundation industries. As United Kingdom Onshore Oil and Gas points out, the crisis that the industry faces will not be solved just by dealing with issues relating to energy and business rates, important though those issues are. It needs to be addressed by supporting UK steel to play a bigger role in manufacturing supply chains domestically and globally. This is about the Government supporting the development of a wider range of steel capabilities, by building the business case for the development of a UK shale gas supply chain.
What we do not need, as the hon. Member for Thirsk and Malton said, is a repeat of what has happened with the UK’s offshore wind industry, where we have missed opportunities to build a robust supply chain, despite our strength in the wind energy market. This time, the Government can get things right by working with industry and by supporting the building of a business case for developing shale gas. They can encourage confidence among investors and supply-chain companies and prevent the industry from meeting the fate that has befallen the green energy sector.
Steel’s opportunities as part of the shale gas supply chain focus on two main capabilities. First, as was pointed out earlier, the shale gas industry could need more than 12,000 km of high-quality steel casing, costing £2.3 billion. It could also need 50 drilling rigs, which would cost £1.6 billion to manufacture. So how do we make sure that we make the best of British, in meeting that potential demand? I suggest that we need first to identify the best means of making the UK contribution to the rigging requirements of the shale gas industry. That may or may not mean the domestic manufacturing of the rig components; but at the very least there is great potential for exploiting domestically the need to upgrade rig components to UK standards and to provide ancillary equipment. According to EEF, that market could be worth £1.2 billion. That is a good, practical, pragmatic way forward, which the Government could help to deliver.
As to the steel casing, the problem is, of course, that the UK manufactures welded tubing—not the seamless tubing required by the industry. UKOOG points out, however, that a significant amount of work is required on seamless pipes before they are ready to be used by the shale gas industry and that that could and should be done in the UK. That position is supported by EEF. I would prefer it if the necessary investment could be made to give a UK home to such a manufacturing capability once again; but, however we look at the issue, the Government have a role to play in supporting the steel industry to exploit the opportunities available and thereby to secure a better future for itself.
The Government need to support the establishment of the business case for all aspects of the shale gas supply chain, with particular urgency in relation to the steel aspects of that supply chain. As UKOOG points out,
“We are at the start of the shale journey and the steel industry needs help now.”
UKOOG has pledged to work with the Department for Business, Innovation and Skills to see whether any support can be given. That is incredibly helpful. What we want from the Minister today is a commitment to ensuring that that offer of collaboration from an industry that in a sense is new to the UK—shale gas extraction is new—is taken up enthusiastically by the Government; we want it to be translated into a supply chain strategy that guarantees that the best of British will lie at the heart of a successful, safe and environmentally sustainable British shale gas industry.
Graham Evans (Weaver Vale) (Con)
It is a pleasure, as always, to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) on securing this important debate. It is a pleasure to follow the hon. Member for Penistone and Stocksbridge (Angela Smith), who, in a campaigning speech, made some powerful points on behalf of her constituency and in favour of well-paid jobs and the future of the steel industry in south Yorkshire.
I am the chair of the chemical industry all-party group and co-chair of the energy-intensive industries all-party group. The UK chemical and pharmaceutical industries have a strong record as manufacturing’s No. 1 export earner. However, the fact that they are energy-intensive industries that compete globally means that their export success is critically dependent on secure and competitively priced energy supplies.
The chemical industry uses energy supplies both as fuel and as a raw material to make the basic chemicals that provide key building blocks for almost every sector of manufacturing and the wider economy. UK energy supplies are becoming uncompetitive and less secure. Supplies of North sea gas for use as raw materials and fuel are diminishing, and there is increased reliance on less secure supplies of imported gas. Our onshore oil and gas reserves offer an unrivalled opportunity to secure our energy supply for the future, crucially lessening our dependence on foreign energy markets while also creating tens of thousands of high-skill, high-wage jobs and generating billions in tax revenues.
The political realities in Russia and Ukraine, as well as parts of the middle east, show in no uncertain terms the increasing importance of energy security in the coming years. We cannot afford to be complacent. It is estimated that fracking has offered the US and Canada approximately 100 years of gas security, and it has presented an opportunity to generate electricity with half the carbon dioxide emissions of coal. Our shale reserves offer a stepping stone in our transition to a low-carbon future, especially the move from coal. Fracking can undoubtedly provide us with a legitimate, cleaner means of gradually bridging the gap between fossil fuels and renewable energy. Our energy security and the reduction of CO2 emissions are critical considerations when we think about fracking as part of a broad energy mix, but I firmly believe that scientific and engineering evidence should be front and centre.
The safety and security of people, their homes and their businesses are paramount to any discussion. As I have said in the past, I cannot and will not support anything that may pose a risk to the health, safety and wellbeing of local residents, the natural environment, homes or businesses. Perhaps that is an area in which the Government need to do more to convince the great British public. I recently held two public meetings, in Frodsham and Helsby, where there is currently fracking exploration. I invited representatives of the Environment Agency, Public Health England and the Health and Safety Executive, together with a local property surveyor, representatives of Ineos with more than 50 years’ experience in the industry, and a rather sceptical professor.
The meetings were particularly well attended. It is interesting that the public bodies are relatively poor at getting points across. They are there to reassure the public, but they are reluctant public speakers. They are reluctant to engage face to face with members of the public, who have legitimate reasons to be concerned. People may have been told that their property will not be worth as much, that it may be susceptible to subsidence, or that their health may be at risk. There are many such stories—I regard them as scare stories, but they are based on what is said by powerful lobby groups such as Frack Free Dee, which point to what has happened in Australia and America in the past.
Kevin Hollinrake
I had a similar experience at a public meeting in my constituency. All the regulators were on a panel there, and it was clear that some questions and answers fell between the cracks. Does my hon. Friend accept that a single regulator with overall responsibility for the industry would improve public confidence?
Graham Evans
My hon. Friend makes a powerful point, and I agree. The three agencies involved are the Environment Agency, Public Health England and the Health and Safety Executive, and they go together as a threesome. If the Environment Agency says it cannot or will not attend, Public Health England and the HSE do not turn up. They go as a triple act. The people involved must of course be skilled in what their agency does, but I point out to the Minister that that should include being skilled in public speaking. That means speaking to the public in plain language, not jargon. People’s concerns are legitimate, but I also believe that there is evidence available to reassure the public. I am sorry to say that it is a struggle. We politicians are used to knocking on doors and being eye to eye, face to face, with the public, so we can argue and explain complicated issues to our constituents. However, the public agencies need to raise their game and stop using jargon.
Kevin Brennan (Cardiff West) (Lab)
The hon. Gentleman is making a compelling point. There was a day, obviously, when civil servants of that type did not engage at all with the public. Did he consider inviting a Minister to explain things, given that Ministers are responsible for policy and have the skills he is talking about?
Graham Evans
No, I did not consider inviting a Minister. It was a Friday night in the north-west of England, on a wild, windy and wet night. I would not expect my right hon. and hon. Friends to support me. We constituency MPs are perfectly placed. We are experienced enough, and we know the public and the area. I chaired the meeting, and I believe it is the role of the MP to do that, and to reflect all the concerns that exist. The public agencies are there to reassure the public, because not all members of the public believe what politicians say, but I also had independent people there. There was an independent professor there, who was a sceptic, but also a local businessman who was an expert in property values, and representatives of Ineos, a good local employer and well known chemical company.
Those public meetings were a great success. Despite the suggestion of the hon. Member for Cardiff West (Kevin Brennan), I would not expect a Minister to be at such meetings, but I would expect the public agencies to be there. My hon. Friend the Member for Thirsk and Malton made a good point, and we should have the expertise there to reassure the public. We are asked for guarantees; we cannot guarantee anything, but the whole point of the Environment Agency and Public Health England is to hold Government, the contractors and the companies to account.
I regard this as a first-world problem. We are a great manufacturing nation, and we need to keep it that way for high-wage jobs. When I became an MP in 2010 we had a wind farm application on Frodsham marshes, which went ahead. We also had four applications for energy from waste sites, otherwise known as incinerators, surrounding Weaver Vale. Two of those have planning permission, one is in operation and one is currently being built. Energy is clearly a thing of the 21st century in a constituency such as mine, which is part of Cheshire. Cheshire is regarded as a rural county, but it has expertise in engineering and chemicals.
The potential benefits of additional high-skill, high-wage engineering and manufacturing jobs and the increased security of our energy supply are too important to neglect. Hydraulic fracturing is an established technology and has been used in the oil and gas industries for many decades. The UK has more than 60 years’ experience of regulating the onshore and offshore oil and gas industry and is a world leader in the field. I believe that if the best engineering practices are used alongside a robust inspection system, fracking can be carried out safely in our constituencies. Engineering and chemical industries are a vital part of the northern powerhouse, especially if we want to ensure a high-wage, low-tax, low-welfare economy in the north-west of England.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Thirsk and Malton (Kevin Hollinrake) on securing the debate. I read about his visit to Pennsylvania with great interest.
Onshore oil and gas operations use rigs, casing, pipework and other components in the drilling and stabilisation of wells. Those terms will be familiar to many of my constituents in West Aberdeenshire and Kincardine, and to many people throughout the north-east of Scotland who work in the offshore oil and gas industry. Indeed, unconventional oil and gas extraction already takes places to some extent in the North sea.
Furthermore, Scotland has a long history of unconventional onshore extraction. James “Paraffin” Young, who lived in my constituency in Durris for a time, was extracting shale oil in West Lothian as far back as the 1850s. At one time the industry employed 4,000 men, but the availability of cheaper forms of oil meant that it died out. I understand that concerns about the environment and the impact on public health were not taken as seriously in the 19th century as they are today, but the impact of unconventional oil and gas on our environment, communities and economy needs to be fully understood. That is why, on 28 January 2015, the Scottish Government introduced a moratorium on onshore unconventional oil and gas, including hydraulic fracturing. The Government also announced a programme of research into the issues surrounding it, as well as a full public consultation.
The moratorium will allow time for careful examination of the issues and proper engagement with the public in considering them. The comprehensive programme of research includes projects to investigate possible climate change impacts; a full public health impact assessment; further work to strengthen planning guidance; further tightening of environmental regulation; research on transport impacts; seismic monitoring research; consideration of decommissioning and aftercare; and economic impact research.
People who live near places where there could be onshore oil and gas extraction are rightly concerned about the potential impacts—other Members have mentioned that and given good advice on why local people may not need to be so concerned. That is why the Scottish National party-led Scottish Government are taking a pragmatic, responsible and evidence-based approach to the development of onshore oil and gas.
Neil Parish (Tiverton and Honiton) (Con)
It is a pleasure to speak under your chairmanship, Mr Howarth. I thank my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) for securing the debate. He is quite a brave man—I can stand up and support fracking because it largely does not affect my constituency, but when fracking does affect a Member’s constituency, supporting it is a much braver thing to do. He made a measured speech, as did my hon. Friend the Member for Weaver Vale (Graham Evans). We have to ensure that the public understand what we want to do, because they want to be reassured that it will be safe.
I have made the point before in this Chamber that we sometimes miss a trick in this country. I spent 10 years in the European Parliament—do not blame me for everything that happened in Europe over that period. In France, for example, when they build nuclear power stations they ensure there are houses, roads, infrastructure and leisure facilities. I am not saying we can do all of that with the fracking industry, but we can make the industry more beneficial for local residents. That is what we need to do, because at the moment we are not really selling fracking very well. That is the trouble; we need to sell it.
Tom Blenkinsop
Carbon emissions are obviously a big issue surrounding shale or any form of fossil fuel extraction. We have to treat CO2 as not only a waste product but a potential by-product, because the chemical industry already uses it as feedstock for a lot of different things, including agriculture, the bottling industry, the canning industry and the food preparation industry in general. It is the purest form of CO2 when it comes through those energy-intensives. We need to educate people about the benefits of fossil fuels, the CO2 from which can be sequestered and used again, thereby reducing the emissions that they create.
Neil Parish
The hon. Gentleman makes a good point, but we have to ensure that the people who will be living around the mouths of the wells, where the shale gas comes up to the surface, feel that there is a direct benefit to them. It is good to appeal to the greater good, but it is also good to appeal to those who will see the fracking most. That is the particular point I am making.
Angela Smith
Does the hon. Gentleman acknowledge that there are already plans on the table to return to local communities some of the investment and profit from the shale gas industry—something like 6% of the value of the gas extracted?
Neil Parish
I think there are such plans. There are various ideas, such as sovereign funds, but again, we need to explain to the local residents that they will get that money. One problem in the past with many such schemes has been that the money has not filtered down to the local people who have to live right next to the entrance to a shale gas resource. That is what I want to see.
We need to ensure that we explain the situation to local people and that they know there will be something in it for them—I know that may sound basic—and that they are doing something for the greater good. I will go on to talk about industry, but the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) made a really good point: fossil fuel extraction is necessary. We need only take the agricultural industry, in which natural gas creates ammonium nitrate, to see that it is hugely necessary.
My hon. Friend the Member for Thirsk and Malton made a point about having a single regulator, which is a good idea. It is about reassuring the public. The fracking will take place far underground and there is little or no chance of any problems with groundwater supply, but people are talking about those things. Those who are against fracking make much of them, so they need to be reassured. We must ensure that someone goes to the areas in question and presents the case strongly, so that people feel reassured about the safety of fracking. People can always cite problems in certain parts of the world, which makes it doubly important that we reassure people.
Tom Blenkinsop
The hon. Gentleman is being generous with his time. I want to back up what he is saying. He is a fellow North York Moors MP, where we have the Boulby potash mine in the national park. The mine goes more than 1 mile underground and 2 miles out under the North sea. Although it does not use the same technology, it goes through the same strata that the shale and gas industry will go through and is completely controlled. When large developments such as that occur, there is initially big uproar and upheaval, but the mine now employs more than 1,000 people. Although it is sadly letting people go, without it, the community would not have benefited from the well-paid jobs and solid employment they have reaped over the past 30 or 40 years.
Neil Parish
The hon. Gentleman raises an interesting point. I became very much involved with potash, because it is important in growing crops. We have such a massive amount of potash that we can probably produce enough not only for this country but for virtually the whole world. As he says, everybody has to be reassured that the processes can work together.
I am really heartened by this morning’s debate, given what I was expecting—perhaps I am tempting fate, as Members may yet come in with the opposite view. I often think that when we are talking about shale gas, it is easier to support those who are protesting against it. They make an awful lot of noise and have a fair point to make, but they get almost undue attention, and I think we have to be realistic about the potential for shale gas and the resource that we have.
To pick up on a point that my hon. Friend the Member for Weaver Vale made, we are potentially very reliant on gas from Russia, given that it may well come through Europe to Britain. We also import an awful lot of frozen gas from the middle east by tanker through Milford Haven. All those routes are susceptible to problems, and we will need a lot of gas in future. As we reduce our carbon emissions, there will still be a great need for gas. I think about 40% of our heating in this country comes from gas, and when people have gas in their homes, they expect to be able to turn on the gas boiler or gas fire. It would be wrong of people on all sides of the political debate not to allow shale gas to be got out of the ground, although we have to make sure that the controls are there, that we can do it safely, and that local communities feel that they get huge benefits from it.
We will continue to need gas as we decarbonise, particularly for heating and manufacturing. If we are not able to extract shale gas, the UK will have to import. In 2014 the UK imported 48% of its gas needs, and in 2030, without shale gas, it will import three quarters. Shale gas is still in its exploration phase, and if production is successful, it could vastly reduce gas imports. National Grid projects that it could meet about 40% of UK gas demand by 2030, but we need to get the process up and running if we are ever to hit that figure. We have to make shale gas extraction much more acceptable to local people, and we need to have a single regulator.
Additionally, shale gas extraction has the potential to create more than 64,000 jobs, which would not only help our long-term economic plan but ensure energy stability, which, with our ever-growing population, is a matter of increasing concern. Furthermore, the shale gas industry could help to revitalise our struggling steel industry. If shale gas extraction were to take off in the UK, the industry could need more than 12,000 km of quality steel casing, which would cost in the region of £2.3 billion. I have looked into that, and it is interesting that the type of pipes that are needed are not manufactured in this country. If we were to go into shale gas in a big way, we could invest in the steel industry to get it back up and running.
Tom Blenkinsop
The two tube mills in Britain are in Corby and Hartlepool, and they could easily be adapted to produce non-welded tubing. Of course, there is also a very good site in Teesside that is no longer being used. Again, that site could be adapted to provide non-welded tubing if virgin steel were produced once again there.
Neil Parish
I agree with the hon. Gentleman, because a way of supporting our steel industry would be to make sure that we produced British steel that went into the British shale gas industry. We would also be certain that the steel pipes that we produced were of great quality. We should be able to reassure the general public about the quality of that steel piping, so it could be a win-win situation.
In the US, having abundant cheap shale gas has helped to attract $138 billion of investment in the chemical industry, which is funding something like 225 new projects. The US has also brought a huge amount of its manufacturing back to that country because of its supply of shale gas. I do not believe the UK has quite the resource that the US has, but it will make a significant difference.
This has been a good debate, with many ideas being raised that I hope the Minister will take on board. My final point is to repeat what I said at the beginning: we have to make sure that the plans are acceptable to local people and benefit them. We have to bring out into public exactly what safety measures are being put in place, and we have to make that argument clearly in public meetings. We should ensure that we bring shale gas out of the ground in this country, to create better energy security in the future.
David Mowat (Warrington South) (Con)
I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) for leading the charge on this. It seems that the key word in this debate is “manufacturing”, and it is good to have a discussion that focuses on that. I thought that the hon. Member for Penistone and Stocksbridge (Angela Smith), in particular, made an extremely good speech, not only about the shale industry and manufacturing in that area, but the impact on manufacturing generally. It is very hard to have a march of the makers when we have higher electricity and feedstock costs, and generally a higher cost environment than our competitors, particularly those on the eastern seaboard of the US. Those points were well made.
I support the shale industry, which I have spoken about in the past. I completely agree that the concerns of local MPs—I have a fracking site in my constituency—need to be listened to. The industry needs to be well regulated and safe. I will come on to—what did we hear?—the “pragmatic and responsible” position apparently taken by the SNP.
I completely support the need for good regulation and local involvement, but I also have to say that sadly, in my view, the shale industry in the UK is not going to take off with the current prices of oil and gas. At $28 a barrel, the US shale industry is closing down and it has much more significant economies of scale than we have—the cost is something like $50 or $60 a barrel over there, and the gas price is linked. There will have to be closures. Frankly, in Aberdeen, we are seeing the impact of $28 a barrel. That is only just starting to hit Aberdeen, because $28 is higher than the operating cost in the North sea, let alone development and exploration.
I will put that caveat to one side and turn to the manufacturing potential of the industry—I hope I am wrong, however, and that perhaps prices will increase. We do not know.
Angela Smith
I thank the hon. Gentleman for his kind comments. Is it not also the case that the shale gas industry is much more fluid, dynamic and has much lower start-up costs than the oil industry, for instance, and that, in the long term, shale gas probably has a better future?
David Mowat
All that is true—and it is much more tactical, quicker and goes on from one to another. It does not have the big up-front development costs of, for example, North sea platforms. That is true, but it is also true that the wells do not last as long. The fact is that in the US, the shale industry is a $50-a-barrel industry, and at $28 dollars, that industry is in trouble. That is the whole strategy that the Saudis are taking and is what they are trying to achieve. They are going to be successful unless other things make them stop.
The title of the debate, however, is “Onshore Oil and Gas”—not shale. I say that because it is worth remembering that we have an onshore oil and gas industry. We have drilling and have had it for the past 30 years in places such as the New Forest, without the level of controversy that appears to surround this industry.
Other Members have talked about this, but let us examine briefly what has happened in the US shale industry. The industry has reduced the cost of gas by two thirds and has been converting—unfortunately, this also might stop—liquefied natural gas import ports to become LNG export ports. Equally important, the US has met any climate change target that anyone has given it. It did not sign up to Kyoto, but it would have met it by miles because of the displacement of coal by gas in its carbon emissions.
I want the House fully to understand that if the world were capable of taking out all coal and replacing it with gas, which is a big ask, it would be equivalent to increasing the amount of renewables in the world by a factor of six. That would be real progress in emissions. When political parties talk about carbon emissions—we heard about that earlier—without giving cognisance to that fact, it is frankly disingenuous at best.
Kirsty Blackman (Aberdeen North) (SNP)
On emissions and greenhouse gas, it is relevant to think about methane emissions when natural gas is used instead of coal. We need to consider that, and not just the carbon emissions.
David Mowat
That is a strong point and I agree with it. It is extremely important that, as in the US, there are no methane emissions. We have seen over and again in places such as Pennsylvania that methane is not emitted and that some of the scare stories are not true. I am sure that when the Scottish Government conduct their pragmatic and responsible review of the industry they will find that out for themselves.
In the US—I will not repeat my points—there are two elements in what cheap energy can do in manufacturing. The US has created around 200,000 jobs in that industry but, more important, the estimate is 1 million jobs in the onshoring chemicals industry in the US eastern seaboard. The transformation is extraordinary. It is re-shoring industry from Asia, China, Europe and, frankly, the UK.
Organisations make marginal decisions—this is not about closing Teesside and moving it to the US. When it comes to the marginal decision of where to open the next production unit, it will not be in Grangemouth, Teesside or Runcorn, but in Pennsylvania or Cleveland because that is where energy prices and feedstock prices are so competitive that more money can be made. We need to be cognisant of that. We sometimes talk in this House as though it is a new industry, but it is not.
The question arises—it is a fair one—of whether that applies to the UK. I have heard it said many times that things are different in the UK. It is true that we have a smaller manufacturing base and a much smaller chemicals industry, so perhaps it will not be so dramatic. People sometimes say, “Well, US gas prices have reduced by 70%, but that can’t happen here because we are on a European grid.” Generally speaking, when there is more of a commodity, the price falls. It is true that we have a European gas price and a European hub, but we had a global market for oil and look at what shale eventually did to the oil price. We are still living with that.
Tom Blenkinsop
I take on board what the hon. Gentleman is saying about a sheikhs versus shale fight, but the reduction in general fossil fuel prices, because of the online, downstream effect of renewables in the last 10 years, has also had an effect on driving down fossil fuel prices. The future of shale could be very beneficial to energy intensives because of cost, which is at least 50% cheaper than conventional gas. In addition, most of those industrial sites in Britain are located close to where those feedstocks are found.
David Mowat
I meant to say at the start that with current prices where they are, I do not think we will see a massive upkick in the UK’s shale industry. I think that will happen where shale is available near a chemicals site—INEOS in Runcorn and in Grangemouth is an example—because the costs and economics are different.
Tom Blenkinsop
Rather than seeing shale as a means by which to reduce consumer prices for heating boilers, for example, we should also have an industrial strategy that targets the use of shale gas for cheap energy-friendly intensives because that would be a cheap benefit.
David Mowat
My point was more about feedstock. I have no problem with an industrial strategy along those lines, although I make the point gently that the million jobs that were created on the eastern seaboard of the US were the result not so much of industrial strategy, but of a massively cheaper economic model and business case and all that goes with that. We need to learn from that.
The Chairman of the Select Committee on Environment, Food and Rural Affairs, my hon. Friend the Member for Tiverton and Honiton (Neil Parish), made a number of points about the fact that we are running out of gas. This is not principally a discussion about whether we should have gas versus renewables. It is gas versus coal, as I said earlier, in environmental terms. Gas production is now 70% lower than five years ago and we are importing it from Qatar and principally from Norway, but increasingly from Russia. Centrica has a contract with Gazprom and around 10% of our gas will come from Russia by 2020. We need to understand that and be comfortable with the implications.
Alex Cunningham (Stockton North) (Lab)
I am sorry I was not here for the start of the debate. The hon. Gentleman has talked a lot about the proximity of supply and forward gas production over the years. Will he talk a bit about coal gasification, which could be so important and is so close to Teesside and the north-east, for our energy-intensive industries?
David Mowat
I am not sure whether that was a request for me to talk about coal gasification. I will not because I have been talking for 10 minutes, but I agree that it is a complex market and an opportunity for Teesside. Our country’s industry base in Teesside is extremely important to all constituents there, and I completely agree with that.
On Wednesday, I had dinner with the head of Ernst and Young in the UK and I said that one thing that annoys me about parliamentary debates is that we quote reports from people like Ernst and Young as though they are some sort of gospel. We all say, “That’s what they say, so it is true and I will go with that.” It said in its recent report that it estimates that 64,000 jobs will be created in the shale industry alone, 6,000 direct and the rest in the supply chain, steel and so on. I return to the US experience where more jobs were created in the industries that benefited from the lower feedstocks than in the direct industry—the chemicals industry and so on.
Angela Smith
I thank the hon. Gentleman for making that important point. Does he recognise that the steel industry unions are one of the biggest supporters of the shale gas industry in the US?
David Mowat
I think the steel industry unions are right, as are the chemicals and aluminium industry unions. The US, unlike the UK, still has an aluminium industry, principally because energy prices there allow it to happen.
Neil Parish
The US has reduced its gas price hugely to attract the industry. When we extract shale gas, will we reduce our gas price or will we keep it the same? That is an interesting point because, if we are to encourage the industry properly I suspect we will have to reduce our gas price.
David Mowat
Gas prices are set by the market. We have a spot price for gas which is set in the European gas market. People have made the point that the European price will not decline in the same way as in the US. That may be true, but I make the point again that they could have said that about oil and shale oil. We have seen what has happened there. Clearly, the more there is of something, all other things being equal, the more the price falls. Fuel poverty is not the subject of this debate, but many people are living in fuel poverty in our country and we should all be keen to have lower energy prices.
Before I close, I want to pick up on the pragmatic and responsible points made by the Scottish National party. All of us as Members of Parliament have a leadership role in our communities. We heard my hon. Friend the Member for Thirsk and Malton exercising his leadership role. Of course he faces pressures in terms of the environment of the Yorkshire dales, but he also understands that we need jobs in our country and we need to create wealth. Importing gas at scale from Qatar, Russia and Norway takes jobs away from our country and has an impact on industries in Cleveland and so on. That is the exercise of leadership. “Leadership” is an important word, and all of us in this place need to exercise leadership. Saying that we are going to have a moratorium on this activity because that is responsible and pragmatic when the reality is that this industry has been going for 10 years and can go to Pennsylvania, like my hon. Friend did, and have a look—it can do all of that—is what I would describe as negative leadership, and it is populist politics because there is a body of people out there who are receptive to that; and that is not what any of us were elected to this place to do.
Mr George Howarth (in the Chair)
We have approximately 30 minutes left. That should be adequate time for the three Front Benchers, but I caution them that the hon. Member for Thirsk and Malton (Kevin Hollinrake), who moved the motion, has said that he would like a few minutes to sum up at the end.
Kirsty Blackman (Aberdeen North) (SNP)
It is an honour to serve under your chairmanship, Mr Howarth. I thank the hon. Member for Thirsk and Malton (Kevin Hollinrake) for bringing this debate to the House; that is very much appreciated. I am delighted to follow the hon. Member for Warrington South (David Mowat), because he picked up on a few points from the SNP and this is a good time to discuss those. I am also pleased that my hon. Friend the Member for West Aberdeenshire and Kincardine (Stuart Blair Donaldson) said some of what I was planning to say, because that means that I can get through my speech a bit faster.
My hon. Friend laid out the SNP position. We are looking at a comprehensive programme of research, and the consultation is due to end in spring 2017. Mary Church, head of campaigns for Friends of the Earth Scotland, said:
“This framework for reviewing shale gas fracking and coalbed methane looks like a well designed process, over a sensible timescale…undertaking a thorough review of unconventional gas cannot be rushed.”
If we are to exercise leadership and take the public along with us on this issue, a comprehensive review and a moratorium in the meantime is a sensible approach.
Graham Evans
The hon. Lady quotes Friends of the Earth. Is that the same Friends of the Earth that distributes misleading information to the general public by direct mail?
Kirsty Blackman
I have never received any misleading information from Friends of the Earth, so I cannot answer that point.
I want to make a few points about fracking. I do not understand what the hurry is. As the hon. Member for Warrington South mentioned, the gas price is pretty low at this point. The risks are not that well known yet. Fracking has been undertaken on an industrial scale really only since the very late 1990s and early 2000s. It does not have a body of evidence behind it. In terms of the rush to do this, the UK Government are trying to paint this as a gas versus coal debate—looking at our energy needs in terms of gas versus coal—but we have been shouting about other things. We have been making the case for things such as renewables and putting them front and centre. I do not think that this is a gas versus coal debate, no matter how much the UK Government try to paint it as such.
Angela Smith
For the record, the term “fracking” is not that helpful to the debate, but surely the key point of today’s debate is the importance to the future of UK manufacturing of giving this industry the support that it needs to get going. On that basis, there is surely a sense of urgency around all this. UK manufacturing needs new industries and new activity in order to grow.
Kirsty Blackman
I appreciate that point and I will come on to manufacturing; I just wanted to answer first a few of the points that had been brought up throughout the debate. “Fracking” is the term that my constituents use and the term that is recognised throughout the UK. That is why I was using it.
It has been mentioned a lot that we should ensure that controls are in place and there is proper regulation. The Scottish Government’s point of view and the direction that we are taking is that we want to prove the safety first and, if we do decide to do this, ensure that the controls are in place after that.
Kevin Hollinrake
During the moratorium, what evidence has been collated about the safety or otherwise of shale gas?
Kirsty Blackman
We are still in the process of researching this. The research does not finish until later this year, and then in 2017 the public consultation will finish, so we are not at the point in time at which we will be publishing the evidence. I think that that is reasonable. It is reasonable to look at the research properly before we bring it all together—
Kirsty Blackman
Not now. I want to make some progress because I do not have long.
I want to talk briefly about carbon capture and storage, which is very important for reducing carbon emissions; that is not just about moving from coal to gas. I have mentioned already the issue in relation to methane emissions. I understand that there is some evidence that methane emissions are relatively low, but I would like to see the body of evidence brought together in a report on unconventional oil and gas.
I also want to talk briefly about the supply chain and the benefits in that respect. I represent Aberdeen, where we have been feeling the effects of the oil crash for much longer than a few weeks or months. For the past year, contractors have been finding it very difficult to get jobs and redundancies have been being made. In terms of the supply chain and supporting jobs in the UK, particularly in manufacturing around the supply chain, renewables would be very helpful. Also helpful would be looking at supporting the oil industry as it is now. I understand that the unconventional onshore oil and gas industry would bring jobs, but we need to protect the jobs that people currently have and are currently losing.
Tom Blenkinsop
I thank the hon. Lady for giving way; she is being generous with her time. The argument that I have certainly tried to make is that to have the industry that provides the solutions for renewables, which we still need to keep pushing hard for, we need the cheaper energy in order to retain the industry—so that we onshore that industry. For a steelworks to go forward and development to become cheaper and more efficient, it needs cheaper energy; and it is only the steel industry that provides the slab that is then rolled into tubes for monopiles that go into wind turbines, for example. It is the only onshore solution and it needs that cheaper energy.
Kirsty Blackman
I appreciate that. I am not sure how much the onshore oil and gas industry will affect the price of energy. I did not know a huge amount about the chemicals industry and things like that; a point was made about feed. However, we do have the lowest oil price for a long time, and natural gas is at a 10-year low as well, so energy prices should be cheaper as things stand, without the need for fracking.
Kirsty Blackman
I do not want to give way again.
I am concerned about the rush to fracking. The UK Government will not get a major tax take from it, because of the current position with the prices. We should not be rushing to do it. In terms of my constituency and protecting jobs in the north-east of Scotland, we need to be looking at supporting the conventional, established offshore oil and gas industry, as well as supporting renewables. The Government need to rethink their renewables obligation changes.
Kevin Brennan (Cardiff West) (Lab)
We have had a very interesting debate. I have certainly learned a lot by listening to contributions from hon. Members on both sides of the Chamber. I thank everyone for that and congratulate the hon. Member for Thirsk and Malton (Kevin Hollinrake) on securing the debate. He told us that fracking—I am sorry to use that term—was a big issue in his constituency. Nevertheless, he made the case in relation to clean air, strategic interests of our economy, the industrial supply chain and jobs, including in the steel industry, tax revenues and exports. He slightly deprecated Government intervention in the economy, I think, by giving examples of economic progress where that had not happened. Then he outlined a whole series of Government interventions that he thought were necessary for this industry to work appropriately in the context of his constituency, so I think that there is a balance to be struck in relation to what the Government’s role is in developing a new industry of this kind.
Kevin Hollinrake
The deprecation that I expressed was more about providing short-term subsidies that are then withdrawn, rather than thinking long term. The interventions that I suggest are long-term interventions that would control and regulate the industry.
Kevin Brennan
I understand that, although I think that there is a case to be made for saying that some of the subsidies that the Government have withdrawn could have been planned in a longer term way. We will leave that point, however, because is not the subject of our debate.
I praise my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith), as other hon. Members have done, for her speech and for campaigning assiduously, particularly on behalf of the steel industry and her constituents. She put the case very well. Whatever we may think about the industry, the House has taken a decision, although it may not be the one that we wanted. There are clearly opportunities for British manufacturing, so we have to take a pragmatic approach and plan accordingly. We need a strategic approach to ensure that UK plc and jobs in the UK benefit to the greatest extent possible from the development of the industry. My hon. Friend outlined the potential for the UK chemicals industry and for manufacturing in general. She made some good points about the pumps that would be required for the industry, about sand and cement and about the steel industry. I congratulate her on her contribution.
The hon. Member for Weaver Vale (Graham Evans) described a public meeting in his constituency. I understand the difficulty of getting the message across. Energy generation is one of the great “wicked issues” of politics. We all know the rule in politics: everybody wants cheap, plentiful, clean energy at the push of a button, but nobody wants it to be produced anywhere near to where they live. Those two things, as we all know, are incompatible. We are required to wrestle with such wicked issues every day as constituency MPs, Ministers and leaders in our community and across our country. The hon. Gentleman was quite right to point that out.
I believe that Ministers might have a more direct role than the hon. Gentleman seems to think in taking the message to the public. That is part of Ministers’ responsibility, and they should not duck away from taking on difficult issues. In my experience, when Ministers take such responsibility, in the longer term they produce results for the Government in question—not that it is my duty to give them advice on how to win elections. I certainly think that Ministers have a direct role, although I appreciate that the Minister might not wish to spend his Friday nights in the way in which the hon. Gentleman described.
The hon. Member for West Aberdeenshire and Kincardine (Stuart Blair Donaldson) gave us an interesting insight, in his brief contribution, into the fact that the industry had its place in the 19th century. Shale was exploited in his constituency in the 19th century, so it is not a new concept.
The hon. Member for Tiverton and Honiton (Neil Parish) told us about his experience in Europe, and told us not to blame him for the bad things that have gone on there. Yesterday, other hon. Members and I attended a dinner with the aerospace industries. Since the start of the European collaboration that is Airbus, the European share of the commercial airline market has gone from 18% of the world market to 50%. It was made absolutely clear to us last night that that would not have happened without European co-operation and our membership of the European Union, so it is not all bad.
The hon. Gentleman described his friend the hon. Member for Thirsk and Malton as brave, and I am sure that he is. I am sure he would be equally brave if his majority were 456 rather than 19,456. He is quite right that it is always tough to have to wrestle with concerns from one’s own constituents.
The hon. Member for Warrington South (David Mowat) made, as ever, an informative and expert speech. He pointed out—this is the elephant in the debate—that the current wholesale price makes it substantially more difficult for the industry to get going than might otherwise be the case. He made a well-informed and interesting speech, in which he pointed out the potential for other industries.
We had a speech from the SNP spokesperson, the hon. Member for Aberdeen North (Kirsty Blackman), who laid out her party’s position. I wish my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) had made a speech. He made many interventions, all of which were interesting and, as ever, informative. We slightly missed out, but he did give us the benefit of his interventions.
It is my responsibility to set out our position as a party. We have already laid out the conditions that we wanted to see in place before the industry developed further, to ensure the implementation of the protections that hon. Members have expressed concern about. I will not go into great detail on that, because we have not got time. Given that the UK will rely on gas, on any estimate, until at least the 2030s and possibly beyond that—we are very reliant on imported gas from Norway and Qatar, as was pointed out during the debate—we support exploratory drilling, but it must not be at any cost. We made that clear in the amendments we tabled last year to the Infrastructure Bill. Despite conceding some of those points during the debate, the Government have somewhat reneged on them since the general election. We laid out a large number of conditions that we thought were necessary before exploratory drilling could go ahead. I will not list them now, because of the time, but they are well established on the record. That remains our party’s policy.
We have criticised the Government for allowing communities to decide whether they want onshore wind farms but not extending the same community involvement to this industry. There are questions about the appropriate level of local concern over a strategic industry of this kind. In relation to onshore wind, the Government have rather undermined their argument about the industry by the position that they have taken. I will not press any further on that point.
The development of this industry offers great opportunities for manufacturing industry in this country. One might call it “manufracturing”, as some have done. The Government must acknowledge that unless they bring forward an active industrial strategy, those opportunities will not be realised. We have heard about opportunities that have been missed with other industries, including offshore wind, because of a failure to understand and exploit the supply chain opportunities of a developing industry. There is a great danger that the same thing will happen in relation to this industry as it develops, unless there is an active industrial strategy. That must be driven by the Government being prepared to pull every lever at their disposal and bring all the appropriate parties together in the same room, as the previous Government did, for example, with the creation of the Automotive Council. In fairness, that was carried on beyond 2010 and is still in existence. It has brought tremendous benefit to UK manufacturing by getting industry and interested parties together and encouraging them to understand that there is a commonality of need, even where people are in competition with each other, for the sector.
Tom Blenkinsop
On the subject of an integrated industrial strategy, the comments of the hon. Member for Warrington South (David Mowat) about the east coast of America are quite interesting. The Obama Administration underwrote a lot of those projects with stimulus funding, which is part and parcel of the Obama Administration’s industrial strategy.
Kevin Brennan
On this side of the Atlantic, we tend to think that the USA is a laissez-faire society, but when we go there and see the reality of policies, not only at federal level but at state level, we soon find out that the picture is very different from our assumptions. Next time, I hope that my hon. Friend will prepare a speech, because we will not let him intervene so many times, no matter how interesting his contributions are. We look forward to hearing from the Minister about what he will do to make sure that the Government pull every possible lever.
Mr George Howarth (in the Chair)
Order. Before I call the Minister, I advise him not to take the Opposition spokesman’s suggestion of addressing us, as Queen Victoria accused Gladstone of doing to her, as though we were a public meeting.
The Minister for Skills (Nick Boles)
It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) on securing the debate. I had the advantage, or perhaps the disadvantage, of arriving in the Chamber this morning almost wholly ignorant on the subject. This Chamber, at its best, is the best university seminar in the world, and I will leave after an hour and a half a lot more knowledgeable on the subject.
Particularly important and welcome is how constructive and responsible the debate has been. Not a single contribution has been out-and-out anti-unconventional onshore oil and gas drilling. Concerns have been expressed and different approaches by different Governments in the country have been outlined, but nobody has suggested that onshore drilling does not potentially have a role to play in our future.
Interestingly, the focus—especially from Conservative Members—has been on the role of the Government and their various agencies in helping people to cope with change, the unexpected, and the things that baffle and worry them. I congratulate all my hon. Friends on the role they take as Members of Parliament in bringing people together, securing the contributions of relevant experts and helping to lead their communities. The hon. Member for Cardiff West (Kevin Brennan) observed the scale of the victory of my hon. Friend the Member for Thirsk and Malton in the last election, but I am sure that he would be as brave in leading his community wherever he was elected and with however few votes over his nearest opponent.
The suggestion of a combined regulator is interesting. There might be a more practical approach than merging regulators, which would be pretty complicated. I will ask Ministers—I suspect it will be those in the Department of Energy and Climate Change rather than the Department for Business, Innovation and Skills, but it might be a combination of the two—why all three agencies have to send people to meetings. I will ask whether it is possible to have people who, despite being employed by the Environment Agency or the HSE, can speak to all the different aspects, rather than, as my hon. Friend the Member for Weaver Vale (Graham Evans) pointed out, the agencies having to travel in packs. That seems slightly inefficient and suggests that there is not a joined-up view and that things can get lost in the cracks.
The Government’s policy on shale is that it can make a significant contribution to energy security, environmental protection and economic growth if it is managed carefully and regulated responsibly. Both Government and Opposition Members have mentioned the desire to arrive at just that balance, between recognising the opportunity and dealing with the risks and legitimate concerns.
On energy security, my hon. Friend the Member for Tiverton and Honiton (Neil Parish) mentioned that we currently import more than 50% of our gas, and my hon. Friend the Member for Warrington South (David Mowat) pointed out that by 2020, 10% will come from Russia. In the 2020s, based on current projections without the development of domestic sources of onshore gas, we will import more than 70% of our gas needs. Many Members have made the point that gas will always be a major part of our energy mix—or if not always, at least for the foreseeable decades. It is therefore important that we have a secure supply of it, ideally from domestic sources.
Alex Cunningham
I am pleased that the Minister has expanded his knowledge this morning. Does he plan to become equally knowledgeable about coal gasification? He could become an advocate for that part of the energy mix as well.
Nick Boles
The hon. Gentleman tempts me. No doubt if he secures a similar debate on that subject, I will have that opportunity. I am sure he is right that we can help to reinforce the competitive advantage of our existing chemical and steel industries, and others, through all sorts of innovative ways of securing energy supplies that are more environmentally sensitive than previous ones.
On the vital question of environmental protection, my hon. Friend the Member for Warrington South made the powerful point that, if all the world’s coal were replaced by gas, it would contribute the equivalent of a sixfold multiplication of the world’s renewables industries. Gas is a fossil fuel and, in the long run, we all hope not to be reliant on fossil fuels. Nevertheless, the transition from coal to gas is probably the most dramatic thing we can do to enable us to cut carbon emissions and prevent further climate change. That is why the Government are so keen to see the development of shale gas in the UK. There are substantial reserves, which will assist us in achieving our environmental objectives and providing economic security.
Kirsty Blackman
What about the possibility of supporting offshore oil and gas companies to extract gas from more difficult high-pressure, high-temperature wells, for instance, rather than putting the efforts into shale gas?
Nick Boles
In this constructive and responsible debate, I do not want to enter into partisan criticism. The hon. Lady and the hon. Member for West Aberdeenshire and Kincardine (Stuart Blair Donaldson) represent seats in Aberdeenshire, which, of all places in the United Kingdom, has a great understanding of and reliance on the oil and gas industries. It was extraordinary that they did not mention the Scottish election that is coming up in the spring, as that was perhaps one consideration that informed the timetable of the SNP’s no doubt responsible and serious moratorium on the development of the industry.
It was extraordinary that the hon. Member for Aberdeen North (Kirsty Blackman) said that the industry has not been in existence for very long and therefore we do not know whether it is safe, when she also mentioned that it started in a serious way in the 1990s. I wish that the 1990s were not as long ago as they are, but they are 20-odd years ago. The failures of the previous Government mean that we have lost a huge opportunity by being slow. We do not want to continue that irresponsibility.
I thought the most interesting part of the debate was the discussion about the vital interplay between the potential of unconventional oil and gas and coal gasification, and the competitiveness of industries that are fundamental to the UK’s prosperity and employment in the north-east and elsewhere, which face a challenging time. We have heard, in interventions by the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) and in the excellent speech by the hon. Member for Penistone and Stocksbridge (Angela Smith), about the dramatic effect that access to much cheaper and more local gas supplies has had on the chemical industry in the United States, and how vital it could be here. We have also heard about the opportunity that it would create for our hard-pressed steel industry if it were able to supply the dramatic needs estimated in the Ernst and Young report—£2.4 billion of steel tubing, and drilling rigs worth an estimated £1.65 billion. If the steel industry were able to take part in that and the chemical industry were able to benefit from the cheaper costs, we could benefit dramatically. Thanks to my hon. Friend the Member for Thirsk and Malton, we have heard a powerful case for a responsible, regulated and measured approach, but not for a moratorium. I congratulate him on securing the debate.
Kevin Hollinrake
Once again, it is a pleasure to serve under your chairmanship, Mr Howarth. I apologise for my initial lack of knowledge about protocol. I am grateful to Government and Opposition Members for the constructive way in which the debate has been dealt with. I am also grateful to the Minister. I quite understand that onshore oil and gas is not his normal brief, but skills and industry is, and we have heard compelling cases from Members on both sides of the House about the opportunities for the steel, chemical and engineering industries. There are huge opportunities for jobs for young people, which would give them a chance in life as young engineers. I welcome the recent announcement by the Secretary of State for Education that schools will be required to direct young people to engineering as well as to university, which will be key.
We need clear regulation. People have concerns about who they would go to if something went wrong—would it be the Environment Agency or the Health and Safety Executive? Having a single regulator, or a lead regulator, would deal with some of those concerns. We also need a clear, well articulated plan. The shadow Minister mentioned my majority. That is a clear case in point. We need to ensure that Members of all parties—whatever their majorities—are willing to support onshore drilling on the basis that it is the right thing for the UK and a real opportunity for UK manufacturing. It is incumbent on the Government to clearly illustrate how that can be done in a way that eases local people’s concerns.
Motion lapsed (Standing Order No. 10(6)).
Child Poverty
(8 years, 9 months ago)
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Peter Dowd (Bootle) (Lab)
I beg to move,
That this House has considered levels of child poverty.
I am pleased to serve under your oversight, Mr Howarth.
“Even if we are not destitute, we still experience poverty if we cannot afford things that society regards as essential. The fact that we do not suffer the conditions of a hundred years ago is irrelevant… So poverty is relative—and those who pretend otherwise are wrong.”
I start by agreeing with the Prime Minister, who hit the nail on the head when he said that in his 2006 Scarman lecture. Consideration of the levels of child poverty is a matter of huge significance. A reasonable definition of poverty proposed by the Joseph Rowntree Foundation is
“when a person’s resources are not enough to meet their basic needs.”
In other words, being able to enjoy the activities of normal daily living is important. The Prime Minister agreed with that in practical terms.
I do not want our consideration to turn into a political football, but given the political choices that the Government have made in this policy area, it would be almost impossible not to stray on to that pitch. I take it as read that, at some point or other, a Government Member will mention the apparent mess in which Labour left the country; how the Government have got the country back on track and saved the day but that there is still much to do; how the country needs to fix the roof while the sun shines; how we have to live within our means; and, of course, every other cliché to which Ministers can lay their tongues. Unlike the world economic crisis of 2008, which was clearly and wholly the fault of the last Labour Government, even I acknowledge that the current international economic uncertainty has little to do with Government policies, but that cannot be an excuse or an alibi for the Government to shirk from ensuring that child poverty does not increase.
Nick Thomas-Symonds (Torfaen) (Lab)
It is a pleasure to serve under your chairmanship, Mr Howarth. Does my hon. Friend share my concern about what the Social Mobility and Child Poverty Commission said just before Christmas:
“It has long been obvious that the existing child poverty targets are not going to be met. In fact they will be missed by a country mile”?
Does he agree that that is a damning indictment of the Government’s policies?
Peter Dowd
It is a damning indictment. If just one organisation was saying that, perhaps we could bypass it, but organisation after organisation is identifying that as a cause of concern. Somewhat topically, if the Government can exempt the most powerful of commercial institutions from paying their due taxes or can slope away from challenging the practices of bankers, who are the real culprits in the economic chaos of 2008, surely they can protect our children from the worst effects of those who seem unable or unwilling to pay decent wages.
The existence of any level of child poverty in one of the world’s wealthiest countries should be a source of deep concern to everyone in this room, but it should also be a source of shame that the levels of child poverty in this country are high and rising. I have many friends who either were or are teachers or health and social care professionals—they work or have worked to make the lives of children better, easier and gentler—but such professionals have a hard task. They have spent much of their careers seeing the number of children in poverty beginning to drop. For example, poverty reduced dramatically between 1998 and 2011, when 1.1 million children were lifted out of poverty, but that has changed over the past few years, as my hon. Friend said. Austerity has taken its toll, particularly on those who can least afford it. Figures from the Department for Work and Pensions indicate that, since 2010, child poverty has, at best, flatlined. Meanwhile, the number of children in absolute poverty has risen by half a million since 2010. That is 100,000 children every year, more than 8,000 children a month, almost 2,000 children every week or, put another way, 300 children a day for five years—year in, year out—which cannot be right.
Let us not beat about the bush. The unspoken question on many minds is whether that poverty is due to the fecklessness of parents. Well, I think not in most cases. More than two thirds of children affected by poverty live in households where at least one member is in work. God knows what type of work permits and enables such poverty, but they are, none the less, in work. End Child Poverty, an organisation considering such issues, is particularly concerned about the rising poverty in working families. As the Joseph Rowntree Foundation report, “A UK without Poverty,” noted,
“Too often, public debate talks about ‘the poor’ as if they were a separate group of people with a completely different way of life.”
Imran Hussain (Bradford East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Howarth. Does my hon. Friend agree that low-wage, low-skill economies lead to an increase in child poverty? In my constituency, Bradford East, we have an absolute child poverty rate of 28.6%, compared with a national average of 18.2%, which is unacceptable. Does he agree that one solution is not this rhetoric of more employment, which the Government keep telling us, but to provide high-skill, high-wage jobs, so that families cannot just survive but live properly and children are brought out of poverty?
Peter Dowd
I agree with my hon. Friend, and I will come back to that in a moment.
Nick Thomas-Symonds
I am grateful to my hon. Friend for giving way again. He is making an important speech on an important topic, and I congratulate him on securing this debate. He has mentioned poverty suffered by people who are in work. Does he agree that the cuts that the Government are introducing to the work allowance of universal credit from April 2016 will make that situation worse? Perhaps that explains the enormous turnout of Tory Back Benchers to support the Minister today.
Peter Dowd
I agree with my hon. Friend. I spoke earlier about Members in the room being deeply concerned about poverty, but obviously not that many Government Members are concerned.
I will finish the quote from the Joseph Rowntree Foundation report:
“In reality almost anyone can experience poverty—over half of the population spent at least one year in relative income poverty between 1991 and 2003.”
Even if we accept that fecklessness is a factor, it is only part of the picture, and not a very big part. It becomes another alibi for doing little about the problem. Blaming poor people for being poor, even when they are working hard, is unconscionable. Shakespeare is always a good source for thought:
“And, being rich, my virtue then shall be,
To say there is no vice, but beggary.”
My late mother was a war widow. She died at the age of 95 and had been a widow for 50 years. Her mother was a war widow and a war mother—she died at the age of 106 and had been a widow for 67 years. Much, if not most, of their time was spent in relative poverty, with poverty for their children, too. Was that right? As the youngest, I feel that I was lucky, but luck should have nothing to do with it. That cannot be right.
The country’s economic structure plays a significant part in poverty. For example, the Government are still not concentrating on the effects of the productivity gap, which accounts for billions of pounds in lost GDP. My hon. Friend the Member for Bradford East (Imran Hussain) raised that issue earlier. Output per worker remains 2% below the pre-crisis levels of 2008, whereas in the rest of the G7, it is 5% higher. The Economist has said:
“The French could take Friday off and still produce more than Britons do in a week.”
In an article in MoneyWeek last year, Simon Wilson indicated:
“Bank of England calculations suggest if productivity had kept pace with the pre-2008 trend, the UK population might on average be 17% better off than it is today.”
Rather than pointing the finger at the poor, the Government should get that same finger out and address that driver of poverty.
Jo Cox (Batley and Spen) (Lab)
I have statistics similar those of to my hon. Friend the Member for Bradford East (Imran Hussain). In my constituency, one third of all children, 33%, live in poverty, which is heartbreaking and shocking for the many hard-working families there. Does my hon. Friend the Member for Bootle (Peter Dowd) welcome the major defeat in the Lords last night of the Government’s attempt to abolish income-related child poverty targets, and does he agree that it is simply not credible to tackle child poverty without acknowledging the worst issue, a lack of money? For the Government to attempt to abolish that target is simply reprehensible.
Peter Dowd
I agree with my hon. Friend, but I think a pattern is beginning to develop with this Government: they redefine everything when it does not suit them. So, for example, affordable housing now means a house costing £400,000 or £500,000. Everything is redefined to suit the Government’s agenda.
Patricia Gibson (North Ayrshire and Arran) (SNP)
To follow on from the point made by the hon. Member for Batley and Spen (Jo Cox), is the hon. Gentleman as concerned as child poverty charities are by the Government’s attempt to redefine child poverty? It is important to publish annual figures on income-related child poverty, if for no other reason than the long-term impact of such poverty on health, development, educational outcomes and life chances.
Peter Dowd
The hon. Lady makes an important point. As I said earlier, even the Prime Minister accepts that there is relative poverty, and all the jiggery-pokery with definitions is not going to make that untrue.
Liz McInnes (Heywood and Middleton) (Lab)
Is my hon. Friend aware that the Child Poverty Action Group has stated that it costs £29 billion a year to respond to the issues caused by child poverty? CPAG says that it is a false economy to drive up child poverty and that this Government should be considering measures to drive it down.
Peter Dowd
My hon. Friend is absolutely right. She has stolen my thunder—I will refer to that figure later—but she makes an absolutely valid point.
The Government’s January 2014 evidence review of the drivers of poverty found that a lack of sufficient income from parental employment, not just worklessness, is the most important obstacle to getting children out of poverty. Of course, to pick up on what my hon. Friend said, the Government say that a high-skilled, high-wage economy will lift family incomes—ergo, poverty will fade away. In the world where many of my constituents live, it does not quite work like that. I am afraid that even combined with increased personal tax allowances, the increase in the minimum wage, or whatever the Government want to call it—another redefinition—does not go far enough to alleviate child poverty to any substantial degree.
There can be no doubt that child poverty is rising and that it has an effect on educational outcomes, health outcomes and job prospects in the longer term. Independent projections from the Institute for Fiscal Studies indicate that, as has been mentioned, child poverty is beginning to rise. Research by End Child Poverty identified that 4.1 million families and 7.7 million children have been affected by below-inflation rises in both child benefit and child tax credit over the past few years. Interestingly, poverty of aspiration by the Government in policy terms begets financial poverty, because it restricts the use of the very tools that could tackle the drivers of poverty.
In my constituency, child poverty in one ward has reached 40%. Across the constituency, it is around 30%. In other words, almost 7,000 children in my constituency live in poverty. That cannot be right. Remembering the point I made earlier about the number of children in working families who still live in poverty, youth unemployment hovers between 8% and 9% and adult unemployment at about 7%. The median wage is £470, below the national median level of £520 and the regional level of £480. What message is that sending to our children: “Start your life in poverty; get a job on low wages; and you’ll still be in poverty—and so, in turn, will your children.”? It is hardly the most encouraging of straplines for young people.
In 2015, £7 million in early intervention funding was allocated to Sefton Council, in whose area my constituency sits. That is a reduction of £10 million since 2010 in early intervention, the very thing we should be getting to grips with. How can that funding cut help alleviate child poverty? Problem debt in Bootle is £12.5 million. The Children’s Society suggests:
“Too often, when families are struggling with repayments, the response from creditors is unhelpful…a breathing space scheme”
would give
“struggling families an extended period of protection from default charges, mounting interest, collections and enforcement action”,
enabling them to seek advice and preventing them from falling deeper into the debt trap. That is a practical suggestion.
I believe that my constituency is not an outlier in statistical terms; it is typical of many areas, both rural and urban. It is lazy to suggest that people are shirkers. Levels of child poverty in this country are dreadful. They are a blot on the integrity of our society. The Government cannot solve all the problems, nor does anyone expect them to, but poverty costs money. As my hon. Friend the Member for Heywood and Middleton (Liz McInnes) said earlier, the cost to the UK of poverty is reckoned by one assessment at about £29 billion pounds: almost £6 billion in lost tax, £15 billion for extra spending on services to deal with the consequences of poverty and £8.5 billion in lost earnings to individuals. What a waste! Surely, even forgetting the human stories and experiences behind those figures, the statistics and costs are enough to make any Government reconsider their strategy for dealing with the child poverty that our country faces.
As Nelson Mandela said, standing just yards away from here while he addressed Parliament,
“poverty is not natural. It is man-made, and it can be overcome and eradicated by the actions of human beings.”
I have managed to agree with the Prime Minister and Nelson Mandela in one fell swoop, which does not happen very often.
The Minister for Employment (Priti Patel)
It is a pleasure to serve under your chairmanship, Mr Howarth. I thank the hon. Member for Bootle (Peter Dowd) for securing this debate. I agree completely with him that child poverty is an incredibly important issue, and that child poverty levels are too high in this country. Indeed, he and I discussed the indicator and its importance to addressing child poverty while discussing the Welfare Reform and Work Bill in Committee not long ago.
The issue is of immense importance. The hon. Gentleman referred to my right hon. Friend the Prime Minister in his remarks. Tackling child poverty is close to the Prime Minister’s heart, and it is at the heart of this Government’s agenda. We have committed to eliminating child poverty and to improving the life chances of children up and down the country. They are the future of this country. It is also important to recognise, as the hon. Gentleman has done, that poverty is not natural. At the same time, it should not be defined by arbitrary measures. We must look at the actual causes of poverty and how we as responsible Government and parliamentarians use policy levers to create the right solutions to address the actual causes of poverty.
Nick Thomas-Symonds
Does the Minister agree with what the Social Mobility and Child Poverty Commission said just before Christmas? It said that
“it is not credible to try to improve the life chances of the poor without acknowledging the most obvious symptom of poverty, lack of money.”
Will she take this opportunity to confirm that in defining child poverty, the Government will take into account income, as well as their defeat on this matter in the House of Lords last night?
Priti Patel
I recognise the defeat that took place in the House of Lords last night. It is a perfectly normal part of the parliamentary process. On income measures, we will continue to use the number of households below average income. On the point about the Social Mobility and Child Poverty Commission, the SMCP itself is clear that the current approach focuses on dealing with symptoms and not the underlying causes of child poverty. Of course, that is exactly the purpose of this Government.
In fact, we debated this issue very extensively during the passage of the Welfare Reform and Work Bill. We are focusing on the root causes rather than symptoms. It is also important to say that we are seeking to prioritise the areas that will make the biggest difference and help to transform the lives of children.
Nick Thomas-Symonds
Will the Minister simply confirm something? Does she agree that lack of money is an obvious measure of poverty—yes or no?
Priti Patel
Income is a significant part of this issue, but there are many other causes as well. Through the Welfare Reform and Work Bill, we are focusing on certain factors, because all the evidence tells us that the factors that have the biggest impact on child poverty and our children’s life chances, and consequently they become the real drivers, are focus on education, educational attainment and work, because they make the biggest difference to disadvantaged children, both now and in the future.
In particular, with the new life chances strategy we are focused, as I have already said, on tackling the root causes. The Prime Minister has already outlined that strategy, which sets out a comprehensive plan to fight aspects of disadvantage and extend opportunity. However, we should also recognise that many of those in poverty have to confront a range of challenges and issues, such as drug addiction, alcoholism and health issues, including poor mental health. It is important that we use the right public policy levers to bring the support together to deliver the right services and mechanisms for those households.
The strategy will include a wider set of non-statutory measures on the root causes of child poverty, including family breakdown, the problem of debt, and drug and alcohol addiction. These measures will sit alongside the life chances measures in the Welfare Reform and Work Bill. This spring in particular will present an opportunity to examine the details and to consider how we start to address these deep-rooted social problems, and how we can work collectively—by using public policy and the delivery mechanisms that we have in all our communities—to focus on how we can support children and transform their lives.
Jo Cox
I thank the Minister for giving way. I just want to push her a little bit on whether she will now accept the defeat last night and listen to a range of experts, the Social Mobility and Child Poverty Commission, and the public, who feel that the Government should report annually on income-related aspects of child poverty. While I acknowledge that child poverty is a complex issue, the income dimension is such a key part of it that it is not credible to ignore it.
Priti Patel
The Bill is going through the right process of scrutiny now in the Lords, as it already has in the Commons. Of course, we will consider all responses when it comes to considering the next steps in particular. That is the right and proper parliamentary process and of course all legislation goes through it.
Once again, however, I must emphasise that there is no silver bullet for this situation; there is no way in which child poverty can be just addressed overnight. A range of areas need to be looked at and, as I have said, tackling the root causes is a fundamental step in the right direction.
Nick Thomas-Symonds
The Minister is being very generous in giving way. Does she accept that trying to change the definition of child poverty simply confirms what the Social Mobility and Child Poverty Commission has said about missing the existing targets by a country mile? Are the Government not just trying to change the definition because they will miss the targets?
Priti Patel
I completely reject that assertion for many reasons, and I do not have the time now to have the full debates that we had in Committee; please forgive me, Mr Howarth.
This process is not about moving goalposts or changing definitions; it is about making a fundamental review of the approach that we take. I will not be tempted by the hon. Member for Bootle, who basically said that I would inevitably regale Members with what happened under Labour. However, this process is a fundamental shift in the strategy and the approach that are being taken. The approach is a holistic one, looking at the root causes and recognising that we have to address, for example, the number of workless households and the causes of worklessness, and ask why households have been workless in the past, and recognising that having work in households changes the future outcome for children and of course redefines child poverty and what it means to households.
We should also recognise in this debate that work plays a very important role in addressing the issue of poverty, including child poverty, because we know that work is the best route out of poverty. Evidence has shown that nearly three quarters of poor workless families who have found employment have escaped poverty. So these are some of the crucial underlying factors that we have to address, and of course work—
Priti Patel
I will give way just one more time, because there are other points that I want to make.
Liz McInnes
I thank the Minister and I will ask a brief question. If work is the route out of poverty, can she explain why two thirds of those who are defined as being in child poverty are in working households?
Priti Patel
We should also recognise that evidence shows that the highest poverty exit rate—75%—was for children living in families who went from part-time to full-time employment. Of course, as the economy grows, and through the introduction of the new national living wage as well, we will see those households benefiting much more when it comes to income in particular.
Regarding the hon. Member for Bootle’s own constituency, the latest figures show that the number of children living in households that receive out-of-work benefits fell by 7% between May 2013 and May 2014. Of course, we are seeing that trend develop by providing more employment opportunities, by recognising that, of course, work is the best route out of poverty, and by finding the right employment to support those families in particular to gain employment.
Imran Hussain
I accept that work assists with removing child poverty. Nevertheless, while the Government talk about mass employment and this road to economic recovery, in my constituency of Bradford East many of the jobs are zero-hours contracts, part-time work and poorly paid work. That does not assist my constituents and it certainly does not go towards eradicating child poverty in my constituency.
Priti Patel
There is good news in the economy and not all the jobs in the hon. Gentleman’s constituency will be part-time, low-paid or zero-hours, so he has made a sweeping generalisation. However, regarding his point about low-skill, low-wage work, he is right; that is a wider issue in the economy that we must tackle. Tackling it is based on getting a higher skill country and economy, which can only be achieved by our being competitive as an economy and by investing in education, which is exactly what this Government are doing, and by focusing on education as a key factor in transforming the outcomes and lives of children in particular. Educational attainment is the biggest single factor in ensuring that poor children do not end up as poor adults and get stuck in that cycle of dependency and that cycle of low wages and low skills.
We all know that good English and maths are important. There are plenty of studies—hundreds of them, and international studies as well as national ones—that recognise that those subjects are key aspects in improving children’s future life chances. Focusing on educational standards and having a new, vigorous curriculum are part of this Government’s commitment. However, educational attainment is also important. In areas of deprivation, turning around schools that unfortunately have been focused on low standards and low outcomes, and ensuring that we have more good and outstanding schools, particularly in areas of deprivation, including wards, is important, and we would all support that.
Hon. Members have obviously touched on measures in the Welfare Reform and Work Bill, but once again we must look at the changes that we are introducing, particularly regarding welfare. This process is not about individuals and using some of the terms that have been used: I think that the language that the hon. Member for Bootle used about shirking should not be used at all.
In the minute or so that I have left, it is important for me to emphasise that part of these reforms is focusing on the support that we can provide to individuals; not only cash payments but support to help people to get into work. That is exactly what the Welfare Reform and Work Bill is about.
I want to reassure the House about our focus when it comes to eliminating child poverty. The Government and this Prime Minister have been very clear about that. Our focus is on work and education, on a commitment to improving the life chances of all children and—importantly—on tackling the root causes of child poverty.
Question put and agreed to.
Further Education Colleges (North-east)
(8 years, 9 months ago)
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Helen Goodman (Bishop Auckland) (Lab)
I beg to move,
That this House has considered further education colleges in the North East.
It is a great pleasure to serve under your chairmanship, Sir Edward. I requested the debate after a meeting that north-east MPs had with the further education colleges in our region. We believe that the quality of education that young people get in FE colleges is central, not just to them and to their life chances and futures, but to the economy in our region, and we therefore have a number of questions to put to the Minister, which I hope he is able to answer.
The economic needs of the north-east are clear. We have the largest proportion of our economy in manufacturing, and it is very good manufacturing. We are the only region outside London to have a balance of payments surplus, because we are extremely successful exporters, and we want to build on that platform.
In preparation for the debate, I contacted the North East chamber of commerce, because it does fantastic work in our region, and it alerted us to where the skills needs and shortages are at the moment. It told me that according to the Office for National Statistics the proportion of adults in the north-east qualified to national vocational qualification level 4 was 7% below the national average; meanwhile the North East local enterprise partnership’s strategic economic plan highlights that by 2020 a staggering 120,000 more jobs will need a level 4 qualification.
The latest quarterly economic survey conducted by the chamber of commerce found that 71% of businesses in the service sector and 83% in the manufacturing sector were experiencing difficulties in recruiting staff, and the UK Commission for Employment and Skills’ employer skills survey reports that 18% of employers face a skills gap—the largest of any English region.
We know that there will be an increase in demand for skilled workers in contact centres, warehousing, manufacturing, construction, customer service, sales and food production and that it will be compounded by the demographic changes that our region faces. We know that 3,500 construction jobs will be created each year between now and the next general election, but we also know that the total population growth in the north-east is less than a third of the national average. We know that many people with skills are retiring—in engineering, the average age of welding machine operators is 50. The skills shortages are completely predictable, and it is absolutely straightforward and simple for us to know that, even to continue as we are, we need to train more people. That is why we are extremely concerned by the prospect of reviews that destabilise and threaten the FE colleges.
The FE colleges in the north-east are much better than those in the rest of the country. According to Ofsted, 95% of them are either good or outstanding, compared with a national average of 79%. Consequently, they are educating 200,000 young people. Bishop Auckland College is absolutely typical of the colleges in our region. It teaches technology subjects, such as construction, along with skills that are needed in the automotive industry, which are even more important now that we have not only Nissan but the new Hitachi plant in Newton Aycliffe. Also, everyone knows we need more skilled workers in childcare and in health and social care, and the college provides courses in those skills, too. It has approximately 900 full-time students and the number of apprenticeships has gone up to almost 1,000.
I am sorry to say that the policies that this Government implemented in the last Parliament and also seem to be proposing now give Bishop Auckland College the feeling that it is being destabilised. What are the Government’s policies? The first thing they did was to cut the education maintenance allowance. The Minister, when he went to Winchester, Oxford and Harvard, might not have needed the support of an education maintenance allowance, but many of my constituents do.
According to National Audit Office figures, there have been real-terms cuts in the sector of 27% since 2010, and although the funding settlement announced by the Chancellor before Christmas was flat in cash terms, it represents another 10% real-terms cut, and I ask the Minister why that is. Why does he believe that it is okay to spend £9,000 per student on university tuition, but only £3,000 per student in FE? That is not a sign of a country that takes its technical skills base seriously, and I urge him to look at the experience on the other side of the North sea—at what is happening in Germany—and say, “We were lagging behind in this area 120 years ago and we are still lagging behind.” Alison Wolf found that in her nationwide survey.
I also ask why the Minister has instituted area-based reviews. Obviously, if there are failing FE colleges in some part of the country, he can review them all he likes, but that is not the situation in our region. The hon. Member for Berwick-upon-Tweed (Mrs Trevelyan) smiles and nods, because she knows I am not making a political point. I am making a point about the quality of education in the north-east. When the Minister made the announcement about the reviews, he said that he did not want any arbitrary boundaries, but we have arbitrary boundaries. The Tees valley review is under way, but the north-east one has not yet started, yet constituents of mine are educated both in Darlington and Stockton and in Bishop Auckland and Durham. That seems very arbitrary to us. What will the Minister do to resolve different possible upshots from the reviews? We have been told that there is slippage, so we would like to know when he expects the north-east review to take place.
When the Minister announced the reviews, he said that he expected policy options to include rationalising the curriculum and considering opportunities for specialisation, merger, collaboration and closure. Improving the curriculum is always a good idea, as is collaboration, but closure is unacceptable and particularly problematic in a rural area.
The average distance travelled by the 16 to 18-year-olds who go to Bishop Auckland College in my constituency is 8 miles each way each day, and for those over the age of 19, it is 14 miles. If the college was closed and they had to go to Darlington and Durham, some of those young people would have journeys of 28 miles. It is not just the time and distance that are the problem; it is the cost. The bus fare from Barnard Castle to Darlington is £7 return—a £35-a-week bill—and for a young person living in Cockfield and going to Durham the cost would be £11 a day, or £55 a week. Those amounts are simply unaffordable. The Minister must know, notwithstanding his own wholly different educational and personal experience, that that would put some young people off doing what was best for them and for the country. Their whole future life possibilities will be limited by extortionate fares and excessive travel times.
When the Minister announced the reviews, he also said that any changes should be funded by the local enterprise partnerships and the local authorities. I was absolutely astounded by what he meant by that. Durham County Council is having to undertake cuts of 40% between 2010 and 2020. Against that massive reduction in the available resources, I simply cannot see how the council can be expected to take on new responsibilities for financing FE.
As I said earlier, Bishop Auckland College is facilitating 1,200 apprenticeships. In fact, I have an apprentice in my office—my third apprentice—and I have had extremely good experiences with them. They have improved the efficiency of the office no end. When I talk to the college, it says that the key logjam in increasing the number of good-quality apprenticeships is not what goes on in the colleges, but finding the placements with the employers.
I was interested to hear the questions that the chamber of commerce had about the apprenticeship levy. The first point it asked me to raise was whether the Minister intends to wrap up the apprenticeship arrangements under the Construction Industry Training Board with the apprenticeship levy. The construction industry has a good scheme that is working well. Everyone is happy with it. Rather than asking for it to be closed down and for the industry to get involved in something new, would it not just be simpler to let the industry carry on doing something that works well and to exempt it from the new arrangements? If it ain’t broke, don’t fix it.
The second point that the chamber of commerce made was that its members want longer-term funding, with agreements of at least two years to tie in with the fact that apprenticeships last for two to four years. That point was reiterated by the colleges. On numerous occasions in recent years, decisions about funding have been taken after they had begun to recruit for the following academic year, because the academic year and the financial year do not coincide. They are calling for three-year settlements. That proposal seems perfectly sensible, and I would like the Minister to consider it.
The thing that is really unclear is how the levy will be distributed. Which sectors will receive the money, and how will the Minister ensure that it reaches small and medium-sized enterprises? As the chamber of commerce pointed out, it is important that we prioritise current skills shortages and future skills shortages that we can predict from economic forecasts and how the regional economy is training. It also said—this seems completely reasonable—that we should prioritise those employers who already have a good training record.
The colleges and the employers are united in wanting a good inspection regime. It could continue to be Ofsted, but that good regime is vital to maintain the quality and, with that, the confidence that people have in apprentices. A recent survey for the UK Commission for Employment and Skills found that 18% of employers in the north-east offer apprenticeships and 37% of employers wish or intend to do so. That is the highest level in the entire country. They are showing their commitment, and they, the colleges and we wish to see that matched by the Government with resources and stable frameworks for policy and delivery.
Mr Kevan Jones (North Durham) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward. I begin by congratulating my hon. Friend the Member for Bishop Auckland (Helen Goodman) on securing this debate. She outlined what is self-evident to many of us in the north-east: we have a good network of further education colleges.
I do not have a further education college in my constituency. My learners access Derwentside College in Consett and New College Durham. They also travel further afield to Newcastle and Sunderland and to other colleges in the region. As my hon. Friend outlined, some go to Darlington and Teesside. The colleges are an asset to our region. It is clear to anyone who speaks to or visits any of them that they are not inward-looking institutions—they are dynamic and forward-thinking. Derwentside College has a good liaison with local engineering companies, both large and small. It not only engages in recognising and understanding what further training is needed, but actively takes part in encouraging young people and adult learners to think of a career in engineering.
New College is an outward-looking institution that sponsors two academies: one in Stanley in my constituency and one in Consett, which is in the constituency of my hon. Friend the Member for North West Durham (Pat Glass). That initiative was spearheaded by John Widdowson, who is the chief executive of the college. He is working well to build the link between the school sector and the FE sector. He is giving great opportunities in Stanley to many young people. In addition, New College has 200 international students from across the world who come to study there.
I had the privilege last year of visiting Newcastle College’s new railway engineering academy. That initiative came from the college, which recognised that there is a skills shortage in the rail sector. It is now providing well-qualified people for jobs—in some cases, those jobs are highly paid—in the rail sector. That college is taking the initiative. In the north-east, we have colleges that are not just allowing the world to pass them by; they are taking the initiative to understand what the business community and their local communities require.
Andy McDonald (Middlesbrough) (Lab)
While my hon. Friend is acknowledging some of the work across the region, will he pay tribute to Middlesbrough College’s work on its remarkable new science, technology, engineering and maths centre? That was launched recently, very much with the involvement of local employers, the manufacturing base and the supply chain.
Mr Jones
Yes, I will. It is a good example of how local colleges are taking the lead, not by just putting on courses that they hope people will come to, but by working with employers to ensure that the courses they offer are needed by young people and adult learners and by local businesses. This might be an old-fashioned thing, but in our region, the colleges and the education sector are raising awareness that careers in engineering and manufacturing are a way forward and not a thing of the past.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
My hon. Friend raises an important point: further education colleges in the north-east already work together and are forward-looking. Newcastle College is engaging with new industries, such as the aeronautical industry and the energy industries. Does he share my concern that the area-based reviews may take the focus away from what is best for our industry and our young people? Too much time may be spent focusing on how to respond to the review. I would like to see more work on adult education in the north-east, particularly given the cuts to local services.
Mr Jones
I agree with my hon. Friend, because one of the important points is collaboration between colleges. Looking back, one of the problems in the further education sector was where we had competition between different colleges. That network of working together, which provides opportunities for young people and adult learners, is important. Speak to anyone in the industry and they will say that the 16-year-old leaving school today is unlikely to be in the same job when they retire at 65 or 67 or whatever the retirement age will be when they come to retire. They will need constant on-the-job training and will need to re-access the education system, so the further education sector is vital.
I chaired a meeting last night at an event organised by the Industry and Parliament Trust to talk about the aerospace sector, which has huge potential for growth not only in engineering skills, but in the soft skills of process management and other areas as well. All our colleges, certainly in Durham, are encouraging not only engineering apprentices, who are vital, but the growth sector of tourism in the north-east. I know that Houghall college and also Northumberland deal with land skills and agriculture, which people might think are industries of the past, but they are very important to rural communities in the north-east, and certainly the tourism sector is a growth area across the north-east.
I understand that the Government will want to tackle bad performance, and I support that. If a college or any institution is failing its learners, it needs to be dealt with, but I am not sure how the review will fit in with the rest of the education system. For example, I have already mentioned New College’s sponsorship of two academies, because it saw a clear need to link back into education. The sector is not separate from the rest of the education system, so I want to know how local schools and suchlike will be involved in the process.
My hon. Friend the Member for Bishop Auckland mentioned travel, which is a stark issue in my area and many rural areas. Many young people have to travel quite long distances to access courses. It might be easy in large cities such as London or Birmingham where there is a choice of providers close together, but in my constituency and in hers—for example, in Northumberland—people have to travel long distances, so the issue is not just about the number of colleges, but where they are. I totally agree with her that the abolition of the education maintenance allowance had a huge effect on young people’s ability to access courses.
Ian Lavery (Wansbeck) (Lab)
Does my hon. Friend recognise the problems in Northumberland? Northumberland College in my constituency is 60 miles from the Scottish border and 20 miles from the nearest fantastic city of Newcastle. Northumberland College has got fantastic results with 1,000 apprentices and £2.5 million invested in a new STEM centre. We have got fantastic results like we have never had before and a good rating by Ofsted. If there is any reduction in financing, or rationalisation, mergers or closures, does my hon. Friend agree that Northumberland could not be a part of that?
Mr Jones
I agree, but that is where the problem lies. I sympathise with the Minister. Having been a Minister myself, I accept that civil servants sometimes look at things through a London—not even a south-east—prism and think that if something is not happening in London or the south-east, it cannot be happening elsewhere. The idea that my hon. Friend has an outstanding college in Northumberland is perhaps something that they cannot comprehend. Any changes need to be right. One size will not fit all. We have a dynamic group of colleges. The issue is not about competition. That would be a retrograde step back to the bad old days when people were literally competing. That is not a good use of resources and not good for the learners themselves.
Another aspect that is important for the further education sector is to raise aspirations. If we are going to get people into engineering or hospitality and tourism, one thing that the north-east needs more than anything—the further education sector has a key part to play—is to raise aspirations. Sadly, in my own constituency, and in other constituencies as well, we have the problem of—it is a horrible word—NEET: not in education, employment or training. It is difficult to find out the numbers. There are individuals now who are not included in any statistics anywhere. They are not in the education statistics; they are not claiming benefits; and they do menial, part-time, casual work. That is okay while they are young, but they are missing out on the opportunities to get the qualifications that they need for the future, and in many cases they put themselves at great risk working on building sites or in conditions with no health and safety provision or any care for those individuals. Those are the people we need to reach. Sometimes, when the school system has failed them, the further education sector is a good way to access them.
I want to address two other points and how other Departments’ policies impact on the further education sector. Just outside my constituency, in the City of Durham constituency, is Finchale Training College. It was set up in 1943 for the rehabilitation and retraining of ex-servicemen. It does fantastic work with veterans who have mental health problems and physical disabilities. It has a long tradition of retraining them and getting them ready for work. It has also done other training work in the wider further education sector. It was a residential college until 2015 when the Government changed the rules in a move away from residential colleges, and we can argue the pros and cons of that.
In September 2015, the Department for Work and Pensions introduced the specialist employment service to help individuals who need extra help because of disabilities or other training needs. They would have gone into the residential system, but are now—I think positively—in the community. The system set up to deal with this is not only bureaucratic, but it has a detrimental effect on colleges such as Finchale. Contracts were issued nationally and large organisations such as the Shaw Trust, Remploy and others got the contracts. They have sub-partners and Finchale is a sub-partner for the Shaw Trust. The pathway for the people who need extra help into the system is via the disability employment advisers in local jobcentres. There are only two full-time disability employment advisers in the entire north-east; the rest are part time, and there is a problem. Access is gained through a computer-based system. On the first working day of each month, a number of places and contracts are put out. The employment advisers then have to match people to those.
In theory, there is a regional cap, so there should be 18 for the region, but that does not work in practice. So Finchale, which would have expected 70 students over the last period, has only got two, because as soon as a jobcentre in Croydon or south Wales logs on and gets in early, it can upload all its applicants to fill the places. So the idea that Finchale will access learners from south Wales or Croydon is not the case. There are an estimated 200 people in the north-east who need help.
Sir Edward Leigh (in the Chair)
Order. The hon. Gentleman is giving an excellent speech, but he has gone on now for 15 minutes. Several people want to speak, and I want to get everybody in, so can he now bring his remarks to a close?
Mr Jones
Will the Minister ask his Department for Work and Pensions colleagues to change the system? The system needs to have a regional cap and to allow for people at least to access it, because at the moment it is having a detrimental effect on colleges such as Finchale.
Finally, I would like to hear the Minister’s thoughts on regional devolution. We are told that post-16 further education will be devolved to the new regional body, whatever that will be. Will he guarantee that, if that happens, any cash will be ring-fenced or immune from cuts? When the public health budgets were devolved to local government, the first thing to happen was that they were top-sliced. One of my fears, I think rightly, is that the devolution agenda being pushed by the Government is more about devolving responsibility—without the cash to go with it—and then the blame when the new local authorities have to make the cuts. I am interested to know the Minister’s thinking.
We have world-leading colleges and further education institutions in the north-east. The Minister needs to work with them and not to try and implant in the north-east some blueprint that might look nice on his civil servants’ spreadsheets. If something is not broken, why try and fix it?
Sir Edward Leigh (in the Chair)
We have a number of people wishing to speak. Please keep your speeches down to less than six minutes.
Mr Iain Wright (Hartlepool) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward. I thank my hon. Friend the Member for Bishop Auckland (Helen Goodman) for securing the debate.
Further education colleges in the north-east are important engines of economic growth and prosperity in our local communities, as well as significant drivers of social mobility. By 2022 the Tees valley will require 127,000 jobs in key sectors, but only 278,300 people out of a working-age population of 417,000 are in employment. The skills mismatch is incredibly important, and FE colleges can fill the gap.
Hartlepool, for a relatively small town, has a remarkably diverse range of post-16 provision. We have a sixth-form college, Cleveland College of Art and Design, and two schools with a sixth form. Hartlepool College of Further Education is the biggest provider of apprenticeships in the Tees valley and the second biggest provider in the north-east for 16-to-18 apprenticeships. It has a fully functioning aircraft hangar, with two jets and a helicopter, and we have real skills, expertise and quality in STEM. The college’s apprenticeship success rate was 86.4%, when the national rate was 70.3%.
As my hon. Friends have indicated, there are concerns that the Government’s reforms are pushing FE colleges to adopt significant changes in their business models, which will put their viability at risk.
Alex Cunningham (Stockton North) (Lab)
I am grateful to my hon. Friend and neighbour for giving way. Yesterday in Education questions the Minister dismissed my concerns about the cost of area reviews, which I am led to believe could result in millions of pounds of extra banking fees being incurred as loan agreements are ended and new ones created. Does my hon. Friend agree that any real financial benefit to colleges might be lost unless the Government step in and decide what will happen with those additional costs?
Mr Wright
My hon. Friend makes a fair point, but I would go further, because I worry about the area-based review in the Tees valley. May I ask the Minister why the review includes FE and sixth-form colleges, but not school sixth forms, 16-to-19 free schools or university technical colleges? If a comprehensive review of post-16 provision in an area is being undertaken, why include only certain providers? The 10 FE colleges in the Tees valley subject to the review account for only about 60% of provision, so how can a proper evaluation take place? The process seems opaque, and no one has been able to demonstrate to me clear and transparent criteria for how the area-based review is being conducted. Will he use this opportunity to do so this afternoon?
Furthermore, given that colleges are autonomous organisations, it is difficult to see how any conclusions of the review can be implemented unless the Government starve colleges of funding until they agree to the conclusions. Will the Minister respond to that point and confirm that colleges in the north-east that refuse to accept the findings will not experience disproportionately harsh cuts to their funding?
The Government’s key objective in skills policy is the target of 3 million apprenticeships by 2020. The apprenticeship levy has been proposed as a means to ensure that firms pay for training. I appreciate that core funding for 16 to 19-year-olds and adult skills will be maintained in cash, if not real, terms as a result of the spending review. However, the Minister knows that there remains acute pressure on college budgets. The Skills Funding Agency has suggested that about 70 colleges throughout the country could be deemed financially inadequate by the end of 2015-16.
A devastating impact on FE colleges in the north-east is possible. Will the Minister reassure the House, without referring to specific institutions—doing so might undermine confidence—that colleges in the region will have suitable resources? Will he explain how he anticipates that the combination of his main priority, apprenticeship expansion, with other FE college activities will complement one another, rather than the former being seen as a substitute or alternative for the latter?
I mentioned that FE colleges in the north-east are drivers of social mobility. For people in the north-east in their 20, 30s or 40s who have been made redundant—sorrowfully, we have had far too much of that in the north-east recently—or who may not have worked hard at school but now want to put their lives back on track, and yet are not in a position to take on an apprenticeship place, how does the Minister anticipate that FE colleges will be able to provide them with the necessary basic skills to make something of their lives?
I turn to the apprenticeship levy and, in particular, something that the Minister said when giving evidence to the Sub-Committee on Education, Skills and the Economy yesterday. About 2% of firms in England will be liable for the levy, and the Tees valley figure is broadly comparable to the national proportion—2.2% of our employers are large firms. In Committee I asked the Minister whether the Government position was that the levy will be a ring-fenced fund to be drawn on only by levy payers to fund apprentice training. The Minister said that large firms would have “first dibs” on the money raised from the levy.
That response prompts a number of questions. If that is the case, how will the 98% of smaller firms receive funding for apprenticeship training through the levy if they are waiting for scraps from the table? Will firms be able to carry the levy forward to subsequent financial years, so that if a large firm does not want to draw on it in year one, it will have that possibility in year two? Again, how will that help smaller firms? How will the system help FE colleges provide suitable financial planning? Will the “first dibs” approach be allocated on a national, regional or sub-regional basis—will it be large firms only in the Tees valley, or only in Hartlepool? How will the levy work?
As the Minister understands, the considerable uncertainty is undermining the ability of colleges in the north-east to plan and to provide their existing excellent further education provision. I hope that further detail will be provided this afternoon, so that colleges can get on with the job of ensuring that we can transform our regional economy and that people’s lives in the north-east are made better.
Sir Edward Leigh (in the Chair)
Congratulations—on the nail at six minutes. I call Anne-Marie Trevelyan.
Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
Thank you, Sir Edward. I will do my best, although I am less practised than my colleagues.
Northumberland is one of our largest counties geographically, covering more than 2,000 square miles, but with a population of only 320,000. More than 50% of the population live in the small south-east corner of the country, where our excellent Northumberland College is situated, in the constituency of the hon. Member for Wansbeck (Ian Lavery). For students in the Hexham or Berwick constituencies, the travel times and distances from local towns such as Alnwick, Hexham, Haltwhistle or Berwick are enormous. From Berwick the journey is more than 50 miles each way. The need for an excellent college to offer courses that the local school cannot is vital.
Northumberland College, under the fantastic leadership of Marcus Clinton, ably supported by a brave and determined board of governors, aims to provide a world-leading college for our students. A network of highly specialist centres is being built to provide a regional centre of excellence for hospitality, for tourism and for land-based training. A technology park, a STEM centre and a wind hub in conjunction with the Port of Blyth are also being created. Northumberland College wants to ensure that every student can access the training that they need in their chosen field, but my constituents face a challenge in even getting to the college.
Since our Labour county council stopped funding post-16 transport some years ago, the college has had to pick up the bill so that no student is lost. It is vital that there is stronger careers advice in our high schools, and that the sixth forms and colleges work together. Unlike in other parts of the country, in rural north Northumberland the pressure on schools is not too many pupils but too few. The schools are therefore keen to persuade their pupils to stay on for A-levels to help their cash flow, even though the college might be the better choice for a pupil. I ask the Minister, as the hon. Member for Hartlepool (Mr Wright) did, why the area review is not looking at provision in sixth forms as well as colleges and encompassing the whole post-16 sector. It is a small sector in Northumberland, but vital if we are to make the best use of resources and get the best for our students and for the future economic benefit of Northumberland.
A student who wants to specialise in construction, engineering or IT in our new STEM centre, or in land-based studies, which are so important to rural Northumberland, may be better off going to Northumberland College than remaining in a school setting, but that will be a problem as long as the battle for funds is an issue. Our college could not do more on rationalisation and working with local businesses to build apprenticeship programmes, but sparsely populated communities present real challenges, which I hope the area review and the Minister will shortly consider closely.
On apprenticeships, I, like the hon. Member for Hartlepool, would like the Minister to clarify how SMEs, which are the lifeblood of Northumberland—we do not have any large companies, and every company is an SME—will access levy funding to help them take on apprentices. We are struggling to get clarity on that, and I would appreciate having the Minister’s guidance so that we and every SME that wants to be part of the apprenticeship programme can get our heads around the issue.
As the only college in our county, Northumberland College welcomes the recent moves to stabilise funding over the coming period, to introduce 19-plus loans and to support apprenticeship funding—my point about SMEs notwithstanding—and it is keen to discuss that with the Minister. It also welcomes the increase in funding for those studying the land-based industries, and I hope Northumberland will continue to lead the way on innovative and modern thinking about farming practices. Those funding streams are allowing Northumberland College, at Kirkley Hall, near Ponteland—and, soon, I hope, at a satellite campus near Berwick, if we can persuade a local farmer to take on a bunch of students—to maintain a really specialist resource that is important for our agricultural county and for the whole north-east region. I look forward to hearing shortly from the Minister about how we can get some real clarity on that and the other issues I have raised.
Jenny Chapman (Darlington) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Bishop Auckland (Helen Goodman) on securing this important debate, and I am grateful for the opportunity to contribute.
I am not opposed in principle to area reviews, and it is right to assess from time to time the post-16 education on offer to young people and adults in any locality. We need to do that now because resources are scarce and colleges have been under immense pressure—more than they have ever been—in the past five years.
As a result of the environment the Government have created in recent years, I have seen some quite sharp practices taking place between colleges. In my area, we have the ludicrous situation that students have been enticed by offers of free travel to study at colleges further from home, when they could just as easily have studied the same courses in their home towns. That is not a sensible use of public money. Colleges are incorporated, but they are funded by the state, and taxpayers would expect such practices to be discouraged. My fear is that area review actually encourages such a lack of co-ordination and collaboration and that, once colleges agree whatever they agree with the area review team, the situation will deteriorate. I want to know what area review will do to cement collaboration between colleges.
I am all for student choice. I have no objection at all to Darlington students travelling further afield to access courses that are not on offer in the town or that are offered to a higher standard elsewhere. In fact, I would encourage that, and a small number of students from my area travel to Hartlepool to study on the courses mentioned by my hon. Friend the Member for Hartlepool (Mr Wright). I am pleased that they do that, and it is great that they can, but the lamentable state of public transport in the Tees valley is becoming an ever bigger obstacle to that happening more often. However, I do not like the gimmicky enticement of students who have not had the benefit of independent, well-informed advice about what is best for them.
College funding mechanisms certainly need to be looked at. Currently, colleges can do well as long as they can attract enough students on to their courses and keep them there, but they are not held to account adequately for the destinations of course leavers. Colleges operate in a market, but that market does not work sufficiently well for students.
My hon. Friend the Member for Hartlepool was absolutely right to refer to social mobility. There is a lack of quality advice and guidance for young people. Students are therefore not savvy consumers able to shape the market in the way that I am sure the Minister would wish. The Social Mobility and Child Poverty Commission put it well:
“There is a jungle of qualifications, courses and institutions which students find hard to penetrate. Quality is variable and there is little or no visibility about outcomes. Nor is the system working as well as it should for the economy with skills shortages in precisely those areas—construction, technical and scientific skills—that vocational education is supposed to supply.”
In the north-east, we have seen thousands of older potential students lose their jobs in the public sector—and now in steel, too. How will area review take account of the needs of older learners? I ask that because I looked at what happened in Scotland, which undertook an area review—indeed, I was expecting a Member from Scotland to be here. The number of colleges in Scotland fell from 37 to 20. At the same time, there was a reduction of 48% in the number of part-time students and of 41% in the number of students aged 25 or over. That is deeply concerning to those of us from the north-east, given the job losses I referred to.
Chi Onwurah
My hon. Friend makes an important point about adult education and the capacity of our further education colleges to meet a growing demand for which there is less support. As the chair of the all-party group on adult education, I hope that the Minister will be able to give us some reassurance that the destruction of adult education will not continue.
Jenny Chapman
My hon. Friend makes an important point. The review could do serious damage if we are not mindful of the impact on older learners, given the experience north of the border.
One of the real problems is the confusion about courses, funding streams and where courses lead. A UCAS-style website could be created for vocational education, so that any learner can see for themselves what progression they are likely to undergo and what employment and earnings opportunities they are likely to have, as a consequence of choosing any course.
It would be remiss of me not to refer to my two local colleges—Darlington College, which is ably led by Kate Roe, and Queen Elizabeth Sixth Form College, which is led by Tim Fisher. The heads of both colleges are fantastic individuals, but they are both grappling like mad with how on earth to take their colleges forward, given the context that we are likely to see. Colleges in Darlington are really struggling with what Darlington needs to look like in the 21st century. What should the course mix look like? Who are the students of the future? What will they want? What will the skills needs be not just in our local area, but in the region, in the country and internationally? I want students in Darlington to get the same opportunities as students in the Minister’s constituency, because that is not the case now. That is what we are meant to be aiming for. Those are the right questions for my colleges to be asking, and the Government should be focused on helping them to find answers.
Many of our colleges collaborate well, but there are too many examples of competition. I fear that the area review process will cement that counterproductive behaviour between colleges. As well as three-year funding security, colleges need external leadership. Unless we cement in some form of governance change—I do not know whether that should be done through city deals or some other means, but we do need strategic leadership on a wider scale—and force colleges to accept a direction that builds in employers’ needs, it is inevitable, given the likely future funding context and the competition for students, that different institutions will embark on wasteful enterprises and use novelty gimmicks to remain viable. That is in nobody’s interests: it is bad for the economy, bad for taxpayers and, worst of all, bad for our students, who need well-informed advice that is given without prejudice and based on a sound knowledge of the jobs market.
I am afraid that so far area review has been conducted away from the gaze of students and parents, and away from employers. That has to change. The colleges are our colleges. They are vital local employers and community resources, and they undertake a vital task. We all feel great ownership of our colleges and do not want that to be lost. As I have said, I am open to change, as are my colleges, but the Minister needs to understand that the rationale for that change must have the students’ best interests at heart.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I commend my hon. Friend the Member for Bishop Auckland (Helen Goodman) on securing the debate, given the vital role played by further education in our region, which my hon. Friends have amply set out. I am pleased to have the opportunity to contribute, because on Friday I met the new principal of Newcastle College, Tony Lewin, at the college’s aviation academy, which is based at Newcastle international airport in my constituency and ably led by former RAF engineer Tim Jacklin.
The aviation academy is just one of a wide range of world-class facilities at Newcastle College, including the energy, chefs, construction, healthcare, lifestyle and performance academies, as well as the rail academy, which has already been mentioned. I like to think of the aviation academy as one of the college’s flagship operations, not only because it is in my constituency but because the facilities offered to learners are second to none. Students come from across the north of England to undertake FE courses in areas such as airport operations, cabin crew operations, aeronautical engineering, aviation operations and aerospace engineering. Some of them go on to take a foundation degree in aeronautical engineering or even an honours degree in aircraft engineering, operated in partnership with Kingston University.
Many of the courses are run in conjunction with high-profile names from the aviation industry, including Jet2 and Swissport, ensuring that the academy is delivering the skills that industry needs. Indeed, such are the facilities—including the academy’s very own fully functional Boeing 737, and workshops kitted out with latest hydraulics, landing gear, pneumatics and electrical and electronic equipment—that people come from across the world to undertake the courses. Current students come from as far afield as Mozambique, Namibia and the Maldives.
Of course, all that is being provided at a time of great uncertainty for the FE sector, which has too often been afforded very limited time to plan properly or strategically, as a result of budget cuts imposed by the Government over recent months and years at unacceptably short notice. I will not repeat all that has been said in the debate—my hon. Friend the Member for North Durham (Mr Jones) made a powerful case for the innovative approach taken by north-east colleges, as did other hon. Members—but it is worth reflecting on the open letter sent to the Prime Minister ahead of last year’s spending review by 128 FE colleges across the country that stated:
“Late and unexpectedly large reductions in annual funding allocations...make it increasingly difficult to plan ahead with any certainty. Significant funding cuts for the 2015-16 academic year were announced in March 2015 with a further round of cuts announced in July. The cuts applied immediately from 1 August 2015. The uncertainty this creates means colleges cannot invest in their staff, effectively plan their curriculum, and meet the needs of the local economy and communities which they serve. It has become almost impossible to plan ahead and work meaningfully with other agencies and partners who rely on us to deliver their education, training and skills requirements.”
That is a serious concern for any part of the country, but surely more so for the north-east, which continues to have the highest rate of unemployment anywhere in the country by some margin.
Of course, one of the key ways in which the north-east FE sector is supporting our regional economy is through apprenticeships. Indeed, the proportion of the north-eastern colleges’ adult education budget used for apprenticeships is higher—at 41%—than in any other region. I welcome any growth in the number of high-quality, meaningful apprenticeships because, as hon. Members may recall, one of the first things I did after being elected to this place in 2010 was to introduce a Bill to make better use of our public procurement system to deliver apprenticeship places. It was therefore with a wry smile that I read the Cabinet Office’s new procurement policy note, published in August last year, which clearly states that
“central Government procurement contracts with a full life value of over £10 million and a duration of over 12 months should be used to support skills development and delivery of the apprenticeship commitment”—
particularly as I was told again and again by coalition Ministers that what I wanted could not possibly be done because of EU law.
Yet there is further uncertainty for colleges, among others, about apprenticeships. Newcastle College wants to take an active role in the delivery of apprenticeships through the new apprenticeship levy. However, despite the Government’s proposal for the levy to be operational from April 2017, in just one year’s time, the college is concerned about the continued lack of detail on how the initiative will work in practice. One can see why the scheme will be attractive to large firms, which can offset their apprenticeship costs against their levy payment; and, of course, the Government claim that only 2% of firms—those with an annual wage bill of more than £3 million—will have to pay the levy in the first place. So, as my hon. Friend the Member for Hartlepool (Mr Wright) asked, what about those smaller firms who will not pay the levy? How will they access funding for the programme, and will they be able to do so in a way that is not mired in bureaucracy that will put them off? After all, such businesses currently deliver more than 90% of apprenticeships in the country, yet FE Week reported 11 days ago that the Department for Business, Innovation and Skills just cannot clarify the issue.
Other questions remain, including how Ministers will ensure that, instead of a race to the bottom, the new system will create a race for quality apprenticeships—quantity over quality is a big risk—what will happen to potential apprentices who cannot be matched with an employer; what happens to the funding for apprentices where a firm terminates an apprenticeship part-way through; and how the Government will prevent a dip in apprenticeship numbers while firms wait to see how the new plans pan out.
For colleges such as Newcastle, for SMEs and, most importantly, for should-be apprentices across the country, I implore the Minister to make the details of the scheme available without delay, so that colleges and businesses have the lead-in time to plan properly for the changes ahead.
Mr Gordon Marsden (Blackpool South) (Lab)
The story of the area reviews is one of a belated and, to be blunt, over-hasty response by the Government to a developing crisis that they should have seen coming over a period of time. I congratulate everyone who has spoken, including the hon. Member for Berwick-upon-Tweed (Mrs Trevelyan). All the contributions were strong and compelling arguments for the vital importance of FE in the north-east. I particularly congratulate my hon. Friend the Member for Bishop Auckland (Helen Goodman) on securing the debate in the first place.
Some of the common themes that have come out of the process have been about the nature of the north-east’s excellence, and the need not to jeopardise that in any way—not just the good manufacturing base, but also the service centre. It is not only for young people that that is important. In view of some of the statistics, such as that the average age of welders is 50, retraining and reskilling older people is crucial. I hope that the Minister did not miss the fact that virtually everyone who has spoken is worried about the unintended—I assume they are unintended—consequences of the over-hasty and rushed process I have referred to.
Ian Lavery
Is it not time that we cut to the chase? We have discussed Newcastle College, Northumberland College, Hartlepool College of Further Education, Bishop Auckland College, and colleges in Darlington, Durham and Teesside, among many others. All of them provide a brilliant education service to the people in their area. The reality is that we are here because we are extremely concerned that the area-based review will mean rationalisation or merger, which could both mean closure—or that it will simply mean closure. We are really concerned. We want some guarantees from the Minister that that will not happen in an area where the provision is much needed.
Mr Marsden
My hon. Friend repeats the eloquence that he and colleagues have displayed throughout the debate. Indeed, the questions he puts are essential, because what we have seen from the Government has been a continual process of cuts to funding both in-year and outside of it. An important point was made earlier about the inability to adjust in such a period of time. There has also been a lack of promotional budget for traineeships; cuts in the adult skills budgets, where the Government are still trying to find £360 million of efficiencies and savings; and the scrapping of the education maintenance allowance to which many colleagues have referred.
I am afraid that that theme continues, with the scrapping of higher education maintenance grants for some of the most disadvantaged students, which are crucial to many colleges in the north-east. I have looked at figures that show that will affect 380 students at Cleveland College of Art and Design, 377 at New College Durham and more than 50 at Bishop Auckland College—that is not to mention those at Northumberland, Tyne Metropolitan, Newcastle College and Newcastle Sixth Form College. Therefore a large number of colleges will be affected.
While all of that is going on, we have seen the Minister and the Government set timescales for the area reviews at unrealistic levels. The arbitrary nature of the way in which the reviews are being carried out does not point to a happy outcome, which is why in December the Public Accounts Committee expressed its concern that that will not deliver a more robust and sustainable further education sector. It said that
“The departments appear to see the national programme of area-based reviews, which they announced in July 2015, as a fix-all solution to the sector’s problems. But the reviews have the potential to be haphazard”.
That is rather understating it. On the basis of what we have seen and heard so far today, the words “bull” and “china shop” come to mind.
Colleges across the north-east have done great work to support not just young people, but older people in gaining skills and we have heard how vital they are to the sub-regional economy. That is why we cannot afford to see the Government’s area reviews damaging the link between colleges and businesses or the many decent networks of colleges and schools in the area. As I said to The Times Educational Supplement in October,
“FE is all about getting students”—
especially local people—
“into work in the local economy.”
However, the area reviews risk undoing all that hard work. In view of the potential for combined authorities in the north-east that may wish to take on skills, education and training powers, over-centralised, Whitehall-led area decisions taken now could hamper their ability to do so effectively. That is particularly the case for adult skills and community learning budgets, which are the ones most likely to be devolved under any combined authority umbrella settlement.
Reports from the many parties that have run reviews have raised concerns that there is no clear process for making difficult decisions. My hon. Friend the Member for Scunthorpe (Nic Dakin), who is a former FE principal, expressed that view to FE Week in October. The steering groups look unwieldy and the reviews do not have to involve all post-16 providers. I am also concerned that groups of 25 are far too large. I would like the Minister to respond to those points.
We know that there are issues of financial inadequacy. The National Audit Office’s report shows that 29 colleges were inadequate in 2013 and that will rise to about 70 in 2015-16. That is a consequence of the many errors and failures of the previous Government, which have been continued by this Government. For many people, the idea that we have one law for sixth-forms and FE colleges and another for schools, academies and free school sixth-forms who are not participating in the process or affected by it, beggars belief. If the reviews were about the quality of teaching and maximising FE colleges’ apprenticeships and outreach in the community, surely they should include all education and training providers. That point was made by Susan Pember, who was a distinguished civil servant in the Minister’s Department until not so long ago. As Martin Doel from the Association of Colleges and others have said, it is illogical that the process should continue without them.
All of the concerns raised have been highlighted in our discussion and it is imperative, as we have heard, that the local geography and economic conditions are taken into account in such reviews. In the north-east, as my hon. Friend the Member for Bishop Auckland demonstrated, the changes may be very harmful to the social fabric and social mobility of young people.
It is interesting that when the ideas for mergers and so on came to the Minister’s distinguished predecessor as Minister for Skills, the right hon. Member for South Holland and The Deepings (Mr Hayes), I am led to believe that he quietly shooed them away. He did that for a good reason, because he represents a rural constituency and therefore he knew well what some of the problems would be. The area reviews look set to force shotgun marriages on many colleges, with closures and mergers being put ahead of geography and economic sense.
It is also a pity, as my hon. Friends have said, that there has not been a broader role for learners, trade unions and the whole range of people affected by the changes. The National Union of Students has taken its own initiative and convened roundtables to mirror some of the reviews. An early report from its area review in the Tees Valley says:
“The travel infrastructure across Tees Valley needs to be improved significantly, particularly if learners are expected to travel further. At the moment, many colleges have to put on buses to enable students to come to college. With funding cuts and potential for a wider catchment of learners, this is not a sustainable model.”
It also mentioned an issue that we have not touched on today:
“We have significant concerns about the future of student support services, such as counselling, pastoral care and childcare, which are vital for widening access…and a commitment to ongoing support for disabled students…with physical and learning disabilities.”
My hon. Friend the Member for Stockton North (Alex Cunningham) mentioned the potential costs. Although the Minister said yesterday that he did not want such things to happen, we all know about the law of unintended consequences, so I hope that, if he does not answer that point today, he will write specifically to hon. Members to explain who will pay.
The truth of the matter is that all of the colleges we have heard about play a crucial role in partnering with businesses to provide the training and skills needed for the future in the north-east. We have seen that in the examples given and I could list many more, but I do not wish to add to those amply provided by my colleagues. We need to see the potential skills shortages and careers advice issue addressed, because they are crucial to sustaining those colleges. I was interested to see the recent Newcastle City Council taskforce report, which criticised standards as being inconsistent.
The experience of careers advice and training falls short not just in the north-east but across the country, yet the Government have continued their cuts, restricting the support it is possible to give young people. Just yesterday in the Chamber, the Secretary of State had no answer to my question on the adequacy of limited funding and volunteers for a national careers service and the area reviews may do little to help and plenty to hinder promoting FE in careers advice.
Critically, we cannot afford to let talented and skilled young people, and older ones, fall by the wayside because their colleges have closed and the funding is not there to develop the skills needed to boost regional and sub-regional economies. The Government’s area reviews, as they stand at the moment, are littered with problems and miss key components—they are simply a cost-cutting exercise. As we have heard, FE in the north-east is vital to improving the regional economy, so the Government must ensure that closures, mergers and cost-cuttings do not take place and do not destabilise the balance between education and work and that students do not lose the opportunity to go to a college near them. Otherwise, the Minister is in danger of presiding over a series of dysfunctional Rubik’s cube processes, which could do permanent damage to local economies and learners’ life chances in the north-east and elsewhere.
The Minister for Skills (Nick Boles)
It is a great pleasure to serve under your chairmanship, Sir Edward. I congratulate and, indeed, thank the hon. Member for Bishop Auckland (Helen Goodman) for securing the debate because I hope that it gives me an opportunity to reassure her on a number of points.
The hon. Lady said that the process of area reviews is destabilising colleges in the north-east. What destabilises colleges in not only the north-east but across the country is the Labour party holding an Opposition day debate in advance of the spending review and declaring that further education budgets will be cut by between 25% and 40%. Of course, what we actually saw in the spending review was a protection in flat cash terms of both the adult and community learning budgets and the funding rate for 16 to 19-year-olds—something that nobody in the college sector, the Opposition or anywhere else had predicted.
What also destabilises is hearing a series of speeches—with a few honourable exceptions, which I will come back to—from Members in which they wave appalling prospects of forced closures and people having to trudge hundreds of miles through the snow to get to a course, when absolutely nothing could be further from the truth and when they have literally no evidence at all for any of the fears they are trying to awake.
There are two approaches to opposition. The first is the approach that was admirably modelled by the hon. Members for Darlington (Jenny Chapman) and for Newcastle upon Tyne North (Catherine McKinnell), who said that she, in principle, could support the idea of an area review if it was genuinely intended to create stronger institutions that would be better able to supply the skills training required to meet the region’s skills needs. We also heard constructive suggestions from the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), who has now left. However, I would say to the other Opposition Members that it does nothing at all for their colleges or the students who they claim to represent to terrify them into thinking that the Government are somehow slashing budgets when we are not or closing institutions when there is no proposal to do so.
Nick Boles
No, I am not going to give way. I am going to move on—[Interruption.]
Sir Edward Leigh (in the Chair)
Order. The Minister has intimated that he is not giving way, and I am afraid we have to listen to him quietly. It may be difficult, but Members must calm down.
Nick Boles
Hon. Members have asked a great many questions, and I want to try to answer as many as I can.
First, as well as seeming to think that my own educational background was a subject of interest for the debate, the hon. Member for Bishop Auckland suggested that I have no understanding of rural areas and the issues they face. I point out to her and the hon. Member for Blackpool South (Mr Marsden) that the constituency of South Holland and The Deepings neighbours—indeed, borders—my own. Your constituency, Sir Edward, also does. I, too, have a very rural constituency. I, too, have a constituency in which there are three towns that are more than 20 miles apart, so I entirely understand the issues. I am afraid that in Lincolnshire, fine and wonderful county though it is, we probably do not have much better public transport between towns than in the north-east, so to suggest that I have somehow brought an urban or south-east view to area reviews is ludicrous.
Secondly, the whole point about area reviews is that they are locally based. They are run locally, with local colleges taking these decisions. We of course accept that for the lower level of training in particular—level 1, 2 and 3 training—it is simply impossible to expect people to travel significant distances if we want them to continue in education. We do want them to continue in education, so we will absolutely not be looking to do that.
Opposition Members might want to ask themselves why the great and much admired Newcastle College is able to do so well. One reason is that it is big. In a single year, it secures £38 million of grant funding from the Skills Funding Agency alone, whereas many other colleges in the north-east receive £2 million, £3 million, £4 million or £5 million. “Merger” does not necessarily mean the closure of sites. In fact, what makes the closure of a site much more likely is a small, financially challenged institution that simply cannot cope with the overhead costs of running a college for very low volumes of training—
Nick Boles
I will not give way. I am answering all Opposition Members’ questions—[Interruption.]
Nick Boles
I will now move on to funding. With many of the Opposition Members here today having participated in that Opposition day debate in which they frightened their constituents and mine with the prospect of a 25% to 40% cut, I hoped that I might hear one word of welcome for the fact that the Chancellor was able to guarantee that the adult and community learning budget will be protected in flat cash terms throughout the spending review period—that is, until 2019-20—and that the 16-to-19 funding rate will also remain flat at £4,000 until 2019-20. Opposition Members predicted a 25% to 40% cut. We, through managing the economy responsibly, have secured funding stability, which I know their colleges welcome.
The hon. Member for Hartlepool (Mr Wright), as always, asked some important and serious follow-up questions, with the slight advantage of having quizzed me yesterday for an hour and a half. I will try to answer them, though they are not directly on the theme of area reviews. The change in the nature of apprenticeship funding is, of course, a critical element in looking at the future of any college’s finances. I hope that he will welcome, endorse and help to go out and spread this message. Currently, across the country, colleges secure only 30% of all the funding for apprenticeship training. The rest—two thirds—goes to private training providers. We all believe that private training providers have an important role to play, and none of us wants to fix the market for colleges, but I hope that he and other hon. Members will join me in urging colleges to set themselves the ambition of winning two thirds of that funding.
Colleges are incredibly well placed to provide training for apprenticeships, as many colleges in the north-east already do. It will be a significantly expanding budget. The apprenticeship levy, about which the hon. Gentleman has some understandable concerns, will increase apprenticeship funding in England to £2.6 billion by the end of this Parliament. Between 2010 and 2020, apprenticeship funding in this country will have doubled. What other education budget will have doubled in that period? That is a dramatic shift. Colleges are fantastically well placed to take advantage of that funding, and I hope that we can work together to ensure that more of them secure it.
The hon. Member for Bishop Auckland asked an important question about the interaction between the new apprenticeship levy and the Construction Industry Training Board levy. She is right to say that the CITB has the support of the industry, but she is perhaps a little over-generous to say that the scheme is not broke. The reality is that our construction industry yet again has gone straight from feast to famine and suddenly finds that it does not have the skills it needs, so something is not quite working in the provision of skilled labour. I am sure that that is as true in her constituency as it is elsewhere in the country.
We have made very clear to the industry and, indeed, to the CITB that it will be for the industry to decide how it wants to combine the two levies. It may well be possible to devise a solution whereby one levy is effectively netted off against the other, so that no individual levy payer pays twice but we continue to provide support. The CITB levy, as the hon. Lady will be well aware, will cover more employers than the apprenticeship levy. She has my commitment that we will work with the industry to ensure the two levies work well alongside each other.
A question was asked about the devolution settlements and whether the funding that might be devolved will be ring-fenced. Hon. Members will be aware that we have already devolved capital funding to local enterprise partnerships in relation to skills. That funding is not ring-fenced; it goes into the single capital pot that the partnerships have. I hope that Members will be reassured to know that even as adult skills funding starts to be devolved to areas that have secured devolution deals, local authorities in those areas will still be subject to the same statutory requirements to provide certain skills for free to certain members of the population. Local authorities might not have a ring-fenced budget, but they absolutely will have a statutory duty to meet that provision, as they do in relation to social services and all sorts of other services. I am sure that hon. Members will know from their own experience that local authorities take such statutory duties very seriously indeed.
The hon. Member for Darlington raised an interesting point and was the only person really to get into what she called the jungle of qualifications. I agree with her; it is often a baffling sea to any 16-year-old who comes in, seeking a set of courses to take them to a career. I hope that she will welcome and contribute to the review being conducted by a former Labour Minister, Lord Sainsbury. He is looking into constructing slightly clearer and more directive routes for technical and professional education, so that from the age of 16, young people are given a clear sense of what will actually take them into a job.
Finally, I come back to area reviews, which are the real subject of the debate. It is very important to understand and underline that colleges are independent institutions. We simply do not have the power, nor do we want to have the power, to tell them to merge, close or do any such thing. That is why—
Several hon. Members rose—
Nick Boles
I am not going to give way when I am in the middle of explaining something. That is why, of course, we have set up these reviews as being locally based and driven by the colleges. Of course, there is input from the Skills Funding Agency, because there is a great deal of expertise and because the Skills Funding Agency and the Education Funding Agency are the major sources of their financing. Frankly, however, many colleges—not least Newcastle College—also get a lot of funding independently, and quite right, too. They get it from business and do not need to look to the Government to tell them what their future is. We have invited all these colleges to work together and come up with a solution that will make them all more robust and more sustainable. It seems extraordinary to me that Opposition Members do not believe that any change could be positive.
Several hon. Members rose—
Nick Boles
Opposition Members just simply assume that every potential change is a threat and is somehow going to close a vital—
Mr Marsden
On a point of order, Sir Edward. You will observe that we have a considerable amount of time for the Minister to answer interventions, but he has refused to take any. Is it in order for him to do so, or is it just simply impolite not to?
Sir Edward Leigh (in the Chair)
It is certainly in order for him to decide whether to take interventions. Whether it is polite or impolite is for others to judge.
Nick Boles
Thank you very much, Sir Edward, for confirming my understanding of Standing Orders. I just want to conclude by reassuring hon. Members—[Interruption.] I just want to conclude my argument by reassuring hon. Members that area reviews are not top-down impositions. They are not going to come up—
Mr Kevan Jones
On a point of order, Sir Edward. I have never seen a Minister fail to accept any interventions. When time is not on a Minister’s side, it is fair not to, but we have eight minutes left and he has refused to have any Opposition Members challenge him on anything he has said, which is absolutely outrageous.
Sir Edward Leigh (in the Chair)
Well, that is not a point of order, but there we are.
Nick Boles
I hoped that Opposition Members would understand that, when I said that I wanted to conclude my argument, that was slightly different from saying that I wanted to conclude my speech. I will be happy to take some interventions when I have concluded the argument that area reviews are not going to be centrally imposed solutions. They are locally generated solutions that will provide a prospect for every college—about which Opposition Members have spoken in such glowing terms—to do an even better job in the future of providing vital technical skills to their young people.
I will start, if I may, by taking an intervention from the hon. Member for Bishop Auckland, given that she secured the debate, and I am happy to use the rest of the time to take further interventions.
Sir Edward Leigh (in the Chair)
I was going to call the hon. Lady to wind up at the end if she wants to, so does she want to let others come in first?
Nick Boles
In which case, I am happy to give way to the hon. Member for Stockton North (Alex Cunningham).
Alex Cunningham
The Minister has not addressed the issue that I raised with him yesterday, which has been raised again today, about the banking fees that merging colleges will ultimately face as a result of any mergers that take place. They will run into millions of pounds across the country. What action will he take either to influence the banks or to ensure that those costs do not lie at the doors of colleges and that they get the benefit of any mergers that go ahead?
Nick Boles
I am glad that the hon. Gentleman has asked the question again. He is right, of course, that sometimes when there are changes to banking arrangements, fees arise, but those will be visible and transparent, and a college will only undertake an operation that might trigger those fees if it considers that, overall, doing so is in its interest. He will be aware that the Chancellor made it clear in the spending review process that there will be a facility to provide transitional funding for the implementation of area reviews. We will have access to that facility if we need it to support, for instance, a merger or some other arrangement; but ultimately, we will only support such a merger or arrangement if the colleges believe that it is worth doing, even if there are some transitional transaction fees. I hope that helps a little.
Mr Kevan Jones
I am glad that, despite the Minister’s arrogance, he has been shamed into accepting interventions. He is trying to portray the north-east colleges as somehow stuck in the mud and not wanting to change. I assure him, however, that he could not meet a more dynamic set of leaders who actually want change. I want to ask him specifically about the point I raised on the specialist employment service. Although I accept that that is a Department for Work and Pensions responsibility, will he assure me that he will raise it with his colleagues at the DWP?
Nick Boles
Of course, I am very happy to raise that with DWP colleagues; I regularly meet the Minister for Employment and actually I will meet the Under-Secretary of State for Disabled People soon. May I just make it clear on the record that at no time have I suggested that colleges in the north-east are stick-in-the-muds? Indeed, I have singled out several as exemplar colleges. I absolutely have said that some Labour Members who have spoken in the debate seem to be stick-in-the-muds and attached to defending existing arrangements, and I happy to repeat that claim.
Mr Jones
What the Minister is highlighting is that it seems as though he has made up his mind what he wants: he thinks big is beautiful. He rightly argues, as I said in my contribution, that Newcastle College is a good, forward-looking institution, but he clearly wants large colleges with satellites. That is not what local colleges in the region want; they want to co-operate with one another, so I am sorry, but he is being disingenuous if he is suggesting that he has somehow not made his mind up even before he started this review.
Sir Edward Leigh (in the Chair)
Order. Will the Minister give Helen Goodman a couple of minutes to wind up, please?
Nick Boles
Of course I will. I just want to give any other hon. Member the opportunity to intervene, Sir Edward. They seem to be very keen to intervene—but perhaps less keen now.
Helen Goodman
First, the Minister began his remarks by suggesting that some of us who spoke in this debate were scaremongering and that we had no evidence to suggest that options coming out of the reviews might include the closure of institutions. That is not the case. It was his document, “Reviewing post-16 education and training institutions: guidance on area reviews”—published on 8 September 2015, when he was the Minister—that floated that option. That is what people have noticed.
Secondly, the Minister knows perfectly well—he is an extremely well-informed man—that flat cash means real-terms cuts. That is what we have pointed out.
Thirdly, I asked the Minister why he thought it was right that the capitation was lowest in FE, as compared with universities and, of course, with sixth-form colleges. If this country is going to continue to develop a high level of technical expertise and manufacturing, we need to put more money into this kind of education, which needs small groups and high-quality equipment to teach these young people.
Question put and agreed to.
Resolved,
That this House has considered further education colleges in the North East.
Merseyside Fire and Rescue Service
(8 years, 9 months ago)
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Margaret Greenwood (Wirral West) (Lab)
I beg to move,
That this House has considered the funding of Merseyside Fire and Rescue Service.
Sitting suspended for Divisions in the House.
Margaret Greenwood
It is an honour to serve under your chairmanship, Mr Hollobone, and I am so pleased to have secured this debate this afternoon on the future of Merseyside fire and rescue service.
I begin by congratulating Merseyside fire and rescue service on its response to the floods right across the north of England this winter. It was able to provide that response because it makes such a positive contribution to national resilience, and I think we would all agree that we would like to see that contribution continue.
Merseyside fire and rescue service has been at the receiving end of severe cuts from central Government since 2011 and it faces further damaging cuts under the current Government. The cuts have led to fire station closures, a reduction in the number of fire engines and the loss of firefighter posts. The situation is a serious one and so I would like to describe these cuts in some detail today.
We all rely on the emergency services to be there should we need them. The work of firefighters is heroic. They enter burning buildings to rescue people who are in extreme peril, and who are terrified, exhausted or unconscious. That is the work that our firefighters do. They are brave people who put their own lives at risk to save the lives of others and I am sure that the Minister himself understands that, because of course he was himself once a firefighter. Firefighters are highly valued public servants.
In Merseyside during 2014-15, there were 582 rescues from all incidents; a rescue was carried out by Merseyside firefighters once every 15 hours. Their value cannot be in doubt. So it is important that we do what we can to ensure that firefighters can carry out their work in as safe an environment as possible. That is the very least that we owe them.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
I congratulate my hon. Friend on securing this very important debate. Does she share my concern that by 2020 there could be a cut of around 41% in the number of Merseyside firefighters in this vital emergency service?
Margaret Greenwood
I thank my hon. Friend for making that really important point, which I will return to. She is absolutely right. A cut of 41% in any workforce would add stress, but in an environment such as firefighting the resulting stress would be an unacceptable one to place upon firefighters.
With these points in mind, I will set out the scale of the cuts that the service has suffered since 2011 and their impact. I will then turn to the further cuts that were announced in December last year by the Government, and their implications, and I will ask the Minister to consider what all this means for Merseyside fire and rescue service.
Looking at the cuts from 2011-12 to 2015-16, we see that Merseyside fire and rescue service had a total cut from central Government of 32%, which is a huge and damaging cut. Like other metropolitan authorities, Merseyside relies to a much greater degree on its central Government grant than do county combined authorities such as Buckinghamshire. In 2010-11, Merseyside received 63% of its funding from its Government grant. Clearly, when the Government grant is cut, Merseyside receives a disproportionate cut in overall funding.
From 2011-12 to 2015-16, the cuts resulted in Merseyside fire and rescue service having to make £26 million worth of savings. What that meant on the ground is that we have lost nearly 300 firefighters, which is a cut of 31%; we have lost nearly 150 support staff, fire prevention and protection staff, and management staff, which is a cut of 35%; and we have had a 21% cut in our control staff, whose numbers are down from 42 to 33.
Cuts from central Government have also led to cuts in the number of fire engines on Merseyside, and in this respect the numbers are staggering. Back in 2011, we had 42 fire engines; we now have just 28, which is a cut of 33%. That cut has also led to a cut in the number of fire stations. On Merseyside, we are losing four fire stations as we go down from 26 to 22, which is a cut of 15%.
In my constituency of Wirral West, we currently have two fire stations—one at Upton and the other at West Kirby. Both are due to close and my constituents will no longer have their own fire stations but instead will be reliant on fire engines arriving from a neighbouring constituency. That will lead to longer response times, particularly into West Kirby and Hoylake, which are important urban centres. I am extremely concerned about this situation. Merseyside’s chief fire officer, Dan Stephens, has described the closure of those two stations, to be replaced by one station at Saughall Massie, as “the least worst option”. Clearly, that is not a ringing endorsement. The situation is far from ideal.
The loss of firefighters, fire engines and fire stations has led to an increase in response times across Merseyside over the five-year period from 2011 to 2016. Most notably, the response times of the second fire engine to attend incidents have increased by up to three minutes. That is worrying, because the crew of the first fire engine to arrive at an incident have to assess whether to carry out a search for people or to tackle the blaze. The arrival of the second fire engine is crucial, because with two crews the service can both tackle the blaze and carry out search and rescue. The Minister knows that minutes cost lives in a fire and that any increase in response times increases the risk of loss of life.
Ian Lavery (Wansbeck) (Lab)
The number of fire deaths is often misrepresented, but the facts and figures with regard to Merseyside are that in 2011-12 there were five fire deaths; in the year 2014-15, there was a doubling of that number to 10; and the indications are that the number could even treble in the next year or so. Does my hon. Friend share my deep concerns about this situation?
Margaret Greenwood
I thank my hon. Friend for that really important point, because of course someone might say that five is a small number—of course, every life matters—but when we see a trend such as that one it is significant. We also have to consider the wider trauma that is suffered, because of course one person who dies in a fire may have many relatives and children, and so the trauma is not just restricted to that one person. This is a very serious situation.
In addition to the increased risks to the public that we are seeing, we must also bear in mind what these cuts mean to the fire crews themselves. When a firefighter is committed to an incident wearing breathing apparatus, the length of time that they spend dealing with that incident and the activity that they undertake will have a bearing on the length of time they will need to recover away from the area of danger before they can be recommitted. Each time a firefighter wears breathing apparatus at an incident, the potential risk that they face increases, because of the amount of time they are exposed to hazards and the physical efforts of repeated use of breathing apparatus.
The speed at which other fire appliances arrive to provide additional crew in breathing apparatus is crucial to reducing the risk to firefighters and to providing an effective firefighting response. Dan Stephens, the chief fire officer of Merseyside fire and rescue service, has given his view of the impacts of the cuts so far. He says, “The reduction of appliance numbers resulting from the cuts to the Merseyside fire and rescue authority budget have increased response times for the first and subsequent appliances to life-risk incidents. The reduction in appliances has also impacted on the number of crews that can be released for risk-critical training and exercises on any given shift. The organisational capacity to undertake community safety interventions such as home fire safety checks has also been significantly reduced.” It is important that we take notice of the chief fire officer’s analysis of the situation that the cuts have given rise to.
Mr George Howarth (Knowsley) (Lab)
I am very grateful to my hon. Friend both for her good fortune in securing this debate and for the powerful way in which she is making her case. Does she agree that given the weight of the problem that she has described, it would be appropriate for the Government to treat the fire and rescue service in the same way that they have treated the police, which is to say there should be no further cuts to the fire and rescue service?
Margaret Greenwood
I thank my right hon. Friend for that excellent point, and I absolutely agree with it.
As though all that has happened from 2011-12 to 2015-16 was not enough, there are more cuts to come. The future funding settlement announced as part of the local government funding settlement at the end of last year—on 17 December—has left Merseyside fire and rescue service facing a 41.3% cash reduction in the revenue support grant, which is the grant from central Government, over the period from 2016-17 to 2019-20. That equates to approximately a 50% reduction in real terms. Once business rates are added, Merseyside fire and rescue service will see a cut in cash terms of 16%, or between 22% and 25% in real terms if we take inflation into account. Of course, we have to remember that that those cuts are on top of the cuts that the service has already suffered, meaning total cuts of £11 million over the four years. The cuts that are coming our way are likely to lead to the loss of another 10 fire engines, taking the number down from 28 to 18, and the loss of another four or more fire stations.
The overall impact of the cuts delivered and planned for by the coalition Government and the current Government, between April 2011 and March 2020, will be a 41% reduction in the number of firefighters—a loss of about 400—a 46% reduction in the number of support, fire prevention and management staff, to just under 200, and a 21% cut in control staff, bringing their number down from 42 to 33. We can also expect to see the number of fire engines reduced from 42 to 18—a 43% cut.
Mrs Ellman
My hon. Friend is generous in giving way again. Does she agree that it is of great credit to Merseyside fire and rescue service that it has maintained such high standards in the face of the cuts? It would be absolutely wrong for the Government to continue their course of action in the knowledge that there would be a calamity in due course.
Margaret Greenwood
My hon. Friend makes an excellent point. She is absolutely right that it behoves the Government to take the situation extremely seriously.
The combined numbers for the loss of fire stations mean that we would be down from 26 to 18—a 31% cut. The numbers are shocking, and the scale of the cuts dramatic. Frankly, I find it unbelievable that it is possible to cut the number of firefighters by 41% with no increased risk of loss of life.
Steve Rotheram (Liverpool, Walton) (Lab)
My hon. Friend paints a bleak picture of the impact of the cuts. In many ways, Merseyside fire and rescue service is a victim of its own success. It undertook to carry out preventive measures pre-2010, and that had a massive impact on the number of incidents to which it was called out. Last year, fire deaths on Merseyside doubled, but the low point in 2010 was because of those measures. Does my hon. Friend fear that the loss of 300 firefighter posts will have devastating consequences for firefighters’ ability to address the rising number of fire deaths on Merseyside?
Margaret Greenwood
I agree with my hon. Friend’s excellent point.
We have already mentioned the increased response times that are so critical when it comes to saving life. Independent consultants Greenstreet Berman suggest that by 2020, should the cuts go ahead, slower response times nationally will mean up to 41 additional deaths at dwelling fires, up to 91 additional deaths at road traffic collisions, up to 57 additional deaths at water incidents and 212 additional deaths at special service incidents. A significant increase in loss of life is predicted, so we must consider too what cuts in staffing on that scale will mean for those left working in the service. Anyone working in an environment that involves teamwork knows full well that the loss of 40% of staff would put pressure on those remaining.
As well as considering the impact on the service’s ability to respond to fires, we must also bear in mind the other essential work that the fire service carries out. In 2015, the Government published the latest edition of the national risk register of civil emergencies, which is the unclassified version of the national risk assessment. The register covers a range of civil emergencies that threaten serious damage to our welfare, the environment and security. A striking number of those threats are matters dealt with by the fire and rescue service, for example terrorist attacks, coastal and inland flooding, storms and gales, low temperatures and heavy snow, heatwaves and severe wild fires, pandemic influenza and other disease outbreaks, major industrial and transport accidents, and public disorder, such as during the civil disturbances of 2011. We must remember that a Government’s first duty is to protect its citizens, and the coalition failed in that duty in 2011, with the riots that took place in London. I happened to be in London at the time, and it was very frightening to be there.
Firefighters in Merseyside continually plan, prepare and train for those kinds of emergencies. Some of the risks posed by such events have increased in recent years, and with climate change many of the risks are likely to increase in the foreseeable future. The Government’s own analysis of flooding incidents responded to by fire and rescue services across England in 2014-15 shows a 15% decrease in the number of such incidents, but I think that we would all agree that this winter we have seen just how important fire and rescue services are in flood incidents, and we have all powerfully been made aware of how unpredictable extreme weather events can be. Merseyside fire and rescue service has supported every major flood event over the past 10 years.
We have to remember too the risk of terrorism. Terrorist incidents are, of course, by their nature unpredictable, but Merseyside fire and rescue must be able to respond to them. For example, it provided a terrorist firearms attack team for the NATO summit in Cardiff.
Other events are highly uncertain and difficult to quantify, and it is impossible to plan for multiple events. Everyone assumes that the fire and rescue service is prepared, equipped and staffed to meet every challenge. The Government’s planning for such risks assumes that sufficient firefighters are available to tackle the emergencies, and that the fire and rescue service in Merseyside is resilient in the face of such threats.
I want to talk a little about the drop in the number of fire incidents. Some have tried to argue that the drop justifies the reduced spending on fire and rescue services. That might have once been the case, but after receiving deep cuts in 2011, Merseyside fire and rescue service should not face any more. The latest round of cuts will adversely affect the service’s ability to carry out crucial fire prevention work in the community, which is particularly important when one considers the age profile of the local population, as in my constituency, for example. Older people suffering from memory loss, mobility issues, sight and hearing loss, and dementia increase the risk of domestic fires. The prevention work carried out by Merseyside fire and rescue service is as important today as it has ever been.
The increase in the number of road traffic incidents, to which the fire service across England has had to respond, should also be borne in mind. The coalition’s cuts to Merseyside fire and rescue service have damaged the service’s ability to respond to fire and a range of other incidents, many of them life-threatening. The cuts announced before Christmas will make matters far worse. The loss of 41% of firefighters, 46% of support, prevention, protection and management staff, and 21% of control staff will put an inacceptable strain on the remaining staff and affect response times. Cuts on that scale could also lead to loss of life.
I have looked but have been unable to find mention in the Conservative party manifesto that the Government intended to make dramatic cuts to essential life-saving services. I welcome a correction from the Minister if I am wrong. I very much doubt that the public will support this level of cuts or that they would be forgiving of such detriment to the service over time.
Mr George Howarth
My hon. Friend will be aware that Dan Stephens, the chief fire officer, said today that he believes that there is no capacity to absorb any further cuts. He also said that the situation is exacerbated by our low tax base and that
“the cuts we have sustained to date”
mean that the
“bulk of future savings”
will have
“to come from response”.
Is that not the case in a nutshell? My hon. Friend has described all the consequences—that more people will be at risk, more firefighters will be at risk, more people will lose their lives, more people will be injured and more properties will be destroyed or badly damaged.
Margaret Greenwood
My right hon. Friend makes an excellent point. Increasing response times is not an option if we take risk management seriously.
In the spending review, on 25 November, the Chancellor made great play of the fact that there would be no cuts in the police budget and that there would be real-terms protection for police funding. He said:
“The police protect us, and we are going to protect the police.”—[Official Report, 25 November 2015; Vol. 602, c. 1373.]
On closer inspection, the pledge does not look quite as watertight as it did when it was first made, but the U-turn does prompt the question: why are the Government not going to protect firefighters? Moving the responsibility for the fire service from the Department for Communities and Local Government to the Home Office offers the Minister an opportunity to pause, reconsider and drop the cuts, and I urge him to do so.
Mr Philip Hollobone (in the Chair)
I will call the Front Benchers at 5.38 pm. They will have 10 minutes each, and Margaret Greenwood will then have two minutes at the end to sum up the debate. We have got between now and 5.38 pm for other contributions. I have two names on the list in front of me—I am happy to take others—of which the first is Conor McGinn.
Conor McGinn (St Helens North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I am grateful to my hon. Friend the Member for Wirral West (Margaret Greenwood) for enabling us to have this important debate. She spoke passionately and outlined in some detail the severe difficulties facing Merseyside fire and rescue service and the fears that its staff, public representatives and the people of Merseyside have for its future. I agree with everything that she said, so I will restrict most of my brief remarks to the impact on my constituency.
Let me say at the outset that I deeply regret the situation that Merseyside fire and rescue service finds itself in as a result of the huge cuts to its budget, which have meant that it has had to reduce significantly the number of firefighters, appliances and stations across the region. I pay tribute to the fire authority and senior management in the service for how they have tried to mitigate the worst effects. I also commend the regional and national leadership of the Fire Brigades Union for how they have worked constructively to protect and defend their members, but also for how they have laid the blame where it truly lies, which is at the feet of this Conservative Government.
Following a consultation last year, it seems likely that St Helens fire station in my constituency will close. Eccleston station, in the constituency of St Helens South and Whiston, will suffer the same fate, with a new station being built to serve an area previously covered by two. This merger, as it has been called, is a bitter blow to those who work at the stations, and there are expected to be 22 job losses. It will also have a hugely negative impact on the local community, who value the station, their firefighters and the prevention and safety work done out of what is colloquially known as Parr station. More fundamentally, it raises questions about the impact on public safety, given the statistics that have already been quoted in this debate—notably the rise in response times and the increase in the number of fatalities across Merseyside, which is above the national average. It is currently proposed that the second fire engine at the new station will be crewed by whole-time retained firefighters, and there are concerns about the potential impact that will have on the already bad response times, especially at periods of high demand.
I am very fond of the Minister, but there is a pattern here. Over the past five years, £20 million has been taken from Merseyside fire and rescue authority, with a further £6.3 million to be found this financial year. My local council in St Helens will have had its budget halved by 2020. A planned new police station in Newton-le-Willows is now unlikely to be built, and St Helens courthouse is under threat of closure. The Tory Government call that savings. I call it theft. They are taking from the people of St Helens, Merseyside and the north-west of England what is rightfully theirs: their public services.
Steve Rotheram
My hon. Friend makes a powerful point on the cumulative impact not just of the cuts to the Merseyside fire and rescue service, but of the cuts to local authorities in our area. Does he agree that it is a targeted ideology of the Government to hit the poorest areas hardest? Unfortunately, Liverpool City Council has had a 52% cut, which is disproportionate to the cuts in other areas, such as Witney in Oxfordshire, which is the Prime Minister’s seat.
Conor McGinn
It certainly seems that way. Public services are not optional; they belong to the people of this country and the people of St Helens, Merseyside and the north-west of England. Those public services have been paid for by their taxes, built by their hands and staffed by their hard work. Firefighters and their families represent all that is best about our public services and communities. The Opposition will stand by them, as they have so often stood by us.
Liz McInnes (Heywood and Middleton) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Wirral West (Margaret Greenwood) for securing this important debate. She is right to highlight the cuts to Merseyside fire and rescue service and to the six metropolitan fire and rescue authorities in general. They have borne the brunt of budgetary reductions between 2010-11 and 2015-16. My constituency is served by the Greater Manchester fire and rescue authority, which like its metropolitan sister in Merseyside is facing massive cuts that cannot mean anything other than a drastic reduction in its services. Following the local government settlement, Greater Manchester fire and rescue authority will have to cut £15.8 million from its budget by 2020, with a massive £12.6 million reduction in the first two years alone.
Today the Government announced greater collaboration with the other emergency services, but Greater Manchester already has numerous collaborative projects, which include a national flagship station at Irlam that includes police, fire and ambulance, and the development of the UK’s first safe and well assessments, which focus on health and crime prevention as well as fire safety and prevention. It is the first fire and rescue service in the UK to have all front-line firefighters and resources responding to cardiac arrests on behalf of the local ambulance service. It is also building a joint fire and ambulance station in Wigan; providing offices to Greater Manchester police in Stockport, Stalybridge and Mossley; launching the community risk intervention team to support Greater Manchester police and health services; opening prevention hubs with Greater Manchester police and Salford City Council to support troubled families; and developing and delivering joint realistic multi-agency public disorder training.
The Government announced joint working with the police with a lot of fanfare, but I put it to the Minister that it is already going on. A further cut of £15.8 million will undoubtedly have an impact on the projects I have just outlined and will serve to limit the type of joint working that the Greater Manchester fire and rescue service has done so successfully with the police and other agencies. That is surely a retrograde step, given today’s announcement.
Since 2009-10, Greater Manchester fire and rescue authority has saved £28 million, which amounts to a 25% reduction in budget. Similarly to Merseyside fire and rescue service, that has been achieved through cutting the numbers of firefighters; cutting support staff and senior management; revisions to firefighter shifts and crewing arrangements; increased collaboration with other services, as I have already outlined; and improved procurement, among many other savings. With those steps already taken, a further cut of £15.8 million will require an unacceptable reduction in the fire and rescue cover that the service can provide. The scale of the new cuts will require the loss of a further 312 firefighter posts and the reduction of night-time cover from 56 fire engines to 33, meaning that Bury, Stockport and Trafford will have only one engine that is immediately available. The cuts will reduce front-line firefighters to 1,000 by 2019. In 1996, the authority had more than 2,000 firefighters. Fewer firefighters means fewer crewed-up fire engines being immediately available. As other Members have outlined, the consequence is that it will take longer to get to incidents and fires will spread more extensively.
Greater Manchester fire service has delivered more than 425,000 home visits and reduced fires by 42% over the past six years, but the trend of reduced incidents is now levelling off and in some places reversing. Between July and September last year, special service calls, such as road traffic collisions and flood responses, rose by 28% compared with the same period in the previous year. The numbers of non-domestic fires, accidental house fires and fire casualties have also increased. Further cuts will have an impact on preventive work, resulting in increased risk, more fires and more casualties.
On Boxing day last year, two thirds of Greater Manchester fire and rescue service’s available resources were deployed to provide flood rescue response across the county. Firefighters rescued nearly 1,000 people in less than 24 hours. Future incidents of that size will leave large parts of Greater Manchester with no fire and rescue cover. The Fire and Rescue Services Act 2004 does not place a statutory duty on fire services to respond to flooding, and Greater Manchester fire and rescue service will be unable to maintain its current levels of response to flooding following a further £15.8 million in cuts.
Greater Manchester fire and rescue service is one of the most innovative brigades in the country. As we go forward into a devolved administration in Manchester, our communities should have the power to decide the type of fire and rescue service that they need. Cost-benefit analysis shows that for every £1 invested in firefighter provision in Greater Manchester, £18 is returned in benefits to the local economy—a contribution of £1.27 billion in 2014 alone. I urge the Government to take note of those figures and ask themselves whether further cuts to our fire and rescue services are a false economy. If the answer is yes, which I believe it is, the Government must think again before they put short-term financial savings ahead of public safety.
Peter Dowd (Bootle) (Lab)
I am pleased to speak under your stewardship, Mr Hollobone, and I congratulate my hon. Friend the Member for Wirral West (Margaret Greenwood) on securing this important debate.
As a former chair of Merseyside fire and rescue service, I feel I have a little knowledge—some would say very little knowledge—of the area that it serves. As a former Fire Minister, my right hon. Friend the Member for Knowsley (Mr Howarth) also shares significant knowledge of the service. The headquarters of the fire service is in my Bootle constituency. I visited the service HQ only a few weeks ago, and I am pleased to say that there is a jointly located command and control centre, shared with the police. That was an initiative taken and implemented without Government diktat, so Merseyside is already ahead of the curve in that regard. Discussions have also taken place to one degree or another with the ambulance service over the potential relocation of its control centre within the Merseyside fire service.
The service has excellent partnership arrangements with the police and local authorities, and, over the years, has developed excellent relations with community groups, voluntary organisations and the faith sector. It is no easy task to go out and make contact day in and day out to build up relationships with those organisations, and they respond constructively and positively.
Merseyside fire and rescue service can truly claim to be an integrated partner within the various communities that go to make up Merseyside. In addition, its relationships with the business community are absolutely second to none. Put simply, Merseyside has an excellent service that has a record of being proactive—in that, too, it is second to none. Over the years it has not only responded in the physical sense to actual fires, but has been responsive in ensuring that prevention has been at the top of its agenda. That takes time, determination and both financial and human resources, which are incrementally disappearing.
Merseyside fire and rescue service has risen to the financial challenge, albeit an unfair one, that the Government have set it over the past five years. Merseyside is a diverse community. It has a major river running through it, with two strategic road tunnels running beneath. It has major dock estates on both sides of the river and a burgeoning cruise terminal, with a major expansion of the Seaforth dock under way. It has an airport, two universities and major regional, national and international hospitals of repute within its care. It has two excellent football teams, in addition to Liverpool FC. It also has Aintree racecourse, which hosts one of the largest horse-racing events in the world. Meanwhile, Merseyside fire and rescue service has brought down the number of fires over the years with an innovative fire prevention strategy. The number of deaths and injuries have gone down to remarkably low levels, and that excellent record is in jeopardy. There is no doubt about that at all. It has done all that without kicking up a fuss and under great financial pressure, but that can go on only for so long without having serious effects on the resilience of the service.
The six metropolitan authorities, out of a total of 46 services, accounted for 57% of the budgetary reduction in the service as a whole between 2011 and 2013. Little is changing under the Government’s proposals; in fact, it is getting worse. During the same period, Merseyside fire and rescue service’s budget was cut by 13%—one of the highest cuts, and double the average—while others received increases. That is simply not fair and not equitable, and it is on top of all other the major cuts to local government services across the region over the past few years, which my right hon. and hon. Friends have mentioned. Put simply, that financial inequity is wrong, particularly when lives and livelihoods are at risk. The Government really have to think again.
Lyn Brown (West Ham) (Lab)
As we have heard, and as the figures that I have show, the Merseyside service faces a 41% cut in the support it will get from the Government over the next five years. It is calculated that that means it is likely to shrivel from 962 firefighters in 2011 to 564 in 2020, almost halving its firefighting workforce. Fire engines have been depleted from 42 to 28—it is possible that another 10 engines are to go—and four of Merseyside’s 26 stations have closed, with another eight under threat. It is a really dramatic cut in front-line services by anybody’s measures.
My hon. Friend the Member for Wirral West (Margaret Greenwood) made an excellent speech, supported by the other Merseyside MPs. She was absolutely right to bring the subject to the House’s attention and to seek to get the Government to understand, even at this very late stage, just what these cuts mean to our constituencies and constituents. It is not just Merseyside—other fire services have been hit hard, with a 15.6% reduction in the cash budgets of metropolitan services and a reduction of 5.9% for non-metropolitan services. As the National Audit Office has said:
“Spending power has fallen most in areas assessed by the Department as having highest levels of…need.”
There are likely to be more incidents in areas of the highest need, as the Minister knows only too well. It is in the cities—in poorer metropolitan areas just like Merseyside—that fires are most likely to happen and to cause the most damage. Spending forecasts show that the trend is likely to continue. According to the House of Commons Library, metropolitan services are going to lose more spending power than combined county services, which means that services such as Merseyside’s will continue to face the toughest cash squeeze. Where is the risk-based allocation that used to inform Government spending on fire services?
Since 2010, our fire and rescue service has had to deal with year-on-year cuts totalling an estimated £236 million—about 22.5% of its overall Government funding—and a further 8.8% this year alone. That has led to real reductions on the frontline. We have 5,000 fewer firefighters in England than we had in 2010. I travelled around the country earlier this year—I was the shadow Fire Minister prior to the election—and I talked to people at both metropolitan and non-metropolitan services. Some of them told me that their services would not be viable in the future. Those words chilled me, as they should chill the Minister.
Those who see logic in slashing fire budgets seem to believe that as there are now fewer fires it is safe to have a depleted fire service, but that argument is utterly specious. It completely disregards other important services that firefighters provide in key areas such as flood fighting, terrorism and others that we have heard about today. As my hon. Friend the Member for Wirral West said, a key factor in the smaller number of fires is the 670,000 home fire safety checks that the fire service carries out every year. Since 2004, when the checks began in earnest, the proportion of homes with fire alarms has increased from 74% to 88%. Those checks save lives as well as preventing fires—double the number of fatalities happen when a fire occurs in a building without a smoke alarm. To cut the fire service because the number of fire incidents has been reduced successfully, saving lives in the process, would be like cutting the number of mammograms because the number of deaths from breast cancer is going down. It is complete madness.
We should therefore be in no doubt that the cuts faced by services such as Merseyside will put the public at greater risk. Indeed, as we heard earlier, the independent consultants Greenstreet Berman suggest that by 2020, slower response times nationally—they are now at their worst level for 20 years—could lead to more than 100 additional deaths a year. The cuts may well lead to the Government failing in their first duty: to keep the public safe.
Fire deaths in Merseyside have already increased over the past five years of cuts. I know we are dealing with small numbers at the local level, so I do not want to talk about percentages because they can be totally misleading, but the trend concerns me deeply, as it should concern the Minister.
The funding cuts faced by the Merseyside fire service and other beleaguered services are all the more difficult to manage because the Government have consistently shown little or no leadership on the future of fire services. Now, however, after a long period of inertia, the Government are suggesting a patchwork, top-down reorganisation. They are effectively proposing to put fire services under police and crime commissioners, or to place the police on the boards of fire services to be part of their management. They are also suggesting a single employer.
There is real concern that all that will mean that the fire service becomes subsidiary to the police and ceases to be a statutory service in its own right, and that the fire service will be the one to see the reductions in budget and staffing—no longer two equal services working side by side for the public good, but one subordinate to another. Where PCCs take over, what guarantees do the public have that fire budgets will be maintained? Merseyside has a right to ask for that, and for an unequivocal assurance from the Minister that this top-down proposal will not be used to introduce privatisation.
The reorganisation is, I assume, to save money. Why, oh why did the Minister not look to Wales or Scotland to work out how a reorganisation could be done to save money and yet protect the frontline? Was it simply a “not invented here” reaction, or something more nefarious? As the shadow Fire Minister before the election, I thought hard about what an incoming Labour Government could do to save money, in Merseyside and elsewhere, and protect the frontline. I consulted experts, and they told me that there were only three ways to work within the Tory-Liberal Democrat spending plans: merge the service into one; volunteerise the whole service; or privatise it. Which of those options is today’s announcement moving us towards—a service staffed completely by volunteers or a privatised service?
As the Minister knows, firefighters run into danger when the rest of us are running away. They are professional and work with determination and expertise to protect us all from the most appalling risks. They should be valued and listened to, not ignored. The Minister knows that better than anyone, and I urge him to take stock of the funding on Merseyside and in all the other areas of the country that are struggling to make massive reductions.
The Minister must respond to the impressive and passionate case that Merseyside MPs have made today about fire service funding, and not fob them off with some fairy tale about reorganisation providing more money for the frontline. Budget reductions and his suggestions for mergers with the PCCs put him in danger of creating a Cinderella service. That fairy tale ended happily, but today, sadly, I see no Prince Charming on the horizon.
The Minister for Policing, Crime and Criminal Justice (Mike Penning)
It is, as everyone has said, Mr Hollobone, a pleasure to serve under your chairmanship yet again.
I welcome the shadow Minister, the hon. Member for West Ham (Lyn Brown), to her role. I thought we had got rid of each other after the psychoactive substances debate, but here we are again. I do not know which of us feels sorrier. This is the first time that she has attacked me, which is probably a sign of the future, but we can still be friends outside the Chamber.
Colleagues from Merseyside are present today and I understand what they have said, although I do not understand or recognise some of the figures that have been used. I will come to those in a moment.
I congratulate the hon. Member for Wirral West (Margaret Greenwood) on securing the debate and on making all these colleagues come out of the main Chamber for this debate, which is obviously important. I will answer as many of the points as possible. Naturally, if I cannot answer them all, I will write to colleagues. Actually, I want to write to colleagues from throughout the area—to colleagues who are not present as well—to clarify some of the figures, because I just do not recognise some of them. If I am wrong, I will obviously make that clear later and apologise, but let me give an example. The shadow Minister talked about core spending power between now and 2020, and a 41% cut was alluded to. Actually, it is 3.4% and a reduction of £2.1 million. There is obviously a discrepancy between the figures that my officials have produced for me and the figures that have been used in the debate.
One thing that slightly surprised me was this. The local authority is concerned and obviously has lobbied extensively, yet my notes tell me that Merseyside had the opportunity formally to respond to the local government financial settlement if it was concerned about the funding cuts, but it did not do so, so it did not take part in the consultation. I might be wrong, but those are the notes I have. I would think that if there were concerns, they would have been expressed.
Mike Penning
I will make a tiny bit of progress and then give way.
I am very conscious that a former Minister and a former chair of the Merseyside fire and rescue service are present. I pay tribute to the hon. Member for Bootle (Peter Dowd), because he went through an enormously difficult time in reforming the Merseyside service. I know that that was not an easy thing for him to do, so I pay tribute to him for the work that he and his board did.
For a short period, I was a fireman in the fire and rescue service in Essex, and I was the branch representative of the Fire Brigades Union for a very short period—until we fell out—and so no one is more conscious than I am of the work that our firefighters do on a daily basis. A lot of it is not seen by the public, even though the public expect them to do it. I am very conscious, having been to Lancashire, of the work that is done through mutual aid agreements. I saw help come across those borders—there were no borders and no lines on maps; firefighters just went across to help in the way that they should have. Firefighters from my constituency in Hertfordshire were also in the north-west, assisting with high-velocity pumps. A lot needs to be learnt from the type of flooding and rescue work that was done. The Prime Minister has already announced a review of not only how we protect the public better from flooding, but how we respond and where the facilities should be.
It is also important that we acknowledge the changes that have taken place in the structure of the fire service, certainly since I joined in ’82, as well as what has happened over the past few years. I pay tribute to the Fire Brigades Union, which in my time, would never have agreed to some of the changes that have taken place, especially in the manning of stations. However, practicalities relating to the modernisation of the service meant that when I was in Lancashire only the other day, all the whole-time station staff I met were what I would call day-manning staff. Other crews come down at night and are on call. It seems to be working really well there. It was first piloted, I think, in Woodham Ferrers in Essex, back in the ’80s. When I was there, we went to day-manning stations. It is about a different sort of facility, looking at what the requirements are and when staff can come in.
Mr Howarth
I am grateful to the Minister. I join him in paying tribute to the FBU for the concessions that it has been willing to make, but does he not recognise that, because it has already made those concessions, the scope for any further reductions is inevitably much smaller?
Mike Penning
In some respects, I agree with the right hon. Gentleman. We have come some way, but I do not think that anyone would say that we have fully come through. For instance, the figure I have for the number of retained firefighters in Merseyside is 25, which is very low. That may be because we are looking at day-manning stations among other things, but the use of retained firefighters is how it is done in many parts of the country. Sadly, that is not the case in London, where there are no retained firefighters, which I find strange. We need to continue to look at that.
I do not have the full figures for Manchester, because the debate is about Merseyside fire and rescue service, so I will have to write to the hon. Member for Heywood and Middleton (Liz McInnes). My officials were scurrying away behind me to ensure that I had some details, but it is probably better if I write to her. I will say again that I do not recognise some of the figures on the amount of losses. We can all throw figures around, but let us get down to the facts.
Colleagues have talked about the small but significant increase in deaths in Merseyside, and that needs to be addressed. The statistics are always difficult: one death is too many, and one of the first things I said when I took over this responsibility just over three weeks ago was, “Yes, we have reduced deaths nationally enormously, but hundreds of people still die in fires and we need to get that figure down even more.” With the fire service in Merseyside and my specialist teams, I will personally look and ask for analysis as to why that figure has moved.
A couple of comments are very important. I am brand-new into the job. I was a firefighter, but that was a long time ago and the service has changed enormously since then. The one thing that has not changed is that, while we go in one direction, the fire service and other emergency services are going in the other direction, so it is right that we continue to pay tribute to fire services across the country and acknowledge the work that they do and that there have been many changes. In the debate, I was listening carefully about who is manning what and where.
Some colleagues said that their fire station may not open—I refer in particular to the hon. Member for St Helens North (Conor McGinn). It might well open if it were a fire and police station. It is difficult to convert a police station into a fire station because the big red trucks do not get into the foyer so well, but we can plan constructively in the community. I always use the analogy that a church is not about buildings; it is about people coming together, and that is what we are talking about with the emergency services.
The reforms we announced today based on the consultation are not top-down but an attempt to move further forward. As chief fire officer Paul Hancock said today, there is a general warmth towards them in the service. This is not about taking one force, putting it under another and undermining it—as a former firefighter, why would I do that? I am trying to ensure that those on the front line have the opportunities and finances there and that we do not waste money in silos with headquarters here and there when they could come together. Why is it that in any part of the country the fire and police headquarters are not in the same building? Why are human resources and procurement not done together?
Since I took over responsibility for the fire service, I have published information on the 43 police authorities in which I listed about 20 average products that they buy for front-line operational use, so that the public can see how much each PCC and chief constable is spending on that equipment. The variation is enormous. For instance, on a type of approved body armour, there was a £300 difference between one piece of kit and another. On batons, the figure was about £80. I intend to do similarly for the fire service. I am not telling anyone that they should go to a specific organisation to buy their equipment, but I think the public should know what is being spent and how it is being spent. In vehicle procurement, the fire service should be part of the e-auctions process to ensure that taxpayers’ money is spent correctly.
Mike Penning
I will give way in a second, but I want to make a tiny bit of progress.
The equipment has changed dramatically from when I was in the fire service. We need to look carefully at the equipment we have for the 21st century. For instance, when I was in Lancashire, six fire appliances were sadly damaged due to the flood. Their crews watched the Army vehicles go through. Squaddies will drive through anything, but their vehicles are adapted to go through it, whereas six of the fire appliances got trapped in the water, went off the road straight away and were quite seriously damaged. The engines were damaged as well. We need to look at the manufacturers to make sure we have the right equipment.
Steve Rotheram
In case there is any confusion, Merseyside fire and rescue service submitted a response to the consultation on behalf of and jointly with other metropolitan authorities; I want to clarify that point. My hon. Friend the Member for Bootle (Peter Dowd) may well be mistaken and myopic in his choice of football team, but he was absolutely right on the statistics we used, which were provided by Merseyside fire and rescue service itself. He was there, along with a number of other Merseyside MPs, when the Leader of the Opposition visited the joint control centre that the Government are pushing in Bootle. The chair of Merseyside fire and rescue service, Councillor Dave Hanratty, has asked me to extend the same invitation to the Minister. The chief gave out that information, and he is very careful about being absolutely non-political and impartial, so the Minister can come along and get the briefing for himself.
Mike Penning
I will come. I have been to Merseyside many times in my ministerial role, not least when I announced the decision to open the cruise terminal in Liverpool, which was opposed by many areas in the south of England. I know Merseyside very well, and I will come as soon as my diary allows.
I would never say that anybody has intentionally used a figure that is not correct. Of course, everybody thinks that the figures they use are correct. All I have said is that the information I have is slightly different. It may be a question of semantics—who knows? Let us get the facts right, and then we will know.
The biggest thing I want to make sure I get across to the House is that I am new and I have an open mind. The Prime Minister has put me here for a reason, and it is obviously a logical reason. The role of Fire Minister is back in the Home Office where it was when I was a firefighter in the ’80s, interestingly, and it is logical that the emergency services are together. I will look carefully at why Merseyside has seen this slight but significant increase in deaths. It is very important we look at that and find out what has been going on.
Margaret Greenwood
I thank the Minister for his response and his proposition to look carefully into the increase in deaths; that is welcome. However, I have to say that I find his response on the business of figures somewhat baffling, because all the figures I have presented to him have come from Merseyside fire and rescue service. I wonder why he has not challenged the figures I have come up with of £26 million in cuts during the coalition and a further £11 million cuts to come. It does not matter whether we talk in percentages; those are huge cuts and that is a vast amount of money. Talking about merging HR functions and so forth is all well and good, but it does not really go to the nub of the issue. This is all about saving money, and that is the issue we are so concerned about.
Peter Dowd
In 2010-11, Merseyside received 63% of its funding from Government grants, so any cut in Government grant has a disproportionate effect. Does my hon. Friend agree that the Minister would do well to look at that particular element in his assessments?
Margaret Greenwood
My hon. Friend makes an excellent point. Of course, not all areas of the country receive that level of grant, but to us it is massively important. These cuts are real, and they are being felt already. We have already lost 300 firefighters. I am losing all the fire stations in my constituency. These cuts have not been magicked out of a small percentage; they are real cuts we are seeing.
I commend the Minister for paying tribute to the way in which the FBU has responded to modernisation, but I wonder what more he wants. The FBU has gone a long way to meet the cuts dealt to it already. As my right hon. Friend the Member for Knowsley (Mr Howarth) said, with the fire services having made those concessions and responded so valiantly to the scale of the cuts last time, there is nothing left to cut without detriment to services.
Finally, I would like to welcome the Minister to come to Merseyside and urge him to look at the figures very closely indeed.
Margaret Greenwood
I therefore urge the Minister to consider the possibility of dropping the cuts. If the cuts are of the scale that we have presented today, which I believe they are, there is a strong case for cutting them. Merseyside deserves a fire service that it can rely on and that is well funded, well resourced and does not put its firefighters at risk.
Question put and agreed to.
Resolved,
That this House has considered the funding of Merseyside Fire and Rescue Service.
Written Statements
(8 years, 9 months ago)
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Small Companies Audit Exemption Thresholds
(8 years, 9 months ago)
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The Minister for Small Business, Industry and Enterprise (Anna Soubry)
My noble Friend the Parliamentary Under-Secretary of State for Business, Innovation and Skills (Baroness Neville-Rolfe) has today made the following statement.
The Government have carefully considered responses to questions posed on the audit exemption threshold in the Government’s discussion paper on the implementation of the Audit Directive (2014/56/EU) and the Audit Regulation (Regulation 537/2014). Some stakeholders argued that amending the audit exemption threshold increases the risk of poor financial reporting and that the thresholds should be maintained at the previous level or raised to some intermediate level lower than the thresholds now used to determine a “small company” for financial reporting purposes. Others argued for the thresholds rising to the maximum permitted, quoting the erosion of the value of the audit exemption thresholds due to inflationary effects and the need to avoid imposing avoidable regulation on small companies. Moreover removing the link between the thresholds for eligibility for the small company regime and those for the audit exemption would introduce unnecessary complexity into company law and cause confusion for users.
The Government have concluded that, as now, all companies should continue to be able to have an audit. Companies will not however be required to have an audit for the financial years commencing on or after 1 January 2016 if at their balance sheet date they satisfy at least two of the three following criteria, in general for two consecutive financial years:
Turnover ≤ £10.2 million
Balance sheet total ≤ £ 5.1 million
Number of employees ≤ 50
and they are not otherwise excluded from accessing the audit exemption, for example due to the nature of their business.
Audit and auditors will continue to have an important role in supporting small businesses to achieve their ambitions and grow; and in providing assurance to owners and lenders about a company’s performance. Although it is estimated that raising the audit exemption thresholds will bring a further 7,400 companies within scope of the exemption, on current practice the Government anticipate that 4,400 will choose to continue to have an external audit. Of the 3,000 companies expected additionally to take up the exemption, some will seek alternative routes to ensure that the company’s systems are robust; for example, through assurance reviews or increased oversight of accounts preparation.
In view of the news expressed by stakeholders the Government will keep the changes in the audit exemption thresholds under review. We will respond quickly should evidence emerge that further action is required to ensure that the UK continues to have a world-class financial reporting and assurance framework which meets the needs of users and regulators.
[HCWS491]
Control of UK Companies: Transparency
(8 years, 9 months ago)
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The Minister for Universities and Science (Joseph Johnson)
My noble Friend the Parliamentary Under-Secretary of State for Business, Innovation and Skills has today made the following statement.
On Monday the 25 January, I laid before Parliament draft regulations in connection with Part 21A Companies Act 2006. These establish the public register of information about people with significant control (PSC) over UK companies and limited liability partnerships (LLPs). This is an important step in providing much greater transparency about who owns UK companies and LLPs. This will boost trust in UK businesses, and reduce the risk of UK companies and LLPs being used for corrupt purposes.
The Government appreciate that transparency is usually in the public interest, as it is useful to know with whom one is doing business and helps deter and identify where corporate entities are being used for criminal activities.
The Government recognise that in certain rare circumstances publication of PSC information could put individuals at serious risk of violence or intimidation.
The draft regulations therefore provide for applications to be made to withhold the personal information of PSCs from public disclosure. In such cases the information must still be provided, and the fact that the information exists but is protected, will be made public. This is set out in more detail in Section 790ZG and regulations 33-45 of the draft Companies (Register of People with Significant Control) Regulations 2016.
Section 790J also enables the Secretary of State to make general exemptions to the new requirements. The Secretary of State has not granted any such exemptions, and would only be prepared to grant exemptions in very limited circumstances. These circumstances would be that the exemption is in the interests of national security; the economic wellbeing of the UK, or in the support of the prevention or detection of serious crime.
An exemption would also only be granted if the Secretary of State received satisfactory assurances on other matters like the company or LLP was not being run for personal benefit of any individual and that the exemption was necessary for the person seeking it to achieve their lawful objectives. I do not propose to comment further on whether I have received any such requests or whether I have granted them.
[HCWS488]
Financial Services
(8 years, 9 months ago)
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The Economic Secretary to the Treasury (Harriett Baldwin)
The Chancellor has this morning announced that Andrew Bailey has been appointed as the next chief executive of the Financial Conduct Authority.
Andrew will succeed Tracey McDermott, interim CEO, and bring his extensive skills and experience of regulation to ensure that the UK financial services sector is the best regulated in the world.
The Chancellor has also announced the appointments of Bradley Fried, Baroness Hogg, Ruth Kelly and Tom Wright as non-executive directors.
These appointments are being made by HM Treasury under, and in accordance with, the Financial Services and Markets Act 2000 as amended.
[HCWS490]
Fire and Rescue Authorities: Funding for Pension Redress Payments
(8 years, 9 months ago)
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The Secretary of State for Communities and Local Government (Greg Clark)
In May 2015, the pensions ombudsman issued his final determination in a case brought by a retired Scottish firefighter against the Government Actuary’s Department. This found that the Government Actuary’s Department failed to review the factors used in the calculation of the firefighter’s lump sum pension payment at the appropriate time, and that this amounted to maladministration. The Government determined that the principles of this ruling should be applied to other affected individuals across the UK, including around 6,000 retired firefighters in England.
Ministerial responsibility for fire and rescue policy transferred to the Home Office on 5 January 2016. The Permanent Secretary at the Department for Communities and Local Government remains the accounting officer for fire budgets until 31 March 2016, and budgets remain with the Department for Communities and Local Government until then. From 1 April 2016 remaining responsibilities for fire budgets and administrative responsibilities will transfer to the Home Office.
Parliamentary approval for additional capital of £94 million will be sought in a supplementary estimate for the Department for Communities and Local Government. Pending that approval, urgent expenditure estimated at £94 million will be met by repayable cash advances from the Contingencies Fund.
[HCWS493]
Emergency Services: Closer Working
(8 years, 9 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
Efficient and effective emergency services are essential to keeping our communities safe. Closer working between the police, fire and rescue and NHS ambulance services can improve the way they serve communities, protect the public and provide value for money for taxpayers.
The Government are committed to supporting collaborative and innovative blue light working, and have invested over £80 million in such projects. While there are good examples of joint working in some local areas, there is much more to be done before collaborative working becomes the norm. For example, there could be savings to be made from greater sharing of premises, back offices, IT and procurement systems, which can release valuable resources to the frontline.
I have worked closely with the Secretary of State for Communities and Local Government and the Secretary of State for Health to develop a range of proposals to enable closer working between the emergency services and to provide for stronger local accountability. On 11 September 2015, we published a joint consultation paper setting out our proposals and seeking views on how best to implement them. The consultation ended on 23 October 2015. Over 300 responses were received from national, local and regional organisations, police forces, police and crime commissioners, fire and rescue authorities, local councils, ambulance trusts, front-line practitioners, associations and other interested groups and individuals. We would like to thank all those who gave their time to respond and contribute to the consultation process.
Today, we have published the Government’s response to the consultation, which summarises the comments we received and sets out how we intend to proceed.
Having carefully considered all the consultation responses, we intend to legislate to:
introduce a high-level duty to collaborate on all three emergency services, to improve efficiency or effectiveness;
enable police and crime commissioners to take on the functions and duties of fire and rescue authorities, where a local case is made;
further enable police and crime commissioners to create a single employer for police and fire staff where they take on the responsibilities of their local fire and rescue service, and where a local case is made;
in areas where a police and crime commissioner has not become responsible for fire and rescue, enabling them to have representation on their local fire and rescue authority with voting rights, where the fire and rescue authority agrees; and
abolish the London Fire and Emergency Planning Authority and give the Mayor of London direct responsibility for the fire and rescue service in London.
The intention is that these measures will ensure collaboration is widespread and ambitious across the country.
Bringing police and fire together locally under the leadership of a PCC will provide greater direct accountability for the public and will accelerate local collaboration. This does not mean a takeover of the fire service by the police. The important distinction between operational policing and firefighting will be maintained, with the current law that prevents a full-time police officer from being a firefighter remaining in place, and with no intention to give firefighters the power of arrest.
Alongside this, the Prime Minister’s recent announcement that responsibility for fire policy has transferred from the Department for Communities and Local Government to the Home Office shows the Government’s commitment to closer collaboration between police and fire and rescue services. Bringing together responsibility for fire and police in the same Department provides the same clear leadership in central Government that our proposals on emergency services collaboration seek to deliver locally. It provides an excellent opportunity for sharing good practice to drive reform and to deliver better outcomes for the public.
These measures will apply to England only. Further details on the measures and how the consultation has informed them, are set out within the Government’s published response.
Copies of the Government’s response to the consultation will be placed in the Library of the House.
[HCWS489]
Youth Justice
(8 years, 9 months ago)
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The Lord Chancellor and Secretary of State for Justice (Michael Gove)
As I assured the House on 11 January, Official Report, column 573, the safety and welfare of all those in custody is vital. We treat the allegations of abuse directed towards young people at the Medway Secure Training Centre, run by G4S, with the utmost seriousness. Kent police and Medway Council’s child protection team have launched an investigation which will determine whether there is any evidence to justify criminal proceedings. The Ministry of Justice and Youth Justice Board will fully support and co-operate with their enquiries.
Following the allegations, our immediate priority has been to ensure that young people at the centre are safe. HMIP and Ofsted visited Medway STC on 11 January and their findings are published today. The Youth Justice Board, which is responsible for commissioning and oversight of the secure youth estate, has increased both its own monitoring at Medway STC and the presence of Barnardo’s, who provide an independent advocacy service at the centre. The YJB immediately stopped all placements of young people into the centre and suspended the certification of staff named in the allegations.
I believe, however, that we need to do more in order to have confidence that the STC is being run safely and that the right lessons have been learned. Today’s report by HMIP and Ofsted recommends the appointment of a commissioner to provide additional external oversight of the governance of the centre. I agree that additional external oversight is necessary and am also concerned that it draws on the broadest possible expertise.
I am therefore today appointing an independent improvement board, comprised of four members with substantial expertise in education, running secure establishments and looking after children with behavioural difficulties. This board will fulfil the same function, with the same remit, as HMIP and Ofsted’s recommendation for a commissioner. We have tasked G4S with putting an improvement plan in place, which this board will oversee.
I have appointed Dr Gary Holden as the chair of the improvement board. Dr Holden is the chief executive officer and executive principal of The Williamson Trust, a successful academy chain in Kent. This includes the outstanding Sir Joseph Williamson’s Mathematical School, located less than a mile from Medway STC. He is also a national leader of education and chair of the Teaching Schools Council. His experience as a headteacher and leader of a high-performing organisation make him ideally suited to identify the steps that should be taken to raise standards at Medway STC.
Dr Holden will be joined by: Bernard Allen, an expert in behaviour management and the use of restraint; Emily Thomas, interim governor of HM Prison Holloway and former governor of HM young offender institution Cookham Wood; and Sharon Gray OBE, an education consultant and former headteacher with experience of working with children with behavioural difficulties, including in residential settings.
The board will provide increased oversight, scrutiny and challenge of managerial arrangements, in particular in relation to the safeguarding of young people. Board members will have authority to visit any part of the site at any time, access records at Medway and interview children during their investigations. The board will report any concerns about the provision of services at Medway to me. The board’s work will assist me in determining the necessary improvements that G4S must make to restore confidence that young people are properly safeguarded at the STC.
The terms of reference for the independent improvement board are to:
investigate the safeguarding arrangements at Medway in order to inform the development and approval of the improvement plan to be produced by G4S and any steps to be taken by the Youth Justice Board (YJB) and other organisations;
oversee, challenge and support G4S in implementing their improvement plan;
report to the Secretary of State on the Board’s confidence in the capability of G4S, YJB and other organisations to meet appropriate safeguarding standards at Medway STC in the future, and the performance and monitoring arrangements required to provide assurance; and
submit any recommendations on the safeguarding of young people in custody, including the role of the YJB and other organisations, to inform practice in the wider youth custodial estate and Charlie Taylor’s review of the youth justice system.
The board will complete its work by the end of March 2016.
[HCWS492]
House of Lords
Introduction: Lord Bishop of Newcastle
Death of a Former Member: Lord Parkinson
The Lord Speaker (Baroness D'Souza)
My Lords, I regret to inform the House of the death on 22 January of the noble Lord, Lord Parkinson. On behalf of the House I extend our condolences to his family and friends.
Taxation: Avoidance and Evasion
Lord Ashton of Hyde (Con)
My Lords, in the summer Budget 2015 the Government announced measures that would raise at least £5 billion per year through tackling avoidance, aggressive tax planning, evasion and non-compliance in the tax system. This included an £800 million investment to strengthen HMRC’s evasion and non-compliance activity, enabling it to recover a cumulative £7.2 billion over the next five years. A further package of measures was announced in the Autumn Statement 2015 which is forecast to raise a further £700 million by 2021. Further details are available on the internet—through all well-known search engines.
Lord Dubs (Lab)
Well, my Lords, I am bound to say that it sounds good but on examination it is not. I wonder if the Minister could explain the Government’s attitude to the Google deal. The Chancellor says it is a great success. The Prime Minister does not seem to know and says it is a good step forward. Many Conservatives say that the deal is derisory. It is difficult to know what the Government’s view is. Secondly, could the Minister say something about letting the truth come out about deals such as this? In the Evening Standard today there is an opinion poll: 80% of the public want more openness. Surely it is time we said goodbye to taxpayer confidentiality so that we can learn what is going on in our name and have a better tax system.
Lord Ashton of Hyde
My Lords, it is a tricky question to determine between the different statements of the Prime Minister, the Chancellor and others. I am afraid I have not seen all their comments in context; I would need to see those before I am able to deliver my final judgment. Taxpayer confidentiality is a long-established principle and it is important that details of confidentiality are maintained, and that applies to everyone. What we want is fair payment of tax by everyone, be they large or small companies, or individuals.
Lord Crickhowell (Con)
My Lords, the small businesses of the town of Crickhowell have launched a campaign under the name Fair Tax Town because many of them are paying more corporation tax than the big international corporations. Despite what my noble friend has said about action being taken, many of them feel that that action is so far quite inadequate. Will my noble friend give me an assurance that a really determined effort will now be made by the Government to sort out this unacceptable situation?
Lord Ashton of Hyde
My noble friend is right that we expect all companies, large and small, to be treated equally and to pay the tax that is due. This Government have reduced corporation tax. The quid pro quo for that is that when it is due on taxable profits, it should be paid. We are also tackling this internationally, because with multinational companies it has to be taken worldwide. That is why we have led the efforts in the G20 on the base erosion and profit shifting project, and we are now leading the group of 94 countries in the OECD which are implementing that.
Baroness Kramer (LD)
My Lords, my heart rather goes out to the Minister, so let me ask him an easy question. Fifty-five per cent of calls by ordinary taxpayers and small businesses are not answered by HMRC. Will the Government consider spending their rather derisory settlement from Google on staffing its phones, so that the many people trying to pay their taxes actually can?
Lord Ashton of Hyde
I answered exactly that question a few weeks ago, and I am happy to point out that HMRC has recruited 3,000 new staff into customer service roles on flexible working patterns to address just that point. This will provide 1,800 additional people working on telephone helplines outside normal office hours, when many customers choose to call. More than 900 people from across HMRC have also been moved into these posts. I think everyone agrees that the previous service was substandard, but it is improving.
Lord Davies of Oldham (Lab)
My Lords, I, too, sympathise with the Minister but of course, this same trick was played in the Commons. Junior Ministers responded to the issues there, as here, instead of those who are meant to take the decisions. The Minister has just confessed to the House that he does not have a clear line to answer the Question that was posed to him, but the rest of the country is quite clear that the deal struck with Google is an outrageous one. Can the Minister therefore answer this question? The United States is signed up to the OECD precepts, as is the Chancellor, so how come the US can tax major companies with considerable success and get the percentage of tax it expects, when in the United Kingdom, multinationals in particular pay an absolutely derisory rate of corporation tax?
Lord Ashton of Hyde
I am grateful for the sympathy of the noble Baroness and the noble Lord but I do not think that I need it today. The fact is that HMRC has taxed the full amount of UK taxable profits at the statutory corporation rate. One of the reasons why this country is attracting inward foreign investment is that it has a rule of law and treats people according to the rules.
Lord Wigley (PC)
My Lords, I add my voice to that of the noble Lord, Lord Crickhowell, who emphasised the strength of feeling among small businesses, which pay their tax honourably and on time, when they see the fat cats getting away with it in this manner. Have the Government considered introducing turnover tax as an alternative to corporation tax, in circumstances where such companies are shuffling their corporation tax to other countries? A turnover tax is something they could not avoid.
Lord Ashton of Hyde
The noble Lord puts his finger on an interesting question. At the moment, as I said, it is a corporation tax based on taxable profits. It has never been done on turnover but what we are doing is making sure that taxable profit rests in the country where the economic activity takes place. That is why we introduced the diverted profits tax. However, I note that the Treasury Select Committee has agreed terms of reference to look at the corporate tax base.
Baroness Knight of Collingtree (Con)
My Lords, can my noble friend tell the House whether the problem remains of having foreign people who have never learned how to speak the language looking after sick people? There was quite a lot of publicity about it. Are patients always able to talk to a nurse who understands the language?
Lord Ashton of Hyde
My Lords, it is obviously good that people who deal with the public speak fluent English. That is why we are introducing such a provision in the Immigration Bill.
Family Test
(8 years, 9 months ago)
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Baroness Lister of Burtersett
To ask Her Majesty’s Government what impact the Family Test has had on policy-making.
The Minister of State, Department for Work and Pensions (Baroness Altmann) (Con)
My Lords, the family test is an integral part of the policy-making process. There is a cross-government commitment to embed the family test in all domestic policy considerations. The Department for Work and Pensions has established a dedicated team to support government departments and ensure that the family test is applied in a meaningful way.
Baroness Lister of Burtersett (Lab)
My Lords, the DWP recommends, in its guidance to other departments on the family test, that they consider publication of any assessment. However, it has rejected calls from family organisations and faith groups that it should do so itself on the policy in the Welfare Reform and Work Bill to limit financial support to two children. Could the Minister explain why? Will she commit to routine publication in future, in the interests of transparency and of the explicit family perspective on policy-making that we were promised?
Baroness Altmann
My Lords, the family test is included in and incorporated into advice to Ministers on new policy. It is not a pass or fail exercise; it is about helping to make informed decisions about how to support strong and stable families. It is much broader than a tick-box exercise, which seems to be the thrust of the question.
The Lord Bishop of Worcester
My Lords, I have not consulted their Graces the most reverend Primates the Archbishops, but I feel confident in saying that we on these Benches welcome the thrust of the life-chances strategy, which the Prime Minister outlined in a recent speech. We believe, as does the Prime Minister, that the family is the best anti-poverty measure ever invented—invented by God, in fact, although the Prime Minister did not add that. The increase in funding for relationship support is welcome, but could the Minister indicate how the priorities articulated in the family test might shape the development of the life-chances strategy as it is published and implemented in due course?
Baroness Altmann
The life-chances strategy aims to tackle the root causes of child poverty and to help transform children’s lives. Those root causes include family breakdown, addiction, debt and worklessness. The Prime Minister has announced the doubling of funding for relationship support over the next five years, as well as the tearing down of sink estates, investment in mental health care and support for women during pregnancy.
Lord Kirkwood of Kirkhope (LD)
My Lords, I remind the Minister that when the Prime Minister announced this important policy in August 2014, he made a point of saying that he wanted the test to apply to every single domestic policy. That is what he said. Would the Minister be prepared to commission an independent evaluation of that policy, in early course, so that we can test whether the Prime Minister’s ambitious policy intent is being delivered in practice?
Baroness Altmann
My Lords, I assure the House that the family test is indeed incorporated into every new domestic policy consideration by this Government.
Baroness Sherlock (Lab)
My Lords, I spoke recently to a woman called Ruth, who had adopted three siblings aged under four. The children were placed with her only because she agreed to stay home in their early years, because they were very damaged. However, her husband was a vicar, and she could only afford to give up work and feed the children because of tax credits. She got in touch to say that if the Government push through the plan tomorrow to limit all benefits and tax credits to the first two children in any family, she would not be able to adopt those children in future, and they would stay in care at a cost of £40,000 per child per year. I asked the Minister how that policy passed the family test. He would not tell me. Will she?
Baroness Altmann
My Lords, as I said, the family test is not a tick-box exercise. Policy is always about trade-offs, but the family test ensures that family impacts are explicitly considered when making those trade-offs.
Baroness Hollis of Heigham (Lab)
My Lords, we spent quite a lot of time yesterday looking at issues affecting the family through the Welfare Reform and Work Bill. My noble friends Lady Lister and Lady Sherlock in particular pressed the Minister time and again as to whether these proposals in the Bill passed the family test. Answer came there none. Can the Minister tell us in what way, explicitly, the proposals in the Welfare Reform and Work Bill have been subjected to and evaluated against the family test and whether they have passed it, as she has told the House today?
Baroness Altmann
I can only repeat to the noble Baroness that the family test is not a pass or fail exercise. It is right to make our welfare system fairer for the working families currently paying into the system to support others, and the family test has been explicitly considered in the new policies and trade-offs necessary in all policy-making.
The Archbishop of York
My Lords, I hope that the family test recognises that poor families come in different shapes and sizes and that there is no intention of pushing a particular policy, of which we saw a little in China. Margaret and I had two children of our own and then fostered two children who came to us at the ages of eight and one and a half. They are now working adults. Had this family test been around, I would have been worried, as Ruth is, because that child would have found it very difficult. Will the Minister assure us that when the family test comes, common sense will prevail, not numbers?
Baroness Altmann
My Lords, families are the foundations of society. Strong and stable families, we know, can have a huge impact on improving the life chances of our children, and we have a clear and unqualified commitment to strengthening and supporting family life for our children and for generations to come.
National Health Service: Nurses
(8 years, 9 months ago)
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Lord Clark of Windermere
To ask Her Majesty’s Government what plans they have to ensure that there are a sufficient number of nurses in the National Health Service.
The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)
My Lords, Health Education England is responsible for workforce planning in the NHS. In 2016-17, the HEE commissioning and investment plan forecasts an additional supply by 2020 of 40,000 nurses as a result of undergraduate and postgraduate commissions placed with universities between 2012 and 2016. Moving new nursing students on to the student loans system from August 2017 allows universities to offer up to 10,000 extra nursing, midwifery and allied health degree places by 2020-21.
Lord Clark of Windermere (Lab)
I thank the Minister for his answer, and we all wish the Government well in trying to make up the shortfall of nurses which is bedevilling our National Health Service at the moment. I am dubious about the abolition of the bursary scheme and think that the Government’s proposals are highly risky, but I wish the Government well. I ask the Minister for an assurance that if they proceed with the abolition of the bursary scheme, they will recognise that the cost to nurses at the end of their training will probably be approaching £50,000. Will the Government give a commitment that they will fund a payback or reward scheme so that those nurses who have spent a number of years in the National Health Service will have some of those debts written off?
Lord Prior of Brampton
My Lords, I thank the noble Lord for wishing the scheme well. It is intended to increase the supply of young men and women going into the nursing profession, with which I think everyone in this House would agree. It is true at one level to say that people receiving loans rather than bursaries will have a debt of about £50,000 at the end, but the repayment of that is, as the noble Lord knows, graduated, and only 9% of the excess over £21,000 a year will be payable, not the full amount, as he suggests.
Baroness Gardner of Parkes (Con)
My Lords, I have previously raised the question of the abolition of the SENs, and the Minister has told me that thought is being given to training which will not require university entrance. Are the Government making any progress on that, as there are many wonderful nurses—I am sure that we have all known some—who could never have got enough academic points to come in at the university training level?
Lord Prior of Brampton
My Lords, I completely agree with my noble friend’s sentiments. She will be pleased to know that from August of this year, Health Education England will be funding 1,000 new nursing associates, who will not be taking a degree but will effectively do a nurse apprenticeship, although they will be able to switch over to doing a degree later in their career if they so choose.
Baroness Walmsley (LD)
My Lords, given that hospital trusts are recruiting 5,600 nurses from outside the EU every year, that is surely much more of a pull factor than anything the Government might do with benefits. Given the fact that trainee nurses have to work on a clinical placement outside term time in which they add value to the NHS and take on responsibility, why are they not paid?
Lord Prior of Brampton
My Lords, I do not entirely follow the noble Baroness’s question. All I can say is that we are all pleased that we are able to attract nurses from overseas, but that cannot be the right long-term policy for this country. We must train our own nurses and not rely upon recruiting nurses from overseas.
Baroness Watkins of Tavistock (CB)
My Lords, what consideration have the Government given to enabling people who want to study nursing as a second degree to have loans in the way that they will allow for those studying some STEM subjects? We have traditionally had mature entrants who are already graduates.
Lord Prior of Brampton
My Lords, we are still consulting on the details of this scheme, but I assure the noble Baroness that the loan scheme will be available for mature students doing their second degree as it is for those doing their first degree.
Lord Hunt of Kings Heath (Lab)
My Lords, last night in the education regulations debate, the noble Baroness, Lady Evans, said from the Dispatch Box that last year the cap on applications for nursing students meant that 37,000 applications were rejected, yet today the Minister quoted the figure of 10,000 extra places by 2020, which I take to mean 2,000 places a year. What about the other 35,000 a year who are presumably rejected for a nursing place? If there are ways of getting rid of the cap, why on earth are the Government not allowing many more nurses to be trained? Is it actually because they have cut the budget of Health Education England which would have to finance the placements of those student nurses in NHS trusts?
Lord Prior of Brampton
My Lords, I think the noble Lord is wrong in what he says, but I will double check. I believe that there will be an additional 10,000 placements per year, but I will check that afterwards. That is not until 2021 because the new scheme will not come into place until August 2017, which means that the first students will come out of the new scheme in 2020. We are estimating that there will be 10,000 in that year.
Baroness Finlay of Llandaff (CB)
Do the Government recognise that the retention of nurses is also extremely important and that the loss from the profession later in life may reflect difficult working conditions and lack of support? Will the Government also note that nurses in the hospice world and specialists in palliative nursing tend to be older nurses who have left NHS employment and gone to the charitable sector precisely because they feel that they can work as they want to, fully and professionally, and have a supported working environment?
Lord Prior of Brampton
My Lords, retention and return to practice are crucial. The noble Baroness may be interested to know that Health Education England has up to 90, I think, courses that have so far attracted just under 1,000 nurses back to practice. The cost of attracting someone back to practice is some £2,000 each compared with some £50,000 for a new nurse.
Baroness Wall of New Barnet (Lab)
My Lords, the noble Lord will be aware of the pressure that is quite rightly on trusts to reduce their agency spend. How can we cope with doing that when we are also still trying to get in nurses whose visas are being stopped, despite the fact that that restriction was supposed to have been lifted?
Lord Prior of Brampton
The cost of agency spend has risen from around £2.8 billion a year to some £4 billion this year. It is far too high. There is recognition that reliance upon agencies to this degree is also not good for quality of care. On grounds of both care and cost, we wish to reduce the spend on agencies.
Press Regulation
Lord Clement-Jones
To ask Her Majesty’s Government, in the light of the launch of the new press regulator IMPRESS, what steps they are taking to promote independent and effective press regulation.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)
My Lords, this Government support the framework for independent press self-regulation delivered in the previous Parliament. This system protects the freedom of the press while offering real redress when mistakes are made. We want to see the press voluntarily comply with the reforms recommended by Lord Justice Leveson and enshrined in the royal charter.
Lord Clement-Jones (LD)
My Lords, I am glad to hear that the Government support the framework agreed in the last Parliament. However, is not the key question whether the Prime Minister will honour his pledge to the victims of press abuse by commencing the court costs incentive set out in Section 40 of the Crime and Courts Act, as Parliament intended?
Baroness Neville-Rolfe
My Lords, the exemplary damages provisions, which now extend to all media cases, came into effect on 3 November and provide an incentive to publishers to sign up. We are not convinced that the time is right for the introduction of the costs provisions but the Secretary of State is considering the issue further and discussing it with interested parties; we have had some discussions with individual noble Lords in this House.
Lord Sherbourne of Didsbury (Con)
My Lords, has my noble friend read the report on press regulation by the Communications Committee last year? Do the Government accept its recommendation that with the system evolving, especially with IMPRESS and IPSO, they should keep it under review and monitor it very carefully?
Baroness Neville-Rolfe
I am not sure that I am allowed to do this, but I must recommend this report as excellent reading. It is a very clear summary—I congratulate the noble Lord, Lord Best, and the committee on it—and one of the good things is that it encourages regular review and reporting; of course the Press Recognition Panel will report each year.
Lord Lea of Crondall (Lab)
Are the Government seriously saying that they are implementing Leveson?
Baroness Neville-Rolfe
We have brought in and implemented the new regulatory framework, and as recently as last November we brought in the wider exemplary damages provisions. There is a Leveson part 2 but that cannot be turned to until the phone-hacking cases are completed in the courts.
Lord Lester of Herne Hill (LD)
My Lords, is the Minister aware that in its first year IPSO, supported by most newspapers, is establishing itself as being independent and effective under the chairmanship of Sir Alan Moses? It deals efficiently with complaints and makes instructions, which the press obey, to publish corrections even on the front pages of their newspapers. Does it therefore not follow that the Government should do nothing to undermine that system while it is being developed and certainly should be very careful, as the Minister has indicated, about introducing sanctions like arbitrary costs or punitive damages that people such as myself believe are likely to fall foul of press freedom and the European Convention on Human Rights?
Baroness Neville-Rolfe
My Lords, I have great sympathy with the noble Lord’s point. The single most important point is freedom of the press, as he says, and I am glad that we have found an independent, self-regulatory system which is now starting to deliver.
Lord Wood of Anfield (Lab)
My Lords, Section 40—the costs protection clause—was part of the Crime and Courts Act that was passed overwhelmingly in the Commons and here. Is the Minister saying that the Government are now revisiting the wisdom of Section 40?
Baroness Neville-Rolfe
As the Secretary of State made clear in a speech before Christmas, he is reflecting on whether now is the time to bring in that provision. The noble Lord is right: it sits on the statute book—there is no suggestion of doing anything about that—but we are reflecting on when to commence it.
Lord Foster of Bath (LD)
My Lords, further to that question and answer, does the Minister agree that an effective press regulator, as well as protecting the public, should also protect ambitious watchdog journalists from the threat of ruinous court costs by wealthy and powerful people who try to prevent publication of awkward stories? Notwithstanding the comments of my noble friend Lord Lester, does the Minister agree that this is another reason why the Secretary of State should rapidly enact the court costs incentives, which have already been agreed by Parliament?
Baroness Neville-Rolfe
I am not sure that I see it quite that way. The extended exemplary damages are a good thing and a good incentive. We need a free press; the system is getting under way; and the Secretary of State is entirely right to think about as and when—and when and if—to bring in the costs provisions, which of course sit on the statute book and can be commenced at any time.
Lord Stevenson of Balmacara (Lab)
My Lords, perhaps I may take the Minister back to Leveson part 2. The second part was due to look at specific claims made about phone hacking, what went wrong with the original police investigations, and alleged police corruption. As the Minister said, it was delayed pending the conclusion of criminal prosecutions. My understanding is that those prosecutions have now been completed. If that is the case, we know that hacking took place at the News of the World and at Mirror Group titles but we do not know exactly what went on elsewhere. Can we have confirmation from the noble Baroness that the second part of the public inquiry will take place and, if so, what the timetable will be?
Baroness Neville-Rolfe
My understanding is different in that two cases are outstanding. That means that Leveson part 2 will not be able to take place until after those investigations and trials have concluded. However, as soon as they have been completed, we will formally consult Sir Brian Leveson, as he now is, as chair of the inquiry before announcing what is appropriate.
Baroness Hollins (CB)
My Lords, are the Government going back on their commitments over Leveson?
Baroness Neville-Rolfe
No. The Government have brought in the regulatory system that was agreed in the last Parliament. The only issues today are the question that we are exploring, which is the timing and appropriateness of the costs provisions, and part 2, which, as the noble Lord opposite said, we have to defer until the criminal court cases are out of the way. I appreciate that that is frustrating for this House but, as we have heard from the Benches opposite, progress has been made in the mean time, and last week IMPRESS applied for recognition.
Failures of the 111 Helpline
(8 years, 9 months ago)
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The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)
My Lords, with the leave of the House, I shall repeat as a Statement the Answer to an Urgent Question given in another place by my right honourable friend the Secretary of State for Health on NHS England’s report into the death of William Mead and the failures of the 111 helpline. The Statement is as follows.
“Mr Speaker, this tragic case concerns the death of a one year-old boy, William Mead, on 14 December 2014 in Cornwall. While any health system will inevitably suffer tragedies from time to time, the issues raised in this case have significant implications for the rest of the NHS which I am determined we should learn from.
First, though, I would like to offer my sincere condolences to the family of William Mead. I have met William’s mother Melissa, who spoke incredibly movingly about the loss of her son. Quite simply we let her, her family and William down in the worst possible way through serious failings in the NHS care offered, and I would like to apologise to them on behalf of the Government and the NHS for what happened. I would also like to thank them for their support and co-operation in the investigation that has now been completed. Today, NHS England published the results of that investigation—a root-cause analysis of what happened. The recommendations are far-reaching, with national implications.
The report concludes that there were four areas of missed opportunity by the local health services where a different course of action should have been taken. These include primary care and general practice appointments by William’s family, out-of-hours calls with their GP and the NHS 111 service. Although the report concluded that these did not constitute direct serious failings by the individuals involved, had different action been taken at these points, William would probably have survived.
Across these different parts of the NHS, a major failing was that in the last six to eight weeks of William’s life the underlying pathology, including pneumonia and a chest infection, was not recognised and treated. The report cites potential factors such as a lack of understanding of sepsis, particularly in children, and pressure on GPs to reduce antibiotic prescribing and acute hospital referrals. Although this was not raised by the GPs involved, the report also refers to the potential pressure of workload.
There were specific recommendations in relation to NHS 111 which should be treated as a national, not a local, issue. Call advisers are trained not to deviate from their script, but the report says that they need to be trained to appreciate when there is a need to probe further, how to recognise a complex call and when to call in clinical advice earlier. It also cites limited sensitivity in the algorithms used by call handlers to red-flag signs relating to sepsis. The Government and NHS England accept these recommendations, which will be implemented as soon as possible.
New commissioning standards issued in October 2015 require commissioners to create more functionally integrated 111 and GP out-of-hours services, and Sir Bruce Keogh’s ongoing urgent and emergency care review will simplify the way the public interacts with the NHS for urgent care needs.
Most of all, we must recognise that our understanding of sepsis across the NHS is totally inadequate. This condition claims around 35,000 lives every year, including around 1,000 children.
I would like to acknowledge and thank my honourable friend the Member for Truro and Falmouth, who, as well as being the constituency MP to the Mead family, has worked tirelessly to raise awareness of sepsis and has worked closely with the UK Sepsis Trust to reduce the number of avoidable deaths from sepsis.
In January last year I announced a package of measures to help improve diagnosis of sepsis in both hospitals and GP surgeries, and significant efforts are being made to improve awareness of the condition among both doctors and the public. But the tragic death of William Mead reminds us there is much more work to be done”.
Lord Hunt of Kings Heath (Lab)
My Lords, I am very grateful to the noble Lord for repeating that. I start by paying tribute to Melissa Mead and her husband Paul, who have fought to know the truth about their son’s death and who are now campaigning to raise awareness about the care of sepsis and how we can improve it.
Clearly, the key is to learn lessons and take action in the immediate future. Ministers were warned about poor sepsis care back in September 2013 when an ombudsman report highlighted shortcomings in initial assessment and delay in emergency treatment that led to missed opportunities to save lives. Can the Minister say what action has been taken by the Government? Will he urgently meet the UK Sepsis Trust to discuss what needs to happen to raise awareness among GPs, the NHS and the public?
The Minister outlined the failures in the 111 response. He will know that the replacement of NHS Direct, which was predominantly a nurse-led service, with NHS 111 means that the service now relies mainly on call handlers who receive as little as six weeks’ training and where turnover among staff can be very rapid. Is he going to review the training that call handlers receive and will he consider increasing the number of clinically trained staff available to respond to calls?
The Minister will be aware that there are two other inquiries into NHS 111 failures at the moment: in the east Midlands and on the south-east coast. Can the public have confidence that the 111 service is fit to diagnose patients with life-threatening conditions?
Lord Prior of Brampton
My Lords, I echo the tribute that the noble Lord paid to the Mead family and their recognition that we can only learn from these terrible tragedies. The fact that they are prepared to make available the report to other parts of the NHS will help in that learning process. I, or one of the other Ministers concerned, will certainly undertake to meet the UK Sepsis Trust.
The noble Lord raised the issue of the 111 service. It is worth making the point that, in this case, the call handler took the call and referred it to a GP who was part of the out-of-hours service. The GP then spoke directly to William’s mother and decided on what the right course of action was. However, I take on board exactly what the noble Lord said about training and the mix between clinicians and non-clinicians in 111 call centres. It will become a better service when the out-of-hours service and the 111 service are integrated.
One point that came out of the report was that had there been an electronic patient record indicating the evidence of the time that William had spent with GPs in the preceding six weeks, the GP who took the call might possibly have come to a different decision. This was a tragic case of all the holes in the Swiss cheese lining up to cause this awful tragedy. Therefore, I take on board what the noble Lord said about 111 and will pursue that with NHS England.
Baroness Walmsley (LD)
My Lords, I share the concerns of the noble Lord, Lord Hunt, about 111, but does this not go much wider? On the issue of medical and public education about sepsis, what are Public Health England and Health Education England going to do about this? We cannot rely on the BBC1 programme “Trust Me, I’m a Doctor”, which this week has certainly increased my understanding of the symptoms of sepsis. But that needs to be spread to the wider public. I recommend that people go on iPlayer and watch that programme if they want to know about this. Does this not also indicate that this very conscientious and determined mother was not listened to? She knew her child was behaving abnormally and all the people who talked to her—from GPs through to everyone else—just did not listen.
Lord Prior of Brampton
My Lords, the facts of this case demonstrate that a lot of things went wrong. That is the real tragedy of it. Had one of those things not gone wrong, the tragedy may not have happened. The noble Baroness referred in particular to medical education but it is wider than that. As I said, a whole stream of things went wrong and we must learn from that.
Baroness Masham of Ilton (CB)
My Lords, does the Minister agree that confusing messages are coming out? One is that antibiotics are being given too liberally. The other is that they are desperately needed for serious chest infections—and this boy had pneumonia, which was missed. Cases of meningitis are also missed. Such illnesses really need antibiotics. Does he agree?
Lord Prior of Brampton
My Lords, in a sense there are mixed messages—but there is a common-sense message here as well. We do not want to overuse antibiotics but, on the other hand, clearly where there is a serious infection, antibiotics are absolutely necessary. At one level it is a mixed message but there is a common-sense way through the two.
Baroness McIntosh of Hudnall (Lab)
My Lords, the noble Lord has pointed out—as those of us who have read about this case are aware—that the patient was a very young child. One thing that I find troubling about this whole history is that that fact appears not significantly to have influenced the way in which his case was handled. Is it not the case that there should be a default position in respect of very young children exhibiting symptoms where the precautionary principle should apply, whether in respect of prescribing antibiotics, referring to hospital or any other kind of presumption of the possibility of acute illness?
Lord Prior of Brampton
My Lords, one would expect the doctors concerned to make that presumption in the case of a very young child. But the noble Baroness makes a valid point and I am sure that NHS England will take it on board.
Baroness Meacher (CB)
My Lords, does the Minister agree that this tragic case occurred in an environment of incredible pressure on GPs and others within the NHS, with a growing blame culture and huge numbers of patients—they have to see 60 to 70 in a day very often? We all have to accept that things will go wrong if we leave GPs, in particular, working under those sorts of personal pressures and so on. We know that 30% or so will leave the profession in the coming years. Will the Minister meet with me to discuss what he might do to alleviate some of those problems? That could be very helpful.
Lord Prior of Brampton
My Lords, unquestionably there are huge workload pressures on GPs. There is no doubt about that. I do not think they were a primary cause of this particular tragedy, but I will be happy to meet with the noble Baroness to discuss that.
General Dental Council (Fitness to Practise etc.) Order 2015
(8 years, 9 months ago)
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Lord Prior of Brampton
Moved by
That the draft order laid before the House on 18 November 2015 be approved.
Relevant document: 11th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 18 January.
Psychoactive Substances Bill [HL]
(8 years, 9 months ago)
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The Minister of State, Home Office (Lord Bates) (Con)
My Lords, I beg to move that this House agree with the Commons in their Amendment 1.
Noble Lords will recall the debate on Report in this House on 14 July, on the use of psychoactive substances in prisons. The noble Lord, Lord Rosser, then argued that the supply of psychoactive substances in prisons was of such concern that it should be made a statutory aggravating factor under Clause 6 of the Bill.
In response, I recognised that the use of psychoactive substances by prisoners represented a significant challenge to the welfare of prisoners and the safe and secure management of prisons. While expressing sympathy for the noble Lord’s amendment, I argued that the promulgation of further aggravating factors was properly a matter for the Sentencing Council. That being the case, I undertook to write to the Sentencing Council to draw its attention to the debate, which the Minister for Policing, Fire and Criminal Justice and Victims has now done. I also argued that it would be worth looking at alternative ways of addressing this problem, including introducing an offence of possession of a psychoactive substance in prison. Your Lordships’ House was not persuaded that these undertakings went far enough and consequently agreed the amendment put forward by the Opposition.
Having reflected on the debate on Report, the Government are content that the supply of, or an offer to supply, a psychoactive substance in prison should be treated as a statutory aggravating factor. Commons Amendment 5 therefore simply makes drafting improvements to the amendment passed by this House in July. Specifically, the amendment replaces the reference to “prison premises” with the term “custodial institution” and then defines this term to include adult prisons and their juvenile equivalents, service custody premises and immigration detention accommodation. Immigration detention centres are not, of course, penal institutions, hence the adoption of the term “custodial institution” as an alternative to the reference to prison premises.
Commons Amendment 6 brings forward subsection (9) of Clause 6 and simply improves the logical flow of the clause.
As I indicated in July, the Government were giving separate consideration to the case for including in the Bill an offence of possession of a psychoactive substance in a custodial institution. The case for this is essentially the same as the one set out by the noble Lord, Lord Rosser, when he put forward his amendment to Clause 6. The presence of psychoactive substances in prisons is a destructive and growing problem. The use of psychoactive substances—now the drugs of choice among prisoners—has been linked to mental health problems and disturbed behaviour by prisoners, including violence. It is having an increasingly destructive impact on security and order in prisons and on the welfare of individual prisoners. In a bulletin published in July, the Prisons and Probation Ombudsman identified 19 deaths in prison between April 2012 and September 2014 where the prisoner was known, or strongly suspected, to have been using psychoactive substances before their death.
Control and order are fundamental foundations of prison life. Without them, staff, prisoner and visitor safety cannot be guaranteed and the rehabilitation of prisoners cannot take place. We have already introduced a number of measures to tackle the use of psychoactive substances in prisons. These include training of specialist dog teams to search and detect synthetic drugs in prisons in England and Wales; searching cells for hidden drugs; patrolling prison perimeters; and searching visitors to prevent drugs from being smuggled in. More than 120 dogs have now received special training in psychoactive substance detection and we will have trained more than 300 dogs by the end of the calendar year. Other measures include a major push on prison communications to make sure that offenders are aware of the consequences of taking psychoactive substances —as are visitors who attempt to bring them in—and the introduction of new drug tests in the coming months to identify prisoners using psychoactive substances.
Nonetheless, the use of psychoactive substances remains significant and pervasive in prisons. A possession offence in prison—as provided for in Commons Amendment 9—will enable the police and Crown Prosecution Service to pursue cases where prisoners, visitors or staff are found with small quantities of psychoactive substances in prisons. The introduction of such an offence will support our stance that the use of psychoactive substances in prison is not to be tolerated.
Many instances of simple possession by prisoners can often effectively be dealt with by the internal prison disciplinary service. Where joint working between prisons and the police identifies a particular problem with psychoactive substances in a prison, a prison possession offence could be used very effectively and might just deter some of those involved. Under the Misuse of Drugs Act 1971, possession offences quite properly attract lower maximum sentences compared with production, supply and importation offences, and so it is here. While the offences in Clauses 4 to 8 of the Bill have a maximum penalty of seven years’ imprisonment, Commons Amendment 10 to Clause 9 provides for a maximum penalty for this new offence of two years’ imprisonment. Commons Amendments 1, 21, 22, 27, 31 and 34 to 37 are consequential on Commons Amendment 9. General possession of a psychoactive substance in the community will continue to not be a criminal offence. This reflects the recommendation of the expert panel that the focus of the legislation should be on tackling the trade in psychoactive substances, but as I have set out, the problems caused by the use of psychoactive substances in prisons are such as to justify a targeted possession offence that applies only in the context of possession in prisons or other custodial institutions.
The Government have listened to the arguments put forward by this House for strengthening the Bill to tackle the particular harms caused by the use of psychoactive substances in prisons and other custodial institutions. Having pressed for such strengthening of the Bill, the House will, I am sure, join me in welcoming these Commons amendments.
Lord Rosser (Lab)
My Lords, as the Minister has said, this group of amendments indicates that the Government have accepted the view of this House, as expressed through the carrying of an amendment on Report, that when sentencing an offender for the offence of supplying or offering to supply a psychoactive substance, it should be regarded as a statutory aggravating factor if that offence took place on prison premises. The only change the Government have made is to replace the reference in the Lords amendment to “prison premises” with “custodial institution”, and we welcome the Government’s decision to accept the view of the House on this matter.
However, this group of amendments also provides for a new offence of possession of a psychoactive substance in a custodial institution as opposed to the far more serious issue of supplying such substances, which is now already covered in the Bill. The new offence of possession will cover inmates, visitors and staff in prisons with, I think, the maximum penalty being two years’ imprisonment, an unlimited fine, or both. Thus, the only new power the new offence would give is the ability further to punish inmates and others in a prison for possessing psychoactive substances for their own use, as opposed to supplying them to others. Since those who run our prisons already have powers to discipline and punish inmates for possessing controlled psychoactive substances, I ask the Minister this: where has the late pressure come from to create this new offence, since the Government did not previously think it should be provided for in the Bill? Has the pressure come from those running our prisons, or from the Prisons and Probation Ombudsman or the Chief Inspector of Prisons, who have both certainly expressed concern about the impact of psychoactive substances but neither of whom, as far as I am aware, has called for a new offence of possession? What they have argued is that better and more effective detection mechanisms need to be in place to detect psychoactive substances in our prisons, along with more frequent drug testing.
Is not the reality that, for those who possess psychoactive substances in the confines of our prisons, where the bullying and violence associated with the existence of such substances has already been identified by the Chief Inspector of Prisons, the need is to regard this primarily as a health issue and to focus on education with an appropriate drug education and awareness strategy? What are the Government actually doing to combat possession of new psychoactive substances for personal use through these means, which are surely likely to be more effective, if the resources are provided, than the new offence proposed in this group of amendments? Is that not the support that those who run our prisons really need to address this issue, along with the resources to provide effective detection mechanisms and more regular drug testing? Are not those the resources that this Government have so far been failing to provide, as, in my opinion, the Minister implicitly acknowledged in his opening comments? What is the Government’s estimate of the reduction in the personal use of psychoactive substances in our prisons that will result from the creation of this new offence, and on the basis of what information was that estimate made?
Finally, will this new possession offence in prison for inmates, visitors and staff also apply to poppers? I ask this in view of the support there has been, including from the Commons Home Affairs Committee, for adding poppers to the list of exemptions to the ban on psychoactive substances because of the potential consequences of such a ban in this case. In the light of the decision by the Home Secretary to refer the issue of poppers for further consideration by expert bodies, do we really want to create a new possession offence in respect of a substance which is popular in some sections of the gay community, has been used recreationally in Britain for more than 30 years and has not so far been banned by any Government, given the likelihood that within the next few months a decision could be made as a result of expert consideration that it should continue to not be banned?
Having said that, and having made my points, I want to make it clear that we certainly do not intend to oppose the Commons government amendments creating the new offence of possession, but we want answers to the points that I have raised.
Baroness Hamwee (LD)
My Lords, the situation described by the Minister is very serious and seems to lead directly to issues of prison reform—drugs being one of the considerations—but one would want to look at far wider causes than how concerns about prison manifest themselves in this issue. I wondered what ingenuity might be applied to introduce the issue of poppers, since it would be quite difficult to provide an amendment to the government amendments to deal with that, so I congratulate the noble Lord, Lord Rosser, on finding a way to introduce the subject.
We, of course, will not oppose these amendments, but I must say that we will now have possession of a controlled drug being an offence, possession of a new psychoactive substance not being an offence, but possession of a new psychoactive substance in prison being an offence. In our view, that is too muddled but, of course, at earlier stages of this Bill we were calling for a widespread health-based review of all drugs laws, so I am sure that the Minister will not be entirely surprised that I make that comment.
Lord Ramsbotham (CB)
My Lords, I warmly endorse all that the noble Lord, Lord Rosser, has said. One aspect of Amendment 9 that the Minister mentioned was that a number of improvements were being made in prisons to the detection of new psychoactive substances. I should like to refer particularly to a very powerful report published last month by the Chief Inspector of Prisons on the use of new psychoactive substances. He said:
“Drug misuse is a serious threat to the security of the prison system, the health of individual prisoners and the safety of prisoners and staff”,
but the new psychoactive substances are an even more serious offence and,
“are now the most serious threat to the safety and security of the prison system”.
Because dealing with the new psychoactive substances—searching for them and so on—was so patchy in the Prison Service, the Chief Inspector of Prisons recommended:
“The Prison Service should improve its response to current levels and types of drug misuse in prisons and ensure that its structures enable it to respond quickly and flexibly to the next trend”.
I will mention the next trend before I conclude. The chief inspector recommended:
“A national committee should be established, chaired by the Prisons Minister, with a membership of relevant operational experts from the public and private prison sectors, health services, law enforcement, substance misuse services and other relevant experts. The committee should be tasked to produce and publish an annual assessment of all aspects of drug use in prisons, based on all the available evidence and intelligence, and produce and keep under review a national prison drugs strategy”.
If that annual report was required, it would, of course, cover the possession mentioned in the amendment that we are discussing, but I am particularly concerned that, in briefing the cross-party group on criminal justice, drugs and alcohol that I chair, the chief inspector mentioned the next trend causing him and his inspectors even more worry, which was the introduction of powdered alcohol. Therefore, we must have a system in place that monitors trends as well as current practices. I ask the Minister: what is happening about the establishment of such a national committee?
Lord Bates
My Lords, I thank the noble Lord, Lord Rosser, for his welcome of the amendment and other noble Lords who have spoken in favour of it. It is important.
The noble Lord asked a number of questions on whether the offence will apply only to prisoners. This is an important point to address to the noble Baroness, Lady Hamwee. The new offence will apply to all persons in possession of a psychoactive substance in prison. It is not particularly targeting prisoners themselves, so it could include visitors—or staff, for that matter—who possess these new psychoactive substances.
The noble Lord asked what pressure had come for this. Pressure came from a number of sources, including those that argued in favour of his amendment last July. Although it was not originally one such pressure, the noble Lord, Lord Ramsbotham, has brought to the fore the impressive and disturbing report of Her Majesty’s Chief Inspector of Prisons, called Changing Patterns of Substance Misuse in Adult Prisons and Service Responses, from December 2015. As the noble Lord has quoted, the chief inspector has said that new psychoactive substances,
“have created significant additional harm and are now the most serious threat to the safety and security of the prison system that our inspections identify”.
The noble Lord is absolutely right to identify this. I spoke in my introductory remarks about the additional dogs being trained for inspections, but it is right—the noble Lord, Lord Rosser, asked for this—that there should be a major push on prison communications to ensure that offenders are aware of the consequences of taking psychoactive substances, as are visitors attempting to bring them in. New drug tests are also being developed in this area.
I know that it was slightly ingenious to bring poppers into this group. I had prepared some remarks to address that in the second group of amendments. If noble Lords will allow me, I will address my remarks in that setting, lest I duplicate them.
On the prison drugs strategy, the idea that the noble Lord, Lord Ramsbotham, suggests is very interesting. While I cannot give a firm undertaking today, I would want to speak to the Prisons Minister, Andrew Selous, about this suggestion. I will get back to the noble Lord on whether a national committee could do this. Again, we are conscious of the constantly changing nature of this. In many ways, that was the argument for the blanket ban on psychoactive substances, rather than the whack-a-mole situation we were in before, where new things popped up as other things were outlawed.
With those comments and promises to get back to noble Lords on specific points of interest and to address further concerns in the next group, I beg to move.
Lord Bates
That this House do agree with the Commons in their Amendments 2 to 4.
(Exceptions to offences) (exceptions to offences).”
(Exceptions to offences) (exceptions to offences).”
Lord Bates
My Lords, in drafting this Bill, we have adopted a similar approach to that taken by the Republic of Ireland’s Criminal Justice (Psychoactive Substances) Act 2010; namely, setting out a broad definition of a psychoactive substance and then circumscribing it with a robust set of exemptions to narrow the Bill’s scope. The current list of exempted substances in Schedule 1 includes substances controlled through existing legislation, such as alcohol, tobacco and nicotine, medicinal products and controlled drugs, and substances where psychoactive effects are negligible, such as caffeine and foodstuffs.
I am delighted to see my noble friend Lady Chisholm of Owlpen in her place with me on the Front Bench. During the Bill’s passage through this House, my noble friend responded to amendments tabled by the noble Baroness, Lady Meacher, and the noble Lord, Lord Rosser, and agreed that we should look again at the drafting of the Bill with a view to strengthening the exemptions for medicinal products and research. As my noble friend Lady Chisholm made clear on Report in July, the Government have no intention through this Bill of fettering the discretion of clinicians to prescribe or direct the supply of substances which, in their clinical judgment, meet the needs of their patients. My noble friend also made it clear that we have no intention of constraining bona fide scientific research. This Government attach the highest priority to research and are committed to removing—or not putting in place—unnecessary regulatory barriers that impede that research in the UK.
During the summer, the Home Office worked closely with a range of public and private organisations to address both points, and I am confident that the new formulation put forward in these Commons amendments effectively responds to the issue and ensures that we have a robust list of exemptions.
Let me deal first with the definition of a medicinal product in Schedule 1 to the Bill. One concern put to us by the noble Baroness, Lady Meacher, was that the definition did not cover so-called “specials”; that is, products which are used in healthcare but have no marketing authorisation. These products have been manufactured or imported, to the order of a doctor and certain other medical practitioners, specifically for the treatment of individual patients to meet their special clinical need.
It is not our intention that medicinal products regulated under the framework provided for in the Human Medicines Regulations 2012 should be caught by this Bill. In defining a medicinal product by reference to a product with certain types of marketing authorisation, we were, on reflection, not casting the net widely enough. Commons Amendment 41 properly aligns the Bill with the regulatory framework for medicines. The Home Office worked closely with the Department of Health and the Medicines and Healthcare Products Regulatory Agency during the summer to revise this exemption.
Following careful consideration, Commons Amendment 41 uses the definition of a “medicinal product” as defined in Regulation 2 of the Human Medicines Regulations 2012. This would mean that any substance which falls within the following definition would be caught by the exemption and so would be outside the scope of the Bill:
“(a) any substance … presented as having properties of preventing or treating disease in human beings; or … (b) any substance … that may be used by or administered to human beings with a view to … (i) restoring, correcting or modifying a physiological function by exerting a pharmacological, immunological or metabolic action, or … (ii) making a medical diagnosis.”.
The Human Medicines Regulations consolidate the law of the United Kingdom concerning medicinal products for human use, including their authorisation, manufacture, distribution, importation and sale. I can assure noble Lords that we are satisfied that this revised definition covers all medicinal products that are approved for use in the UK. This definition includes investigational medicinal products, homeopathic medicinal products and traditional herbal medicines. That being the case, we can dispense with paragraphs 3 to 5 of Schedule 1, and Commons Amendment 42 removes them accordingly.
The Medicines and Healthcare Products Regulatory Agency will remain the body which regulates activity in relation to medicinal products, whether they are authorised or not, and these amendments and the Bill will not encroach on that. The MHRA is already called upon to determine whether a product meets the definition of a “medicinal product”. This will be an important role going forward to assist with ensuring that the exemption for medicinal products is relied on only in appropriate cases. Our approach will ensure that the regulatory frameworks for psychoactive substances and human medicines complement rather than overlap each other and ensure that the public are properly protected for medicinal and non-medicinal psychoactive substances.
Having dealt with the changes to the list of exempted substances, I now turn to exempted activities. Commons Amendment 11 provides that it would not be an offence under the Bill for a person to produce, supply, offer to supply, possess with intent to supply, import or export, or possess in a custodian institution a psychoactive substance if, in the circumstances in which it is carried by that person, the activity is an exempted activity. Commons Amendment 43 then sets out the list of exempted activities. These fall into two categories. The first exempts legitimate activities of healthcare professionals, while the second covers research. I will explain both in turn.
The exemption for healthcare-related activities will cover healthcare professionals acting in the course of their profession, and ensures that the Bill will not fetter their discretion as clinicians. At the moment a healthcare professional is free to prescribe or direct the supply of any psychoactive substance that is not a medicinal product as defined by the Human Medicines Regulations if, in their clinical judgment, this is in the best interests of the patient. While we do not have specific examples of such substances in mind, we wish to ensure that the Bill does not fetter clinicians’ freedom in this regard.
Commons Amendment 11 will ensure that, either now or in the future, a healthcare professional will not be hindered in offering treatment which in their clinical judgment is right for their patient. There are separate rules, in particular in relation to controlled drugs, which govern which substances a healthcare practitioner can and cannot prescribe which are unaffected by this exemption.
We have defined a “health care professional” using the existing definition in Regulation 8 of the Human Medicines Regulations 2012. This definition includes a doctor, dentist, pharmacist, nurse and midwife among others. The exemption also extends to people who supply substances to patients in accordance with a prescription issued by a healthcare professional, or at their direction.
Turning to research, while the inclusion of investigational medicinal products in Schedule 1 signalled our intention to exempt research activity, the Government recognise that the exemption fell short of what was required and, as such, failed to cover all research which could be caught by the Bill. I am grateful to the Academy of Medical Sciences and to noble Lords for raising this issue. The Home Office has reconsidered this issue and, after consulting the Department for Business, Innovation and Skills, the Department of Health, the Health Research Authority, the Government Office for Science, the Academy of Medical Sciences, the Association of the British Pharmaceutical Industry and the devolved Administrations, we have identified a revised approach.
Given that a wide range of bodies might undertake relevant research, our approach has been to frame the exemption around research which has received appropriate ethical approval from an ethics review body. We understand that all research which will be caught by the Bill should receive such approval. We have discussed this approach with the Academy of Medical Sciences and others in the research community, who are content with our approach.
All research that is approved by one of the Health Research Authority’s research ethics committees will be exempted and, as the Health Research Authority’s remit covers health and social care research, we expect that this will be a major mechanism for the exemption of research. We acknowledge the possibility of research in fields other than health and social care and, for that reason, the exemption will also cover all research approved by: an ethics committee constituted by a government department; an NHS body; a research institute, including universities; or a charity which is concerned with advancing health or saving lives.
These mechanisms for ethical approval are already in place and the Government believe that any research involving the consumption of a psychoactive substance by a human should be considered by an ethics committee, not least to give due regard to the safety of the research’s participants. From our discussions with the research community over the summer, we have not been able to identify any example of in-scope research which has not been considered by an ethics body, so this exemption should not create any additional bureaucracy for the research community, nor require bona fide researchers to do anything they do not already do. We are just conscious not to create a loophole which allows head shops and others to undertake so-called research to facilitate the supply of these substances. It is worth putting on record again that a considerable amount of scientific research falls outside the scope of the Bill in any case. Only research involving the consumption of a psychoactive substance by a person would be caught.
Commons Amendment 11 includes a power to add to or vary the list of exempted activities in the new schedule inserted by Commons Amendment 43. This regulation-making power effectively replaces that in Clause 10, so Commons Amendment 12 omits that clause. Commons Amendments 2 to 4, 7, 8, 13, 29, 30 and 38 are all consequential on Commons Amendments 11 and 43.
I was asked about poppers. The Government recognise that representations have been made to the effect that poppers have a beneficial health and relationship effect. In consultation with the Department of Health and the Medicines and Healthcare Products Regulatory Agency—the MHRA—the Home Office will therefore consider, following the enactment of the Bill and before the Summer Recess, whether there is evidence to support these claims and, if so, whether it is sufficient to justify exempting the alkyl nitrites group, or individual substances in that group. Clause 3 enables the Home Secretary, by regulations—after statutory consultation with the Advisory Council on the Misuse of Drugs and subject to the affirmative procedure—to add to the list of exempted substances in Schedule 1 to the Bill.
Finally, I thank all those in the medical and research community, as well as those in government departments and this House, who assisted us over the summer in drafting these amendments. I now believe that we have a strong exemption list which meets the guiding principle. I beg to move.
Lord Rosser
I thank the noble Lord for his very full and thorough explanation of the purpose and intention of this group of amendments. As the Minister has said, the intention of this group is to address concerns expressed by ourselves and other noble Lords, including the noble Baroness, Lady Meacher, during the Bill’s passage in this House, that healthcare activities and scientific medical research relating to new psychoactive substances were not adequately protected in the Bill. The amendments insert a new clause and schedule to provide for exemptions to the offences under Clauses 4 to 8 of the Bill and the new possession offence which has just been discussed. As the Minister said, these exemptions are for activities carried out by healthcare professionals and for approved scientific research activity. The Government’s amendments also confer on the Secretary of State the power, through regulations subject to the affirmative procedure, to add to or vary any activity described in the schedule to the Bill which has now been inserted by the Commons.
The Minister has referred to the position of those bodies and institutions directly affected by this Commons amendment. I think the Minister has already said this, but I would be grateful if he would confirm that those bodies and institutions are satisfied that the amendments that have been carried in the Commons, and which we are considering at the moment, meet the concerns that they have expressed.
Finally, in relation to poppers, I understand that a decision is likely to be made fairly soon. I think the suggestion was that conclusions might be reached by the summer. Are we then in a situation where poppers might be banned under the terms of the Bill, only to be—if I may use the expression—unbanned in the summer? Or are we in a situation where the terms of the Bill in relation to the new psychoactive substances will not come into force until a conclusion has been reached in respect of poppers?
Baroness Hamwee
I welcome these amendments very much, particularly the ones relating to research, a concern about which was shared on these Benches. I remember asking about veterinary research, as distinct from research relating to human medicine. There were some raised eyebrows at that point and I had better not pursue it now. But I assume that these provisions will enable research regarding the medicinal use of cannabis, about which we were particularly concerned and on which I moved an amendment. The possible limitation of research was one of the concerns underlying that amendment.
I have a couple of questions for the Minister. I hope I gave him enough notice of them. I am sorry that they came so late by email. Both relate to the definition of,
“a relevant ethics review body”.
The first is on the use of the term “individuals” in paragraph 4(b) of the proposed new schedule. I wondered whether that might suggest—clearly absurdly—that we were looking at research involving separate individuals rather than cohorts of people. When I looked at the Human Medicines Regulations, I realised that the term “human beings” was used and that seemed a rather more appropriate term, less likely to be interpreted in a different way.
My second concern is with regard to charities. We very much want to see wide research so we welcome this approach. I recognise that the regulation of charities has been the subject of some concern and some change recently, but we may not be altogether rid of—how can I put it?—dodgy charities. Is there any sort of loophole here that would enable a dodgy charity to have an ethics committee—it would probably be rather a dodgy ethics committee but, nevertheless, it would be one—that would allow less than appropriate research?
Lord Hayward (Con)
I would like to pursue the matter raised by the noble Lord, Lord Rosser, as well as touch on a broader aspect of the legislation. I am in the slightly odd position of having arrived in this place after the original debates in Committee, and I would like to make two points.
First, there is something I do not really understand—and I say this having been chief executive of the British Beer & Pub Association. Pubs were created in 1751. This legislation is all or nothing. There is no allowance for things that might be sold in either a licensed premises or a regulated premises. There are many things in British life that are sold under such circumstances and I do not understand why we have to have an all-or-nothing approach to these substances. I understand the nature of the legislation but there are chemical circumstances under which people could define things and regulate them. If we have been doing something for 260 years, I think the Home Office might catch up. It is probably not its finest hour in terms of legislative process.
To follow up the question asked by the noble Lord, Lord Rosser, since the Government say—this is a change of position, although it was not a specific government amendment—that they will look at something, they could do one of two things. They could either adjust the timetable for the whole legislation and defer it slightly or rush through a consideration of something that is likely to be driven underground in the mean time. The noble Lord, Lord Rosser, asked whether we are going to ban and then unban. What advice will be given to the police in the mean time? Are they to disregard the sale of illegal products or are they just not to prosecute? It really does not make sense. I suggest that we either adopt a position of regulating products or defer the introduction of this legislation.
Lord Bates
In response, I say first to my noble friend Lord Hayward, who has been a welcome addition to this House since his arrival, that when we were considering the Bill during its earlier stages in this House, the problem we were trying to identify was that once these new psychoactive substances were named, I or someone else, such as my noble friend Lady Chisholm, would come before your Lordships’ House with secondary legislation seeking to ban a particular chemical composition. Then it would be slightly tweaked by one or two molecules and reappear the next week as something else, and all the time people would be put at risk. That was the mischief that the whole thrust of this legislation was about. In the Conservative Party manifesto at the last election, we also made it clear that we would institute a blanket ban.
Forgive me for going through the points raised almost in reverse order, but my noble friend Lord Hayward asked whether we are going to ban and then unban. That is to prejudge the outcome of the consultation and review. The review may say that it is something that should be taken off the list; it may say that it should remain on the list. That is for it to do, so we do not know what the outcome will be. As we do not know that, we cannot prejudge it by putting it into this primary legislation. But because of this legislation we have a secondary legislation option whereby, if that decision is taken as a result of the consultation, we can act quickly to address it.
Let me deal with some of the other points which were raised. First, the noble Lord, Lord Rosser, asked me to confirm whether various medical groups and research groups had been consulted. Yes, they have, and they have been immensely helpful. I know that many in your Lordships’ House who spoke in Committee and on Report were speaking precisely to that point about the potential danger that this posed to legitimate medical research. I think they would welcome the fact that we have made it explicit in the Bill that these exemptions are there for research.
I thank the noble Baroness, Lady Hamwee, for her advance notice of the question on charities. The charity we are talking about would of course be a registered charity, and it would have to be one concerned with the advancing of health and saving lives. One hopes that the ability of someone to set up a “charitable body” which then started dispensing might be restricted, in the same way as restricting research to that approved by an ethics committee was the correct way forward. I can confirm that the Academy of Medical Sciences and other research communities were consulted on this. Also in response to the noble Baroness, cannabis is a controlled drug so it is outside the scope of the Bill, as controlled drugs are specifically exempt. The regulations that govern research in relation to cannabis are under the Misuse of Drugs Act, which is unchanged.
I may have answered the other points that were raised —no, there was a specific one on the term “individual”. The definition of the ethics body in new paragraph 4(b) does not exclude clinical trials of cohorts of people, as it refers to “individuals”—plural—not to an individual. It is important that medical charities such as Cancer Research are able to benefit from this exemption. We do not believe that the exemption for charities risks opening any loopholes. Section 1 of the Charities Act 2011 defines a charity as,
“an institution … established for charitable purposes only”.
Section 2(1)(b) of the Act states that the charitable purposes must be in the public interest. Head shops are unlikely to be considered as acting in the public interest—on the contrary, we would argue—so could not benefit from this exemption. I hope that that has been helpful in addressing some of the points raised.
Lord Rosser
The situation with poppers is that they are not banned at the moment, but they will be when the Bill comes into effect and becomes an Act. I accept what the Minister says about the wording being “could” not “will”, but they could then be unbanned in the summer, as I think the Government have said that they expect their consideration by experts will be concluded by the Summer Recess. Is that a particularly satisfactory situation? If I am correct, something that is not banned at the moment may end up being banned for a few months and then unbanned.
Lord Bates
In a sense, my argument is about what alternative we have to this. The moment for putting something through now, in primary legislation, has passed. We have to allow this to take its course. Our concession was to say that we would undertake a review in consultation with the Department of Health and the Medicines and Healthcare Products Regulatory Agency. Following the enactment of the Bill, and before the Summer Recess, we will consider whether there is evidence to support these claims. There is a question mark there and we believe that that research and consultation need to happen before we take any further action at this stage.
I see that the cavalry has arrived; I am, as ever, grateful my noble friend Lady Chisholm. To add to the list of exemptions requires the Home Secretary only to make regulations subject to affirmative procedure. To remove from the original list of exemptions would require further primary legislation. I think I have already said this, so I rest my case at that point and beg to move Amendments 2 to 4 in my name.
Baroness Hamwee
My Lords, the point is well made and this is an almost insoluble dilemma. I entirely see the Government’s concern to have the overall legislation in place quickly. However, first, can the Minister give the House any news as to when this may come into effect? Secondly, with regard to the particular situation which has been described, this is by no means a solution, but has the Minister been advised as to the likely view of the judiciary—if that is not an improper question for a Minister to answer—in a situation where, by the time a charge comes to be heard by a court, an exemption has been made through regulations?
Lord Bates
Subject to your Lordships’ approval this afternoon, the legislation will come into force in April 2016. We discussed in Committee, with the noble Lord, Lord Pannick, how the police might respond to that. The police of course have discretion in these circumstances, and we have said very clearly that we know who we are after in relation to this, which is the people who are actually importing, selling and supplying these dangerous substances. I believe that the police can use their discretion at that point. If there are specific circumstances that require further clarification on that, it can be provided for later under the terms of the Bill.
Lord Bates
That this House do agree with the Commons in their amendments 5 to 13.
( ) In this section—
“custodial institution” means any of the following—
(a) a prison;
(b) a young offender institution, secure training centre, secure college, young offenders institution, young offenders centre, juvenile justice centre or remand centre;
(c) a removal centre, a short-term holding facility or pre- departure accommodation;
(d) service custody premises;
“removal centre”, “short-term holding facility” and “pre-departure accommodation” have the meaning given by section 147 of the Immigration and Asylum Act 1999;
“service custody premises” has the meaning given by section 300(7) of the Armed Forces Act 2006.”
“Possession of a psychoactive substance in a custodial institution
(1) A person commits an offence if—
(a) the person is in possession of a psychoactive substance in a custodial institution,
(b) the person knows or suspects that the substance is a psychoactive substance, and
(c) the person intends to consume the psychoactive substance for its psychoactive effects.
(2) In this section “custodial institution” has the same meaning as in section 6.
(3) This section is subject to section (Exceptions to offences) (exceptions to offences).”
“( ) A person guilty of an offence under section (Possession of a psychoactive substance in a custodial institution) is liable—
(a) on summary conviction in England and Wales—
(i) to imprisonment for a term not exceeding 12 months (or 6 months, if the offence was committed before the commencement of section 154(1) of the Criminal Justice Act 2003), or
(ii) to a fine, or both;
(b) on summary conviction in Scotland—
(i) to imprisonment for a term not exceeding 12 months, or
(ii) to a fine not exceeding the statutory maximum, or both;
(c) on summary conviction in Northern Ireland—
(i) to imprisonment for a term not exceeding 6 months, or
(ii) to a fine not exceeding the statutory maximum, or both;
(d) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine, or both.”
“Exceptions to offences
(1) It is not an offence under this Act for a person to carry on any activity listed in subsection (3) if, in the circumstances in which it is carried on by that person, the activity is an exempted activity.
(2) In this section “exempted activity” means an activity listed in Schedule
(Exempted activities).
(3) The activities referred to in subsection (1) are— (a) producing a psychoactive substance;
(b) supplying such a substance;
(c) offering to supply such a substance;
(d) possessing such a substance with intent to supply it; (e) importing or exporting such a substance;
(f) possessing such a substance in a custodial institution (within the meaning of section (Possession of a psychoactive substance in a custodial institution)).
(4) The Secretary of State may by regulations amend Schedule (Exempted activities) in order to—
(a) add or vary any description of activity;
(b) remove any description of activity added under paragraph (a).
(5) Before making any regulations under this section the Secretary of State must consult—
(a) the Advisory Council on the Misuse of Drugs, and
(b) such other persons as the Secretary of State considers appropriate.
(6) The power to make regulations under this section is exercisable by statutory instrument.
(7) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
Lord Bates
That this House do agree with the Commons in their Amendments 14 to 20.
“( ) in a case where the prohibition order or the premises order imposing the access prohibition was made by a court in Scotland, the sheriff.”
“(b) where—
(i) the order was made under section 18 on an appeal in relation to a person’s conviction or sentence for an offence, or
(ii) the order was made by a court under that section against a person committed or remitted to that court for sentencing for an offence,
the court by or before which the person was convicted (but see subsection (6A));”
“(6A) Where the person mentioned in subsection (6)(b)—(a) was convicted by a youth court, but
(b) is aged 18 or over at the time of the application,
the reference in subsection (6)(b) to the court by or before which the person was convicted is to be read as a reference to a magistrates’ court or, in Northern Ireland, a court of summary jurisdiction.”
“( ) An Act of Adjournal under section 305 of the Criminal Procedure (Scotland) Act 1995 (Acts of Adjournal) may be made in relation to proceedings before the High Court of Justiciary, the sheriff or the Sheriff Appeal Court—
(a) arising by virtue of section 18 or 28;
(b) under section 27, where the application relates to a prohibition order made under section 18;
(c) under section 29(5);
(d) under subsection (1) of section 30, where the relevant order (as defined in subsection (3) of that section) was made under section 18;
(e) under section 30(7).”
Lord Bates
Noble Lords will recall that at Report in July, I moved various technical amendments to the Bill to ensure that it properly reflects Scots law and Scottish judicial and policing practice. The Commons amendments in this group are in a similar vein. The group also repeals the Intoxicating Substances (Supply) Act 1985, which the Bill renders redundant. I can provide further detail if required, but for now, I beg to move.
Lord Bates
That this House do agree with the Commons in their Amendments 21 to 48.
“( ) a warrant that relates only to premises specified in the warrant (a “specific-premises warrant”), or
( ) in the case of a warrant issued in England and Wales or Northern Ireland, a warrant that relates to any premises occupied or controlled by a person specified in the warrant (an “all-premises warrant”).”
“( ) An application for a search warrant may be made without notice being given to persons who might be affected by the warrant.
( ) The application must be supported—
(a) in England and Wales, by an information in writing; (b) in Scotland, by evidence on oath;
(c) in Northern Ireland, by a complaint on oath.
( ) A person applying for a search warrant must answer on oath any question that the justice hearing the application asks the person.
In the case of an application made by a procurator fiscal, that requirement may be met by a relevant enforcement officer.”
(a) applications for search warrants made in England and Wales or Northern Ireland, and
(b) search warrants issued in England and Wales or Northern Ireland.”
“(c) if the person is remitted to the High Court of Justiciary to be dealt with for that offence, the High Court of Justiciary.”
“( ) The power under section 384(1) of the Armed Forces Act 2006 (“the 2006 Act”) may be exercised so as to extend to any of the Channel Islands (with or without modifications) any amendment or repeal made by or under this Act of any part of the 2006 Act.
( ) The power under section 384(2) of the 2006 Act may be exercised so as to modify any provision of that Act as amended by or under this Act as it extends to the Isle of Man or a British overseas territory.”
“In this paragraph “Medicinal product” has the same meaning as in the Human Medicines Regulations 2012 (S.I. 2012/1916) (see regulation 2 of those Regulations).”
“EXEMPTED ACTIVITIES
Healthcare-related activities
1 Any activity carried on by a person who is a health care professional and is acting in the course of his or her profession.
In this paragraph “health care professional” has the same meaning as in the Human Medicines Regulations 2012 (S.I. 2012/1916) (see regulation 8 of those Regulations).
2 Any activity carried on for the purpose of, or in connection with—
(a) the supply to, or the consumption by, any person of a substance prescribed for that person by a health care professional acting in the course of his or her profession, or
(b) the supply to, or the consumption by, any person of a substance in accordance with the directions of a health care professional acting in the course of his or her profession.
In this paragraph “health care professional” has the same meaning as in the Human Medicines Regulations 2012 (see regulation 8 of those Regulations).
3 Any activity carried on in respect of an active substance by a person who—
(a) is registered in accordance with regulation 45N of the Human Medicines Regulations 2012, or
(b) is exempt from any requirement to be so registered by virtue of regulation 45M(2) or (3) of those Regulations.
In this paragraph “active substance” has the same meaning as in the Human Medicines Regulations 2012 (see regulation 8 of those Regulations).
Research
4 Any activity carried on in the course of, or in connection with, approved scientific research.
In this paragraph—
“approved scientific research” means scientific research carried out by a person who has approval from a relevant ethics review body to carry out that research;
“relevant ethics review body” means—
(a) a research ethics committee recognised or established by the Health Research Authority under Chapter 2 of Part 3 of the Care Act 2014, or
(b) a body appointed by any of the following for the purpose of assessing the ethics of research involving individuals—
(i) the Secretary of State, the Scottish Ministers, the Welsh Ministers, or a Northern Ireland department;
(ii) a relevant NHS body;
(iii) a body that is a Research Council for the purposes of the Science and Technology Act 1965;
(iv) an institution that is a research institution for the purposes of Chapter 4A of Part 7 of the Income Tax (Earnings and Pensions) Act 2003 (see section 457 of that Act);
(v) a charity which has as its charitable purpose (or one of its charitable purposes) the advancement of health or the saving of lives;
“charity” means—
(a) a charity as defined by section 1(1) of the Charities Act 2011,
(b) a body entered in the Scottish Charity Register, or
(c) a charity as defined by section 1(1) of the Charities Act (Northern Ireland) 2008;
“relevant NHS body” means—
(a) an NHS trust or NHS foundation trust in England, (b) an NHS trust or Local Health Board in Wales,
(c) a Health Board or Special Health Board constituted under section 2 of the National Health Service (Scotland) Act 1978,
(d) the Common Services Agency for the Scottish Health Service, or
(e) any of the health and social care bodies in Northern Ireland falling within paragraphs (a) to (d) of section 1(5) of the Health and Social Care (Reform) Act (Northern Ireland) 2009.”
“PART A1
APPLICATION OF THIS SCHEDULE
This Schedule applies to—
(a) applications for search warrants made in England and Wales or
Northern Ireland, and
(b) search warrants issued in England and Wales or Northern Ireland.”
“Intoxicating Substances (Supply) Act 1985
(1) The Intoxicating Substances (Supply) Act 1985 is repealed.
(2) In consequence of the repeal made by sub-paragraph (1), in Schedules 3 and 6 to the Regulatory Enforcement and Sanctions Act 2008, omit the entry relating to the Intoxicating Substances (Supply) Act 1985.”
“Regulatory Enforcement and Sanctions Act 2008
In Schedule 3 to the Regulatory Enforcement and Sanctions Act 2008 (enactments specified for the purposes of Part 1 of that Act), at the appropriate place insert—
“Psychoactive Substances Act 2016”.”
Housing and Planning Bill
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, it is a great pleasure and a privilege to open this Second Reading debate on the Housing and Planning Bill in your Lordships’ House. We have within this House some of the country’s finest experts on local government, housing and planning, and I look forward to constructive and positive discussions over the coming months.
I particularly look forward to the maiden speech of the noble Baroness, Lady Thornhill. As the first woman to become a directly elected mayor, I have no doubt that she will bring immense value to your Lordships’ House over the coming years. I also look forward to responding to the noble Lord, Lord Thurlow, who also makes his maiden speech today. As both a parish councillor for the past 10 years and an experienced chartered surveyor, his contributions will no doubt greatly enhance our debate today.
It has been just over two years since I took my seat in your Lordship’s House, and seven months since I took my position here on the Front Bench. Debating within this Chamber how we can improve the lives of our citizens has been one of the most rewarding things that I have done, but time and again, I have noticed a pattern to our discussions. On the range of topics brought before us, we keep returning to one question: are the Government doing all that they can?
We asked ourselves that question when we wrote the manifesto on which we were elected, and, in particular, when we considered the challenges faced by those seeking to own their own home, such as: the collapse in housebuilding following the financial crisis in 2008, with completions falling to a level not seen since the 1940s; average house prices being eight times the average salary of those aged between 22 and 39, meaning that 84% of home owners are now over the age of 40; and only a quarter of social renters believing that they will ever get to own their own home.
The Bill addresses those challenges and more, implementing a number of commitments made at the general election. It is the fulfilment of this Government’s contract to continue the progress that we have already made to tackle this housing crisis head on. It is the proof that we believe that the Government should do all they can to ensure that our children can own their own home. It is the proof that we believe that those who rent should do so in a home that is right for them, protected from rogue landlords and unscrupulous agents, with our social housing doing what it does best—supporting those who need it most. It is the proof, we believe, that our planning system should be the envy of the world, able to unlock the land needed to deliver new homes and to deliver them where they are desperately needed.
As we discuss this Bill, we should keep coming back to the word “home”. Churchill once said:
“There is no doubt that it is around the family and the home that all the greatest virtues, the most dominating virtues of human society, are created, strengthened, and maintained.”
There are roughly 200,000 households being formed every year, all of whom seek to create their first home. They are the very people, in every part of England, that this Bill seeks to help. Some of them will look to the private rented sector and approach a letting agent or private landlord. This Bill will ensure that they can do so with confidence. It will make sure that bad landlords are driven from the sector and that good ones can quickly reclaim abandoned property so it can provide a home for someone else.
Some of these new households will, of course, look to their local authority for help, but, despite the number of people on council waiting lists having fallen under this Government, many will be disappointed. Once a council home is allocated, many people stuck on the waiting list see it disappearing for ever, gone for a generation or more. Now, those people will know that new allocations are regularly reviewed, with new opportunities as a result. If a household, after saving for so long, buys its social home, then an additional home will be built. This Bill will mean that social housing works for the social good of the nation. This is a Bill to make social housing fair, stop private tenants questioning why they pay one level of rent while their neighbour, a social tenant with a similar job and similar high income, is not paying a similar rent, and use the high value of an empty council asset to unlock new homes for more families than ever before and more home owners than ever before. It is our statement that the Government are doing all they can, whatever it takes, to assure those on the waiting list that social housing continues to protect and shelter those who need it the most.
Many of the 200,000 new households each year will want not to rent but to buy their first home. For them, every penny counts. Some will rent privately and attempt to save money for a deposit, and others will stay with family and do what it takes to get on the property ladder, but this is where the problem lies. Despite our best efforts, successive Governments have not been doing all they can to help them. The homes are just not there. Most local authorities in England have seen build rates more than 20% below projections for growth in their households. Since coming into government, we have made a real difference and turned this around. The number of homes being started is now at its highest annual level since 2007. More than 704,000 additional homes have been delivered since April 2010, the number of first-time buyers is at seven-year annual high and mortgage approvals are up 19% on last year.
However, for people still desperate for a first home of their own, mere statistics do not matter. They look to the Government to do more and to your Lordship’s House to assist us in laying the foundations so that homes are within reach for the first time in decades. The Bill will deliver our manifesto commitment to place starter homes at the heart of new developments, a welcome addition to our growing package of support for future home owners, with a 20% discount to get people on the housing ladder. We are providing £2.3 billion to help get starter homes built as part of our £8 billion package for more than 400,000 affordable homes in total. Once again, this is the Government delivering their contract with the electorate with a long-term economic plan to deliver affordable homes to buy as well as to rent.
As we scrutinise the Bill over the coming weeks, we must not forget the context in which it sits. Nearly 270,000 households have been helped to purchase a home since spring 2010 through government-backed schemes, and more council housing has been built since 2010 than in the previous 13 years. If you are a council tenant and you want to buy your home, you can get a discount of up to £103,900. If you are a housing association tenant and want to buy a home, you will have the same opportunity. If you want a new-build house, we will provide equity of up to 40% of the cost of your home or guarantee your mortgage on an older one. If you are desperately saving for a deposit, we will boost your savings by 25% through a Help to Buy ISA. We are doing all we can to support existing social tenants as well, cutting rents for housing association and local authority households by around 12% by 2020. Therefore, taken together with our wider work, the Bill means that we now have ground-breaking opportunities for future homeowners alongside a fair social housing sector with even fairer rents.
At this point I pay tribute to the National Housing Federation. We have always said that housing associations know the needs of their tenants. They know their stock and their residents, which is why we were pleased that they proposed a voluntary agreement to help people into home ownership. Ahead of the main scheme, five housing associations are running a voluntary right-to-buy pilot, and from yesterday the first tenants have been able to start that application process. I said that the Bill means that social housing works for the social good of the nation, and the voluntary agreement reflects this. The agreement sets out that they retain discretion when selling a property, a policy I know many noble Lords will welcome. That means that supported housing, historic legacy stock, properties built with charitable resources, homes in rural areas and properties held in a community land trust can all be protected. In addition, as with the existing right to buy, almshouses will not be included in the scheme.
Social housing will remain for the continued social good of the nation. To fulfil the Government’s mandate and do what we promised, we have to once again look at the speed at which we give planning permission for new homes. Our planning system is already one to be proud of. In the year ending last September, the reformed planning system gave permission for 251,000 new homes —up 53% on the year to September 2010. Our reforms have changed how people look at housebuilding in their communities. Local support has doubled in the last four years, from 28% in 2010 to 56% now, while opposition to local housebuilding has more than halved during the same period. Over 1,700 communities, representing over 8 million people, have started the process of neighbourhood planning.
People want new homes built, and built quickly. This Bill is a shot in the arm for the planning process. It speeds up neighbourhood planning so local communities can confidently plan their future and families can be kept close. Confidence in the planning system is absolutely vital, not just for those communities but to maintain the economic recovery of housebuilders. Local plans are now fundamental, and people expect them. Having one in place is now non-negotiable, not only from the Government’s point of view but also from communities which elect local councillors but fail to see results. Once again, the public expect the Government to do all they can to make sure it happens. They expect to have confidence that the planning system will deliver new homes. Therefore we have been clear: if a local plan is not in place, we will step in, consult with communities and make sure that plans are there. There will be confidence that the way we use our public land—and the way that all-important permission for housing is granted—is smart and fit for the future. Public sector land will no longer sit in surplus.
We have considered the needs of the capital and have refined the Bill accordingly. Fundamentally, we have also considered whether we can do more to help new homes get built for those who want to buy or to rent.
We will continue to ask ourselves whether we can use this opportunity to go further in meeting the expectations of the 200,000 households being formed each year. Where we think we can, we will bring forward amendments to do so. I will consider carefully the views of noble Lords who propose amendments because they, too, think we can go further. Sometimes, of course, we will disagree, but I hope that on many issues we will be able to come to an informed consensus on how the Bill—and the opportunities for those seeking a new home—can be improved.
The Government were elected by people who expect to see us do all we can to increase home ownership, get homes built where they are needed and ensure that social and private housing markets are fair, free from excessive regulation and fit for the future. Let us pass back to the other place a Bill which delivers these expectations, benefits from your Lordships’ experience and scrutiny, makes real the dream of home ownership and proves that this House puts party politics aside to get homes built for those who need them most. I beg to move.
Lord Kennedy of Southwark (Lab)
My Lords, first, I declare interests as an elected councillor in Lewisham and as a trustee of United St Saviour’s Charity, which runs a number of supported housing schemes in south London.
I look forward to the maiden speech of the noble Baroness, Lady Thornhill, who is the directly elected mayor of Watford and brings her vast experience of local government to this debate. I read that she is a supporter of Watford Football Club. All I can say is that I hope that my team meets her team one day in the Premiership—although, as a lifelong supporter of Millwall Football Club, I imagine that that could take a couple of years yet. I also look forward to the maiden speech of the noble Lord, Lord Thurlow, who is an elected hereditary Peer, a Cross-Bencher, a parish councillor and a chartered surveyor by profession. Both the noble Baroness and the noble Lord are very welcome at our deliberations today.
We are in the midst of a housing crisis, with the lowest level of housebuilding since the 1920s. The number of homes completed in 2014 reached 117,000, which is less than the lowest number of homes built under the last Labour Government. Last year, the Government built the fewest homes for social rent in more than two decades—just under 11,000 compared with 33,000 in Labour’s last year of office. In addition, there is an ever-increasing housing benefit bill, which has grown by £2 billion in five years, and a shocking increase in homelessness and rough sleeping. We have had five years of failure, and the response from the Government is the Housing and Planning Bill. It is not the Bill to meet the challenge that we face or to give people hope that things will change and get better.
There are parts of the Bill that we can support, including action to deal with rogue landlords, the section on self-build and custom-built housing, and action to speed up compulsory purchase. We will seek to strengthen these measures as the Bill goes through your Lordships’ House.
However, most of the Bill contains measures that we cannot support. We will be seeking to persuade the Government that their proposals will do nothing to help a family struggling to make ends meet and who will be worried that their rent is going to be hiked up to unaffordable levels due to the pay-to-stay measures. Nor will they help a young couple living in the private rented sector who will face ever-increasing rent rises and look with despair at the new starter home proposals. These unrealistic proposals will deliver nothing for them.
We on these Benches are supportive of measures to increase home ownership, but the starter homes product is still unaffordable to many people. We have concerns about the deposit that people will need to raise to purchase one of these homes in London and about the level of income that will be needed to keep up the repayments. It has been suggested that an income in the region of £77,000 a year could be required. The Council of Mortgage Lenders is also raising concerns that the scheme as presently proposed could prove very unattractive to lenders. So we have a scheme that is unaffordable to many prospective first-time buyers, and a financial services industry that is at best a bit lukewarm about the proposals, with some lenders considering whether they want to be part of the scheme at all.
Others have raised concerns about the scheme. They include Mr Nick Hurd, the Conservative Member of Parliament for Ruislip, Northwood and Pinner, who thought that the £450,000 price cap was more likely to be seen as a price guide by developers. Concerns were also raised by Ms Nicola Blackwood, the Conservative Member for Oxford West and Abingdon in the other place. In addition, London Councils and others have said that the powers to be taken by the Secretary of State must be used in a proportionate way that takes account of local housing need before overriding any local policy document. Quite rightly, local authorities in London want assurances that local overall housing need will be taken into account and that this policy will not just be forced through without any reference to local circumstances. I hope the noble Baroness, Lady Williams of Trafford, will address that specific point at the end of the debate. Will she also comment on how the infrastructure required for these starter homes will be funded?
As I said earlier, we have no particular issues with the section of the Bill concerned with self-build and custom housebuilding, although we will explore through probing amendments whether anything further can be done to improve these measures.
Another aspect of the Bill that causes concern is the forced sale of so-called high-value council housing to fund the extension of the right to buy to housing association tenants. There appears to be no proper plan for the replacement of these homes on a like-for-like basis in the areas where the homes are sold. The loss of a social rented property and its replacement with an affordable rented property—which, in many parts of the country and in particular London, is actually unaffordable—risks breaking up communities. However, this big plan of the Government is not funded by them; it is funded by penalising local authorities in a most unfair way.
In responding to the debate, will the Minister answer the question concerning many London local authorities: will housing associations be required to replace the property in the same area, the same London borough or even in London, or can they put it where they like? What happens if the local authority has transferred all its stock and has no housing to sell? Can she also tell us what will be done if the receipts do not cover everything that is meant to be funded out of the sale, such as the debt charge on the property, the provision of the new home, the brownfield levy et cetera?
Again, in the other place, concerns on this aspect of the Bill were raised by many Members, including Conservative Members such as Dr Sarah Wollaston, the Member for Totnes, particularly in respect of the effect on rural communities of housing associations selling their properties. We share those concerns and I hope that the Minister will seek to alleviate them in her response today. These are matters on which I am sure we will bring forward amendments for consideration in your Lordships’ House.
Another area where disquiet has been raised is the pay-to-stay scheme. If not implemented properly, the scheme runs the risk of negatively affecting the social mix of boroughs and penalising people on modest incomes. Earning limits of £40,000 in London and £30,000 elsewhere are just not realistic. With just a cursory look on a job website, you can find, for example, an office administrator being paid £25,000 a year, or a Sainsbury’s internet shopper—the person who puts all the groceries in the bags before they are delivered to your front door—being paid £16,000 a year. Those figures are for a 40-hour week, before tax, in London. With those or a similar combination of jobs, a couple would easily find that they had breached the income threshold of £40,000. The situation is equally unrealistic outside London, with a cap of just £30,000. Add to that a young person who cannot afford to rent a place of their own and is still living with mum and dad, and you have a family in a really difficult situation.
I live in Lewisham in a very ordinary terrace house, for which I have a mortgage. Rents for similar properties in the private sector locally have reached £2,500 a month or £30,000 a year. The proposals in this Bill put people on modest incomes at risk of finding themselves having to pay a market rent, or so-called affordable rent or some other variation, which would be considerably more than they paid before. That is just unfair. We on these Benches will seek to make the system fairer, more realistic and more understanding of people’s circumstances.
During the passage of the Bill, we also want to examine the nature of the voluntary deal that has been reached between the Government and housing associations and to ensure proper protection for specialist housing, including supported housing.
We on these Benches welcome proposals to bring stricter enforcement to the private rented sector, in particular the introduction of banning orders, along with a rogue landlord database, the expansion of rent repayment orders, and equipping local authorities with information on landlords and their properties through the tenancy deposit scheme, as well as the introduction of fixed-penalty notices. There are, of course, some very good examples of progressive, forward-thinking local authorities, such as Newham and Waltham Forest, that have already been actively working to improve the standards in the private rented sector in their boroughs for many years. There is also a case for the devolution of power from the Secretary of State to the Mayor of London, and so getting the London local authorities and the mayor to work more closely together to make real improvements. The financial penalties for breaches by landlords, introduced by the Government during Report in the other place, are very much welcome in that respect.
We do, however, have concerns about the new fast-track eviction process for landlords to reclaim their property without reference to the courts. That could put tenants in a very vulnerable position, and we will want to explore this during consideration of the Bill. What are the protections for tenants from being illegally evicted by the very rogue landlords we have just been talking about? It would be helpful to the House if the Minister could again explain why the Government thought it necessary to include this provision. What evidence do they have to suggest that abandonment is such a significant problem, and what is in place to protect tenants from illegal eviction?
At present, the Bill does not include anything on protecting tenants in the private rented sector from electrical accidents caused by unchecked and faulty electrical installations. These matters were debated at some length in the other place, but so far the Government have not been persuaded. I very much agree that a mandatory five-year electrical safety check in the private rented sector is both necessary and welcome. Each year, 20,000 fires are caused by electrical faults, which is almost half of all accidental house fires. We will bring forward amendments to make such tests mandatory, and I hope that the Government will listen to the compelling case and move on from their present position, which says there is an expectation on landlords to keep electrical installations safe.
The planning aspects of the Bill will be explored in more detail by my noble friend Lord Beecham and other noble Lords in today’s debate. However, the Bill lacks vision and seems to regard the effective operation of a planning system as a constraint to development and nothing more. The removal of Section 106 contributions from the starter home developments through to in-principle planning consent and the call-in provisions to be given to the Secretary of State are all matters we will want to discuss further.
We need local authorities and communities to be empowered to ensure that local development proposals meet local development needs. It again will be helpful if the noble Baroness can explain to the House how these proposals extend and develop localism—which, again, like the big society, is often only mentioned by opposition spokespersons in the course of debates such as this. I am a supporter of neighbourhood planning and in Crofton Park, the ward I represent on Lewisham Council, we are working hard to set up a neighbourhood forum, but nothing in this Bill will help local people to have a greater say over the kind of developments that are built in their community.
There are, of course, other groups that must be considered as the Bill makes its way through your Lordships’ House. These include berth holders, who are considered as a housing group by the department but are not mentioned in the Bill. Certainly in London, residential use of the waterways has grown considerably, with households living on the water and not only using boats for recreational activity. Again, I would refer the noble Baroness to the actions of Mr Johnny Mercer, the Member for Plymouth, Moor View, in the other place, who has taken the decision to live on his boat in Canada Water in Southwark rather than pay the expensive property prices in London. People like Mr Mercer and others who live on our waterways deserve proper protection and engagement from their local authority and the department.
Other concerns will be raised by noble Lords during the passage of this Bill, including those of travelling show people and the travelling community.
I grew up on a council estate in Southwark. I am always very grateful that my parents were rehoused by Southwark Council; that they had a secure tenancy; and that the property we lived in was safe, warm, dry and maintained properly by the council. The rent was paid by my parents and we were able to live both happily and securely in Walworth, playing our part in the local community. We were not worried about only having a two-year tenancy—were we going to have to move, where were we going to live, was the rent going to become unaffordable? I can see no benefit in these proposals regarding tenancies. They will only make families and vulnerable people feel more insecure and worried about their future, and cause deep anxiety and upset.
This Government do not like council housing or social rents. At its heart, the Bill does everything it can to undermine this type of housing. That is a matter of much regret. I hope that noble Lords from all sides of the House will work together to make much needed improvements to this generally dreadful Bill.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I welcome the chance to debate this extremely important and complex Bill and draw your Lordships’ attention to my entry in the register of interests.
The Housing and Planning Bill has much to commend it but it is also very short on vital detail which will have a dramatic effect on the lives of large numbers of residents in England and Wales. In the time allotted I cannot cover all my concerns. My colleagues can eloquently lay out the case, being well versed in the issues which affect London, other city regions and the countryside.
I look forward to the maiden speeches of the noble Lord, Lord Thurlow, and my noble friend Lady Thornhill. I am sure this will be the first of many contributions she will make.
We are all aware of the desperate state of the housing market. Prices are escalating and supply is not increasing. I welcome the move to promote starter homes. However, I find it incredible that the 20% discount on the value of the starter home should be one off, thus giving the owner a double bonus. First, they do not have to pay the full price for the home; and, secondly, they will have the benefit of inflation when coming to sell. There are countrywide examples of starter homes being sold at discounts for local residents, but that discount is tied into the property in perpetuity for local residents and so future residents trying to get on the property ladder also benefit from that discount. As a taxpayer I find the one-off discount difficult to justify to those on waiting lists.
As someone who shares the rental of a private-landlord flat I am aware of the increasing costs charged by property agents. As a district councillor I see the effect of rogue landlords on the well-being of their tenants. I welcome the establishment of a register of rogue landlords and hope to increase tenants’ access to this register in Committee. I welcome the Government’s increase in the fine for rogue landlords to £30,000, a much more realistic figure than that in the original Bill.
The main thrust of the Bill is around the Government’s manifesto commitment to extend the right to buy to housing association tenants. We know that 80% of the population wish to own their own home. It is an important aspiration and one that we might all like to see achieved, but some serious safeguards are needed to protect the diversity and prosperity of sections of our communities.
I am concerned that the Government are concentrating on right to buy to the exclusion of other tenures. In Committee, Liberal Democrats will oppose the right to buy to the exclusion of other tenures, which is likely to decrease, not increase, the supply of housing. I fear that unless homes with a variety of tenures are built, we will see an increase in the level of homelessness. Indeed, we read this week that the number of families left homeless has rocketed by a third since 2010. New figures released by DCLG show that a record 56,040 families were on the streets last year, up from 42,390 five years ago. This cannot go unchallenged.
What is needed, especially in rural communities, where often the only low-cost housing available has been built under a rural exceptions policy, is a mixture of tenures. If such homes are sold they are unlikely to be replaced, as housing associations will find it much cheaper to build in towns rather than villages and hamlets. Achieving exemptions in the Bill will be crucial.
There are 175 community land trusts across England and Wales: organisations set up and run by local people to develop and manage homes as well as other important, valued community assets. The very purpose of CLTs is to develop homes that are affordable in perpetuity. Such homes are intended to benefit not just one generation but every future occupier. If the right to buy is extended to CLTs, it will nullify their basic aim of keeping homes affordable in perpetuity. It would also threaten their existence. The Government rightly understood this risk, and the Minister is to be commended for exempting CLTs from the voluntary deal on right to buy between the Government and the housing association sector. However, many CLTs are still nervous that an exemption in a voluntary agreement leaves them vulnerable. It is vital for the stability of this small, vibrant, community-led sector that the Bill gives them the clarity and certainty needed to plan securely for the future.
We are all aware that the 20% discount on the right to buy will have to be paid for from somewhere. I am concerned, however, at the formula being proposed for levying a tax on local authorities, which is based on the likely number of high-value properties that may become vacant during any given year. Some authorities which cover areas where housing prices are high will be able to replace efficiently. For those councils whose high-value properties are deliberately large in order to house larger families the loss of this asset will have a serious effect on their ability to fulfil their housing obligations to those families in the future. I urge the Government to think again on the implementation of this formula in its current format.
I turn now to the so-called “pay to stay” clause. The income threshold is far too low. A family income of £40,000 within London and £30,000 outside is not sustainable for families required to pay market rents. For example, rents for a two-bed home in the Lewes District Council area will double from approximately £100 per week to £200 if tenants are charged at the local housing allowance limit, or up to £269 at market level. This will penalise hard-working couples, many of whom have children. It will act as a disincentive to increasing working hours, accepting overtime or moving to a better-paid job. Unless a couple can dramatically increase their income, they will undoubtedly be worse off, despite the government promise to implement a taper on the introduction of market rents. This policy will have a detrimental effect especially on women. A couple with children earning just over £15,000 each may decide that, with increased rent and childcare costs, it is no longer worth while for both of them to work full time. Typically, it will be the women who reduce their hours in such circumstances.
I was perplexed at the late introduction to the Bill of the ending of secure tenancies, with a five-year review currently proposed. In some circumstances the tenancy could be renewed for another short-term period. This will cause uncertainty to tenants. Moving house is one of the most stressful events in any person’s life. To increase for those at the lower end of the income spectrum the likelihood of having to move on a frequent basis is both unnecessary and cruel.
Lastly on the housing side, I wish to comment on Clause 115, on the removal of the need for local authorities to provide for the accommodation needs of Gypsies and Travellers. This is a retrograde step that will lead to more illegal encampments and higher costs for local authorities and landowners, and will do nothing to provide for the needs of children and elderly within those communities. I have long been at a loss to understand why this section of our population is constantly vilified and persecuted. I have come to the conclusion that anyone who dares to be different and have a diverging set of values from those who live in the settled community makes society feel uncomfortable, questions its set of values and must therefore be hounded from pillar to post. We shall oppose this clause in Committee.
Turning now to the planning side of the Bill, I welcome the strengthening of the importance of neighbourhood plans. The Government and local councils should encourage towns and parishes to draw up neighbourhood plans which can be tied into and referenced in local plans. Powers should be given to neighbourhood plan communities to allow them to appeal if they find that planning permissions have been granted within their boundaries on sites which they had not themselves identified for development. This right of appeal would be the same as planning applicants currently enjoy against a refusal.
The Secretary of State is proposing under this Bill to make provision for planning to be determined by those other than a local planning authority, believing that planners are deliberately dragging their feet in processing applications. This is not the case. There are numerous occasions when applications are delayed due to the lack of a timely response from statutory consultees, including the Environment Agency, English Heritage and the highways department. It is not unknown for county councils to take 18 months to comment on a roundabout, thus stalling development. Are the Government intending that those who determine planning applications outside of local authorities be required to seek the views of statutory bodies? I look forward to the Minister’s response.
I am not convinced that tardy planners are the problem in getting developments off the ground. In my own area, many large-scale extant planning permissions have not been started—currently 1,500 homes and rising to 3,000 by the end of the year. The main problem is not the permissions, but the lack of finance available for developers to start and complete their applications. Removing fully qualified and experienced planners from the equation is likely to lead to some extraordinary decisions being made, such as building on flood plains, with disastrous results for local communities.
There are many other elements of this Bill to which we will return during the Committee stage, and other speakers will doubtless cover these areas. I look forward to their contributions and the Minister’s response.
The Lord Bishop of Rochester
My Lords, I, too, welcome the opportunity to hear the maiden speeches of the noble Baroness, Lady Thornhill, and the noble Lord, Lord Thurlow. I look forward to the contributions that they will make to your Lordships’ House.
There is a clear view on all sides of this House, the other place and across large parts of the nation that more housing is needed. The questions concern whether this Bill will help to deliver that housing in the right way and in the right places for the people who need it most. Within my diocese at Ebbsfleet we have one of the largest single housing developments in the United Kingdom—a completely new development which will house up to 45,000 new people. While I have questions about some of the details of that development, and some of the details are as yet unknown, I am generally supportive of what is intended. So I am not against new development and I welcome those things in the Bill which may make that possible in appropriate ways. I welcome the proposed register of brownfield land and the streamlining of aspects of our planning processes, some of which have already been referred to by noble Lords, and the encouragement of self-build and custom-build initiatives. I also welcome the intention to introduce new regulation in the private rented sector, and urge that detailed attention be paid in the framing of regulation to matters of quality in that sector. One would dare to hope that in that sector, property of the quality in which even noble Lords would wish to live could be guaranteed, which might be a suitable benchmark.
Others have spoken already about starter homes. Perhaps they are a useful addition to the overall spread of housing tenures but I am anxious about their inclusion within the definition of affordable, not least because that affordability will disappear after a short period, when it is possible for that home to be sold into the private market at private benefit. I think that my right reverend friend the Lord Bishop of St Albans will address the rural implications and perhaps some other issues. I know that other noble Lords will also address specific issues within the scope of the Bill.
I want to spend some time on the ending of lifetime secure tenancies, which was just referred to and which was introduced in the other place, and, with it, the so-called pay-to-stay provision. To move from a potentially lifetime tenancy to one that is between two to five years in one jump is a huge change. Quite apart from the significant bureaucracy which might be involved and might in many ways be unnecessary because the tenancy will simply continue, there are serious issues here. Mention has already been made of the income threshold for the pay-to-stay provisions and the fact that £40,000 in London—if that is where it ends up—and £30,000 elsewhere is pretty low in terms of household incomes. To put it another way, such incomes would not be able to sustain a mortgage on a starter home.
My concern is not just about individuals but about the effect on the health of communities, which is the point I really wish to make. Council house communities need within them people who will give leadership, engage in voluntary activities and sustain community life and civil society. I have lived and worked in such communities, and I know the truth of that. It is often tenants who are ready to make something of their opportunities, who re-engage with education, learning and training in adult life, who bring that leadership to those communities. They find their way into employment and their incomes increase. Some will move away anyway and always have; but this Bill makes it more likely that those who better their lot in various ways will have no option but to move out of such communities.
These communities sorely need the skills of such people—some Members of your Lordships’ House are examples of such people—with their drive and social and economic entrepreneurship. The danger is that some of our most struggling estates will struggle even more because they will lose the people who have the capacity to bring transformation. Surely that would not be a good outcome. I encourage the Minister and her colleagues to think about the implications of some of these provisions, not just for individuals but for communities. I am sure that we all want to see thriving and vibrant communities, which need ranges of people within them, not least in the more deprived parts of our nation and in communities which house the more vulnerable in our society. I look forward to continuing to engage with this Bill as the debate continues. As we move into Committee and other stages, I am sure there will be lots of contributions. Certainly, I shall keep my eye on some of the matters I have mentioned, which I am sure others will wish to touch on.
Lord Young of Cookham (Con)
My Lords, it is appropriate that Second Reading of this Bill is sandwiched between the two days on Report of the Welfare Reform and Work Bill. I see this Bill as the other side of the coin on housing supply. The welfare Bill, with its imperative of containing public expenditure, includes a number of measures that could impact on housing supply. This Bill has a whole battery of measures on housing and planning to drive up supply, which I heartily welcome.
If we are to meet the backlog of demand and future demand, we need roughly 300,000 new houses per year. Over the last 10 years, we have averaged roughly half that, so we need a step change in performance if we are to meet our obligations. I welcome the priority given to housing by the Prime Minister and the Chancellor in recent announcements, as well as the initiatives recently announced by the Secretary of State and his Ministers.
I am also glad that, while they are focusing on new supply, Ministers have not taken their eye off the need to regenerate and modernise some of the difficult-to-let estates we have in our community. As they drive that initiative forward, I hope they will learn from the experience of housing action trusts in the 1990s—a voluntary partnership between local authorities, residents and the Government, which turned round estates such as Stonebridge Park, Castle Vale and North Hull. Many of the pioneers of the housing action trust movement are still around. They would like to be re-engaged in that initiative to regenerate and diversify some of these challenging estates.
On planning, I welcome the incentives in the Bill to complete the local plan and to remove the no man’s land we have in many parts of the country, occupied by default by the Planning Inspectorate. I welcome the housing provisions, not least the proposals to recycle the proceeds of the sale of high-value local authority properties and housing association right-to-buy properties into new builds. The properties that are sold of course remain part of the nation’s housing stock, but the proceeds of the sale increase the supply of affordable homes.
For me, Clause 58 and the right to buy is a bit like Groundhog Day. Noble Lords may remember that in 1982 the Government introduced a Bill to give tenants of charitable housing associations the right to buy. I took it through the Commons, and it then met what I think is called a headwind in your Lordships’ House. They deleted the offending clauses. But before we could play ping-pong, Margaret Thatcher dissolved that Parliament and the Bill fell. I had to take it all the way through the House of Commons in the next Parliament, but by that time the Government had removed the clauses giving the right to buy to housing association tenants.
To meet the very real disappointment of those tenants, I introduced something called HOTCHA—home ownership for tenants of charitable housing associations —which gave them in cash the discount they would have been entitled to had they bought. Of course, they could then buy what they wanted. In housing policy terms, that had much to commend it. In a fraction not only of the time, but of the price it took to build a new social housing unit, one got a re-let for somebody on the waiting list. There was something in it for the tenant, in that he was not constrained to buy the property he was in; he could buy wherever he wanted. The housing associations were happy because it did not dilute their housing stock. Everybody liked the scheme except the Treasury, where many good housing initiatives have come to grief. It did not like the scheme because it did not see any money come back in return for the money going out of the door. Over the years that scheme became rationed and marginalised. It was converted into the transferable discount scheme. It now reappears in the voluntary agreement with the National Housing Federation. I commend Ministers for their negotiating skills.
Clause 58 alludes to the new right to buy, which noble Lords referred to. My party’s manifesto says:
“We will extend the Right to Buy to tenants in Housing Associations to enable more people to buy a home of their own. It is unfair that they should miss out on a right enjoyed by tenants in local authority homes”.
That implies a scheme that mirrors the right to buy for council tenants, which is enshrined in legislation. If one looks at the voluntary agreement with the National Housing Federation, this is a right to buy on the one hand, qualified by a right not to sell by the landlord. In which case, we are back to our old friend, the transferable discount scheme. In housing policy terms it has much to commend it, but it would be worrying if those who want to buy who read my party’s manifesto were first told by the housing association that they could not because of the exemption, but were then told that they had to wait indefinitely for a transferable discount scheme because the scheme had become rationed. I urge my noble friend to ensure that the hopes raised by my party’s manifesto are not dashed by the Treasury.
The five pilot schemes my noble friend referred to will shed some light on the uptake of the scheme. I contacted one of the pilot schemes. Without advertising the scheme at all, it was within 20 of the 200 pilots allowed to go ahead. I have two questions about these pilot schemes. First, the agreement with the National Housing Federation says that if the association will not sell it will give the discount in cash. That is fine, but it has to be used to buy a house owned by that association or another social landlord. I simply do not understand this restriction. It means the erosion of the social housing stock—which social landlords do not want—and it fetters the discretion of the tenant. I very much hope that this restriction might be lifted for the proper scheme, as I believe it to be not just unnecessary, but actually undesirable.
Secondly, I understand that, at the moment, houses built by housing associations under Section 106 are excluded from the pilot scheme—possibly for legal reasons. A huge number of properties have been built under Section 106 and I hope that that exclusion will not be carried through into the main scheme, when it takes off. If there are legal problems, I hope they might be addressed in legislation.
Having said that, I think this is the most important Bill in the Queen’s Speech. It is a very ambitious Bill which lays the foundation for the revival in housing starts which the country desperately needs. On that basis, I warmly welcome it.
Baroness Andrews (Lab)
My Lords, the opening assertion of the impact statement on the Bill states:
“The public need to have confidence that housing policy in our country is fair and fit for the future”.
Indeed they do. The tragedy of the Bill is that it is neither fair nor fit for the future. It is fair neither to those who are desperate for a home nor to the voluntary and public sector bodies that can and should be able to provide them. It is loaded with unintended consequences. It is silent where it should speak.
As we have heard, this year fewer than half of the 250,000 houses that we needed were built. By its own admission, the private sector cannot supply the houses we need in this country, 30% of which need to be social homes.
The Bill demolishes whatever remains of the Government’s credibility on localism. There are 34 new powers for the Secretary of State—powers to override local housing needs; to take away housing receipts; to limit the way local authorities manage their assets, tenancies and rents; and to limit their powers over planning. Vast swathes of policy are left to secondary legislation, as usual. The Royal Town Planning Institute is not an alarmist body, but it has described these powers as extraordinary. In its briefing, the Local Government Association pleads with the Government to allow councils the continuing flexibility to respond to the needs of their residents.
Most of the radical changes have hardly been debated in the other place. One example is the damaging change to the definition of affordable homes. This was introduced after Committee stage and means that developers will be able to build starter homes in place of affordable social housing as the price of planning permission under Section 106 agreements.
Decent places also depend on decent services. Can the Minister tell us whether developers will still have to provide schools and health centres, roads and community centres under Section 106, or will they be let off that as well?
A policy for starter homes, however welcome—and it is—does not add up to a housing policy for the nation. Where are the homes for growing families, or disabled families with a need for lifetime homes? Where are the homes for retired people who want to downsize? These are the families who will lose out, but we will all lose out because the whole housing system will remain resolutely stuck if we provide significantly only for starter homes. This is a quick fix, but we have a very long-term problem. We know from all the evidence that starter homes are not even affordable for most low and middle-income families, whether in rural areas or central London. However, it is not even a fair policy for future buyers. The 20% discount will apply only to the first tranche of buyers; they will be free to sell their assets after five years at market value. We will be minting a new generation of property speculators.
This Bill is full of ambiguities, not least on the future of housing associations and their social homes. The one area where it is brutally clear is in its hostility to local authorities and their tenants. These are homes; homes that people are proud of in communities that they are proud of, as the right reverend Prelate said. If the Government force local authorities to sell their highest-value vacant properties and to pass receipts on to central government, Camden Council, for example, estimates that it could lose up to half its council housing. The bony fingers of the Secretary of State will reach down to the tenants themselves by bringing an end to secure, lifetime council tenancies and forcing those with very low incomes to pay market rents. It is called “pay to stay”. It is a poisonous expression and I believe it is a poisonous policy. It will hit the very people the community depends on—low-paid key workers such as carers, bus drivers and teaching assistants. These are, says Shelter, quite simply the most significant changes in low-rent and social housing in the history of housing policy. If you put this Bill together with the Welfare Reform and Work Bill, you have a toxic mix: a reduction in the supply of social housing, a forced migration into the private sector—and worse—and a massive increase in the welfare bill.
All this will be compounded by the planning sections of this Bill. Here, what is proposed will, essentially, replace our democratic, plan-led system with its checks and balances with a system whereby, for brownfield sites, major planning applications will automatically be granted permission through what is called “permission in principle”. This will be able to be granted not just for housing but for waste disposal and fracking. At a stroke, it will reduce the right and the ability of local authorities to plan for the different needs of local areas —for those mixed communities of which the right reverend Prelate spoke so eloquently—and it will remove the ability of local people to influence local development. It is the opposite of what the noble Baroness says: it does not create certainty but rather uncertainty, and it does not create confidence.
I was very pleased that the noble Baroness said that she thought we had a planning system in this country to be proud of. She is at odds with the statement in the Explanatory Memorandum that the planning system is an obstacle. That is what the Government have always said. The real enemy of faster and better housebuilding in this country is not the planning system. If it were, we would not have the 261,000 units of housing that are consented but not built or occupied. The real enemies are the lack of finance, skills, building supplies and land, and the huge loss of planning capacity in local authorities through budget cuts.
But dealing with reality is the “too difficult” box, so the Government reach yet again for more deregulation of the planning system, and creating the means of privatising the process of planning itself, which will dislodge the balance of protections which at the moment guarantee protection for the environment, heritage and good, decent, mixed communities. The independence of the planning system is threatened. These provisions are, says the TCPA, “extremely dangerous”. Elements of the Bill will not even enable the Government to achieve their own objectives—not my words but those of the Local Government Association, led by the Conservatives.
The Bill means essentially that we no longer have any policy in this country for building decent, affordable homes, let alone to design decent places to live. Indeed, it risks replicating the worst aspects of housebuilding in the past—poor-quality housing and poor-quality estates. It is a response to five years of policy failure in housing and is a panicky response when we need a long-term decent housing and planning policy. The Bill deserves, and I am sure will get, the most intense challenge and scrutiny in this House.
Baroness Thornhill (LD) (Maiden Speech)
When I mentioned to my noble friends that I was excited but concerned about my maiden speech, finding my way around, not knowing the protocols and thereby making a gaffe, I was told that everyone would be very helpful and extremely friendly and to stop worrying. And that has indeed been the case. The police, attendants and the famous doorkeepers seem adept at spotting the “newbie” and asking, “Does my Lady need some help?”, and the answer is invariably yes. I should also like to thank the noble Lord, whom I did not recognise, who, on seeing me about to turn and cross in front of the Woolsack, reacted swiftly with a firm yank on the shoulder to avert disaster.
I stand before your Lordships as the directly elected mayor of Watford, a position that I have occupied for 14 years, but in a pre-mayoral life I was a senior teacher in secondary schools, specialising in the education of children with learning and behavioural difficulties and responsible for pastoral care and safeguarding. In both careers I have always looked beyond the immediate and the local and contributed at a national and strategic level, most recently as a deputy chair of the Local Government Association. It is a great pleasure to join other alumni of the LGA across the House.
In the spirit of maiden speeches being uncontroversial, my comments are perhaps more measured and general than they might otherwise have been.
In my experience, the laws of unintended consequence and cumulative impact of several measures colliding can thwart even the best intentions. This is the case with the Bill before the House today. By concentrating mainly on home ownership and housing numbers, the Bill fails to get to grips with the real housing crisis. It is true that most people aspire to have a home of their own, but what about those for whom it is not, and never will be, possible? To achieve balanced, cohesive communities, places need a wide range of housing, from supported housing for those in extreme need to homes for both the low-waged and the affluent—in other words, mixed tenures or a variety of provision. Our hospitals need consultants and cleaners, our service sector needs accountants and admin assistants and our schools need head teachers and dinner ladies. All need somewhere to live. This is not just about the number of houses built but the kind of communities that we are creating. Towns and cities work well only when a wide range of people are able to live and work in them, without suffering crippling rents, long commutes and poverty.
I know how important it is for families to have security of tenure—to know that you will be able to stay in your home while your children grow up without having to keep moving house and school, house and school. Currently, in Watford and nationally, rough sleeping is up. The number of families in temporary homeless accommodation is up. Housing waiting lists are going up, along with rents and house prices. I fear the Bill will do nothing for the people and families behind these statistics. During the passage of the Bill, we will scrutinise whether starter homes are indeed affordable and for whom. We will seek to ensure that they come in addition to, not at the expense of, social, affordable and shared-ownership housing, and that the affordability discount is kept in perpetuity, not just for five years. Will forcing councils to sell off high-value assets, along with extending the right to buy to housing associations, result in more affordable homes or not? We will fight to ensure like-for-like replacement. Pay-to-stay means that those in social housing with a combined household income of only £30,000 are made to pay market rent or leave. Will this result in people buying their own homes, as is hoped, or, as is feared, create a disincentive to work or seek promotion, or lead to a reduction to working part-time to avoid the cap? This is not to mention the logistics of policing this policy.
In the concern about the housing part of the Bill, little has been said about its provisions on planning. Here, we are concerned that the democratic process is seen as a barrier to growth and that some of the proposed measures will severely impact on the ability of local authorities to create the kind of community they seek for their residents. It appears to strengthen further the hand of the developers at the expense of communities and their elected representatives. This is a wide-ranging Bill, with many powers worryingly reserved to the Secretary of State. At present, it lacks the detail required for effective scrutiny by both Houses.
Housing is an issue about which I am passionate. One of my earliest memories is of me, aged four, wedged next to a load of boxes in the back of a car. We were moving from Wales to Lancashire, as my parents had lost both their home and their jobs at Tenby Golf Club for the sin of having a second child. Thanks to effective legislation, that could not happen now, but it did then. I have vivid memories of the squalor we lived in for years at the hands of a landlord who, if he was not Rachman, might well have been his northern cousin. Although there are measures in the Bill to deal with rogue landlords, do they really go far enough?
There is real work to do: listening, learning and playing my part in the great work of this House, during the passage of the Bill, and in the months and years to come. In the short time I have been here, it is apparent that the expertise within the House is—to use my children’s favourite word—awesome.
Lord Kerslake (CB)
My Lords, I congratulate the noble Baroness on an excellent maiden speech. It is a pleasure to follow such a distinguished servant—I use that word advisedly—of local government. I first met Dorothy, the noble Baroness, Lady Thornhill, when she took me round—irony of ironies—a social housing scheme connected to Watford Football Club, the Hornets. Her passion, warmth and commitment absolutely shone out on that day. I think she has been too modest about her achievements. Elected in 2002, she was the first ever directly elected Liberal Democrat mayor. She was also the first ever directly elected woman mayor. She succeeded again in 2006, taking more than 50% of the vote on the first count, and was elected again in 2010, making her only the second elected mayor to achieve this. She will bring great wisdom and experience to this House and we look forward to hearing from her in the future.
Turning to the main debate, first, I declare my interest as chair of Peabody, chair of the London Housing Commission and president of the Local Government Association. There was common agreement among the political parties during the election about the urgent need to build more homes. Housing completions are running at just half the number we need to meet what this country requires. In London the situation can be described only as a crisis, with prices to buy or rent moving out of the reach of ordinary Londoners. The Bill should therefore have been the perfect opportunity for the new Government to tackle this crisis head-on.
There are indeed some very welcome measures in the Bill; for example, the proposals to tackle rogue landlords and speed up compulsory purchase. However, the most significant impact of the Bill is to promote one form of tenure, home ownership, at the expense of another, social rented housing. Taken with other measures being proposed by the Government, the only reasonable conclusion is that social housing is being written out of the script. This effectively ends the post-war consensus on housing and the extremely successful partnership with housing associations begun in the 1980s. To deliver this change, the Government are taking extensive centralising powers that entirely cut across their localist philosophy. But perhaps most concerning of all, I have real doubts about whether they will actually deliver the new homes of all types that this country so badly needs. As one major and very respected housebuilder said to me recently, where is the additionality in all this?
I will start with the extension of right to buy to housing associations, which I spoke about in my maiden speech in June. The voluntary understanding between the Government and the housing association movement will give welcome flexibility for them to decide which of their properties are made available for purchase. In the case of Peabody, we will have the discretion to exempt 10,000 or so properties that were built without the benefit of government grant, so that much is welcome. However, what many people have lost sight of is that the bill for these discounts will not be picked up by the Government—who, after all, are promoting the policy—but by local authorities. They in turn will be required to sell off their higher-value properties as they become vacant in order to fund this. A formula-based deduction will be made to their budgets which will leave them with little or no choice but to sell. Shelter has calculated that this will cost them £1.2 billion a year and require the sale of 113,000 council homes.
It is important to say that high-value council properties are typically in high-value areas. This is how we deliver mixed-income, mixed-tenure neighbourhoods and not the mono-tenure estates that people were so concerned about in the past. They are also, by the way, typically the larger three or four-bedroomed homes, which any local authority leader will tell you are the ones most in demand. The Government say that the intention is to replace these one for one. But if we examine the Bill, apart from the reference to London, nothing in it creates a duty for local authorities to do so. Even if they are able to replace one for one, it is very unlikely to be in the same area because those are the very areas where the land is hardest to find. Neither are they likely to be socially rented. The net effect over time is that higher-value areas will be denuded of social housing, first through voluntary sale by housing associations and then through forced sale by local authorities.
We do not yet know the way in which the formula will work. That is one of the many details in the regulations that we have not seen. However we know, as others have said, that some places will be severely affected including some rural areas, which I am sure that the noble Lord, Lord Best, will talk about later. For the avoidance of doubt, this policy has little or nothing to do with the efficient management of stock. It is, first and foremost, a revenue-generating exercise to cover the very considerable cost of housing association right-to-buy discounts. The Treasury had a point when it resisted this in the past. Indeed—and this is quite incredible—should a local authority subsequently decide to transfer all its stock to a housing association, it will still have to pay this levy. Even with the forced council house sales, there is a real doubt whether the receipts generated will adequately meet the cost of the proposals. Indeed, the independent study by the Chartered Institute of Housing demonstrated pretty clearly that they will not. It is hard to think of any other policy where we start on that policy knowing that the sums do not add up. Something will have to give. I think that the House is entitled, before Committee stage, to a full and detailed analysis of the numbers.
The second issue that I want to raise is that of starter homes. When this came forward prior to the election, to me it looked like a welcome if ambitious plan to provide an additional source of supply. Starter homes will now, however, be deemed affordable even though, as others have said, this will require a deposit of £97,000 and income of £77,000 in London. Crucially, starter homes will replace social housing in schemes so they will not be “in addition to” but “instead of”. The Secretary of State will have considerable powers to dictate the number of starter homes that local authorities will build, even down to individual schemes. To state the obvious here, this is a complete denial of localism. As the Local Government Association has rightly said, it should be down to individual local councils to make the decisions on the right mix of housing for their areas. What is the point otherwise of a local needs assessment and a local plan?
The third and final issue I want to raise is the impact of the Bill on social housing in general. Let me summarise that impact. For existing social tenants, there will be fewer opportunities to transfer into larger properties as they become vacant. Grants to support the building of new social housing will largely end in 2018, after the current programme is completed. If tenants’ household income exceeds £40,000 in London or £30,000 outside the capital, they will be required as council tenants to pay market or near-market rents, wiping out completely any benefit that they might have got from the 1% rent reductions. If they are a new council tenant, the local authority will be required—required is the point here—to give them a fixed-term tenancy of between two and five years, instead of a permanent one. What was a discretionary power, introduced barely three years ago, will become a mandatory requirement. The message that this gives to social housing tenants about their future and how they are seen by the Government could not be clearer. Social housing has fallen from being the home to more than a third of the population in the 1980s to just 16% now. With the proposals in the Bill, that figure seems certain to fall still further, with a corresponding rise in rents and reduced tenure.
I finish my speech where I started. Will the Bill deliver the new houses that we so desperately need? To rest our entire plans on private build for sale risks repeating the mistakes of the past. When the financial crisis hit in 2007, private sector housebuilding fell off a cliff. The only houses getting built were social houses. Putting all our eggs in the sales basket leaves us much more vulnerable to any future downturn, just at the point when the economy is looking less favourable.
I sympathise with Ministers struggling to make sense of some ill-thought-out and ideological proposals that found their way into the Conservative Party manifesto. To coin a phrase, “I wouldn’t have started from here”. However, while properly respecting those manifesto commitments, as we must do, there is considerable scope for Members on all sides of this House to work together to improve the Bill. To do this, we need two things. First, we urgently need to see the detail of what is proposed in the secondary legislation. Secondly, we need Ministers to be genuinely open to change.
Viscount Younger of Leckie (Con)
My Lords, I apologise for interrupting but it might be helpful for the House to be reminded that there is a guideline time for speeches. If Back-Bench speeches are kept to around six minutes on this Second Reading, the House might be able to rise at around 10 pm.
Baroness Eaton (Con)
My Lords, I start by declaring an interest as a former chairman of the Local Government Association and a current LGA vice-president, and draw Members’ attention to my interests in the Register of Member’s Interests. I congratulate the noble Baroness, Lady Thornhill, on her maiden speech. I have known her a number of years through local government and it was a pleasure to hear her today. I look forward to hearing the contribution of the noble Lord, Lord Thurlow, later in the evening.
We all know the security that comes from having a safe and decent home, and that is why I am pleased to be able to speak in today’s important debate. Getting more people on to the property ladder and improving social housing are key priorities of this Government, and the Bill that we are considering seeks to build on the progress that has been made over the past five years.
Under the previous Labour Government—I assure the noble Lord, Lord Kennedy, that these figures are correct—housebuilding fell to its lowest peacetime level since the 1920s. Between June 2008 and June 2009, for example, just 75,000 new homes were started in England. By contrast, the most recent figures show that annual housing supply in England amounted to 170,690 net additional dwellings in 2014-2015, a 25% rise on the 2013-2014 figures.
The Help to Buy scheme has assisted thousands of hard-working families on to the property ladder. In December, the Government launched a new help-to-buy ISA, which the Minister referred to earlier, to help first-time buyers save for a deposit. It is worth noting that between 1997 and 2010, the number of social houses for rent decreased by 421,000, while in the five years of the previous Government, twice as many council homes were built as during the 13 years of the preceding Labour Government.
Who could speak about housing without mentioning right to buy? Margaret Thatcher’s Government allowed millions of families to achieve the dream of home ownership, and right to buy was perhaps the defining policy of her time in office. The successful reinvigoration of right to buy in recent years means that over £950 million in sale receipts is now being reinvested in building new homes, levering in a further £2.2 billion of investment.
This is a clear record of success, but the Government have made it clear that much more needs to be done. The Bill which we are considering today aims to double the number of first-time buyers—helping 1 million more people to own their own home—and deliver an additional 275,000 affordable homes by 2020. Ending the unfairness of right to buy being available only to council tenants is surely the right thing to do, and many housing association tenants have already registered their interest in it.
Speaking of fairness, it is surely right, as this Bill proposes, that higher-income social tenants be required to pay a level of rent equivalent to that paid by people on similar incomes in the private rented sector. This proposal will ensure that subsidised social housing is targeted at people in real need. Any housing that is released as a result will provide more opportunities for people in genuine need of social rented accommodation.
I also strongly welcome the provisions in relation to rogue landlords, including the introduction of banning orders for the worst operators and the flexibility for councils to issue fines of up to £30,000, which they will be able to keep for housing purposes, as an alternative to time-consuming prosecutions. These provisions are of course supported by the Government’s announcement last week of extra funding to tackle rogue landlords.
The LGA, which I wish to emphasise is a cross-party organisation, has been mentioned several times. Although the LGA welcomes these and a number of other provisions in the Bill, it is also concerned that some provisions will not help the Government achieve their ambitions to increase the housing stock and to secure the right mix of housing. In particular, the LGA has made clear its concerns in relation to the forced sale of council homes, while also emphasising the need for greater local flexibility in the delivery of starter homes. I know that the LGA has been working constructively with Ministers on these and other matters during the Bill’s parliamentary progress. I welcome that.
I also welcome the fact that the Government are open to having individual discussions with councils about the cumulative impact of the reforms in local areas and the flexibilities that councils could gain to adapt policies and deliver new homes. Following our debate today, and as the Bill continues its progress, I hope that these discussions will continue and that we will be able to reach agreement on the measures that are required to deliver the extra housing that the nation so clearly needs.
When considering the planning aspects of this Bill, I believe it is important to bear in mind research released earlier this month by the LGA showing that a record 475,647 homes in England have been given planning permission but have yet to be built. These figures conclusively prove that the planning system is not the barrier to housebuilding. However, no one would pretend that the system is perfect, and I support the Government’s efforts to streamline the local plan-making process and ensure that plans are not undermined by national policy changes.
Increasing the housing supply, getting people on to the property ladder and improving social housing are objectives we can all surely agree on. These are the driving principles behind the Bill and I hope that through this debate we can work constructively with the Government to deliver legislation that provides more and better housing in this country.
Baroness Royall of Blaisdon (Lab)
My Lords, I start by declaring my interest as a private landlord. I congratulate the noble Baroness, Lady Thornhill, on her maiden speech. Her expertise is very welcome and I wonder whether her pastoral care experience might come in very useful in this House.
I also have very high regard for the Minister, and I share the Government’s aspiration to build thousands more new homes, but as is the case with so much legislation, the rhetoric does not match the reality. The Bill, rather than providing solutions to the housing crisis, exacerbates it. It also cuts across the localism agenda of which the Minister is such a powerful advocate —a vast number of new powers are being granted to the Secretary of State, and local councils’ ability to respond to the needs of their communities is being diminished.
We have had much debate recently about secondary legislation and the Government’s increasingly undemocratic use of framework Bills. In this Bill, the regulation rot sets in at line 14 and continues throughout. In my view, it would be improper and irresponsible for this House to complete its scrutiny of the Bill until we have seen the draft regulations. The Bill changes the housing landscape in our communities, both urban and rural, it changes the balance between private and social housing, and the impact on our society is potentially enormous. The details will be determined by regulation.
I will focus on the Bill’s impact on rural housing. The Bill could and should be a great opportunity to provide the housing that would reinvigorate rural communities. In the south-west, the housing crisis is made worse by the highest level of second homes anywhere in the country. The average price of a home in 2014 was just over £240,000, and in areas such as the Cotswolds this increases by more than 50%. According to the Government’s extraordinary and indefensible new definition of “affordable”, these homes are affordable, but they are simply not affordable for people living on low or average wages, who are already spending more than a third of their income on renting privately and are absolutely unable to save for a deposit, even at a 20% discount.
Affordable housing is crucial to the vitality and sustainability of the countryside, and the failure to create affordable homes is fuelling many of the challenges facing rural communities. The excellent CPRE and Hastoe Housing Association tell us that in 1980, 24% of rural homes were affordable, but now the figure is 8%, and the housing affordability gap is greater in rural communities than in urban—house prices are higher, earnings are lower.
Young people can no longer afford to live in the towns and villages where they grew up, and rural demographics are changing. The centres of community life—schools, post offices, shops and pubs—are all closing, while more older people are moving in, leading to increasing demands on health and social care services, but without the young people to provide the services. What evidence-based cross-government consultation has there been on the Bill?
The greatest and most adverse effect that the Bill will have on rural communities is the extension of right to buy to housing associations. I am against the sale of any housing association home, but the unfortunate, if understandable, deal between the Government and the National Housing Federation means that that cannot be stopped. However, together with noble Lords from all Benches, I will do my utmost to exempt housing associations in rural areas from the provision. Such a move would have the support of the CPRE, the CLA, national parks, the LGA, the Rural Services Network and many housing associations, including Two Rivers, which does a fantastic job in the Forest of Dean, sustaining communities as well as building homes.
I realise that the new agreement to sell is “voluntary”, but what does that mean and how long will it last? Will the Secretary of State eventually intervene? How will tenants react when the aspirations that have been raised by the Government are stymied by an association’s board, as the noble Lord, Lord Young, pointed out? We are told that available discounts will be portable, but what does that mean?
The funding of this right to buy is deeply offensive, and the sums do not add up. Quality council housing stock will be decimated, including in rural areas. I understand that of the homes that Shropshire Council would be forced to sell, 190 might be bungalows for older and disabled people, and 207 might be rural properties. Some settlements would be almost totally hollowed out of social housing. It will be impossible for councils to meet the decent homes standard. Rather than improving the quality of our housing stock by making homes resilient, the Bill will lead to more rabbit hutches of a poor environmental standard that simply will not last.
Few will be able to buy starter homes in rural areas, where the real shortage of homes relates to social housing. The Minister said that starter homes will be additional to the package of support, but the Government have already said that they will not be additional homes, but instead of other affordable homes. Moreover, allowing starter homes to be built on rural exception sites will act as a disincentive for landowners to release future sites for affordable housing. The recent government exemption of Section 106 affordable housing contributions for sites of 10 units or fewer is already reducing the number of affordable homes. I will seek to ensure that rural-80 and rural-50 local authorities will be able to set and negotiate the level of affordable housing contribution on individual sites to reflect local need. This would be localism in practice.
There is much more that I would like to say, including on the threshold of “pay to stay” and the protection of secure tenancies, and on community leadership, as eloquently expressed by the right reverend Prelate the Bishop of Rochester. The Government seem bent on increasing people’s insecurity and putting more money into the hands of private landlords, as well as increasing the housing benefit bill. Do they not agree that homes should be places of safety and security, and not just for those who are able to buy? Do they not understand that secure housing is inextricably linked with physical and mental health, with educational outcomes and the ability to grasp opportunity?
Finally, in respect of rural housing, the plethora of definitions of “rural” causes confusion. I hope, therefore, that we will be able to agree on a definition of a rural community which can be supported by the majority of stakeholders and used for housing and other purposes.
The Bill requires a huge amount of scrutiny and amendment. As it stands, it threatens further to fray the fabric of our rural communities so that they are beyond repair. We cannot and must not allow that to happen.
Baroness Doocey (LD)
My Lords, the Bill seeks to accelerate housing growth via home ownership solutions. The emphasis on stimulating the supply side of housing is to be welcomed, but the Bill does little to tackle the crisis in social housing provision, and will almost certainly have some unintended adverse consequences on both provision and community cohesion.
On high-value sales, I see absolutely nothing wrong with a council selling a high-value property and using the money to build more affordable homes, if it is a local decision taken at local level by councillors accountable to local people. If councillors are forced to sell off high-value vacant properties, or to find the money to pay the Government an equivalent sum from either the general fund or the housing revenue account, they are likely to be left with less provision for families, and the housing crisis will simply go from bad to worse. As councils sell off their most valuable and desirable properties, values in those areas will almost certainly rise as further gentrification sets in, and further council properties will have to be sold, because their increased values now qualify them for sale.
The proposals for local planning authorities to promote the supply of starter homes is likely to lead to a reduction in other forms of affordable housing, if developers can offset current planning policy requirements for social-rented and shared-ownership homes against higher-cost starter homes. I have great concern about how the emphasis on starter homes could affect estate regeneration. It may make it impossible for local authorities to regenerate their estates without pricing their existing tenants out of them. The Bill’s proposals may make it less likely that tenants will be offered a right of return to new estates, making it unlikely that proposals for regeneration will ever gain their consent.
The introduction of “pay to stay” for so-called high-income social tenants could result in huge rent increases for households with an income of more than £40,000 a year in London and £30,000 a year elsewhere. While providing £4 billion to help to build shared ownership homes for people earning up to £80,000 a year, and while funding a 20% discount for people buying new starter homes, the Government propose to soak up any improvement in social tenants’ finances by charging higher rents, thus reducing the chance that they can ever save enough to be able to afford one of the new shared-ownership starter homes.
The proposals for short-term, insecure tenancy terms —an acknowledged weakness in the private rented sector—for all future social housing tenants will have a devastating effect on many tenants and increase property management costs for all social landlords. The proposals in the Bill are already having an impact on registered providers, some of which have started to sell empty stock rather than risk financial loss under right to buy. Others have signalled that providing housing at social rents will no longer be viable. In addition, a number of councils anticipate that some developers may seek new planning permissions to reduce the proportion of social rented housing in preference to starter homes. These proposals will result in dramatic reductions in the availability of social housing and huge increases in waiting lists. Yes, up to 1.3 million tenants will have been able to buy their homes, and I have no doubt that many will exercise the option, helped by a substantial discount, but we know from the experience of council right to buy that stock will not be replaced on a like-for-like basis. There will be diminishing numbers of homes available for social rent, and there will be more households in temporary accommodation.
The Bill recognises that there is a housing crisis in our country but does nothing to address the crisis in social housing provision and little to encourage more construction of rental property in the private sector. It appears to be designed to help those in moderate need of housing at the expense of those in desperate housing need.
Lord Thurlow (CB) (Maiden Speech)
My Lords, as a chartered surveyor, I have chosen to make my maiden speech on this Bill today, and I hope that I can usefully add to the debate on this subject here and in future. First, I wish to thank the many people who have enabled my induction to proceed so smoothly. I include all the staff of the House, particularly the doorkeepers, with their unique brand of subtle guidance, and I certainly include the police and security staff. They all share the qualities of charm, understanding and patience for which I am really most grateful.
It is with a mixture of pride and humility that I stand here today, and I am honoured to have been elected as a hereditary Peer. I chose the Cross Benches because I wish to be independent and to vote with my conscience not with a party whip. My first predecessor in the title in this Chamber sat on the Woolsack in the late 18th century and bemoaned the loss of the American colonies. In fact, I believe that one of the reasons he resigned was because we were not prepared to fight it out. Since then I have been preceded by a number of bishops and others and latterly by my father, who was known to a number of your Lordships. As a career diplomat, he was rather more interested in encouraging colonial independence. He served here as a Cross-Bencher for nearly 30 years. Aged almost 90, he chose not to stand at the hereditary election. I look forward to serving as he did.
By way of my background, my early years were spent abroad following the nomadic diplomatic family circus in far-flung places, moving country every few years, which was an interesting education in itself. In due course, for whatever reason, I joined a mainstream firm of property consultants, qualified, and some 35 years later, in my 50s, retired from that firm having enjoyed a thoroughly fulfilling career in the world of property development, investment and finance. I retain a few appointments in the sector which are declared in the register of interests.
I am particularly interested in this Bill after many years working in the parallel world. Like the noble Baroness, Lady Thornhill, who made an excellent speech, I am conscious of the tradition of remaining non-controversial in a maiden speech, and I promise to do my best to do so.
Like others, I am fully aware of the need to increase the supply of both social and private housing and for residential letting arrangements to be made more flexible. I welcome the proposals to deal with rogue landlords and agents. The recent emergence of the private rented sector as a mainstream element, potentially, of the housing stock in this country is to be applauded, and large sums, which could become hundreds of millions of private sector pounds, have been earmarked by investors for residential development exclusively to rent. Hopefully this will become an important ingredient of private housing provision nationwide and take pressure off the demand for outright ownership. I declare an interest in one let flat in London.
On the subject of planning, the process would benefit from simplifying and speeding up. There appears an opportunity now, presented with this Bill, for greater local community involvement and to consider giving local guidance to developers not only to increase the housing stock, but to materially change and improve our surroundings. Latterly, architects have frequently been forced to design and build to the cheapest price, and frequently their imagination and flair have been compromised. As our urban landscape often reminds us, the built environment has suffered. That could change, and I hope the Bill’s proposals provide a means of achieving this. It is important to remember that delays to development impact economic growth.
I am pleased to note that the Bill introduces transparency on the subject of brownfield land. The proposed obligation to maintain registers of these sites, attached to a simplified permissions process, is an important step forward. This land is often vacant, sometimes contaminated, with unmaintained, unsafe buildings and is unsightly in built-up areas. To encourage building on this derelict land rather than on green fields seems preferable.
To conclude, I look forward to working on these subjects with your Lordships, and I hope that I can contribute in future on similar and other matters.
Baroness Rawlings (Con)
My Lords, the great pleasure of following the noble Lord, Lord Thurlow, and welcoming him warmly to your Lordships’ House falls to me. He has made a remarkable and delightful speech. This Bill is obviously one of his main areas of expertise as a chartered surveyor and senior partner specialising in rural areas and global commercial property. He has all the qualities that are so important for your Lordships’ House both now and in future. Some of his other areas of serious knowledge include charities and Europe, which are both on the agenda at the moment. His historical tour d’horizon made for an interesting speech which your Lordships’ House always appreciates. On behalf of your Lordships, I extend our congratulations. We look forward to many more contributions in future.
I congratulate my noble friend Lady Williams and the Government on encouraging housing associations to give tenants the right to buy through a voluntary agreement with the housing association sector. I wish briefly to refer to a point raised by the noble Baroness, Lady Bakewell of Hardington Mandeville, on the impact of right to buy on the small, but growing and vital, community land trust movement.
The community land trust movement is vibrant in this country. Local people have set up and run organisations to develop and manage homes as well as other assets important to the community. The very purpose of CLTs is to develop homes that are affordable to local people in perpetuity—I stress “in perpetuity”. CLT homes are not supposed to benefit just one generation; they are intended to benefit every future occupier. Extending the right to buy to community land trusts would undermine the very purpose of a CLT—to create an asset for the community in perpetuity —and, I am told, the future of this growing sector. However, as the noble Lady, Baroness Bakewell, pointed out, many of the 175 community land trusts across the country are still nervous that an exemption in a voluntary agreement leaves them very vulnerable to pressure to sell their CLT homes. She pointed out clearly that it is important for the stability of this small but vital sector that the Bill gives them clarity and certainty to be able to plan securely for the future.
I have spoken to the Minister about this situation and very much hope, knowing how understanding she is, that she will find the solution during the passage of the Bill. I repeat: I commend her for exempting community land trusts in the voluntary agreement and trust that Her Majesty’s Government will find a way to support fully a future amendment to enshrine the exemption of CLTs from the right to buy.
Lord Young of Norwood Green (Lab)
My Lords, I do not profess any particular expertise in this issue but nevertheless I have an interest in what is clearly one of the most important challenges we face in our society. I, too, congratulate the maiden speakers on their contributions, although I cannot help inclining especially towards the mayor of Watford, given her background in teaching as well.
Three little words have dominated housing policy for the past 30 years: “right to buy”. I can remember an occasion—perhaps the only time when I canvassed for the Labour Party—when I was chased down the garden path on the grounds that our local council was opposing the right to buy of the council tenant, who was somewhat reluctant to guarantee me his vote for the Labour Party in that election. It was an indelible experience. I cannot help reflecting that those three little words have had a very long consequential tale. After 30 years, if I look at my own local authority, it is no longer just the three little words but it should be five, because 50% of the property that was right to buy is now “right to buy to let”. Is that really what we intended? Does that really create the opportunity for the next generations to buy a house?
I listened carefully to my noble friend Lady Royall. Again, if we look at rural communities, we ask what happened to the social housing in them. It has gone. Of course, the right to buy was extended; now, so many of those properties have risen to the price of private sector housing, placing them beyond the reach of today’s generations. In fact, many of them have become second holiday homes. Is that really what we intended with the right to buy? I do not think so.
We should perhaps think carefully about how prescient were the housing associations of the past, such as Peabody and the Notting Hill Housing Trust. They understood the need to have a viable rented sector that provided good-quality housing at affordable prices. Of course, I cannot deny the fact that many people aspire to own their own homes but a number of homeowners are now beginning to realise that what was viable for their generation is no longer viable. If I reflect back to when I bought my first house in the late 1950s, it took me and my wife at the time a couple of years or so to save up the £500 deposit to buy a house at £3,500 and to pay a mortgage back at £13 a month, which roughly equated to my weekly wage at the time of £13 a week. Could that equation possibly exist today? Of course it could not—it is beyond the reach. The only way many young people—including my own two children from this marriage—have been able to buy their own properties is the bank of mum and dad. That is the only way my children could do it. With their current wages—and both of them are in reasonably well-paid jobs—there is no way that they could do what I managed to do all those years ago.
Therefore, of course, we have extended home ownership but we have done it at a price. Surely, if we are looking for a housing policy that is planned for the future, we have to acknowledge that we need a balance between home ownership being viable and achievable and ensuring that we still have a rented sector, which a large proportion of our society will need. They need reasonable-quality, affordable homes to rent. I listened carefully to the noble Baroness, Lady Rawlings, who made a plea for community land trusts, and I echo that. She said that they were,
“an asset for the community”.
She is absolutely right, but is not social housing an asset for the community? Surely it is.
Of course, I welcome the rogue landlord banning orders, which come not before time. The situation of houses that landlords provide is absolutely appalling. It does not matter where you go: they do not care about the quality of the accommodation they provide or about how many people are crammed into these houses. Look at the programmes that have shown how appalling the situation is in London. I was therefore puzzled that an opposition Motion in the Commons to add a clause to the Bill entitled,
“Implied term of fitness for human habitation in residential lettings”—
which would have amended the Landlord and Tenant Act 1985 with the intention of placing a duty on landlords to ensure that properties let were fit for habitation and remained so over the course of the tenancy—was rejected. Should that not be a given? Why would we seek to oppose that? Instead of banning rogue landlords being the cure, should we not have the prevention that that proposed new clause would have made? I hope that the Government will be prepared to think again. I, too, look forward to the continuing debate in a complex area, and I hope that the Government are willing to listen.
Lord Tope (LD)
My Lords, first, I declare my interest as a vice president of the Local Government Association. In the six minutes that I have today I will focus on some of the issues of greatest concern in London and to Londoners. Obviously, many of these issues are of concern in other parts of the country, too, but the housing situation in London is now so acute that in a poll commissioned by London Councils, housing was the top issue for Londoners, whereas it was only the sixth most important issue in other parts of the country. It is certainly a top priority for every London borough council, so we judge this Bill by how likely it is to help Londoners have a decent home and a secure tenure of whatever sort.
I will start by addressing two issues that have had relatively little attention during the progress of the Bill thus far. The noble Lord, Lord Kennedy, mentioned one of them, I am pleased to say, in his introduction: the issue of electrical safety. The Bill is an opportunity to bring forward additional measures to protect tenants from safety hazards. Last year the Government introduced important regulations for carbon monoxide and smoke alarms in the private rented sector, and tenants are already protected by regular gas safety checks. Electrical safety is being left behind, as there is no legal requirement to prove to tenants that a property they are moving into is electrically safe. Electrical Safety First has told us that electricity causes 20,000 house fires every year, 350,000 injuries and 70 deaths. The Bill provides the opportunity to introduce mandatory electrical safety checks, and I shall table an amendment to give effect to this—unless the Minister can tell me today that the Government themselves intend to do so.
Another London issue that has received little or no attention in the other place is the new London Land Commission, which is chaired jointly by the Housing Minister and the mayor. It has already published the first ever comprehensive register of public land in London, revealing 40,000 sites across the capital with the capacity to deliver a minimum of 130,000 homes. This Bill is a timely opportunity to give the commission the powers it needs to make this happen—for instance, by giving public bodies a duty to co-operate with it and giving it the right of first refusal when such land is to be sold. Will the Minister tell us in her reply what the Government’s intentions are concerning statutory powers for the London Land Commission?
I am a strong believer in devolving more powers from central government—yes, sometimes to the Mayor of London, of whatever persuasion, when appropriate to his strategic role, but also directly to the London boroughs when that is more appropriate. In considering devolution within London it is even more important to recognise that the role of the mayor in relation to the boroughs will work best if it is that of a partner rather than that of a police officer. I hope that that will be borne in mind when the various planning considerations proposed in the Bill are brought before us.
Other issues of particular concern in London are vacant high-value asset sales, starter homes, the right to buy and so-called “pay to stay”. I echo, but will not repeat, what has already been said and will no doubt be said again later in the debate. The policy of selling high-value assets is of particular concern to my own London borough council in Sutton. Using the best information so far available to it from DCLG officials about how the formula might apply at borough level, it looks very likely that Sutton’s housing revenue account will be unviable within the next decade.
We will no doubt spend some time, too, on the so called “two-for-one” replacement policy to be applied in London. Even if the replacement homes are rented properties and in the same borough as the ones they replace—which, frankly, I think is unlikely—the time lag between sale and completion of a replacement will add both cost and human misery to the additional periods in temporary accommodation that homeless households will face. This makes no sense—until we recognise that this is primarily about taxing local authorities and very little about housing more people. Starter homes are fine but unlikely to make much impact in London, as has already been said, so I hope that the Minister will confirm that councils everywhere will continue to have the flexibility to deliver other affordable housing products as well.
I must leave right to buy, pay to stay and many other important issues to others and to later stages of the Bill. But we have much to do if we are to make the provisions of the Bill both workable and of real benefit to those in housing need in London and throughout the country.
The Lord Bishop of St Albans
My Lords, I, too, add my congratulations to the noble Baroness, Lady Thornhill, and the noble Lord, Lord Thurlow, on their excellent maiden speeches.
I shall limit my comments to three areas. My first concern stems from the right-to-buy deal that has been agreed between the Government and the NHF, and the provisions within the Bill which will accommodate starter homes within affordable housing requirements. My concern is that housing which would once have been provided as affordable rented housing—affordable in perpetuity—will now be replaced by starter homes and homes to buy, with the only condition on their resale being that they be held off the market for a period of five years.
The simple fact of the matter is that, as things stand, houses in rural areas sold under the right to buy will not be replaced in the same area—or indeed, in all likelihood, in any rural area. In so far as they are sold, they will be lost for those who need access to affordable rented accommodation and will be replaced by affordable housing in urban areas, where the costs of development are usually cheaper and where more sites are available. Similarly, affordable rented housing built under Section 106 agreements is likely to be lost from the beginning and replaced by starter homes that benefit only those who are in a position to take advantage of the 20% discount.
What rural areas need most is not large numbers of starter homes but affordable homes to rent and homes for shared ownership—homes that are accessible to the many households on low to middle incomes who will never be able to own their own home but who form the very lifeblood of many rural communities.
I might raise a further point of concern about the status of rural exception sites, which provide around 20% of rural affordable housing. Will the Minister clarify whether tenants will be able to exercise right to buy there, or will guarantees and covenants on the land, given by philanthropic landowners, hold firm? Will she also clarify whether a proportion of starter homes will be required on rural exception sites, or will regulations exclude those sites from the provisions of the Bill?
The second issue that I want to raise is the question of fairness. Is it right to force local authorities to sell off vacant council houses to pay for the right-to-buy deal? I appreciate that this proposal takes the form of a levy on the value of vacant properties so that there is no forced sale, but the effect will be the same. Councils will be forced to sell off assets, which they may have held on to prudently, to fund a national right-to-buy programme from which they have no guarantee of benefiting. This means rural council homes being sold off to fund urban right to buy, and it means Greater London council homes being sold off to fund right to buy in areas of lesser need.
In the area in which I live—St Albans—it has been estimated that the council will have to sell off 60% of its council homes, pushing the low paid out of the centre of town to the fringes, with no guarantee of recompense to the local authority. This is wholly inappropriate and goes against the principle of localism that this Government have tried to enshrine. At the very least, rural council homes need to be excluded from the calculation of this levy. But I would also like to see measures intended to ensure that St Albans keeps hold of the majority of its assets for the sake of those who will not otherwise be able to afford to live there.
Finally, I want to highlight concerns about the impact of the Bill on Gypsy, Roma and Traveller communities. Clause 115 removes the requirement for local councils to consider the needs of the area’s Traveller community specifically, and instead to make provision through caravan sites and inland waterways. It is very likely that this will result in fewer sites becoming available for Gypsies and Travellers, as their specific needs will be buried within the wider housing needs of the community. Such a change is likely only to increase the number of illegal Traveller sites, so inflaming community relations. The failure to provide an impact assessment of this measure is again frustrating, but I hope that the Government will give this and the other matters that I have raised due consideration in Committee.
Lord Lansley (Con)
My Lords, it is a pleasure to join in this debate, which even at this stage is demonstrating that it is extremely well informed and engaging. It promises a lot of substantial discussions in Committee and beyond, and I look forward to listening carefully to those.
For now, time does not permit one to enter into all the arguments, but it seems to me that it is important for us to secure through the ambition and scope of the Bill the resources to enable housing association tenants to meet their aspiration of home ownership, and to generate the resources we need to deploy in the building of additional social housing.
At its heart, however, this is not a limited zero-sum debate about the disposition of existing housing stock. It is about adding to the housing stock and delivering the housing supply we so singularly failed to deliver over the last decade or so, if not longer. As a former Member of Parliament, I saw the housing lists continually lengthening, including right through the period of the last Labour Government, because of the failure to deliver additional housing stock in the places where people needed and wanted to live. Today, I want briefly to illustrate that we have to understand the nature of the past problem we have had and throw everything at it. As the Minister said at the outset, we have to do all we can to help to deliver the additional supply.
In my former constituency, South Cambridgeshire, in the early 2000s—almost 15 years ago—we were debating where we would build a new town. The right reverend Prelate the Bishop of Rochester talked about building at Ebbsfleet. We had in Northstowe—the name it has been given—a site for a new town of up to 10,000 homes, but the intention was that it be private-sector-led. The debate before 2000 led to the structure plan in 2003, which agreed that this new town would be built and, over the subsequent 15 years, deliver about a third of the additional housing required in South Cambridgeshire. That was not to the exclusion of housing in villages, market towns and the city of Cambridge itself but as a substantial addition to it—6,000 homes by 2016. It is now 2016, and I have to advise your Lordships that of the 6,000 homes that were going to be built, none has been. There is no home occupied.
After 2003, little progress was made on planning for far too long. The planning application began to be presented only in 2005. In 2007, Gordon Brown designated Northstowe the exemplar eco-town. This, unfortunately, delayed any progress because everybody started to talk about the eco standards rather than about actually building houses. By 2008, as the noble Lord, Lord Kerslake, said, the market had fallen off a cliff. I think it was probably about a decade ago that he and I were on site discussing it, when he was at the Homes and Communities Agency. Because the project was private-sector-led, there was no progress. It was only in 2012 that the planning application was approved, and only in 2015 was the second phase presented for outline planning permission. It is more than a year ago that Northstowe was described by the then Deputy Prime Minister, Nick Clegg, as the place for the first garden city. We still do not have any progress on that either, and it probably got in the way of anybody making any progress. We do not need more initiatives; we need more houses.
Frankly, this example—in which the first home is likely to be built and occupied in early 2017, a decade later than intended—shows that we have to find a better way of delivering major housing projects. Around Cambridge, there are any number of houses being built as urban and village extensions, but we have to be able to balance the housing supply and deliver on starter homes and key worker housing, which we really need around the city. We have to be able to put new settlements in, otherwise we will never get the balance of housing we are looking for.
I welcome the Bill. As is often the case, it must be seen alongside the other expenditure and administrative measures the Government are taking. For Northstowe in particular, and for other new towns that will come along—such as Waterbeach, which has been proposed outside Cambridge—we need the permission in principle. We need that kind of upfront certainty from the point at which the plan is determined. That will reinforce the determination and right of local communities to say, through their local plan, what the structure of their housing and spatial distribution should be. We need to back that up with a government commitment, which we have now received, to direct commissioning and putting the houses in place. For these purposes, that can be linked to the supply of starter homes and key worker housing. It is really important that that happens. If it happens without direct government involvement, there is too great a risk of loss to the community infrastructure levy under the Section 106 planning obligations in the area as a whole, if the starter home discount had to be funded out of that.
There is a test for the Bill. Does it enable the mistakes of the recent past not to be repeated? Does it enable us to deliver more housing more quickly? That will be the test.
Lord McKenzie of Luton (Lab)
My Lords, six minutes is barely time to scratch the surface of this Bill. It is certainly not enough time fully to expose the policy failures of this Government and their predecessors, who have seen home ownership fall year on year, fewer homes built than any peacetime Government since the 1920s, soaring homelessness and rough sleeping, and one in four families with children renting in the private sector, with private rents reaching an all-time high. It is not enough time, either, to spell out in detail why this Bill fails to address the housing needs of our country. Instead, the Bill offers starter homes that are a non-starter for most; the loss of genuinely affordable homes to rent or buy; the increasing centralisation of our planning system; a flawed right to buy; and the removal of security for tenants. We can have no confidence that it will fundamentally address the chronic shortage of housing in this country. So there will be much for us to do in Committee.
I would like to concentrate my brief comments on just two areas: planning and the so-called high- income social tenants. On planning, the coalition Government proclaimed a new world with the NPPF, the scrapping of regional spatial strategies, the duty to co-operate, neighbourhood planning and neighbourhood development orders, all done under the banner of localism —and, of course, the new homes bonus to solve our housing crisis. If this was all such a success, why does this Bill include a raft of new centralising powers for the Secretary of State to intervene to require local planning authorities to designate specific neighbourhood areas; to set time limits on decisions to hold a referendum on neighbourhood development orders; to direct an authority to amend its local development scheme; to give instructions to an independent examiner to intervene in the development plan process; and to direct the local planning authority to revise a document and submit it to independent examination? Whatever happened to localism? All this moves us inexorably away from a planning system anchored in the democratic processes of the local community. How will all of this encourage local communities to support the new developments we so desperately need?
As if this were not enough, there are powers for the Secretary of State concerning planning obligations and powers to introduce pilots involving alternative providers for the processing of applications for planning permission—the thin end of the wedge, no doubt. Why will the Government not properly resource local authorities’ depleted planning departments and make sensible provision for planning fees?
So far as the proposal to charge market rents to “high income” social tenants is concerned, this has all the makings of a bureaucratic nightmare. Although we may not object in principle to the fundamental proposal, as we have heard previously the threshold above which tenants will be subject to higher rents, £30,000, will hit many hundreds of thousands of households, including couples working full time and earning just the living wage. We, of course, see a disparity between the treatment of housing associations and local authorities. For the former, the policy is mandatory; for the latter, it is voluntary. The additional rents charged by housing associations will be available to them for additional investment but local authorities will have to hand over their proceeds to the Treasury. Like so many aspects of this Bill, the details will be left to regulation. Perhaps the Minister will tell us how much of this we will see before the legislation moves on from this House.
We know that “high income” will be determined by the income of the two highest earners in the household and that the assessment will be based on gross income. The practical challenges of this are obvious. How will the policy cater for the changing composition of households, with individuals moving in and out during the course of a year, or during the course of the year for which the income is to be calculated? What will be the basis of assessment? If rent demands have to be processed before the start of a year, then for the current year and the preceding year a person’s income for tax purposes will not always be known. What will be the position for the self-employed, whose tax position can in certain circumstances take longer to agree? Generally, what will happen if there are legitimate adjustments to gross income for tax purposes after a rent level has been set? Will there be a refund? Will there be an appeals process?
The current rent standard guidance contains provisions which exclude the standard applying where household income reaches £60,000 or more. Here, the household is defined as the tenant or tenants, plus spouses, civil partners or partners. Is it envisaged that the same definitions will apply in these circumstances? Can it be confirmed that adult children living at home—an increasing phenomenon, given our housing crisis—will be outside the calculation? How do the Government respond to concerns that the policy will be a work disincentive and discourage individuals from working longer hours?
The administration of all this will not be without its challenges, but this is just one of the Bill’s lost opportunities.
Lord Greaves (LD)
My Lords, it is always a pleasure to follow the noble Lord, Lord McKenzie of Luton. I wish to speak mainly about planning and I associate myself with what he said about that in the first part of his speech. I also associate myself with my noble friend Lady Bakewell of Hardington Mandeville’s excellent opening speech from these Benches. I am delighted to see my noble friend Lady Thornhill in her place today and to hear her making such a good speech. My other accolade is for the noble Baroness, Lady Andrews, who is not in her place at the moment. Again, I associate myself with everything she said on planning.
I declare my interests as deputy leader of Pendle Borough Council, a member of various planning committees, vice-president of the LGA and vice-chair of the APPG on Local Democracy. No doubt there will be other things as the Bill wends its way through.
Normally at weekends I spend my time on local political stuff, trying to help run the local council and so on. This weekend I took a few days off and sat down to read the Bill and its various documents. People in our household thought I was a bit of a geek but, nevertheless, when noble Lords have a bit of spare time, I recommend that they read the Bills. In particular, I recommend that they read the Bill but do not believe the spin.
I am pleased to see that the noble Baroness, Lady Andrews, is back in her seat—or perhaps I missed her before.
The quality of the Bill is variable. In the 15 years that I have been in your Lordships’ House, taking an interest in housing Bills, planning Bills and all sorts of other Bills, I have come to realise that there are good Bills and bad Bills. Some of this Bill is very well written: it is clear, full of admirable detail—in the Bill and in the schedules—and the Explanatory Notes are good, but parts of it are abysmal.
In recent debates in your Lordships’ House about secondary legislation, affirmative orders and what rights we should or should not have over them, many noble Lords have complained about the skeletal nature of some of the Bills. Anyone doing a future academic course on skeletal Bills could do no better than address themselves to Part 1 of this Bill on starter homes. It covers not much more than three pages but includes nine ministerial regulation-making powers, over half of which, at the moment, are to be affirmative. I associate myself with what the noble Baroness, Lady Royall of Blaisdon, said: unless we have a lot of detail about what these regulation-making powers are to be, we should not pass the Bill in this House.
As to the planning system, the Government’s view appears to be, first, that we need to build more houses; secondly, that the planning system is broken; and, thirdly, that the planning system is to blame for not enough houses being built. I have said several times in your Lordships’ House that I believe the planning system is bust, and I stand by that. However, it is wrong to identify the problem of not building enough houses as basically lying in the planning system. It lies in a lack of finance and people’s lack of ability to build houses—and the proposals in the planning section of the Bill will not improve matters. The problem in the planning system is not mainly in development management or the processing of applications but in plan-making. The plan-making system for developing local planning policy is in need of substantial overhaul and the Bill does not do that.
Local plan-making is supposed to take place within a coherent framework of the national planning policy on an evidential base of needs, the facts on the ground and in consultation with all affected interests, including local people and local residents. However, national policy is erratic, dictatorial and is always being changed. The building of the evidential base is overly elaborate and too reliant on evidence based on instructions from on high, and the outcomes, when the computers churn them out, are very often “garbage in/garbage out”.
As a result, the consultation system is expensive, highly complex, bureaucratic and repetitive. It involves an avalanche of barely comprehensible paper and is inaccessible to most people. It usually ends up consulting vested interests, such as landowners, developers, organised bodies and a few powerful people—mainly the people who are able to pay experts who understand the system to deal with the continual requirement for more and more input into the consultation. These are the consultants and other people who make their livings out of this.
I have read the Bill carefully—every damned word of it—and, in my view, it will make things worse. It will make the planning system more centralised. There will be more detailed centralised control over everything that happens and local people will have less influence and power. It will become more complicated and less accessible for people to put their spoke in. As I have said, if you do not believe me, read the Bill and not the spin.
Lord Cameron of Dillington (CB)
My Lords, I declare an interest as a farmer, a landowner and a chartered surveyor.
I congratulate the Government on attempting to grip our housing crisis, both through this Bill and other measures. We are making progress and the Bill is part of that. However, it does not provide all the answers and I hope we can work on how to improve the situation. The key is to provide adequate housing across all sectors of society and all forms of tenure to suit as many people and as many levels of income as possible. It is essential that we do not reduce the amount of housing available to the less well-off, which is what I fear we are doing.
The Government have a moral obligation to step in where circumstances upset the normal supply and demand and, to me, that means rural England, where 80% of the population want to live—at least, in southern England they do—but where society rightly decrees that there should be a limited number of houses built. Supply can never meet demand.
I am struck by how similar the problems are between the countryside and London: the unaffordability of starter homes to the majority of locals; the near impossibility of finding space in the immediate neighbourhood to replace affordable homes that are being forcibly sold off; the desperate need to find housing for key workers and the impossibility of doing so; and even the tendency for vacant houses to be bought up by outsiders at prices that no local could possibly afford—and then sometimes left empty for large parts of the year by their new owners, who are foreigners in London and second home owners in the countryside.
Let us begin with starter homes. These add to our repertoire of ways of making homes more available for ownership by the young, especially when combined with Help to Buy. We all know, however, that these particular young people will have to be earning well above the average wage in at least 40% of local authority areas, according to research by Savills. The real problem with starter homes is their transiency—here today, gone tomorrow. Can we continue to build more and more starter homes ad infinitum to cater for the continuous waves of aspiring young? Can we afford to? In the countryside, you cannot just keep on building. In the Commons the Minister said that,
“we want to see rural exception sites being used for starter homes to enable thriving rural villages to grow”.—[Official Report, Commons, 19/11/15; col. 185.]
This must not happen. It is a complete misunderstanding of what exception sites are for: they are put in place for all time. Actually, it will not happen. No farmer is going to donate land to house locals if it can be sold to anyone in five years’ time. No village will agree to an exception site for the same reason, unless the limited planning permission and the discount remain in place for all time. That might help.
I turn to the voluntary right to buy. I hope rural housing associations recognise the urgent need to protect the mixed nature of rural communities. It is dangerous, however, to introduce the concept—or the possibility—of the right to buy in rural communities. Farmers and communities will have to grapple with new safeguards to protect their sites in perpetuity and will naturally be suspicious, making these much-needed exception sites less likely than ever to come forward. I would, therefore, like to see a blanket protection in law from this right to buy for communities of under 3,000 people. Let us face it: the Government are going to have trouble funding these right-to-buy discounts anyway, so why not make it clear to rural tenants from the beginning?
Turning to local authority sales of high-value stock, do the figures really add up? I leave that question to others. More importantly, however, will the replacement houses be built in the same communities? Even if they were built within the same local authority, where I come from that could mean 20 or 30 miles away, roughly the distance between Hackney in London and Sevenoaks in Kent. I worry that rural villages will lose their last remaining public sector affordable houses, never to be replaced, and that the next generation will have nowhere to live.
Moving on swiftly, “pay to stay” is a good idea in principle, but the figures of £30,000 to £40,000 are too harsh, even with a taper. Do not forget, furthermore, that rural families below the poverty line often make ends meet by being self-employed, with variable incomes, and through temporary labour, by taking summer jobs and so on. Some years it works well, but some years the income is paltry. So over what period does, for instance, the £30,000 minimum apply in the countryside? A three-year average would be fairer.
In conclusion, this is a very bold Bill. It is a huge social experiment. I am in favour of a lot of things in the Bill, such as starter homes and even “pay to stay”, provided we can tweak both of them so that they do not have disastrous knock-on consequences. I support home ownership. I can see the argument that continuous letting from generation to generation holds back the social mobility of the aspiring young. I do not agree, however, that we should pay for the dream that the Minister referred to by selling off and reducing the number of affordable homes, which remain vital for those living at or below the average wage. I hope, therefore, that we can work with the Government to avoid the dangers inherent in the Bill, and to raise the percentage of affordable homes from the current 12% of housing stock in the countryside nearer to the urban average of 20%.
Finally, the monitoring of this social experiment must be rural-proofed, for both villages and market towns, so that we can adjust and adapt to the inevitable problems that will arise over time.
Baroness Hodgson of Abinger (Con)
My Lords, I, too, congratulate the noble Baroness, Lady Thornhill, and the noble Lord, Lord Thurlow, on their excellent maiden speeches.
We are all too aware of the housing crisis we find ourselves in and which this Bill is trying to address. Having a home is fundamentally important to us all: it provides long-term stability and security, giving an individual a stake in our society. Thus, we need to do all we can to help more aspiring home owners realise their dreams.
Nowhere is the lack of housing more severe than here in London, as we have already heard. Soaring property prices mean that it is very difficult for young people wanting to come here to work to find somewhere to live that they can afford. It is crucial that this problem is addressed. Does the Minister have figures for what percentage of residential property in central London is now owned by foreign nationals? In recent years it would seem that there has been a crowding-out of the settled population; it is important that our own young people should be able not only to come and work in London but to buy a flat or a house.
While there is clearly a need for increased quantities of housing, I hope that your Lordships would agree that the quality of our housebuilding, specifically the design of it, is also important. Winston Churchill once remarked:
“We shape our buildings; thereafter they shape us”.
Upholding architectural standards and considering aesthetic standards are, therefore, also essential in all types of housing. Our environment has a dramatic impact on our lives, affecting our outlook, our well-being and, most importantly, our health. It can be said that of all artists, architects have the greatest responsibility to, and for, the world around them. We already have many beautiful buildings in the UK—big and small—but it would seem that this aspect is all too often forgotten in new construction. ResPublica’s report, A Community Right to Beauty, highlights this.
We need to ask ourselves why the issue of planning causes such tensions in local communities. As we know, many housing developments fail due to opposition from local communities. Usually it is because they are unhappy with the housing that is being proposed. Too often there is little to distinguish one housing development from another in different parts of the country. While I believe that our localism provisions, which empower local authorities to have a greater say over local styles of building, should have helped, they are effective only if pricing is comparable. Big developers frequently ignore the specific and local context in which they are building and local materials—the beautiful honey-coloured stone of the Cotswolds, or the darker stone of Yorkshire, for example—and price carefully to make it more attractive to accept their somewhat stereotypical national designs.
I also have concerns about planning gain and that it may sometimes sway planning decisions. Existing residents need to know that new housing will enhance, not diminish, their environment, and indeed the value of their homes. If we just wave through thousands of unattractive, low-quality homes to address the housing shortage, we will not be achieving true sustainability. Moreover, ultimately it also short-changes those who purchase them. Fifty years ago we thought that tower blocks were the answer to housing. How wrong we were. We must avoid similar mistakes and ensure that we do not present our successors with similar challenges in a generation from now.
In smaller towns, there is also much resentment when new developments are simply bolted on in ways that do not reflect or complement the original communities. It is crucial that new housing fits in with the existing layout, enhancing the local community and creating cohesion. If we were to ensure that new housing was sensitively designed in relation to existing landscapes and architecture, I genuinely believe that we might see a step change in local attitudes.
I am glad that this Bill encourages building on brownfield sites. It is, therefore, essential that local authorities have sufficiently knowledgeable and expert staff to assess potential developments and to designate brownfield sites. The current framework rightly states that the construction of new buildings should be regarded as inappropriate for the green belt. However, I am somewhat concerned, as I understand that there are proposals currently under consultation to allow some local plans to also begin allocating green belt land for starter homes. There has also been a sharp increase in the number of homes securing full planning approval in the green belt in recent years. I do applaud the starter home concept: it is an innovative and necessary measure to help first-time buyers. However, allowing these homes to infringe upon our precious green belt cannot be the answer. I am sure that I am not alone in this House in valuing the countryside. The green belt is sacrosanct and should not be compromised, as once concreted over, we will never get it back. Conservation officers also have a critical role to play. I hope that the Minister will give an assurance that the Bill will continue to provide the same level of protection to historic buildings, which are also a finite resource.
One of the most important ways of ensuring that welcome and sustainable housing is built in the right places is including affected neighbourhoods in the planning process. Evidence shows that involving residents in the design of new housing delivers a range of social and economic benefits that better meet the needs of both new and existing residents and ultimately creating more attractive areas that will also influence potential investors into the community. Thus I commend the measures in the Bill to extend the designation of neighbourhood areas. I believe that this is crucial to ensuring that greater consideration is given to the appropriateness of new housing and will in turn help to reduce the gridlock of opposition to new developments; in short, everybody wins. I welcome the efforts to address the need for more homes, which are so badly needed. However, we must build homes that will last, nurture and enhance communities for years to come.
Baroness Young of Old Scone (Lab)
My Lords, I think we are all in agreement about the importance of housing, and particularly affordable housing, especially with the new predictions on even greater population growth. We all want to see houses that are secure and affordable homes in which people can thrive and which are provided in ways that foster mixed communities and are environmentally and financially sustainable for the future. I do not think that the Bill contributes much to that, and in fact it could make matters worse rather than better. Several of its provisions have also been introduced in haste at the last minute and have not been tested out in the other place, so we have a serious job of work in front of us.
I do not want to focus in my brief time on the dash for starter homes and home ownership; I simply agree with many noble Lords who have already talked about the concerns around it reducing the availability of social housing and supported housing, in particular affordable housing for rent. I also endorse the view that the Bill is a bit of a pig in a poke—in fact, it is such a large pig in such a large poke that you can hear it squeaking. As primary legislation it is very broad and arrogates wide powers to the Secretary of State. It is also highly dependent on secondary legislation, so I ask the Minister for assurances that we will be able to see the draft secondary legislation during the Committee stage, otherwise she is asking us to buy this pig in a poke sight unseen.
I want to focus on the Bill as a serious assault on the planning system. It is a pity that the noble Lord, Lord Greaves, is not now in his place because I am a great fan of the planning system. It has stood us in good stead and has been one of the jewels in the crown of British democracy; I do not agree with the noble Lord, Lord Greaves, that it is bust. It enables elected local authority members to review evidence from a wide variety of sources and to balance competing economic, social and environmental needs in the interests of local communities. It has clear mechanisms for the involvement at all stages of local people and it is not as impenetrable as the noble Lord makes out. I find it difficult to believe that he finds the system impenetrable if he likes to read Bills on his weekends off.
The Bill assaults the planning system in a number of highly damaging ways. I believe that the obligations on planning authorities to deliver the Government’s starter homes policy mean that the planning system will become starter home-led rather than plan-led. We are already seeing challenges to the delivery of Section 106 agreements across a whole range of social and economic benefits by challenges under the viability system. I ask the Minister to show how Section 106 agreements and the valuable role they play in shaping local infrastructure, in providing local services and in delivering other social benefits, will not be gobbled up under the pressure for starter homes.
The second challenge that the Bill introduces is in the new planning process in the form of a new category of “permission in principle” for any sites that are identified by “qualifying documents”. The Bill itself is very general in its approach, although I understand that initially it would be for brownfield registers or any sites that are designated in local and neighbourhood plans. But it is not clear that there may not be other registers and qualifying documents that would allow for the permission in principle process to go ahead. For example, once a brownfield site is on a list or in a qualifying document, the intention seems to be that in order to give assurance to investors or developers it then cannot be removed. It will have permission in principle. So it is absolutely vital that there is clarity and consultation on the criteria for what are going to constitute qualifying documents, and that local people will be able to be consulted about and to comment on such documents before they are agreed and immutable. If we are talking about speeding up the planning system, I am not sure that we are not simply putting a requirement to consult very early on in the process rather than later. I am not clear that simply doing that will reduce the logjam.
The Minister kindly organised a meeting with Peers from across the House and I asked her then for clarification about the stage at which local people would be consulted. It seems that we need a flow chart showing what issues such as environmental issues, the importance of sites for wildlife, flood risk, sustainability standards, open space and design would be considered in this new process because after the site is on the register or in a document and has permission in principle, a local authority can only consider “technical details”. I have not yet had the promised clarification from the Minister but I am sure that she has not forgotten about it and I look forward to seeing it shortly. We need to understand what the process is going to consist of before we agree it in this Bill. I would be very unhappy if the process did not ensure proper consideration and consultation on environmental, sustainability and quality standards and did not involve local people throughout.
There are a number of other challenges to the planning system in the Bill and it is a shame that some of them do not actually tackle the issues at the heart of some of the concerns about housing going forward. In my view, the slowness in houses coming forward on sites is not necessarily about the availability of sites; it is often about the availability of finance for small builders for whom such small sites are best suited.
I hope that we can debate further during the passage of the Bill other challenges to the planning system. The Secretary of State will be able to grant consent for housing through the nationally significant infrastructure process. This gross centralisation is the most amazing assault. I do not understand how it works and I hope that I can get some illumination on what was a last-minute insertion of scope for alternative providers to process planning applications rather than local planning authorities, particularly as the alternative provider’s advice will be binding on planning authorities. I am seriously confused as to how that will work.
These fundamental changes to the planning system risk focusing too closely on speeding up the planning system, when in fact the problem is not planning approvals but build out, rather, on applications which have already been granted. Other factors such as the availability of skills, finance and measures to ensure that large developers do not hang on to sites to keep prices up all need to be tackled before we erode the planning system, which is a tribute to localism, democratic accountability and community involvement.
Lord Stoneham of Droxford (LD)
My Lords, in the limited time available in this debate, I would like to speak from the perspective of someone who for the past 12 years has been involved in challenging three housing associations to improve their performance and do more for development. I must declare my interest as currently chair of Housing and Care 21. Because of my experience of wanting to challenge organisations to do better, I accept that one should not take a totally negative view of the Government’s challenges to housing associations at this time, although I accept that at times I have been somewhat tested. Every challenge is an opportunity to improve performance and there is great potential in housing associations to build more homes, if only the Government would realise that potential. But that potential depends on a stream of rents, using assets well and creating surpluses so that the funds can be found to do more development.
I have two general questions to ask about the Bill. The first is whether it will help us to build more homes over the next 10 years, which I think is a relevant timescale not least because we do not want to see 1 million homes built by the next general election and then the housing industry going into its normal cyclical downturn, so we are back to the average for housebuilding for the next decade that we have seen in the past decade. The second question that I want to challenge is: is it the type of housing that we want? Is it the quality and balance that we want to meet genuine need?
To deal with balance first, I just cannot believe that the whole emphasis of this housing strategy on private ownership is right. It cannot be right socially to have all your eggs in one basket and it certainly is not right economically, either. We seem to have abandoned the strategy of the previous Government of building rented accommodation through affordable rents. I am quite glad about that because we were told at the time that that was more cost-effective than grants—but I never believed it. Affordable rents merely put pressure, as we predicted, on housing benefit bills. But it is not clear what will happen to funding after 2018. We may have a situation in housing associations where the only development being done is replacing property which has been sold through the right to buy.
There is one huge inconsistency in this Bill, which goes back to the bedroom tax. At the time of the bedroom tax, we were told that 500,000 households were living in accommodation which was too large for them. But to deliver on that policy, we had to provide smaller accommodation that they could move into. I am afraid that this Bill will not answer that at all. So I ask the Minister: what is the implication for the policy on the bedroom tax in five years’ time as this policy is pursued?
Can anybody imagine a more complex funding scheme for the right to buy than the one proposed in this Bill? The Government have persuaded the National Housing Federation to co-operate with right to buy, but I think that we have yet to hear the full voice of councils which are concerned that they will have to sell their expensive properties. As the noble Lord, Lord Kerslake, said, there is a huge discrepancy in funding which has got to be exposed and which we have to be told about. There is a fundamental principle here, which is that areas that have to sell their council housing should be able to use the money in their own area to improve their stock and to build more affordable housing. I do not want to be told that there is not extreme relative deprivation in some of these wealthy areas. I have seen it in council estates in Winchester, and these are the areas which are going to have to sell most of their stock.
Finally, I turn to the issue of what we should do about the cyclical nature of private housing development in this country, which was raised by the noble Lord, Lord Kerslake. What safeguards will the Government put in to protect when the cyclical downturn comes? Because it will; it comes repeatedly. Every five to six years we get a downturn. Tony Pidgley, the chairman of Berkeley Homes, says that he runs his business on the basis that a catastrophe is round the corner—not his catastrophe, just the market. If you put all your eggs in one basket on private ownership, you raise that risk.
All the Government initiatives, including help to buy and starter homes, have the effect of distorting markets and encouraging price rises. Housing associations will be encouraged to develop a new business model of making profit from private home sales to find funds for development, including perhaps some development that could be for social rent—if they can find it. That will be fine when we are riding the housing upturn. We will have people saying, “Great, we can build more”. That will be the rallying cry. But when the downturn comes, as it surely will, housing associations will be very vulnerable when the housing sector hits the buffers. They will not have the experience to deal with the calls in the market. In many areas, particularly where they have gone into shared ownership, they will have gone into the margins of home ownership and the people buying those homes are the most vulnerable in the economic downturn.
So as we go through this Bill, we have to ask what the countercyclical policies are to switch policies to social rent when that happens. Let us remember the words of the noble Lord, Lord Kerslake, who said in his speech that it was the housing associations which kept the housing sector going in the last recession. Housing associations are best at providing homes for rent. They have developed a knowledge of shared ownership, but private sales will be largely a new venture and that is a substantial risk for them. We should respect the skills that they have and build on them to get the most and the best homes built. Taking them out of their comfort zone will provide risks in this very cyclical sector.
Lord Adebowale (CB)
My Lords, in contributing to this debate, first, I state that I am chief executive of Turning Point, a health and social care organisation supporting people with complex needs. In many cases this includes supporting some of the most vulnerable people in society to find suitable housing. Turning Point is also a registered social landlord. I am also chair of the London Fairness Commission, which is due to report this spring. Housing is one of the key issues reported to us by Londoners in their definition of fairness, as opposed to the definition of Ministers and politicians. I started my career in housing. I worked on several estates and set up housing co-ops. I have worked with vulnerable people in need of housing. Indeed, my parents experienced many of the privations mentioned in the excellent maiden speech of the noble Baroness, Lady Thornhill.
As wide-ranging and controversial as the Bill is, I want to focus on three key areas that impact on the people who fall at the sharp end of the inverse care law; that is, the law that states that people in most need of housing and social care are those who tend to get it the least. I want to talk about the challenges facing housing co-ops; the right to buy being extended to housing association tenants and how this will affect people with complex needs trying to obtain housing; and, finally, lifetime tenancies. I should point out that Turning Point did not sign the voluntary agreement letter between housing associations and the Government. I talked to our clients and tenants, who told me in resoundingly clear terms that the answer is no and that they did not want to sign the letter. We should not assume that everyone wants to own their own home. Most people aspire to an affordable, stable home in a stable community.
Housing co-ops are small businesses providing sorely needed social housing on a sustainable basis at little cost to the state. Fully mutual housing co-operatives are fundamentally different from housing associations in that they are democratic bodies where all tenants are also voting members of the body that controls their housing—the very definition of being all in it together. Based on my experience, I am particularly concerned that the Bill has not fully considered the potential impact that legislation would have on housing co-operatives. Given current proposals, co-ops could face increased rent arrears and legal costs. Proposals could also lead to overoccupation of tenants and negatively impact on their ability and motivation to work by reducing their earnings or working hours, as stated in an excellent paper written by Richard Stubbs, who has been very much involved in housing co-ops, for the Longlife Housing Co-operative.
The 1% per annum rent decrease announced in the Welfare Reform and Work Bill will also cut the annual income of co-ops, which could mean that they will have to find ways to cover the shortfall without reducing what is spent on maintaining much-needed housing. The Longlife Housing Co-operative has calculated that the 1% reduction, disregarding inflation, will reduce annual income by almost £15,000 per annum. That might not seem like a lot of money but in the budgets available to housing co-ops it could add up to a substantial amount. Over 20 years, it would be about £500,000. Co-ops could therefore be rendered inoperable and measures would likely force their failure, which would be detrimental to the sector. Will the Minister agree to meet with a representative from the housing co-operative movement to discuss their concerns in more detail?
Clauses 56 to 61 concern right to buy. In addition to concerns around co-ops, many are worried about what this Bill means for people, particularly first-time buyers and people on low incomes, as the housing stock fails to keep up with demand. On 22 October 2015, I asked the Minister whether there will be a timeframe within which housing associations are expected to build these extra homes and whether there would be a minimum guarantee of rented accommodation built to support individuals suffering from ongoing health issues.
This is important because the people I hear from, both through the London Fairness Commission and those with mental health conditions, and people recovering from substance misuse supported by Turning Point, tell me that they need safe, secure and reliable housing to continue their recovery. However, they are finding that there is a severe shortage of housing available to them. Indeed, the Office for National Statistics showed that there is already a shortfall of 141,000 homes, with Shelter suggesting that the Bill will lead to 180,000 fewer affordable homes to rent and buy over five years. As of 2 November 2015, according to DCLG figures, over the past three years 9,025 homes have been sold under right to buy in London, and there have been 1,310 starts on replacement.
In response to my Question, the Minister said that replacement homes will be delivered as quickly as possible. While aiming for replacement within two years, the default position is that housing associations will have flexibility to replace homes within a three-year period. This really concerns me, because my definition of “as quickly as possible”, the Government’s definition and that of the individual already having to leave a residential mental health service or other service, but who is unable to because of lack of housing, are very different. My hope therefore is that the Bill will be clear on what “as quickly as possible” means and will look to speed up this process so that people can move on effectively with their lives. It is also important that housing stock being sold off is replaced like for like and in a similar area. The noble Lord, Lord Kerslake, also made it clear that the maths do not quite add up.
Housing is a critical foundation across the life course, both physically and psychologically. While other aspects of our lives may change, the need for safe and secure housing does not. Compared with the general population, people with mental health conditions are one-and-a-half times more likely to live in rented housing, with higher levels of uncertainty about how long they can remain in their current home. Mental ill health is frequently cited as a reason for tenancy breakdown, and having settled housing and accommodation is known to have a positive impact on our mental health. This is critical and provides the basis to enable people to recover, receive support or return to work—or, post-recovery, to enable the individual to continue to live well, work and become part of community life.
I shall illustrate this with a short case study. Lee is 47 and has experienced various mental health issues as a result of multiple redundancies, several house moves, family breakdown and subsequent drug misuse. He is a qualified truck driver, has a degree in engineering and has worked for large and reputable companies such as BT and Bosch. He also has two teenage children with whom he has minimal contact as they live 15 to 30 miles away from him. Lee has been a resident of one of Turning Point’s services for almost two years, and although he has applied for housing four times, he has had his application rejected four times. He has been told that, because he is deemed a temporary resident by the local authority, he lacks sufficient ties in the local area to be granted housing, even though he has lived there for almost two years now. He has also been open and frank about his situation and his past, but this seems to have tarnished his image and chances of being able to move on and start his life again. Under various proposals in the Bill, including the right to buy, the forced sale of vacant high-value houses and, to an extent, the withdrawal of lifetime tenancies, Lee’s chances of securing a home, gaining confidence, independence and employment and starting to think about moving on with his life will be even slimmer.
As is the case with anything involving welfare, in some areas the proportion of council houses likely to be sold is much higher due to more deprived areas being more reliant on social housing. It is quite likely that starter homes will be built in place of new affordable council or housing association homes, and for the first time since the Second World War there is no national investment programme to build such housing. It is also important that housing associations are required to consult regularly with their local councils on the impact of the extended right to buy and any potential deregulation package. This would help to ensure that housing associations and councils manage their housing assets and invest in new and existing homes to meet the needs of local conditions and their tenants, including the most vulnerable.
How the scheme plays out will affect local authorities and their ability to plan for meeting “affordable” needs and to provide replacement stock in their local plans by early 2017. The Bill does allow for negotiation between the Government and individual local authorities on the payments and on retention of receipts, and for certain properties to be exempt. However, it must also enable councils to retain sufficient funds to replace lost council homes in the local area to meet local housing need.
Finally, on lifetime tenancies, the Government spoke recently about building stronger families and recognising the importance of community cohesion. Having such strict regulations over the amount of time residents can or cannot live in a property will have the effect of damaging these very communities. The threat of limited-term tenancies removes one of the last remaining secure types of housing available to people who cannot afford home ownership. It will leave people at the mercy of the insecurities of spiralling private rents and sky-high housing prices. How can people like Lee, for example, form real, tangible links with their place of residence, and therefore their community, if this is liable to change every two to five years? In response to the excellent speech of the noble Baroness, Lady Eaton, I wonder whether she might consider Lee to be a deserving case.
We therefore need a housing Bill that supports stability, recovery, progress and independence, not only for those who are currently working and able, although it is important to support them, too; we need a Bill that is also ambitious enough to support a future population that could be working and able to work if they only had access to secure housing.
The Earl of Liverpool (Con)
My Lords, I preface my brief remarks by declaring an interest as director of a property development company, as shown in the Lords’ register. I wholly support the main aspirations of the Bill, which are to facilitate the creation of 200,000 starter homes by 2020 and to extend right to buy to tenants of housing associations. I believe that this has the potentially to dramatically improve people’s lives in the same way the right-to-buy legislation did when implemented by the Conservative Government in the Housing Act 1980. I am sorry that my noble friend Lord Heseltine is not in his place. I hope that he will not mind me quoting something he said at that time:
“There is in this country a deeply ingrained desire for home ownership. The Government believe that this spirit should be fostered. It reflects the wishes of the people, ensures the wide spread of wealth through society, encourages a personal desire to improve and modernise one’s own home, enables parents to accrue wealth for their children and stimulates the attitudes of independence and self-reliance that are the bedrock of a free society”.—[Official Report, Commons, 15/1/1980; cols. 1444-45.]
Those are fine words that I believe are as appropriate today as they were some 35 years ago.
Many noble Lords will have received briefing papers from various bodies and organisations. I was particularly drawn to one from the Wildfowl and Wetland Trust—I do not think that that has been mentioned so far. The paper reminds us that the risk of surface water, sewer and river flooding can be dramatically increased by development. Graphic pictures of the damage to property in the recent floods in the north are still fresh in our minds. It is predicted that by 2060 climate change could result in a 20% to 40% increase in rainfall and a 30% to 110% increase in flood damage, so it is important that new developments pass a flood resilience test. This requirement should be enshrined in the Bill. I hope that it may be possible to achieve that at later stages.
The Flood and Water Management Act 2010 included a powerful set of provisions for mandating sustainable drainage systems—SUDS, to use the acronym—in new developments, but for some reason the Government chose not to bring Section 32 of that Act into force. The noble lord, Lord Krebs, as chair of the Adaptation Sub-Committee, stated that,
“the uptake of sustainable drainage systems in new development is lamentable”.
I hope that something positive can be done to correct that.
Clause 2 includes provisions intended to increase the number of self-build and custom-built properties. It requires local authorities to maintain a register of individuals who have expressed an interest in acquiring land for this purpose, and to grant development permission for suitable plots of land to meet this demand. This is a very positive proposal which would give tangible help to smaller independent builders. It would also add an extra dimension to the overall provision of new homes.
As noble Lords have already stated, there are a great many provisions in this Bill—too many to go into in detail in the time available. I welcome Part 2 of the Bill which includes measures intended to tackle rogue landlords and property agents in the private rented sector. I congratulate the Government on introducing amendments in another place on Report, making the breaching of a banning order a criminal offence and raising the maximum penalty to £30,000.
One aspect of our planning process which I find generally troubling is the failure of a great number of local authorities to produce a local development plan. A press release from the Prime Minister’s office, published in October last year, stated that only 65% of councils had fully adopted them, and almost 20% of councils still do not have an up-to-date plan at all. I find this shocking as it makes a cohesive programme of development all but impossible. At the same time, it leaves those areas without a plan vulnerable to all kinds of piecemeal and often inappropriate planning applications which the local authority is unable to refuse. As my noble friend the Minister said in her opening remarks, Clause 132 gives the Secretary of State default powers in this respect, which I very much welcome.
I am grateful to the House Library for producing a Library Note which I found very helpful in enabling me to make some sense of this wide-ranging and complex Bill.
I agree with my noble friend Lord Young of Cookham —he is not in his place at the moment—who believes that this is the most important Bill in the gracious Speech. I wish it well in its passage through your Lordships’ House.
Baroness Whitaker (Lab)
My Lords, the housing crisis, our badly stretched planning capacity and the desperate plight of the small minority repeatedly deprived of legitimate housing show that the Government are right to look for a new approach. Planning is essential to achieve the necessary numbers of homes, built to a decent standard. This is what I shall mainly focus on. I declare an interest as an honorary fellow of the RIBA.
I cite the views of Levitt Bernstein, a highly regarded architectural practice on the ground. In evidence given to the Bill Committee in another place, it said,
“that the emphasis is entirely on quantity not quality”.
It is dismayed to learn that the Bill proposes bypassing the planning process so that standards for internal space, daylight, storage and outdoor space, for example—all things that make a home a decent place in which to live—can be dispensed with.
The Government want to ease the obstacles in the way of housing through permitted development rights. A new register of brownfield sites is welcome. However, as presently constituted, this runs a real risk of preventing planning authorities preserving, for instance, workplaces and their jobs, or cherished places of leisure which arguably contribute more to a local economy, heritage and sense of identity than piecemeal housing estates could. Homes must exist in a neighbourhood, and not be plonked in a developers’ vacuum.
The Government have also attempted to deal with the problem of the slow pace of building through their zoning proposals. These essentially do away with the discretion which has enabled planning authorities to safeguard the particular attributes of individual neighbourhoods, as agreed in local plans. There is no safeguard, as in some of the European zoning systems, of combining this with substantial public investment which would follow the local plan. There has been little public debate about this fundamental change to planning culture or its implications for inclusiveness.
The proposals to reform the system of compulsory purchase are a welcome first step, but they should go further. The system has become cumbersome, partly because of encrusted case law, and it is hidebound by market value rather than the primacy of what the local community requires.
Most regrettably, as has been said on all sides of the House, the Bill would also enable local authorities to avoid their responsibilities to Gypsies and Travellers. The difficulties for Travelling people—and this includes show people—are not new. The Labour Government enacted provisions obliging local authorities to include the specific needs of Gypsies and Travellers in their assessments of housing need. Although the authorities were sluggish, to say the least, in fulfilling that obligation, at least the statement of what society expected was clear. This Bill proposes removing that obligation.
Homelessness among Gypsies and Travellers is currently at 20%. If the relevant clause goes through, this will increase. If not enough sites are provided, how can this small minority who travel and who have no authorised sites live legally? How can their children get to school regularly if they are constantly moved on? What about their needs for running water, toilets and refuse collection? How can their health—which is markedly lower than that of the general population—be maintained? Why should they have to accept the trauma of violent upheaval and the friction of local enmity?
This proposal has had no consultation. It offends against the public sector equality duty and, arguably, our obligations under international law. It will cause measurable harm, not least to children and to old and infirm people. In my submission, we do not have the right to force people to abandon their Travelling and Gypsy way of life, an integral part of which is living in caravans. The treatment of Gypsies and Travellers by the state is a stain on our reputation as a civilised country.
What is not in the Bill is an informed approach to what constitutes a place for people to live which enables them to thrive and prosper—in short, design. Instead, there are many provisions which short-circuit the design systems and none that I could see encouraging good design. Perhaps the Minister can point me to some. The obstacles to speedy and efficient planning procedures are, with very few exceptions, not in the planning system itself but in the capacity of the planning authorities to process it, and in their access to capital.
One of the many critical omissions is improving our struggling planning capacity. We need to revive the prestige, professionalism and status of the profession. The challenges of the post-war period led to the rise of some visionary planners, and we have some now, but they are thinly spread and their culture does not prevail everywhere. Outsourcing the planning function— which was not debated in the other place because the Government inserted the provision too late—is likely to compound the omission rather than remedy it.
In short, the Bill is far too unambitious about place-making. Proactive planning is essential to create real, safe and secure neighbourhoods where schools and clinics can be easily reached and work and transport are taken account of, where the amenities and leisure space, so important to well-being, are not out of reach, and where the needs of old age—upon us in increasing numbers—are properly and decently managed. The Bill has nothing to offer in this direction. Indeed, the incentives in it for hasty volume building will make the task of place-making harder.
In this Bill, the Government show indifference to what makes thriving neighbourhoods and to the civilised treatment of minorities. We shall have work to do in Committee.
Baroness Valentine (CB)
Over the past decade, house prices in London have doubled, while private rents have increased by more than a third. But prices are the symptom, not the cause. The problem, as we all know, is that supply is not keeping up with demand. London is expanding by a population the size of Birmingham every decade.
It is a Conservative Party mantra, evidenced in this Bill, that home ownership is good. And lest I be thought to be knocking the Government, I should stress that I wholly support an aspirational culture that encourages people to climb the economic ladder, challenging the mindset that says you have to remain impoverished, whether by facilitating starter homes or encouraging the right to buy. But let us face it, having homes classified as starter, social or affordable is not the point. Housing will remain rationed while we fail to build enough, and we are simply talking about who gets first dibs while the underlying price keeps going up. If we take starter homes in London, Shelter has estimated that you would need to be earning £75,000 to afford a mortgage on a starter home. The average London salary is £28,000.
As chief executive of London First—and I am on the board of Peabody Trust—we are so worried about the lack of housing in London that we have launched a new campaign, Fifty Thousand Homes, which will seek to hold the new mayor to account on not just talking about doubling housebuilding, but doing it. We will solve this crisis only by turning on all the policy taps at once, whether that is availability of land, allowing councils to borrow or supporting housing associations.
Let us look at the consequence of the Government’s approach. First, they seem to be very free with other people’s assets. After many shenanigans, the housing association right-to-buy scheme has become voluntary, but the poor old local authorities have to sell assets to supply the discount. And then they still have to build two houses for one in London. I would be interested to see the audit trail on whether these two-for-one houses end up being net additional. Perhaps this is something the National Audit Office could investigate.
Furthermore, the amount of social housing under Section 106 agreements will potentially reduce to subsidise starter homes, thus providing no net benefit. When it comes to housing associations, I quote a Moody’s announcement of July last year:
“Sector outlook turns negative due to adverse policy decisions”,
which followed the announcement of the 1% annual reduction in social housing rent. This makes it more difficult for housing associations to raise the money they need to build the homes we want. The Government are, though, right to put more pressure on public bodies to sell off underused land for housing. The Bill before us introduces a requirement for public bodies to prepare reports of surplus land, which I welcome. However, it needs to go further.
Given what a complicated business getting housing built is, I believe that local government, in the form of the Greater London Authority for London, but also in Birmingham, Manchester and elsewhere, should be significantly empowered to make the complicated judgments between starter, market, affordable and social housing, and should be given the role of taking this land to market, with the right conditions on it. The Chancellor introduced the London Land Commission last year. All cities with housing shortages should have their own land commissions and the surplus assets should be passed to these cities, which know best how to provide housing for local needs.
Speed is critical. Round the corner from me, Putney Hospital closed in 1999. It took 11 years before the council bought it, in 2010, with the intention of building a school and flats. Demolition did not begin until 2014 —15 years after the closure.
The Government need all the help they can get in increasing housebuilding, including making sure we have the skills to build. No one participant can solve it. I encourage the Government to do all they can to make friends with people who want to help them solve the problem. I cannot say that that is where current policy has led them.
Lord True (Con)
My Lords, I declare an interest as leader of a London borough council, but one that, after a large-scale voluntary transfer 15 years ago, is no longer a direct provider of social housing—something I sometimes regret.
I want to make one general point and then raise a few concerns for Committee. That may give the impression that I am negative, but I make it clear that I think there is a lot of good in this Bill. I certainly do not share the views of those opposing the right to buy. Certainly, there are points of detail to look at in Committee, including how you ensure replacement, but we should not stand in the way of aspiration.
My general point takes a slightly different tack from the noble Baroness who has just spoken. We all speak of a housing crisis, particularly in London. I do not demur from the need to build. However, too few of us ask the prior questions. We talk about supply but not about the causes of demand. What factors are stoking soaring asset prices and growing demand? I believe that building sustainable and integrated communities, which is what we need, means local consent. We have just heard that London’s population is fated to grow by a Birmingham a decade, and that it may soar towards 11 million in less than 25 years. Parts of central London are already being hollowed out, as are some rural areas, as we have heard. At the same time, the prolonged artificial depression of the cost of borrowing risks promoting an asset price bubble, which is driving the truly and sustainably affordable ever further away.
With the leaders of five other south London boroughs, I recently attended a presentation from our chief executives pointing to the upper-end projections for population growth—feasible projections, which you can find in the graphs—reaching more than 13 million by 2050. That could mean, on the chief executives’ estimate, 200,000 more homes in south-west London by 2050, or two to two and a half boroughs the size of Sutton or Kingston. Such population and housing growth would irreversibly change the character of many parts of London. I do not mean in terms of people—before the snickerers come in—but in the quality and character of public services and the built environment. Where will we find the transport, health provision, schools and, indeed, the open spaces to support that growth? Too many policies seem to require no provision for that.
Do Londoners actually support a surge to an international megalopolis with building on demand? Is it not high time that we had a debate about this to see whether we can secure consent for an end? If we first agree a sustainable future, then we can create the housing, social and financial policies to match, and make it possible. Once we have consent, we could more easily deliver the homes. By the way, I agree with my noble friend Lady Hodgson that good design—and, from that, planning—has a great part to play in securing consent.
I support starter homes, although I shall be interested to learn in Committee whether it was a Minister or a civil servant who left the question mark in above Clause 2. Your Lordships have rightly asked whether we could see more of the draft regulations. We certainly need clarity about the relationship between starter homes —good idea as they are—and affordable obligations. Why are developers spared obligations to contribute to infrastructure? What is the social case for that?
On planning, I object to yet more powers being given to the Mayor of London to overrule local democratic determination. Recently, I met people from a community group who had worked for years with our council to create a brief for sustainable development in an area of our borough with schools and other facilities, but who are terrified at the prospect of staff from a remote City Hall intervening with scant knowledge of local needs and aspirations. I would like to test the rationale for Clauses 133 and 135. I personally believe profoundly in localism, so it is disappointing to me to see more centralism. I wish councils were not always put on the spot and blamed. Why can councils not challenge public sector bodies that refuse to develop? I should point out that I might name a few names in Committee. And, after all our debates, why does the department persist in a one-club formula for neighbourhood planning? My own authority has had a plan since 2008. We are implementing local village and community plans, adopted after local consultation, and local people would strongly object to the imposition of the bureaucracy of Part 6 of the Bill to replicate or replace adopted village plans. Please sanction or permit councils that are actually doing local community planning to do it.
On exemption, I will be tabling amendments to allow councils to opt out of a damaging policy of automatic arbitraging of office value to residential without planning control. Dozens of small businesses in our borough are being tossed out by developers, as we speak, as a result of this policy. I urge my noble friend to listen on this point. In conclusion, I also ask her to consider allowing councils to recover costs on planning fees. I am grateful for the words I have had with her on this. Subsidising developers in this way cost taxpayers tens of millions a year across London alone. I find it potentially attractive to attach an amendment to Clause 141 but, knowing my noble friend, I am sure she will be able to meet us. She and the Secretary of State are good listeners. Her love and knowledge of local government comes out in everything she says. I hope that, with the help of Ministers and this House, we will make a very important Bill even better.
Baroness Blackstone (Lab)
My Lords, I declare an interest as chair of the group board of the Orbit housing association. We are facing a housing crisis and legislation is certainly needed to help resolve it. Sadly, this Bill falls short in so many ways, forcing the conclusion that when it is enacted and its provisions have been implemented or, in some cases, fail to be implemented, we will still have a housing crisis.
At the centre of our problem is a staggering failure to respond properly to our increasing population with anything like a sufficient increase in the supply of housing and, in particular, of housing which can be afforded by people on medium and low incomes. There is not enough accommodation, especially in London and the south-east, and the prices charged, either for home ownership or for rented houses, are unaffordable for families as well as many single people. The housing market simply is not working and families are forced to pay far too high a proportion of their earnings for accommodation, leaving them with too little to spend on other basic needs, especially in the case of families on low incomes who have children.
A growing proportion of the population has been forced to rely on privately rented accommodation with little security of tenure and often of poor quality. In one of the world’s richest nations, it is shameful that the basic need to be properly housed is not being met for a significant proportion of our population. In order to mitigate this problem, the Government are now shelling out £24 billion per annum on housing benefit, which has increased by £4.4 billion just since 2010. How much better it would have been if most of this enormous expenditure had been on tackling housing supply by building new homes. Having done so little in the previous Government to improve housing supply, this Government have now realised that a huge increase in new homes is required. They have set targets that few believe they will achieve and brought forward this Bill in support of these objectives. I congratulate the Government on addressing the supply of housing, but can only express great disappointment that their ideological commitment to home ownership has led them to abandon developing the provision of social housing for rent. Indeed, this form of tenure will be seriously harmed by the Government’s proposals. It is this issue on which I will now focus.
Before doing so, I want to welcome two or three aspects of the Bill. Like other speakers, I am pleased that there are clauses in Part 2 to deal with rogue landlords and property agents. These unscrupulous people cause untold misery for their tenants and reining them in is long overdue. I also welcome the decision to require the registration of brownfield sites, the decision to speed up compulsory purchase and the proposals on self-build and custom housebuilding.
There is, of course, a good case to be made for helping first-time buyers to purchase a home. Far too many young people are now forced to continue living with their parents into their 30s and we should make it easier for them to fulfil their aspirations to have their own home. However, the Government are profoundly wrong to put so many eggs in the starter home basket as set out in the Bill. I say this for two main reasons. The first is that the starter home clauses will provide subsidies for relatively well-off buyers, many of whom would purchase their homes without government help. The second is that the proposals will lead to a decline in social housing for rent so desperately needed by so many people who will never be able to afford to buy their own homes. As such, it is an indirect attack on the poor in favour of much better-off people, which can only further increase inequality in our society. The Bill does little if anything for those on council house waiting lists, where they have often been languishing for many years.
Why does this Bill create a situation where Section 106 requirements are lifted in new developments for starter homes? Why is so much more being done for one group with housing need and so little for others? Surely there should be a mixed economy in housing where more homes for social rent are provided as well as more homes for owner-occupation. I hope that the Minister will not reply that the Government are redefining affordable housing to include starter homes as an explanation for what will happen to Section 106. To do so is to make the concept of affordable homes utterly meaningless.
There is an even greater risk for maintaining the availability of social housing in the proposals for extending right to buy to housing association properties. To pay for this by forcing the selling of high-value local authority housing hardly plays to the Government’s pledge to devolve decision making. It is, in fact, an unscrupulous assets grab. These homes are not luxurious penthouse properties. They are often quite modest family homes which are valuable because they happen to be in high-demand areas. Forcing their sale will mean that council tenants will often have to move out of their community, and any social mix in the areas where these houses are located will disappear. The Government’s claim that there will be a two-for-one replacement of the expensive council houses and the sold housing association property in London is simply not credible. Will the Minister tell the House how the Government will monitor progress in replacements for these sales? Will she assure us that the Government will come up with an alternative system for paying for the right to buy in housing associations if they fail to meet their replacement targets in London and elsewhere? Nothing in the history of right to buy for council properties can give any confidence that social housing will not be greatly depleted as a result of the clauses on right to buy. For example, between 2012 and 2015, the 32,500 council properties sold were replaced with merely 3,500 new homes.
I also want to challenge the Government on the pay-to-stay provisions in the Bill. This is a further attack on the freedom of local authorities: 34 new powers are given to the Secretary of State. Councils already have the power to charge higher rents to those tenants whose incomes have gone up. The Bill forces them to increase rents on a pre-tax income of £30,000 outside London and £40,000 inside it, and then allows the Treasury to pick up the takings. Income thresholds of this kind do not take account of household needs, such as the number of children in the family. It is also highly likely to be extremely bureaucratic and cumbersome to administer. It hits middle-income tenants, while asset-rich owner-occupiers continue to benefit from unreformed council tax bandings.
Finally, the denial of long-term security of tenure to council tenants will cause unacceptable hardship and insecurity and further threaten the stability of communities. In key respects, the Bill is both punitive and inept.
Lord Foster of Bath (LD)
My Lords, I congratulate the noble Lord, Lord Thurlow, and my noble friend Lady Thornhill on two excellent maiden speeches.
As we have heard from many people in this debate, we simply have not been building enough houses and yet we need to build around 300,000 a year. The coalition Government took some important steps; for example, scrapping the regional spatial strategy and speeding up the planning process by scrapping some 1,000 pages of central policy. Noble Lords may be interested to know that for a period I was a junior Minister at the DCLG and played a small part in one or two other important measures, such as bringing empty houses back into use. In that regard, I welcome the Bill’s proposed changes to the process for compulsory purchase. I also welcome the introduction of neighbourhood plans. I am delighted that already 1,600 neighbourhood plans have been adopted or are in production, and I welcome the measures in the Bill to speed up and simplify the process. There are also measures supporting self-build and custom build, so helping hard-pressed small building firms, which, again, I welcome. I am pleased that the Bill strengthens measures cracking down on rogue landlords.
However, some of the measures of the previous Government, such as the bedroom tax, may have been right in principle but were wrong in detail; for example, seeking to levy the tax on people where no alternative smaller property was available in the same area. That is what I believe is wrong with many aspects of this Bill—often right in principle but so very wrong in the detail.
Few of us would challenge the idea of promoting more starter homes. We certainly need more homes for people to buy, just as we need more social and private houses for people to rent. But the starter home provisions are riddled with problems. The starter homes that the Government have in mind will not, however much they try to change the definition, be affordable to families on ordinary incomes. That has been clearly demonstrated by the figures from Shelter that we have all received. They will simply be out of reach for most middle-income families needing help to buy a home. The worry, therefore, is that these homes will be bought by people with far bigger incomes, not in need of help and not necessarily even local people. The people who will benefit most will be those who need help the least. As the plans stand, they will then be able to sell the property after five years and make a huge profit, and a so-called affordable home will have been lost.
With developers exempted from paying a community infrastructure levy, the planned 200,000 starter homes will place additional pressure on local schools, roads and other infrastructure, creating an additional, unfunded burden for already hard-pressed local councils. Worse, these starter homes will be built instead of, not as well as, the affordable homes that would previously have been required to be built under Section 106 agreements. Given that there has been so much attention tonight on the importance of local plans, one wonders how local councils are going to be able to plan, as they are currently required to, for mixed housing types and tenures to provide the sorts of integrated communities that the noble Lord, Lord True, referred to. If implemented, the Bill could see the end of genuinely affordable housebuilding in this country as the planning obligations which have delivered 250,000 truly affordable homes for purchase and rent over the past 10 years are abolished and replaced with a starter homes-only obligation. As the noble Lord, Lord Kerslake, said, social housing is being written out of the script.
Another area where the principle is right but the details are wrong is the right to buy housing association properties. Some of my noble friends may be concerned about this but I am not opposed to right to buy. Indeed, it was the Liberal Party back in 1947 that first proposed right to buy. But the details matter, such as ensuring at least a one-for-one replacement, where there is a need, in the locality of the sold house. I am pleased that the originally proposed compulsory scheme requiring all housing associations to offer right to buy has been replaced by a voluntary scheme. However, it is of great concern that part of the funding for it will come by requiring councils to sell off vacant high-value council houses, and to do so with no like-for-like replacement and certainly not in the area where they are sold. The National Housing Federation, which negotiated the voluntary scheme with the Government, does not agree with this means of funding it. The London Chamber of Commerce and Industry says it is likely to lead to a reduction in housing for those on low incomes. The independent Chartered Institute of Housing goes even further, saying that this measure could mean the loss of 195,000 genuinely affordable socially rented homes in the next five years. It is deeply worrying.
There is much else to be worried about, including: the failure to address the need for tougher “fit for human habitation” rules; the lack of consultation on many of the measures, including the 60 pages of new legislation laid at the last minute; the centralisation of decision-making, with more than 30 new powers for the Secretary of State; and the absence of much detail, with many measures to come through regulations, many of which have not been seen and, worryingly, may not be seen even before we complete our deliberations in this House.
As I have said, there are measures in the Bill that should be welcomed. But far too many, such as those I have already mentioned and others, such as the threshold for pay to stay or the application of permission in principle for rural sites, require far more detailed consideration before they should be allowed to pass your Lordships’ House.
Lord Best (CB)
My Lords, at the Bill’s next stages I look forward to joining debates on starter homes, self-build and custom housebuilding, rogue landlords, right to buy, sales of vacant council housing, rural housing, pay-to-stay rent increases, planning, CPOs and more. Tonight, my six minutes must concentrate on the principal, overarching housing strategy that the Bill seeks to take forward.
The housing strategy has two admirable goals: first, to increase significantly the number of homes built each year in response to acute shortages, with a respectable target of 1 million extra homes over the life of this Parliament; and, secondly, to enable many more households to become owner-occupiers, with a more level playing field between first-time buyers and buy-to-let landlords. These are two worthy aims and I commend them both. The problem is that they exclude support for hundreds of thousands of households, with 70,000 out of a total of 240,000 new households formed each year not being able to take advantage of the new opportunities to buy. Lots of people, particularly in London and the south-east, many with good jobs, simply cannot afford to buy, even at 80% of market value. These will be the losers from a Bill that makes the home-ownership option effectively the only game in town.
Worse, the Bill not only does so little to enable new housebuilding for those on below-average incomes, it actually reduces the existing stock available to those who cannot buy. To a large extent, it is these less affluent households that will pay the price for measures that help people who are better off than them to buy a home. The Bill robs Peter to pay Paul, even though Peter starts off in a worse position. The biggest winners are those who were going to buy anyway and now get substantial financial benefits—for nothing.
In three ways the Bill seeks to achieve its ends by taking resources away from those who are not going to be able to access home ownership. First, in relation to the building of new homes on practically every site in this country, the Bill is proposing that the mechanism of planning gain—the placing of social obligations on housebuilders through planning agreements—switches from requiring affordable housing for rent for the least affluent to requiring starter homes for sale for those who are better off. Councils will be ordered to demand these homes for sale, even if the local authorities’ market analysis and housing needs assessments show that in their area the real need is for affordable housing for rent.
The second way in which the Bill would help potential homeowners but at the expense of those who are in no position to buy is through the replacement of the housing association rented homes that are sold under the voluntary right-to-buy arrangement with homes for sale. Over the years ahead this measure would gradually see the loss of many thousands of existing rented homes that would otherwise have come available to be re-let to poorer households.
There is a third way in which the Bill helps home ownership, but at the expense of affordable renting. This is in the requirement for local authorities to sell their higher-value homes when they become vacant, instead of re-letting them to a family desperately waiting for one. These homes are to be sold on the open market: in London, no doubt, often to overseas buyers. But funding constraints will not make it possible for their one-for-one replacements—or assuming that it really can be achieved, two for one in London—to comprise similarly affordable rented homes, let alone in the same locality. I am thinking here not only of London boroughs but of most rural areas.
I understand that the Government are expecting 100,000 affordable rented homes to be built over the next five years, out of the total of 1 million new properties. This would leave 50,000 of the additional 70,000 lower-income new households formed each year with no new housebuilding for them. They would have to join longer waiting lists for re-lets in the council and housing association stock diminished by the Bill. I just do not know where these households are meant to go.
Neglecting the needs of less well-off households is not only a huge problem for them and for localities, which need a workforce who cannot all be homebuyers; it will also prevent the Government achieving their goal of 1 million homes to be built between 2015 and 2020. Putting 90% of the eggs in the one basket of home ownership—I think that eggs in baskets have now cropped up four times tonight, for which I apologise—means that the country becomes dependent on the single stream of new housebuilding for sale. But housebuilders will build for home ownership only at the speed at which people buy, whereas the subsidised housing of councils and housing associations can be built outside those constraints. It is the contribution of these two streams of housebuilding in combination that can achieve the Government’s target—as history shows us.
If only the Government could be persuaded to boost the supply of affordable homes for rent as well as giving more help to first-time buyers, we could really get on top of the dire housing situation that faces the next generation. However, if austerity policies forbid the necessary investment at this time—despite the opportunities that low interest rates currently create—then at least the division of available resources should give as much priority to ensuring a decent home for those not in a position to buy as for those who can.
Lord O'Shaughnessy (Con)
My Lords, first, I apologise to my noble friend the Minister for missing the first moments of her speech. I thank the House for its generosity in still allowing me to speak. I am deeply grateful for your Lordships’ tolerance of a “newbie”, in the words of the noble Baroness, Lady Thornhill. It will not happen again. As a newbie, I also congratulate the noble Baroness and the noble Lord, Lord Thurlow, on their excellent maiden speeches. Clearly they will be great assets to the House and are not going to mince their words.
The arrival of the Bill before Parliament is a landmark moment and reflects the welcome importance that the Prime Minister and Chancellor have placed on housing. The Conservative Party manifesto—on the back of which, it is worth remembering, the Government won a majority—pledged:
“Everyone who works hard should be able to own a home of their own”.
What more commendable goal could there be for the Government, when that is the aspiration of almost every family? That has been doubted by some in this debate but we need only to look at the fact that three-quarters of 65 to 74 year-olds own their own home to realise just how much people aspire to this over the course of their life.
This goal is more important than ever because, as many noble Lords have mentioned, we suffer a housing crisis in this country. In the 1980s, housing completions were at 180,000 a year but the rate over the last decade has been only 133,000 on average. At the same time, the population has been growing much more rapidly and household formation suggests that we need at least 250,000 homes a year just to keep up—and we are already lagging terribly behind. The overall floor space of our new-build homes is shrinking, and is now the third lowest in the 28 EU countries. There is a critical intergenerational factor, too, with 700,000 more 20 to 34 year-olds living with their parents. The main reason for this is simple affordability. In 1997, the average London house price was four times average London wages; today it is 11 times. The effect of this has been to reduce home ownership from 71% in 2003 to 63% today. The dream of a property-owning democracy is becoming harder to achieve, especially for the young, and that is not a situation that we can allow to continue.
The Government are rightly taking a twin-track approach to solving this crisis in looking at how, first, to divide the current housing stock more equitably and transfer homes into ownership and, secondly, at how to increase the flow of new homes much more dramatically. It is this latter issue, covered in the planning sections of the Bill, to which I will speak. As the noble Baroness, Lady Valentine, and others have said, there are a number of welcome measures that will help increase supply. The clauses relating to self-build can unlock a real housing revolution in this country, moving the market away from one dominated by large housebuilders to one that encourages individuals to meet their own housing needs. This self-build model is very common in Germany, for example, which has also avoided many of the problems in the UK housing market from which we suffer.
Some questions remain that I hope the Minister will address in Committee. Local authorities will be required to hold a register of people who want to do self-build and then grant sufficient planning development permissions on serviced plots of land. Who will pay for those plots? Will local authorities have a duty to advertise the scheme? How quickly will they have to respond to demand? In urban areas, where undeveloped plots are rare, will the Bill enable people to come together to create self-build blocks of flats—the only way this can work in what is ultimately a very urbanised country?
Neighbourhood and local plans have been another successful innovation of the Government, but they clearly still depend on parish or other local bodies to request that an area be designated as such. Again, what about urban areas, where these kinds of hyperlocal fora are less common? What will the Bill do to make sure that local authorities in cities and towns ensure there are suitable organisations that can support the creation of neighbourhood plans across the country?
The proposals for permission in principle offer the opportunity to speed up the planning system. Several noble Lords have said that the planning system is not to blame for the crisis, instead pointing to the number of permissions in so-called land banks, but this is a red herring. Any provider of a good or service needs a supply of raw materials to create their product, and when the process of building a home and getting permission is so slow, it is no wonder that these land banks emerge. If the planning system were quicker, the land banks would be smaller, and that must be our aim. I would like to explore how the combination of the brownfield register and permission in principle could make sure that homes get built more quickly.
Finally, as some noble Lords have pointed out, there is one essential item missing here: the beauty of the built environment. Residents are much more amenable to new homes if they conform to the aesthetic norms of the area, yet this is one policy area on which planning authorities have almost no influence. A trade-off between allowing more freedom to build homes and giving authorities more powers to ensure local design principles are met might be one way to deliver the homes we so desperately need. I warmly welcome the work of my noble friend the Minister on the Bill and look forward to helping her make it even more radical, so that it meets our shared goal of increasing home ownership.
Lord Bassam of Brighton (Lab)
My Lords, I realise that it is rather unconventional for an opposition Chief Whip to speak in a legislative debate. On this occasion, however, I find the issue at hand too important not to say something. I shall make a stand by telling a personal story, which in turn makes a political point.
As a child, you wonder and worry about change. Sometimes it terrifies, sometimes it worries and sometimes it brings relief. I grew up in a pretty village halfway between Colchester and Clacton, called Great Bentley. My mother Enid proudly told me from an early age that it was mentioned in the Domesday Book, but more significantly that it had the largest village green in all of England. Enid was a housekeeper and a cook—probably the last live-in servant in the village. Live-in servants, as watchers of “Downton Abbey” will have observed, were vulnerable to the whims and lives of their patrons. After five years of working for the Franks family, Commander Franks unfortunately died and the big house in which we had been given rooms had to be sold. In short, we were homeless.
For the next three years, the cosy certainties that I had become accustomed to as a small child seemed to have gone. My mother was a resourceful woman, and as I discovered over time, she had a plan, which involved using her limited savings to buy, for the princely sum of £250, a small cottage, which she then had work done on while friends put us up. The plan was also to turn her independent spirit into a romance, which in time saw her married when I was just eight. Marriage, however, brought a dilemma: my mother owned a home and her husband was a council tenant. But she moved in with him and we made the council bungalow our home too. It had many advantages over our cold cottage: it was well repaired, had hot running water and electricity, and was not hard to heat. Best of all for the younger Bassam, it had a television.
Sadly, my mother’s happiness in finding companionship did not last long. Her partner had led a hard life, including fighting in the trenches of the First World War. It all caught up with him and he died at just 66. Luckily, the local authority passed the tenancy on to Enid, and for the rest of my years living at home, we shared a life on De Vere Estate—something unimaginable under the Bill we are debating here today, where councils would only be able to offer two to five-year tenancies.
Typical of most council estates in the 1960s, De Vere Estate provided good-quality housing for working-class families to a standard that previous generations could only have dreamed of. Our neighbours worked on local farms, in engineering companies and at the Colchester Co-op, or did part-time work in local school canteens and factories. There were plenty of builders, carpenters, railway workers and even a couple of dustmen. The estate had 50 houses on it. Most households worked hard, few complained and all but a handful read the Daily Mirror.
Many of the measures in the Bill will undermine the sort of progress that that generation enjoyed, not just through the general loss of security or the reduction in affordable social housing but through the loss of community. On De Vere Estate, I came to know most people who lived close by. I went to school with their sons and daughters, played in the village football and cricket teams, and delivered their daily newspapers. Like most on the estate, I failed my 11-plus—not for want of trying, I hasten to add, and as I had to explain to my mother—but later on I did well enough to get the grades to go to university.
What political conclusions do I draw from all of this? Put simply, the Conservative Party in the immediate post-war period was as committed as Labour to the development of local authority housing. De Vere Estate started under Bevan and was finished under Macmillan. Some of its builders lived in the homes they built. De Vere provided a stable community and good housing at reasonable rents. There were bungalows for older residents. Tendring District Council was perhaps not the best of landlords, but it did repairs, collected rents, helped in bad times and housed those in most need. Local people seemed to get priority in lettings, and families were helped to stay close to one another—something Labour will continue to push for with the Bill, including through like-for-like housebuilding in local areas when social housing is sold off.
De Vere Estate was successful social engineering, albeit on a modest scale. Sadly, all of this began to change after the introduction of right to buy. The De Vere tenants were not daft and saw a bargain when it was offered. Some I know, including my mother, were not happy but took a punt because it made financial sense, even if it did not help future generations. They reckoned that at least they could pass their homes on securely. Some of my contemporaries still live in the homes their parents lived in, but many now also view their estate as providing someone else’s profit rather than a home. I doubt that more than a handful of council tenancies still exist.
I owe my De Vere Estate upbringing a debt of gratitude. Life was hard, but there was fairness and a community solidarity to it—far removed from the Government’s proposed policies of moving tenants on after four, five, three or two years perhaps, limiting tenancies to low-income bands, charging ever higher rents and focusing solely on home ownership at the expense of truly affordable housing. All of that will be—indeed is—socially divisive. It will stigmatise families and be another nail in the coffin of the post-war settlement that helped people get on in life—aspiration—and provided a degree of security. I take the view that we should resist these changes as robustly as we can. If we do not, we will regret it, and young people will ask in future how on earth a Government could get away with such a grand theft of the public realm.
Lord Palmer of Childs Hill (LD)
My Lords, shortage of housing is largely due to the slowness of developers in bringing land into use. I hope the Minister, when replying, will deal with the problem of large holders of land for development, often with full planning permission, who are slow to develop the properties.
Are there any examples of developers developing for sale on a single site of more than 150 homes per annum? I understand it is said that you cannot sell out a large site due to the absorption problem of sales of 100 to 150 per annum. This does not happen, of course, on small sites. You can see their logic: it is about being certain of sales and keeping up the price of their built stock. We need the Bill to tackle how to make it uncomfortable and unprofitable for hoarders of housing land. Without these actions, all the smooth words will not deal with our shortage of accommodation. Developers build to demand; they do not build and then find demand. Developers will have seen two or three downturns and other developers go bankrupt. In that climate, I reckon that few will rise to meet the demands.
It has been reported that the four biggest companies in the industry in this country account for more than 450,000 of the plots. It is not that they have insufficient funds: they are sitting on £947 million in cash and declared or issued more than £1.5 billion in payouts to shareholders in 2015. It was further reported that the nine housebuilders in the FTSE 100 and FTSE 250 hold 615,152 housing plots in their land bank. This is four times the total number of homes built in Britain in the past year.
How are the Government going to address the scandal that our biggest housebuilders, the ones I mentioned, possess enough land to create more than 600,000 new homes? This is not a scenario that will provide 300,000 units across the country, or the 63,000 said to be needed in London.
The theme running through the Bill is to make everyone homeowners. Not only is this impossible, not only are there vast numbers of people in London who will never be able to afford a £450,000 starter home; the Government, in describing unaffordable starter homes as affordable housing, are guilty of a dereliction of duty to provide social rented housing. The description of “affordable” reminds me of the words of Thucydides, writing about the Peloponnesian war:
“To fit with the change of events, words, too, had to change their usual meanings”.
Thus, the Government are driving a coach and horses through what has been and is the true definition of affordable housing.
Other noble Lords have spoken about the interaction of starter homes and Section 106 contributions to affordable housing. I hope the Minister will elaborate on how they will interact. Surely the discount on starter homes should be more permanent, as other noble Lords have mentioned.
The Government are apparently convinced that home ownership is good but home rental is bad. Not everybody wants the permanence of home ownership, which by its very nature harms the economy by making the labour force less mobile and less likely to move to work. London has always been a city where rich and poor live close, or fairly close, together, which is the strength of mixed communities. I have heard it compared recently to Paris, where poor people are in the banlieues on the outside and richer people live closer to the centre.
What is needed in the Bill is incentives against land banking by developers, enforcement of expiry dates for planning permission and, on renewed application, no certainty that planning permission will be granted. Many developers think that even when their planning permission expires, they can come back for renewal. I have sat on a planning committee, and the planners say, “Oh, well, they were given permission a year or two ago. You therefore have to agree to renew their planning application”, because the objections were always overturned at the time. That is what developers do: they sit on the land until the price of property goes up, while there are not enough houses in this land. If none of that forces land into development, we need an annual land tax on undeveloped land so that it becomes unprofitable not to build the homes that we need.
Other noble Lords have talked about the lack of published regulations relating to the Bill. I suspect that that is because they have not even been written yet. It is a disgrace to bring a Bill to this House at that stage. This Bill fails on many fronts, and a lot of work needs to be done on it in Committee.
Viscount Eccles (Con)
My Lords, perhaps I should start by declaring a non-party interest. I live in a rented house in north Yorkshire. I have lived in the house for 46 years, and the lease expires when I am 107. So I am one Member of the House who is not hooked on ownership.
Listening to this debate, one thing is absolutely clear. We are all agreed that there is a massive failure in the housing market, that we are building approximately half the number of new homes a year that we need and that the increase in the number of households is likely to continue, for one reason or another.
In those circumstances, there is no room for ideology or a single solution. It should not be a party political matter; we need a big tent in which everyone who has a contribution to make can make it, in order to get supply a great deal nearer to demand. How many of the problems that we have been discussing today would solve themselves if supply was much closer to demand?
In the time remaining I want to concentrate on starter homes, the seven clauses of Part 1 and the scheme that is in them. It illustrates a fundamental lack of thinking and decision-making in this very difficult situation. The scheme provides a 20% subsidy, effectively, which will of course affect the whole market for owner-occupied houses, and many points have been made about that. It will affect all the players in the market.
In our proceedings so far, the effect of that subsidy has been approached very cautiously. In Committee at the other end, lots of doubts were expressed about what would be the unintended consequences of supplying starter homes on the very sketchy terms set out in the first seven clauses. Indeed, I think it would be fair to say that the conclusion of the other end was that the House of Lords has lots to do to clarify the position that might emerge from those seven clauses. They are classically a framework. Indeed, without three of the powers being described in draft—restrictions on sale and letting, the meaning of “first-time buyer” and the starter home requirement—it is very difficult to come to any judgment about the possible success or otherwise of the scheme.
This is, of course, not the end. There are six more powers to lay statutory instruments, some of them amendments for the future and some of them powers that will never be used. In addition, the Secretary of State has a duty to lay down guidelines. Finally, he has a power of direction. When the Delegated Powers Committee reports, I wonder whether this will be a record: nine powers, guidelines and a direction in seven clauses. As an ex-member of the Delegated Powers Committee, I am afraid this implies to me that the scheme has not been thoroughly thought through. This is going to make it very difficult for this House to come to a conclusion about the likely success or otherwise of this new form of home ownership, which seems—as has been said many times this afternoon—to have all sorts of onward effects on the rest of housing tenure which may not have been sufficiently thought through. I therefore hope that my noble friend the Minister will assure us tonight that we are going to know a great deal more about the starter home scheme than we know at present before we complete the proceedings on the Bill.
Viscount Hanworth (Lab)
My Lords, the Housing and Planning Bill is a most ill-conceived piece of legislation. It will do nothing to alleviate the housing crisis. It is certain to exacerbate the crisis and to increase the acute social divisions from which this country is suffering.
One might have expected the civil servants at the Department for Communities and Local Government to do a much better job with a housing Bill, notwithstanding their depleted numbers. However, civil servants no longer have the opportunities they once had to avert political folly—and, of course, this is not where the Bill originated. It originated from think tanks and special advisers affiliated to the Conservative Party. They have ignored the advice of experts in the field. The comments of experts now amount to a damaging critique of the Bill. Indeed, a former Permanent Secretary at the Department for Communities and Local Government, from whom we have heard today, has been among the foremost critics of the Bill.
One of the principal proposals of the Bill, which is to extend the right to buy to the tenants of housing associations, arose at a late stage in the campaign for the general election when the Conservatives felt far from assured of a victory. The proposal, which was to compel the sales of the properties of housing associations, was a reprise of one of Margaret Thatcher’s policies, which was to compel the sale of council houses. Thatcher’s policy seemed, at the time, to be a winning one, and Cameron’s proposal may be regarded as the product of thoughtless desperation. As is the case with so much recent Conservative legislation, an extemporary pronouncement by the Prime Minister has committed others to the task of elaborating a damaging and dysfunctional policy.
In the minds of many in the Conservative Party, as in the mind of Margaret Thatcher, there is an aversion to the provision of council housing on account of its social connotations. This damaging attitude has extended to our system of town and country planning, which is indeed a legacy of the socialist movement. The Housing and Planning Bill inflicts further damage on our national planning system. Significant damage was inflicted in 2012 with the establishment of the new National Planning Policy Framework. A set of sophisticated and carefully crafted documents, which had provided policy guidance in many specific circumstances, and which had been developed and refined over the previous 25 years, was tossed into the rubbish bin, to be replaced by 50 pages of vacuous generalities.
The damage was compounded in subsequent Acts of Parliament, including the Growth and Infrastructure Act 2013, which established the option of bypassing the planning system in favour of applications made directly to the Secretary of State. The present Bill intends to strengthen such provisions. It also proposes to introduce competition in the processing of applications for planning permission in a way that would completely bypass the planning authorities. The destruction of our national system in favour of the administrative fiats of central government is bound to lead to chaos and confusion.
I turn briefly to a critique of some of the measures of the Bill. The original proposal relating to the sale of housing association properties has been buttressed by a policy for the forced sale of council houses in high-value areas and, generally, of homes that have a high market value. This will occur whenever a home becomes vacant, which will preclude its being used to house needy persons or families who have been on council waiting lists. The intention is to use the proceeds of the sales of council houses to pay for the extension of the right to buy to housing association tenants and to finance discounts granted to purchasers of so-called starter homes. The council will be compelled to remit the majority of the proceeds from the sales to central government.
The Bill declares an intention to monitor the progress of such divestments and to penalise a council if, in the judgment of the Secretary of State, the sales are not proceeding at a sufficient rate. The incumbency of council tenants with security of tenure poses a limit to the rate of divestment. This obstacle has led to a clause in the Bill that will compel councils to offer tenancies of only two to five years’ duration to new tenants. Security of housing is a precondition of a stable and a prosperous existence, but such security is to be denied to the least prosperous members of our society. This policy threatens to do massive social damage.
The Bill no longer emphasises the need for affordable housing. Instead, it talks mainly of starter homes. These homes will be available to first-time buyers under the age of 40 at a cost to be limited to £450,000 in Greater London and £250,000 elsewhere. The Bill allows these, nevertheless, to be classified as “affordable” houses. As many critics have remarked, such prices lift the starter houses beyond the reach of the majority of persons of modest incomes and little capital. For those who can afford a starter house, the subsidy that is proposed will be a discount of 20% of the price of a home, which will be a considerable boon. However, there can be no justification for subsidising individual capital gains from the disposal of public assets. The availability of council homes for households in genuine need will be further reduced.
As we have heard, the Bill will lead to significant expenditure from the public purse, through housing benefit, to provide temporary accommodation in the private sector for households who might otherwise have been housed by local authorities. The starter-home initiative will do more to inflate house prices than to increase the supply of accommodation, therefore it will worsen rather than mitigate the current crisis of housing supply and affordability. Indeed, it is remarkable and almost incomprehensible that the Government should have predicated their housing policy on a succession of measures that can serve only to stimulate demand. They have offered few policies that are aimed directly at increasing the supply of housing.
Lord Teverson (LD)
My Lords, I will first declare some interests in that I am a landlord of a single premises. I hope that I am not a rogue one; I can provide references from my tenant. I am a chair of a company called Anchorwood Developments, which is developing a site in north Devon in co-operation with a social landlord. One of my other interests, which is not a declarable interest because I am not paid, is as chair of an organisation or group called the Rural Coalition, which includes a number of membership organisations such as the CPRE, the NFU, the CLA and about 10 other organisations which hold the rural area very dear.
If I could indulge the Minister on this, most of the members of those organisations are probably Conservative voters, so if she can imagine that I am speaking from behind her rather than in front of her, perhaps it will give her the right idea about what we are saying. While the Rural Coalition recognises entirely that this was put forward as part of the Government’s manifesto, those organisations are collectively concerned about a number of areas, particularly around rural issues. I very much echo a number of the comments made by the noble Lord, Lord Cameron, and the right reverend Prelate the Bishop of St Albans.
I will mention a couple of statistics, which I am not sure have come out already. In rural areas, particularly communities which have populations of fewer than 3,000, the number of social houses is something like 8% of the total in comparison with cities, where it is about 19%. In terms of earning power and the ability to become an owner-occupier, the lowest quartile of earnings has to be multiplied roughly eight times to reach the average cost of a dwelling. So there are real challenges, and it is communities with populations of 3,000 or less that I am addressing in my comments this evening.
My first point is on right to buy. There is a real concern here that comes from the low proportion of affordable housing. I recognise that within the voluntary agreement a number of exceptions can be made in relation to rural communities, but the track record of one-for-one replacement—which the Government intend should take place, and I am sure everybody hopes it will—shows that it is incredibly difficult to achieve within a reasonable timescale, and it will certainly be very difficult to replace units of social housing in near proximity to the communities where the people already are. That is a real challenge.
A second concern on right to buy relates to where the properties end up. In the far south-west, within a 15-mile radius of my home, of which I am privileged to be the owner-occupier, there is a hotel on the coast that now has in its possession for use as accommodation a number of ex-council houses. That shows how things move on. There are a number of stories about how council houses that have come under the right-to-buy scheme have become second homes. That is an issue when it comes to the ability of local people to use that housing stock. In Truro, members of my extended family have lived in sold-off council housing that is now buy-to-let accommodation. I agree that it is being used by local people but it is not exactly how we would like accommodation that was once social housing or part of the council housing stock to be used.
My second point concerns the high value of rural locations. The area where I live has a very attractive coastland. People like to spend their holidays there and we encourage that. There are a number of very high-value social housing units that would probably come under this legislation, with the real risk of the properties being sold and becoming either holiday homes or second homes, which would perhaps be used only over the Christmas period or during the summer for extended family holidays. That would contribute something to the economy but it would present a difficulty when there is a real housing crisis. We want to enable both those things to happen.
However, the biggest challenge, which has been mentioned by a number of noble Lords, is that of rural exception sites and starter homes. Of course, all of us who are owner-occupiers have gone through the experience of buying our own starter home, and therefore the last thing we want to do is to prevent other people and other families benefiting from that. But, again, there is a real affordability issue regarding starter homes as they are defined at the moment. Even with the discount, because of the ratio of earnings to house prices, it will be a real challenge for a lot of the people in those communities to afford those homes. There is also a real risk of crowding out affordable housing within an area.
In my village, six excellent community land trust properties are being built. The money paid for these sorts of developments across the nation is about £10,000 a plot or £100,000 an acre. But if people—farmers, primarily—believe that those properties are going to come on to the open market in the future, that source will absolutely dry up. Therefore, the way for the Government to meet the challenge of rural-proofing what we need to achieve in this Bill is, as the noble Lord, Lord Cameron, said so eloquently himself, to exclude those communities of 3,000 people or fewer.
The Earl of Lytton (CB)
My Lords, this is a monster of a Bill and I have a fair clutch of interests to declare, as have other noble Lords: landowner, residential and commercial landlord, one-time developer, and chartered surveyor with an involvement in construction management and development land. I am an immediate past president of the National Association of Local Councils, and a vice-president of the Local Government Association. As ever, my views expressed here are entirely my own.
Nobody doubts the need to tackle the housing shortfall or underestimates its pernicious effects. The questions, therefore, are on the mechanisms, the pace of change and affordability. There is a degree of bravery involved in this Bill, because there are many vested interests in continued high and rising residential property values. We should make no mistake about that. There is much money, loan security, speculative prospect, household equity and tax yield, not forgetting community benefit and infrastructure contributions, to be had out of this system. Housebuilding is an important industry and needs value growth. I view starter homes in that light, and it is clear to me that this is the brave new world of the owner-occupier and the almost certain and progressive attrition of the social rented housing sector. However, I simply note that there will always be those among the population who, for all sorts of reasons, require housing but will be unable to pay a commercial market rent or to obtain a mortgage to enable them to buy it.
Retaining funds derived from social housing sales for the purposes of building more has something of a chequered past. I recall that the proceeds of the Thatcher era sales did not inure for that purpose, despite political promises, and it was a Labour Chancellor who simply pocketed the fund for other things in about the year 2000.
Focusing on my own misgivings about the financial aspects of a one-for-one assumption by selling off social housing at a 20% discount, I understand that relief from the community infrastructure levy and Section 106 obligations, plus a cheaper form of construction, might close part of the gap. However, I observe that development viability is replete with price-sensitive variables, and there is a fair chance that even if one-for-one is achieved, this will result in homes that do not last, are small, cramped and badly arranged, in the poorest locations, and likely to underperform against the market generally. I would question the economic and practical wisdom of that.
I related very strongly to the comment made by the noble Lord, Lord True, about infrastructure. When I travel around and find burdens on local roads that have not been dealt with by infrastructure improvements, I know very well what is happening.
Rural housing has been mentioned by others. A couple of days ago, I spoke to the Exmoor National Park officer. I happen to have an estate in the Exmoor National Park, where average house prices to average earnings run at a multiple of over 14. Even the most basic form of new housing is outside the means of the typical rural workforce, as was alluded to by the noble Lord, Lord Teverson. Of course, second homes, holiday cottages and so on are part of that algorithm, as he mentioned.
I do not see a general tide of munificence coming in and providing affordable sites for replacements. If they are to be devoted not to society at large for long-term social good but to provide a one-off windfall for the first successful occupier, I do not see that happening.
A far larger proportion of our European neighbours’ citizenry considers renting privately the norm, with very clear understandings about the respective roles and duties of landlords and tenants. Yet here in this country it has become a divisive football of party politics, in which old prejudices of landlord bad, tenant good, persist. If ever there was a time for cross-party consensus, this is it.
So although I very much support the measures against rogue landlords and their agents, I know several things. First, they will not be adequately policed because there are too few resources to do it; secondly, the honest landlords and agents will be discouraged, while the dishonest ones will continue to flout the requirement; thirdly, careless tenants, of whom there is a number at least equal to that of rogue landlords, will use this to their own advantage with impunity. Here is my suggestion: how about a public online register of landlords and agents who are verified current members of an accredited body with a deposit and redress system so that would-be tenants can check them out in advance? Would that not be great?
On neighbourhood plans, the previous coalition Government made a fine job of devolving powers to communities but did nothing about creating resources and opportunities for the process to be financed. The National Association of Local Councils has consistently argued for community infrastructure levy regimes to be in place by the end of this year and for a greater proportion of that income to go to those parish councils that have successfully completed the neighbourhood plan process. Otherwise this Bill begins to look like a process of setting a task that cannot be completed and then invoking some sort of direct intervention when, predictably, nothing happens. We can do better than that.
I turn briefly to the changes in the compulsory purchase arrangements. I have spoken to the Compulsory Purchase Association and it assures me that, in the main, the changes are welcome. However, there is one anomaly—the occupier’s loss that is paid to a tenant who is displaced on a compulsory purchase. This is disproportionately less than the freeholder’s equivalent. It needs to be looked at.
Finally, I turn to the issue of housing delivery and small housebuilders, in particular, which is not covered by the Bill. These cannot construct houses at the same low cost that the large-volume housebuilders can achieve. It is difficult for them to tackle the upfront costs of the ecological and other investigations that add hugely to the pre-planning consent stage. These are upfront cash costs. Infrastructure costs are often more expensive for smaller sites. Finance houses will lend against the land asset but are much less keen to lend against a construction project for self-evident risk assessment reasons. It will be interesting during the course of the Bill to see what the Government think about how to deal with the question of small builders.
I generally welcome a lot of what is in the Bill and look forward to discussing it in Committee.
Lord Selsdon (Con)
My Lords, I feel I have gone back in time to Watford. When I first left the Navy I went to work in a factory there called Universal Asbestos, which was trying to get out of asbestos and into plastics. It was a great experience for me. I was then made a rep and my greatest triumph was managing to get “Workers’ Playtime” at the factory. I then became a shop steward. I loved the idea of building things. I was no good with my toy bricks when I was a child but the whole idea of construction appealed to me.
At a very young age, due to a death, I arrived in your Lordships’ House, where I have been for 52 years. I have been drip fed—I would have said originally by geriatrics—by wise men and something sticks to the skin. Construction and building are of great interest. I have looked at and been most interested in what you call regeneration. When I first met Michael Heseltine—whom I had some doubts about because he was a great showman, and I have always been nervous of showmen —we discussed the regeneration of docklands. My family had been in the shipping industry and used to ship people to Australia from docklands. With the ability to use tax allowances and to get clawbacks, the whole of docklands was regenerated. I spent maybe three or four years working there, backwards and forwards, being looked down on because obviously, being a Member of your Lordships’ House, I had no real knowledge or experience and I was there only in name alone. However, we managed to do quite a lot and build things.
The greatest fun of all was working with the left-wing and right-wing councils on houses and accommodation, and looking at the ethnic variations in the East End and docklands and realising that all these were historic, coming from trade and such things. When finally we managed to get things done I thought that, as I chaired the Government’s body for sport for Greater London and the south-east, we should have a sports arena. This caused tremendous problems but, in the end, with the aid of sports bodies, we built an arena and more houses. I finally left docklands and realised that, often with the use of tax allowances, it was the funding and the drive that got things going, and that is where I had a great respect for Michael Heseltine.
When you looked around the country at areas of decline, you thought, “How can these be regenerated and where will the wealth come from?”. One looks at the various centres that have declined, and their history. The wonderful thing about your Lordships’ House is that you can go into the Library and try to find a question that they cannot answer. I have failed every time: they always come back with a suitable answer.
We are considering regeneration and home ownership. The principle of home ownership has always been very important to me, but not necessarily to so many people. I hated the idea of renting something—as I had to do when I first came to London—so I went to see the owner and asked if he would sell to me. He said that I could not afford to buy it. So I then suggested that he lend me the money. He very kindly did, so I bought my first mews house.
When I later became a director of Gleeson, we were not as much into housebuilding as we would have liked, so we set out to find sites. I did not realise how difficult it was, in the construction industry, to find sites, because everyone was competing with everyone else and so the price rolled up. We then hit on the idea that we must do “affordable housing”. I remember discussing, at one of the board meetings, what “affordable” is—surely that relates to the people who can afford it. We therefore started to look at low-cost housing and set up a housebuilding operation, which did not make an enormous amount of money. The important thing, however, was the principle of deciding who you were building for.
Now, with the shift in the pattern of inhabitants in the United Kingdom, and the number of people of all classes and levels of wealth who wish to come to, work in and live in this great country, I feel that we are on the way up—but that hanging in the background is the realisation that we may have to take in more immigrants even than in the Victorian era. I wonder how we can cope with them. I would like to see some kind of master plan for housing and changes in estate duty that would enable people to pass on their properties to their children and grandchildren in shares, rather than have them start again.
I have enjoyed the debate today. I am not sure what the conclusions are. I am impressed by the vast number of people who have been here. I thank the Minister for her help and I hope that this will lead to something productive.
Baroness Lister of Burtersett (Lab)
My Lords, I cannot claim expertise in housing, but I was so appalled by the “pay to stay” and loss of security of tenure provisions that I felt compelled to contribute this evening.
After all, as we have already heard, housing is not simply about bricks and mortar; it is about people’s homes and the security and rootedness that homes can provide. These provisions threaten that security and rootedness. Yet just two weeks ago the Prime Minister declared that this Government are all about security:
“Security is also what drives the social reform that I want this government to undertake in my second term. Individuals and families who are in poverty crave security – for them, it’s the most important value of all”.
Moreover, in his Christmas message he said:
“If there is one thing people want at Christmas, it’s the security of having their family around them and a home that is safe”.
These fine words are totally contradicted by this Bill. Instead, we are once more in this Government’s looking-glass world, in which, following Humpty-Dumpty, a word means what the Government choose it to mean. Thus, “secure” tenancies will now be fixed-term—that is, not secure at all. What we currently understand as secured tenancies have become “old-style” secured tenancies: so 20th century. I cannot understand why such a significant measure was introduced only on the last day of the Commons Committee stage. It means that we have the responsibility to scrutinise it particularly closely.
Shelter warns that the loss of security risks introducing the worst aspects of the current private rented market—instability and churn—into council housing, with worrying implications for homelessness. I am also worried about what it is likely to mean for family stability, social networks and diversity, jobs and children’s education, as well as for women who move to flee domestic violence, carers, disabled people and those with recent experience of homelessness, who need stability. I hope the Government will be open to exemptions for at-risk groups such as these.
In his speech the Prime Minister also talked about families on estates “behind front doors” building,
“warm and welcoming homes just like everyone else”.
Indeed; and the Minister said that she hoped we would keep coming back to the word “home”. But new tenants will no longer be able to invest their lives in warm and welcoming homes. Andrew Arden QC—I declare a personal interest as the godmother of his daughter Emma—has written in a forthcoming editorial in the Journal of Housing Law that, “the idea that a home is not for life is one that can only comfortably be sustained by those who know they will always be in a position to acquire a replacement. Taking away security is taking away housing in its long-term role as the essential base for a family, for security in its widest sense, the confidence to invest in” family and community “without fearing it will all be snatched away should the family fail to meet the criteria for a new tenancy”.
The “pay to stay” provisions strike a further blow at that sense of security. They also drive a coach and horses through the Prime Minister’s claim that “we are uncapping aspiration”. I cannot think of a policy better designed to cap aspiration and undermine a key objective of universal credit. The consultation paper states that the Government want to ensure that the policy supports work incentives, but I fear that no amount of tinkering with tapers and multiple thresholds can avoid its disincentive effect, particularly for second earners, who as we have already heard are mainly women. How does this square with the Prime Minister’s promise that,
“because the evidence shows that families where only one parent is in work are more at risk of poverty we are going to back all those who want to work”?
That is some backing.
I am sure we will explore in Committee the many technical problems that are likely to arise from devising a fair new housing means test based on taxable income in the previous financial year, with no account taken of family size, disability needs, or how it can reflect the way modest earnings fluctuate in today’s labour market. Tenants will be subjected to compulsory means-testing, yet some of them may well have chosen not to claim means-tested benefits in order to avoid what can sometimes be something of an ordeal. Crisis is particularly worried about vulnerable tenants who may not be able to provide the necessary documentation, making them potentially liable for the full market rent regardless of their actual income. Can the Minister explain why the income threshold is so much lower than under the discretionary scheme introduced by the coalition Government? Am I right that the thresholds will not be uprated in line with average earnings? Can she also tell us, as others have asked, when the various details that will be contained in regulations will be published, as it is crucial that we have them before the Committee stage if we are to have an informed debate?
Ministers constantly go on about the messages they want legislation to send. These provisions will send out the message that the party of aspiration will be capping aspiration and that the party of security will be creating insecurity. As we return to our warm and secure homes, I hope we will remember our responsibilities towards those for whom the Prime Minister’s promise of security will ring hollow indeed.
Baroness Grender (LD)
My Lords, I should first like to congratulate my noble friend Lady Thornhill on her maiden speech. It has been an absolute pleasure knocking on doors with her over the past two years. To knock on a door in a mixed tenure community and to understand the passion and drive she has for some of the places that she has ensured were built has been a joy. I also thank the noble Lord, Lord Thurlow, for his excellent and eloquent speech. I feel that chartered surveyors are like buses in this debate because three have come along—and do we need them? Only a week ago I spoke to representatives at Jones Lang LaSalle about the Bill who said that even for them, in terms of the private sector, the housebuilding sector is at only 50% capacity for delivering anywhere near the ambition that this Bill has set out. Much mention has been made of the charitable sector, but the private sector is also worried.
Every housing Bill is an opportunity to lay down a great legacy. I feel that this Bill falls very short of that aim. Not only does it fail to tackle the most chronic need we have—the provision of decent, affordable housing and, above all, social housing—but it deliberately sets out to asset-strip what little social housing is left. That it does so with a request to this place for so many blank cheques given the level of secondary legislation, to which others have already referred, is something that I know and trust the Minister will strive to overcome. I wish her luck with that but she will need it.
This evening, I would like the Minister at least to give a commitment that the details of the regulations on the formula to be applied to local authorities on high-value assets likely to be vacant, under Clauses 67 to 73, will be ready prior to us starting Committee stage. Last night, her officials confirmed in a meeting that most submissions are now in. So there is no need for further delay on the small print, which is so important. That helps this House to judge whether the Government have done the maths. Obviously, as noble Lords have heard, we have our suspicions on that.
We all need to recognise that there has been a failure over the decades to increase the supply of social housing in the wake of right to buy. I recall lobbying the Major Government and the Blair Government on behalf of the charity Shelter and the somewhat glazed look of politicians, especially those from the Treasury if they agreed to meet you at all, on the issue of housing. That was in spite of best endeavours sometimes from Housing Ministers from both Governments.
We all know the eternal truth that decent housing across all tenures needs decent levels of expenditure. Ever since the popularity of right to buy, the Benches opposite have tried different formulas to repeat this Thatcherite policy. Some of us would prefer them to look a little further back and I was interested that the Minister mentioned Churchill. Churchill got Macmillan to build 300,000 homes a year. Perhaps we could urge the Benches opposite to go back a bit further than Thatcherism.
Instead, we have a Bill which will subsidise middle-income home ownership at the expense of affordable homes for rent. I believe that the pay-to-stay policy, combined with the sale of high-value social housing, will reduce the mix of tenure, particularly for inner-city areas. As a governor of an inner-city school, the knowledge that children from all backgrounds, all races and all religions go to that school and live in that community is what I believe makes us such a tolerant and liberal society. But with this Bill I fear that social housing will be driven out of the inner city altogether. Given other current priorities for the Government—for instance, on very difficult issues to tackle such as radicalisation—I urge the Minister to look again at the likely impact of these policies on mixed tenure and therefore a decent mix in our communities.
While this Government have made it clear that social housing and homelessness itself are not seen as priorities for this Bill, the impact will still be felt by low-wage earners, those on social housing waiting lists and, therefore, at the sharp end of that, homeless people. I was so pleased that the noble Baroness, Lady Adebowale, mentioned mental health. Homeless Link will say that, from the surveys that it has done, about 86% of people who are recognised as homeless say that mental health is an issue for them. That will come as no surprise given some of the circumstances they are in.
The measures on rogue landlords are welcome but the critical issue in the private rented sector remains affordability. The end of private tenancy is now the most common cause of statutory homelessness, accounting for 31% of all households accepted as homeless in England and 42% in London.
In Committee, these Benches will want to explore updating the law on fitness for human habitation, to which the noble Lord, Lord Young, referred. While discussed briefly in the other place, the debate centred around tenant rights for compensation rather than on the central issue of empowering tenants as consumers to challenge poor conditions in the courts to get the repair done rather than wait for some kind of compensation. Certainly, we will want to explore that as a possibility.
I have here an example of a lady with a son aged four months who approached Shelter. She was in a top-floor flat with no insulation in the roof. She was without a boiler for six months and had no hot water or heating. We all know that the impact of high levels of poor rented accommodation on the NHS is costed at some £2.5 billion. We definitely want to look at the issue of human habitation.
I will move on very quickly to one more thing, which is abandonment. Given that there are few cases of genuine abandonment, we want to be absolutely clear that landlords will not abuse this power. It is only around 1,570 cases a year. I am sure that the Minister understands that landlords can already apply Section 8 and Section 21. Will this be something that landlords can enforce, particularly on the most vulnerable of tenants?
To return to the point raised by the noble Baroness, Lady Royall, and my noble friend Lord Greaves on the wholesale use of secondary legislation, I sincerely hope that the Bill is given the due diligence it deserves by the secondary legislation committee.
Finally, back to Macmillan: he had the vision to see that dramatically increasing social housing would also drive up private housing. We could do with a bit of vision like that here.
Baroness Greengross (CB)
My Lords, I declare my interest as listed in the register. It is not really surprising that, in trying to achieve the target of building 1 million new homes by 2020, there seems to be in the Bill a need in some areas to redefine, or at least readjust, the relationship between local and central government. Today, the big clamour is for devolving power, and rightly so. The argument goes that local issues affect local people. Surely it is right that these should be decided on a local basis. Indeed, the Chancellor’s much-publicised northern powerhouse is based on just such a premise.
Unfortunately, some—maybe many—local issues are not just local; they also have national effects. To take the obvious example of spending, vast numbers of local decisions can have national consequences as a result. At other times, the actions of one local authority can have serious consequences for an adjoining authority, or, indeed, for agreed national policy. Transport flows are one example, but housing provision can have the same sort of implications. All too often, however, local discretion is constrained by national government guidelines and parameters that, in effect, take away any chance of local authorities really having any discretion at all. Is that really as necessary as the Government claim? Maybe yes, but maybe no. These are the sort of things that the Bill gives us the opportunity to get right in terms of that balance.
Much of the Bill will have near unanimous support. Surely everyone would agree that steps to curb rogue landlords are a really good thing—except for some rogue landlords. Improving compulsory purchase procedures is surely also a good thing for everyone. But in a number of instances, such as speeding up neighbourhood planning or requiring councils to dispose of surplus assets, the Bill seeks either to redefine existing boundaries or to draw new ones. The ends are desirable, but we need to be absolutely certain that the balances drawn are right, not merely for local government, which is an essential objective if it can be reasonably achieved, but, let us be clear, to try to achieve our national objectives.
Some things seem to be right in principle, but they need to be carefully designated in practice. There is a strong case for exempting specialist properties from right to buy. Similarly, it is difficult to see why high-income families should not be required to pay higher rents, so long as those rents are lower than income rises. If a local authority is, in effect, subsidising a person’s housing costs, is it really so revolutionary to suggest that this should in some way—it must be in an acceptable way—be related to that person’s ability to pay? What need to be better defined are surely the parameters within which these things will operate. This must be done in a way that does not undermine our overall aims and targets. Disposal of council assets and phasing out of secure tenancies are other such areas. For example, the opportunity to look at the limits, if any, on tenancies should be carefully reviewed. In all such areas, security for those at risk must be ensured and achieving the balance there is very difficult.
A number of things are clearly giving rise to unrest among local authorities. Many things might be right in concept, but an absolute disaster in implementation. It is here where we need to get the balance right, which I hope we will, as a result of our deliberations. We must have much more detail than the Government have given us so far if we are to be able to do this. It is quite extraordinary to have to work with so little essential detail in many of these areas.
The provision of retirement housing is a matter which, sadly, seems to be largely missing from the Bill. It is extremely important. With the number of people over the age of 65 set to double in the next 30 years, a proper policy with regard to their housing is essential in any national housing strategy. The availability of more specialist accommodation for this section of the population and the resulting downsizing that this would make possible could, by itself, go a long way towards solving our housing shortage. Over and above that, retirement housing has so many other proven advantages for those who live in it—for example, in reducing social isolation, to say nothing of the huge savings in health and welfare costs for national and by local government.
Some changes to planning procedures will be necessary. In doing this, the Government must understand that planning is not necessarily a barrier to development. An effective planning system is critical in driving growth and prosperity.
As the Bill makes its progress, I hope that I shall be able to make more detailed suggestions on many of these matters, and possibly others as well. I am delighted that the Government are now aiming to build 1 million new homes by 2020, to drive up standards and to protect vulnerable tenants. I would also welcome anything that gives a better balance between the role of local and central authorities. Let us hope that, at the end, we will be able to congratulate ourselves that we have actually achieved both and not merely enabled one or other side to have simply power built their own estate.
Baroness Gardner of Parkes (Con)
My Lords, I declare my interest which is in the register. At this stage, there is not much more to say on the Bill because we have had some marvellous contributions. I congratulate the two maiden speakers.
As was said at the beginning, housing is the basis of home and family life and perhaps one of the most important influences on the future of the next generation as well as on the present one. Help to buy, as was said earlier, enables the dream of home ownership. It is natural for people to have that. But we need to learn from past mistakes. In my involvement with housing on the GLC, I visited estates which were almost unusable because they were built out of a sort of concrete and no ventilation was provided. People’s clothes were ruined by ceilings that dripped mould—I recall that happening to one wedding dress. There were so many mistakes made in what was meant to be the solution of building those marvellous blocks. So many of them are now having to be removed or modified completely.
My noble friend Lord Selsdon had some interesting things to say. My expert on party walls, the noble Earl, Lord Lytton, made the point that I do not feel anyone else went into in the same detail—about the shortage of builders. I can recall years ago, when I was a vice-president of the National House Building Council, that the moment you tried to build a certain amount of structure in a certain amount of time, you just did not have enough builders. All the bricklayers used to go off on an eight-week training course and give up after four weeks because they could move straight on to a job, whether they were qualified or not. The Government are going to have to work out how to deal with this issue.
The noble Lord, Lord Palmer, talked about housing land banks. Sure enough, people do have land banks, but you cannot develop all those in five minutes. Certainly, small builders have a very limited rate of production. In large cities, large blocks are the answer because the only extra space we can find is by going up. I had a dental practice near the Barbican and know that people used to have to take their children down to the playground below and watch them from the 17th floor above to see whether they were playing safely. That does not answer any of the community ideas we have. It is important to think these things through and come up with answers that make it possible for people to bring up their families properly.
I welcome the point about enforcement against rogue landlords. But I do not agree that they should be banned as they will go underground and become worse than ever. Those desperate for housing will then be dealing with people against whom they have no comeback as the whole thing will have gone underground. Instead, there should be powers of enforcement and rogue landlords should be put on a blacklist if they are that bad. They should not just be wiped out because that will not get rid of them but will help them to develop a horrible subculture, which will be worse for people than the present situation.
Those who buy a flat in a block become leaseholders. Many of them have no idea at all what responsibilities they are taking on or what will happen. I have spoken to a number of people who bought houses in Margaret Thatcher’s day. They now find that they have an income of £10,000 a year but face a roof bill of £12,000 a year and have no money with which to pay it. Therefore, anything that is sold on a leasehold basis should have to have a sinking fund so that people put away a little bit of something all the time and do not suddenly find themselves completely impoverished and unable to do anything because of that.
I should like to touch on many more things but time is moving on and I must not go on. But an estate should be safe for the community that benefits from it. I was touched to hear the noble Lord, Lord Bassam, describe his childhood. Many people would now regard that hardship as an almost idyllic situation because at least there was love, safety and care.
I agreed with many points made by the noble Baroness, Lady Grender, which require a great deal of thought and need to be gone into. My time is almost up and I must not go on. However, we must, above all, have the regulations before Committee, as others have said. I have found such a situation very unsatisfactory, particularly on the part of this department. It always finds some reason why it cannot produce the regulations in draft form until the Bill is over. Then, all we can do is look at them as a statutory instrument and say either yes or no. We cannot amend them, make sense of them or deal with the questions that come up. So, as I said, above all I support noble Lords in pressing for the regulations to reach us in time for them to play a part in our proceedings in Committee.
Lord Whitty (Lab)
My Lords, I thank the Minister for her calm and clear exposition of the Bill. For more than 10 years I have lambasted successive Governments about the depth of the housing crisis every time we have had a housing debate in this House. I am glad the Government at least recognise the need to step up drastically the number of new houses and dwellings being provided. However, I am afraid that I cannot be as calm as the Minister because I think this Bill is not just a missed opportunity but is, in large part, seriously misconceived and will not deliver the improvement in supply that the Government’s strategy has already identified.
If that sounds a bit partisan, I do not blame this Government for the depth of the housing crisis. For the last 30 years, I have criticised Governments of every complexion and blamed them for their failure to ensure that adequate numbers of houses are built. I blame them for their failure to match right to buy—which I agree with—with new social housing provision. I blame them for the failure of regional policies to relieve the pressure on London and the south-east. I blame them for the massive growth in housing benefit which is, in practice, the way we are paying for all these failures and dysfunctions. I blame them for denying local authorities the ability to provide social solutions and housing of all types. Underlying this—which may be uncomfortable—I blame the mind-set and lifestyle of some of our policy makers, and those who advise them, and their attitude to the people who live in social housing.
This House now has to consider a Bill of 193 clauses, 20 schedules and, no doubt, vast reams of secondary legislation. Many of the clauses have not been properly considered and received cursory—if any—scrutiny in the Commons. A Bill of this size really ought to have been the opportunity to tackle this issue comprehensively. Instead, it concentrates on changes in tenure and relatively minor changes in conditions of tenure—some of which have serious consequences—and only to a limited extent on the nature of the houses supplied. It will not deliver a significant increase in that supply. Unfortunately, it does so in a way that will increase social division, put the squeeze on social housing, undermine social cohesion and inhibit aspiration and self-improvement for those who live in social housing. At the same time, it will sabotage the financial basis of both housing associations and local authorities, and in a way that centralises decision making and undermines local planning.
The previous coalition Government started with a purpose in the Localism Bill. It was very weak, but commendable in principle. Most of what has happened in relation to housing and planning since then has gone in the opposite direction. This Bill gives 34 additional powers to the Secretary of State, mostly to override local authorities in the planning system. It instructs local authorities on what kind of homes they should build; for example, starter homes rather than using Section 106 to build a mix of housing. It requires local authorities to sell off their own highest value properties. It fails to allow local authorities—even the much-vaunted new joint authorities, to which we are supposed to be devolving strategic powers—the ability to raise money to build new homes of any tenure. It requires local authorities to divest themselves of some of their land. It requires local authorities and, indeed, housing associations, to charge higher rents to those households who better themselves in terms of earned income. It overrides planning system decisions and requires the virtual privatisation of parts of local planning departments.
I accept it is not all in one direction: there are a few things which the Bill deregulates and decentralises, but those tend to reflect the prejudices of the saloon bar. The Government are removing various laws on the environment and quality of housing and, as others have said, on providing adequate accommodation for Travellers and so forth. However, the powers to override the planning system are writ large in the Bill.
Other noble Lords have described movingly and in detail the socially damaging effects of some of this Bill’s provisions; I will just mention three. First is the effect of dramatic increases in rent for households with an income of more than £30,000—£40,000 in London—which is less than half what is needed to put down a deposit on an average house in London. This goes directly against the Government’s encouragement of work and aspiration. If the householder gets promoted to a better-paid job; if a second parent goes out to work as the children grow up; if the teenager leaves school and gets a job; then, because the family income will go up, the rent will move to market levels. In many parts of the country, market levels will not be affordable. This is effectively a marginal rate of taxation, far higher than that faced by the super-rich, which will simply force people out of their homes. Secondly, the abolition of security of tenure for all new social tenants, replacing it with a two to five-year tenancy, will both add to family insecurity and detract seriously from community cohesion.
One thing not directly in the Bill but which the noble Baroness, Lady Gardner of Parkes, reminded me of, is that although some estates need demolishing and regenerating, many have vibrant and cohesive communities—most of mixed tenure, these days. To judge by what happened in the past, if they are simply demolished, tenants will lose their homes and leaseholders will be displaced and undercompensated for their homes, undermining their ability to find alternative accommodation. We are thus changing, particularly in our inner cities, the nature of housing and the kind of people we provide housing for. The same applies in a different sense in rural areas. There is a degree of social cleansing here. It is an ugly word but there is enough truth in it to bear the House looking at it.
I hope the House can improve the Bill. There are bits I approve of and which need strengthening, but as a whole it is a serious missed opportunity, which could be very damaging to some of the poorer and low-income families in our country. I hope the Government will listen to arguments for change and that the final Bill will look very different from this one.
Lord Horam (Con)
My Lords, when you find you are the last speaker on the Back-Bench side, the Whips always assure you that it is a place of honour, and they usually manage to do it with a straight face, but it does have one advantage: having listened to a large number of the speakers, if not all of them, you get what the House really believes is the key issue. The key issue is clearly that there is a need for a really substantial increase in the amount of housing, both to rent and to buy, for people of moderate means, particularly young people and particularly in the area with which we are most acutely concerned: London and other cities and towns in the south-east. That is the nub of the challenge that the Bill has to be judged by.
The need is spelled out by the Government—260,000 house units a year—and we are barely halfway there: 125,000 were produced in England in the last year for which there are official figures. The biggest provider, as we know, is the private sector, which produced 96,000 out of that 125,000 and which will be helped by some measures in the Bill, such as the changes to make planning smoother and, I hope, the starter homes. I think we all agree with the noble Baroness, Lady Gardner of Parkes, that we need more detail as soon as possible on this issue as well as others. But the problem with the private sector is that in the final analysis it is producing houses for profit and I am afraid that the profits do not lie at the bottom end of the market. It is the least profitable part of the whole housing equation and therefore I am not confident that there will be a big increase in private sector provision.
That leads us on to the housing associations, which produced 27,000 houses in the last year for which there are official figures. I have no doubt that they were knocked back a bit by the right-to-buy provisions. They had not necessarily anticipated those before they appeared in the manifesto and they may well therefore produce slightly fewer houses in the immediate future than they would otherwise have done. I also have no doubt, knowing them well, that they have a strong social mission. That mission will carry on through the difficulties they may face and I am optimistic—more optimistic than the noble Lord, Lord Stoneham, was—about the chance of them producing more houses. I actually think that ultimately they will produce significantly more houses than they do at the moment and they can and will do that.
That leads us on to the sleeping giant, if you like, of the housing provision scene: council housing, and the appalling figure of 1,360 houses completed in England in the last year for which there are figures. We need much more council housing, not only because of the need to bridge the gap in quantity but because historically it has been the main source of housing for social rents. As the noble Earl, Lord Lytton, said very clearly, whatever happens on the right-to-buy front, whatever happens with buying your own home, you will always need social housing at social rents and an adequate supply of that. It is crucial that that is maintained and much improved from where we are today. The noble Baroness, Lady Grender, made the historic point that Harold Macmillan—a Conservative leader—really did rather a good job in this area. It is not impossible to get to 300,000 but it is certainly a wake-up call to this Conservative Government to get weaving on that front.
I am sure from my discussions with local authority leaders in London, as elsewhere, that they wish to improve the amount of council housing for social rent that they are providing. The problem is financing it; they have a need to borrow and their borrowing, of course, is capped by the Government. I am afraid that we therefore come back to the familiar point made by my noble friend Lord Young of Cookham: that it is about the Treasury. The fact is that the Treasury controls this. I believe that the Treasury needs to relax the borrowing cap on local authorities so that they can build more social housing. That would be right in housing terms and, putting my cap on as an economist, in economic terms at this stage of the economic cycle. It will increase the public sector borrowing requirement but we should not be concerned about that in economic terms.
The Bill is therefore a good Bill, and ingenious. The noble Lord, Lord Greaves, even paid it the remarkable compliment of being in parts well written, which I have never heard before about a government Bill. But it will not succeed in dealing with this huge challenge, which we have all talked about today, unless it is complemented by a serious and sustained effort to get social housing by councils really revved up. I believe that my noble friend should take that measure to the Secretary of State and I wish him well in making that change.
The Duke of Somerset (CB)
My Lords, I apologise to the House and to the Minister for my failure to put my name down in a timely manner. Time allows me to comment on only two topics in the Bill.
First, on the right to buy in rural areas, I speak as a landowner and private landlord in the West Country. Surely, the aim of this part of the Bill should be to enable young and low-paid people to live in the countryside at affordable costs. The right to buy, if applied to small communities, will have the opposite effect. Where a right-to-buy grant is given the house will eventually be resold at full market value, possibly as a second home. Either way, it will no longer be available to local people. The one-for-one replacement policy has not worked historically and it is hard to see how it is going to work in the future. A vague regulation that proceeds from sales should be reinvested in the parish will be utterly dependent on the good will and permission of the local landowner, or do the Government envisage compulsory purchase powers to enable this? Such a landowner is unlikely to offer sites, even altruistically, without the provision of perpetual affordability.
The same must be true of starter homes. Landowners will hesitate to promote low-value land just to enrich an individual, rather than a community. The requirement for these to be on rural exception sites, with permission to resell after five years, is counterproductive and not very sensible. Can the Minister clarify where the money for the right-to-buy discount is going to come from? A great many local authorities no longer own any housing stock, so they will not be receiving the proceeds. The formula proposed is neither clear nor logical.
The sustainability test currently applied by many planning authorities stymies otherwise logical sites from being brought forward for much-needed housing. The aspiration to make everyone travel by public transport or bicycle is just not realistic. Although I applaud the Government’s plan to build more houses, this must be done holistically: that is, hand in hand with proper infrastructure provision, such as doctors’ surgeries, schools, road improvements and buses.
Secondly, I turn to the compulsory purchase regime, which the Government quite rightly seek to improve. However, I do not think they go far enough. The Bill should unequivocally ensure that land is paid for before entry. For later payments due for unforeseeable losses of entry, a proper commercial interest rate should be specified—certainly more than the 2% proposed.
Finally, the abusive ability for NSIPs—nationally significant infrastructure projects—to compulsorily purchase land for unconnected housing at existing-use values is extremely unfair and should be resisted. As many noble Lords have said, many aspects of the Bill are to be welcomed, but it needs much improvement in places.
Lord Shipley (LD)
My Lords, this has been a wide-ranging and incisive Second Reading debate. It has been valuable to listen to all the contributions today. I pay particular tribute to those Members of your Lordships’ House who have made their maiden speeches: my noble friend Lady Thornhill and the noble Lord, Lord Thurlow. It was particularly helpful to hear their detailed understanding of housing and planning matters and their views on the Bill. I thank, too, noble Lords from these Benches and from across the House for the insights and the explanations of their concerns, all of which will merit further thinking and debate as the Bill progresses.
I have drawn two conclusions from the debate. First, the Bill will not solve the UK’s housing crisis. There is a huge shortage of homes to rent and buy, yet the Bill invests large sums of public money in subsiding home ownership, to the detriment of the supply of homes for rent for those who cannot afford to buy. Secondly, the Bill so far provides little detail on the implementation of new policies, leaving far too much to the discretion of the Secretary of State and to secondary legislation. We have heard some examples. The one I will give is that the method by which the income of a high-income household, and therefore the rent to be levied, is to be assessed surely cannot be left simply to regulation. It is vital that we know, before this Bill goes any further, what the regulations will look like. I hope the Minister has heard the concerns from all parts of the House on this. It really does matter.
At the very beginning of this afternoon’s Second Reading, the Minister said that people are sat down in the department and asked whether the Government are doing all they can on housing. The Bill appears to be the Government’s answer to that question, but the truth is that the Government are not doing all they can, for two reasons. First, there will be 200,000 extra households each year—the Minister herself cited that figure twice in her speech. So there is a housing crisis now, but it is going to get much worse, and I see nothing in the Bill that addresses that problem. Secondly, the question is not being answered because not enough social housing for rent is going to be built.
I asked in a Written Question recently what the net increase in the number of homes was likely to be over this Parliament. The reply signed by the Minister simply said:
“My Department does not publish forecasts of net additions”.
That raises the question of why it does not and why the Government can quote a wide range of statistics about their building intentions and ambitions, but then fail to tell us what the net outcome is going to be, taking into account the rise in population and the number of households that we know about, as well as the impact of demolitions of current stock. I further note that the Office for Budget Responsibility said in the summer that housing associations will build fewer affordable homes as a result of the 1% annual cut in rents for the next four years, a policy which is part not of this Bill but of the Welfare Reform and Work Bill. A submission by the British Property Federation states that the build-to-rent sector could deliver a lot more homes. It states that there is room for them as well as homes for sale.
There has been a good discussion of the definition of affordable homes, but a better definition is clearly required. For example, in 2014-15, affordable housing completions were 66,000, the highest for many years. The problem with the definition is that under 20% of those 66,000 were for social rents reflecting local incomes—in other words, truly affordable.
In addition, starter homes are described as affordable, but on average, house buyers earning the national average income of £26,500 will be unable to buy in 90% of England and Wales. Shelter says that people will need to earn £77,000 in London and £50,000 elsewhere to qualify to buy a starter home, given their price. Therefore, the policy is unaffordable for at least two-thirds of households.
In Committee, we need to assess the impact of all the Bill’s proposals. At least we now have an impact assessment, published a couple of days ago, which will merit close study. I accept that measures to help first-time buyers are very welcome, but starter homes must not replace Section 106 requirements on developers for genuinely affordable homes to rent or buy.
On the impact on council houses, we need to examine why local authorities—I declare my vice-presidency of the Local Government Association—are not being treated in the same way as housing associations under the Bill. We also need to know why extra burdens are proposed on local authorities with housing stock, including payments to central government in relation, first, to the sale and presumed sale of high-value council stock and, secondly, to higher-income social tenants’ increased rent, which will have to be met. Alongside the 1% annual rent reduction for four years proposed in the Welfare Reform and Work Bill, these proposals will significantly reduce planned investment in new council housing and improvements to existing stock, with all the problems that will follow that. We need to examine that impact very carefully indeed.
We have heard a great deal from the noble Baroness, Lady Bakewell of Hardington Mandeville, and other noble Lords about the impact on rural areas, and we will need to investigate that in close detail.
There is also the impact on those on low incomes and the supply of social housing for rent. There are 1.6 million people on social housing waiting lists—a large number— and there is a need to house those on low incomes. I look forward to a definitive statement from the Minister that the Government accept the need for social housing for rent: I am coming to the conclusion that they do not. I fear that the Bill will undermine Section 106 requirements on private developers to provide affordable homes.
Worryingly, there is no requirement in the Bill that affordable homes for rent which are sold will be replaced like for like—we have one for one, but we do not have like for like, and they are not the same thing—and in the same geographical area. The two for one in London is in the Bill, but the one for one elsewhere is not. That is a concern.
Tenure for life was established by Mrs Thatcher. It has to be tested, because tenants will think twice about investing their time and money in decorating their homes and maintaining their gardens if they feel that they could lose the tenancy in two to five years’ time. I am unclear why all this is necessary at all, given government plans on rent levels. We have heard a great deal about the impact of “pay to stay”. It is very hard to see how public sector workers, in particular, in places of very high rents, will be able to stay where they are needed to work. The whole area of pay to stay is invidious. At the very least, the level at which pay to stay comes into play will have to rise. It is in principle right that those who earn a good salary could pay a higher rent; the question is about the level.
There has been little discussion of the impact on the taxpayer, but of the £20 billion cost only a very small proportion is for social or affordable rent. The discounted sale and the capital gain on sale after five years for starter homes will not protect taxpayers’ investment.
We have heard a great deal about the private rented sector, which I will not repeat. In many respects the Bill is good on that. It should be a basic right for tenants that privately rented properties are fit for human habitation at the start of and throughout a tenancy.
There is the impact on the planning system. In one sense, it is centralising, as has been said. We are going to have to look at all the clauses in the Bill relating to planning because we could well end up with a US-style zoning system that reduces consultation.
We have a lot to test in Committee. I subscribe to the view expressed by the noble Lord, Lord Kerslake, that we cannot risk everything on private sector sales generating the homes we need. We need a strong social rented sector as well. The great failure of the Bill is that the Government do not seem to understand that.
Lord Beecham (Lab)
My Lords, I join other noble Lords in congratulating the two maiden speakers tonight, the noble Lord, Lord Thurlow, and the noble Baroness, Lady Thornhill—despite, in the latter’s case, what Watford have done to Newcastle United three times this season. Their contributions to this debate have been extremely constructive and helpful.
Eighty years ago, a book was published entitled The Strange Death of Liberal England. The Bill will help to encompass the strange death of social housing. It is strange because councils and housing associations have played a critical role in the provision of good-quality, responsibly managed, affordable housing for rent, and it will be fatal because, inexorably, through the right to buy at significantly discounted prices and the impact of enforced rent reductions, the social rented sector will decline.
I understand why many housing associations agreed to the so-called voluntary deal over right to buy, but they made a grave mistake. With their small majority, the Government would have struggled to impose this radical change on the working of the sector. I predict that if over time they become dissatisfied with the progress of the new right to buy, it will be made compulsory, as it already is for council housing. Needless to say, no such right is contemplated for private sector tenants, now 20% of all householders—twice the proportion of council tenancies in the overall housing stock.
It is, of course, legitimate and right to facilitate the perfectly reasonable aspirations of people wishing to own their own home, but not at the cost of those who do not have such aspirations or the financial wherewithal to meet them. Yet this is what will happen, while the beneficiaries of starter home purchases and of right-to-buy discounts will make a tax-free gain on resale after just five years.
Just how many people will be able to afford the so-called affordable homes—a point raised earlier in this debate? In Newcastle, there are 5,923 applicants on the council’s housing register, 95% of whom earn less than £20,000 a year. The maximum mortgage they could achieve would be £70,000. The Minister visited Newcastle recently. Indeed, she visited my ward, where a new housing estate is being built. She was very impressed with it, and rightly so. The houses are being sold for £170,000, which puts them well beyond the range of the people on our housing list, although in that scheme the council has been able to ensure some houses at reasonable affordable social rents. The opportunity for similar schemes in future will be denied the city, its residents and other authorities.
The last Labour Government could legitimately be criticised for failing to secure more new council housing, although their overall record on new building was reasonable and certainly better than under their successors, who, incidentally, cut housing investments by two-thirds on coming into office in 2010. The noble Baroness, Lady Eaton, referred to a sharp fall in housing completions after 2008. The economy had a sharp fall globally after 2008. The first 100,000 houses built under the coalition Government in their first year were of course started before they came to office—and, as we have heard, their present record is of course quite abysmal.
But in any event, people all too readily forget the Labour Government’s massive investment in improving the housing stock, not least under the aegis of the Homes and Communities Agency, and there is nothing at all in the recent comprehensive spending review for the provision of social rented housing. Yet investment in such housing does not embody a subsidy. As my honourable friend Clive Betts pointed out on Report in the Commons, housing revenue accounts, like councils themselves, have to balance their books. The only element of subsidy at present is the right-to-buy discounts, to which the Bill will add the 20% discount on starter homes. The noble Lord, Lord Horam, rightly called for permission to borrow to be extended to promote council building. I very much welcome that suggestion and I hope that the Government will listen to one of their more senior and experienced Back-Benchers in that respect.
Extending the right to buy to housing association tenants, initially on a voluntary basis, has to be seen in the light of experience in the council sector so far, where for every nine houses sold only one has been replaced, and where a higher proportion of those sold has ended up in the private sector, with higher rents and a correspondingly high impact on housing benefit. Moreover, 91% of sales are deemed unaffordable to people on the national average income of £26,000 a year—which, if that represents the household income, is less than the threshold for the pay-to-stay provisions of the Bill, to which I will return later. Even the CBI and leading property agencies have opposed the Government’s measures in this respect. The Institute for Fiscal Studies referred to:
“The coalition’s less-than-impressive record in delivering replacement housing under the existing right-to-buy”.
It warned of the risk of,
“further depletion of the social housing stock”.
Of course, the Government again talk of replacement, now in deference to their candidate for the London mayoralty, at the rate of two to one in the capital. But that will include the new starter homes, which might represent a physical replacement, but, at costs of up to £250,000 or £450,000 in London, are unlikely to accommodate many, if any, of those on the current long housing waiting lists. Crisis reports that families on or below the so-called national living wage will be unable to afford starter homes in all but 2% of council areas, and in only six council areas will people on average wages or less be able to take advantage of the scheme. In any case, where, I ask the Minister, will these new homes be located—and, as my noble friend Lady Blackstone asked, will the Government monitor the incidence of where these replacements take place?
One of the underlying effects of the government policy that will be made worse by the Bill’s provisions in relation to pay to stay and security of tenure, adding to the existing impact of the bedroom tax, is the effect not only on individuals but on communities. People will be expected or driven to seek affordable accommodation—affordable in a real sense to them, not as defined by some centrally contrived formula—in a different area from where they currently live. Clearly, it will often be difficult, especially in rural areas, to find such alternative homes in the social or even the more expensive private rented sector. The National Association of Local Councils says that it is,
“amazed at the level of rural proofing of these proposals given the government’s response to the Cameron review”,
and calls for an amendment to provide for a rural-proofing review after two years.
Several of your Lordships referred to the problems of rural areas. My noble friend Lady Royall called for an exemption from the right to buy; the noble Lord, Lord Cameron, expressed scepticism about the impact of starter homes; the noble Lord, Lord Teverson, talked about secure homes; and others touched on the problems of rural areas. But individuals and families in both urban and rural areas will not only have to move home; they will have to change their children’s schools and their GP, face longer travelling times to their jobs and start life again in a new community. Ironically, the members of better-paid households may be the more likely to engage in the life of their existing community—a point made by the right reverend Prelate the Bishop of Rochester and the noble Baroness, Lady Thornhill, and expressed implicitly in the very moving speech of my noble friend Lord Bassam.
Moreover, as we have heard, levels of household income at which pay to stay kicks in are very modest. At £30,000 a year, two people on the national minimum wage in a household will face a large rent increase. As we move to a proper living wage, the London figure of £40,000 will trigger the same effect. A pay increase or a better-paid job will incur a higher rent, which will have the effect of penalising endeavour by, in effect, a tax increase—a point made by my noble friend Lord McKenzie. The presence of other family members who have an income—a son or daughter in work or a parent with a pension—may add to the problem. What will be the effect on incentives? As with so much else, councils will have no discretion in the matter; it is yet another exercise in central government dictation at a time when the Government speak grandly about devolution.
What is to happen to specially adapted properties? For that matter, exactly what are the Government going to do about supported housing schemes, about which serious concerns have been voiced—and voiced again today by the National Housing Federation and Women’s Aid? If I heard her correctly, the Minister indicated that they may not be affected by the proposed legislation. Perhaps she could clarify that point when she replies to the debate.
Finally in relation to social housing, there are grave concerns about where the proceeds of sale under right to buy or in relation to vacant high-value homes will be applied. Clearly this will present problems for London and perhaps other areas. To what extent have the Government consulted about this and where do they imagine the impact will fall? The Conservative Member of Parliament Mark Field declared that he worried,
“that forced sales will deplete stock, and that once a windfall has been pocketed, the property concerned will simply be rented out to a high earner”.—[Official Report, Commons, 12/1/16; col. 732.]
Apparently this had already happened in many housing estates in his constituency. In short, he summarised the fears of an eventual house price bubble.
There is one other aspect which, for the last few years, has perhaps distorted the housing debate, and that is the very low interest rates which have fuelled the enormous increase in house prices. Sooner or later rates will rise. What impact will that have on the demand for house purchase, on the ability to buy of even those benefiting from the discount on starter—allegedly affordable—homes and on the market generally? I well remember when Labour took control of Newcastle City Council. In 1974 we bought a newly developed private housing estate from developers who simply could not find buyers. Eventually, of course, they were all sold under the Thatcher Government’s right-to-buy scheme, with virtually no replacements. The Council of Mortgage Lenders warns of the impact of the starter homes discount and the right to buy on the “lenders’ appetite to lend”.
I endorse the concerns expressed by my noble friend Lady Whitaker about Gypsies and Travellers, and I deplore the failure of the Bill to tackle homelessness. Those observations were also supported by the right reverend Prelate the Bishop of St Albans.
While I welcome the Bill’s measures in respect of rogue landlords, it is regrettable that it fails to provide greater security for private tenants—and, as my noble friend Lord Young reminded us, it is simply astonishing that the Government voted down an amendment to secure that all rented properties must be fit for human habitation.
The planning sections of the Bill also raise significant issues. The usual suspects in the property industry proclaim their usual mantra, blaming local planning authorities for the dearth of new building, while presiding over around 500,000 unused planning permissions and, as the noble Lord, Lord Palmer, pointed out, holding large areas of land without taking the opportunity to develop them.
Building starts, the Town and Country Planning Association reveals, fell by 14% between April and June last year. It points out that although the Bill creates a presumption in favour of starter homes and exempts them from Section 106 and community infrastructure planning requirements, nothing is said about design, space or energy requirements. There is an issue not just about the number of homes we need, but about what we are building. We already have the smallest units of any comparable country, and the coalition downgraded the energy efficiency requirements. On this, the Government in general and the Bill in particular have nothing whatever to say.
The trend of bypassing both local authority and community interests, which has become an increasing feature of this Government’s policy, notwithstanding their earlier promises to the contrary, is continued in the Bill.
Under the nationally significant infrastructure projects regime, housing will, in future, be permitted additional to that related to the relevant infrastructure project, with no limit being set out in the Bill. The TCPA argues that any housing in a nationally significant infrastructure project scheme should be incorporated only if allocated in a local plan.
The TCPA also questions the single consent scheme established by Clauses 136 and 137, under which the Secretary of State may grant permission in principle in respect of land allocated for development. This proposal is to be the subject of consultation. Perhaps the Minister will indicate when this will be concluded and whether the outcome will be available before we reach Report. Will the Minister clarify the effect of Clause 136? Will planning authorities be able to specify whether or not a site is subject to PIP, or will the Secretary of State be able to require them to specify housing land for this purpose? In any event, as the TCPA points out, land allocation is not the same as planning consent; it is the first step in a process that needs to involve detailed working through. There are also questions about this so-called zonal planning’s impact on a wide range of issues—from commercial to waste, or even perhaps fracking. What, if anything, will be excluded from the PIP process?
The TCPA raises further questions about the effective outsourcing of the processing of planning applications to alternative providers under Clause 146. Some councils choose to do this given the huge pressure on their budgets and the difficulty of retaining sufficient staff. But the Bill goes beyond that process and, crucially, envisages that the developer may appoint a designated person and, alarmingly, that the Government may by regulation allow that person’s advice to be binding on the local planning authority. This is wholly unacceptable both as to the substance and the procedure that the Government are adopting, which is, as we have seen so many times in this Bill, to proceed by way of secondary legislation.
This brings me, Members will be relieved to hear, to some closing observations on the Bill and, in particular, on the way the Government have handled it. The Bill grew in length exponentially between Committee stage in the Commons and the two days of Report and Third Reading. Substantial amendments were tabled on planning, the regulation of social housing, the power of housing associations to charge high-earning tenants higher rents, security of tenure and more besides. Some of these measures were, and are, highly contentious.
The Government’s contempt for the process of adequately scrutinising legislation—a topic with which this House has been much concerned of late—is ever more apparent. It is compounded by yet another example of the woefully inadequate impact assessments that have so often been the subject of criticism across the House and in the Secondary Legislative Scrutiny Committee. It is made even worse by granting to the Secretary of State the power to ordain secondary legislation—an issue raised by my noble friend Lady Andrews and the noble Baroness, Lady Gardner. I have lost count of the number of matters to be carried forward by orders and regulations. Perhaps the Minister could remind the House just how many they are.
This Bill needs detailed and informed scrutiny, hopefully leading to amendments. I commend the statement by the noble Lord, Lord Porter, on behalf of the Local Government Association, which he chairs, and from the association’s president, the noble Lord, Lord Kerslake. They voiced concerns and announced the association’s intention to seek changes. The House, with its breadth of experience and skills—amply demonstrated tonight—will no doubt listen to the reasoned case made by the Local Government Association and others. I hope, in turn, that the Government will respond constructively. I will not, however, be holding my breath.
Baroness Williams of Trafford
My Lords, I thank all noble Lords who have taken part in this Second Reading debate. I realise that just to name check everyone would take nearly 20 minutes but I pay particular tribute to the maiden speeches of the noble Baroness, Lady Thornhill, and the noble Lord, Lord Thurlow. The noble Baroness and I have a shared history in a funny sort of way which I only realised when she pointed it out to me when she came into the House. Both of them made great contributions today and I know they will continue to make them in the future.
Naturally, a huge number of points have been raised and I shall try to address as many as I can tonight, particularly those made a number of times. Where I cannot address them tonight, I shall continue to listen and discuss them with noble Lords outside the Chamber and in Committee. Several noble Lords have raised concerns and I shall do my best to allay some of their fears. As the Bill is so wide-ranging I shall try to group my comments together.
The issue that starter homes are unaffordable was raised by the noble Lords, Lord Kennedy, Lord Thurlow, Lord Young of Norwood Green, and Lord Kerslake; by the noble Baronesses, Lady Andrews and Lady Doocey; and by the right reverend Prelates the Bishops of Rochester and of St Albans.
I will focus now on the price cap versus the average price. The price cap in the Bill is £250,000 outside of London and £450,000 inside of London. That is a cap and not an average. We fully expect starter homes to be priced well below that cap. The average price for a first-time buyer of properties in England in 2014 was £226,000, and the equivalent starter home would have a discounted price of £169,000. In London the discounted starter home price based on 2014 prices would be £291,000. The experience of help to buy bears this out. Eighty per cent of the properties sold were bought by first-time buyers and the average price of homes purchased under help to buy of £186,000 was well below the national average of £286,000. That means that starter homes will be more affordable than some noble Lords fear.
A number of important questions were raised on how infrastructure would be funded. Local planning authorities will still be able to secure Section 106 contributions for site-specific infrastructure improvements for starter home developments through the planning process. The noble Lord, Lord Thurlow, and my noble friends Lord O’Shaughnessy and Lady Hodgson asked how we can ensure that quality is maintained. Again it is very important to learn the lessons of the past and we are working with the sector on this. We know how important quality is and we issued design exemplars for starter homes in March. We will continue to work with the sector on this.
Many noble Lords also raised concerns about starter homes replacing other forms of affordable housing. Local planning authorities will need to apply their planning policies, including those on affordable housing, in the light of the legal starter homes requirement. Local planning authorities know their market and we would also expect them to seek other forms of affordable housing, such as social rent, where it would be viable. Councils have the options to release more land for housing to ensure that they deliver as much housing of all tenures as needed.
The noble Lord, Lord Kerslake, also said that it should be down to councils to assess needs and deliver on them. Young people need homes now. As my noble friend Lord O’Shaughnessy said, the crisis for first-time buyers is acute. We want councils to consider their needs and the Bill will ensure that they do so. Starter homes will form part of a mix of tenures that we want to see on developments. Councils are in a position to build their own social rented housing, and many are starting to do so. The Government fully intend to make sure that affordable homes to rent continue to be provided. That is why in the spending review we confirmed £1.6 billion for 100,000 affordable homes to rent. The noble Lord, Lord Best, questions whether this is enough. Because it is grant-funded, it is a minimum position. We would expect councils and developers to do more than the bare minimum.
A number of speakers, including the noble Baroness, Lady Bakewell, asked whether starter homes should keep their discount in perpetuity. This would defeat the purpose: long-term restrictions may make it more difficult for the first-time buyer to sell and move on—whether to take up a new job or move to a larger home as their family grows.
Several points were made about the right to buy and high-value assets. In response to the comments of the noble Lord, Lord Young of Cookham, those tenants who buy a starter home under right to buy should have the same freedoms as every other home owner. The existing right to buy does not include any restrictions on letting, and it would be unfair to include this restriction for housing association tenants. The noble Lord, Lord Young, also questioned the exclusion of Section 106-funded properties and right to buy. It was decided, because of the short timescale, to exclude properties built through Section 106 from the voluntary right-to-buy pilot. Aspects of the main scheme will be different. Under the voluntary deal the presumption is that housing associations will offer to sell tenants the property in which they are living, and we would expect them to do so in the majority of cases. We are working with the sector on the detailed implementation of the main scheme.
The noble Baroness, Lady Doocey, asked about housing associations selling off property to avoid the right to buy. The Government are fully compensating housing associations for the right-to-buy discount, based on open-market value, and the housing association will keep the full receipts of the sale, so there is really no financial benefit to a housing association in selling off empty properties to avoid the right to buy.
Lord Kennedy of Southwark
Could I be clear? The Minister said that the Government are fully compensating the housing associations. It is the local authorities that are compensating the housing associations.
Baroness Williams of Trafford
I understand that it is the Government who will fully compensate the housing associations.
Noble Lords, including the noble Lords, Lord Kerslake, Lord Adebowale and Lord Stoneham, the right reverend prelate the Bishop of Rochester and the noble Duke, the Duke of Somerset, are concerned about the wider implications of the Bill and the future of social housing, especially when local authorities are selling their high-value assets. We are considering a number of types of housing that could be excluded when that is taken into account, and cases where housing will not be considered to have become vacant. We are engaging widely, and I will make sure that the points raised here are taken into account. I would also be happy to meet the noble Lord, Lord Adebowale, to discuss housing co-ops in particular.
In addition, the Government are committed to using a portion of the receipts to fund the building of additional homes. The Secretary of State and the local authority can enter into an agreement for the local authority to retain part of its receipts to lead on the delivery of more homes that meet housing need.
Members were also concerned about high-value assets forcing people out of their areas. The aim is not to force people out of homes. This will apply to a property only when it becomes vacant. The Government support the ambitions of social tenants to make the move into home ownership but, equally, it cannot be right that some social tenants on higher incomes are benefiting from lower rents when those renting privately do not. Social housing for rent must primarily be focused on those in real housing need who are on lower incomes.
We recognise that rent rises must be affordable and protect work incentives. That is why we have consulted on proposals to introduce gradual rent rises in relation to income, to help ensure that the extra rental costs are manageable. There is broad support for our proposal for a taper and we will consider the responses carefully.
The noble Baroness, Lady Bakewell, asked about the use of a formula and the loss of family properties. The data that we are collecting will inform the high-value threshold, and for local authorities the use of a threshold to determine payments will give greater certainty and predictability, which will help them to manage their finances better. It will also provide greater flexibility for local authorities to choose what properties they sell in order to make the payments.
The noble Lord, Lord Young, who I commend for the work he described earlier on right to buy all those years ago, asked about the portable discount. Under the terms of the voluntary agreement, where a housing association exercises a discretion not to sell a property, the association would offer tenants the opportunity to use their discount to buy an alternative home from their own or another association’s stock. Receipts from sales under the new scheme, including the government grant to cover the cost of the discount, will generate considerable income for associations to reinvest in new supply, with an additional home being provided for every home sold. To allow the portable discount to be used on properties in the open market loses that income to the sector, limiting the ability of housing associations to deliver new supply. We are currently working with the sector to finalise how the portable discount might work.
The noble Lord, Lord McKenzie, and the noble Baronesses, Lady Young and Lady Andrews, asked questions about planning. The decision to grant planning permission in principle will be locally driven where a choice is made to allocate land for housing-led development in a local plan, neighbourhood plan and new brownfield register. This will promote plan-led development and ensure that decisions take place within a framework that includes the engagement of communities and others, as well as consideration of development against local and national policy, including important matters such as heritage and, of course, flooding. Allowing permission in principle to be granted for housing-led development will allow it to accommodate other uses that are compatible with residential areas such as retail, social and community uses. This will help to deliver the mixed and balanced communities that we want to see. However, the Government were clear in the other place that there is no intention to allow permission in principle to be granted for fracking.
The LGA report referred to by my noble friend Lady Eaton presents a narrow picture of the build out as it only covers homes on major sites—that is, those with 10 units or more—and therefore overstates the average time to complete all work on a site. However, I agree that ensuring that where permission is given for new homes, building them out without delay is a very important part of the equation, and this includes ensuring that the local planning authorities play their part by discharging conditions as quickly as possible.
The noble Baroness, Lady Thornhill, suggested that women would be disproportionately affected by our planning policies, and we will of course continue to keep them under review as, for example, we finalise the new planning policy following the closure of the consultation next month.
The noble Baroness, Lady Bakewell, and the right reverend Prelate the Bishop of St Albans suggested that the Bill has got rid of the need for considering Gypsy and Traveller needs. The Bill does not remove the need to assess their accommodation needs. The proposed changes to the legislation make it clear that the needs of all those who reside in the district must be taken into account, and that includes Gypsies and Travellers. The provision of caravan sites and moorings for houseboats are considered under the duty to assess housing needs in the Housing Act 1985.
I think that I had better move on to the question of the lack of information on secondary legislation. Noble Lords will forgive me if I do not name-check everyone because so many of them raised the issue. I understand the concerns of noble Lords about the number of secondary legislation proposals proposed by the Bill. I will do my best to provide as much information as possible as the Bill progresses. I have discussed this with a number of noble Lords in meetings. I want to ensure that everybody has the information they need to understand the implications of the measures in the Bill and I hope to explain as much as I can during Committee. Each one of the measures will be different and there is much detail that is still to be sorted, as well as data to be collected and analysed and stakeholders that we need to work with. We are consulting widely and we will be sharing the details as they emerge. We want to make sure that we get it right. We do not want to rush into secondary legislation before working with those who will make all this work on the ground. An example will be many of the planning measures where we plan to consult shortly on the details that will be in the secondary legislation.
The noble Baroness, Lady Grender, talked about getting on with the data analysis to inform the formula for high-value assets. As she says, we are making good progress on collecting the data and we need to get the formula right. However, there is still some way to go. I will keep the House informed as we make progress. We will bring forward the detail that Peers want as soon as we can.
The noble Lord, Lord Whitty, and the noble Baroness, Lady Grender, talked about sink estates. We know that the worst estates have huge potential to be revived so that they become thriving communities once more. That is why we are so determined to kick-start work which would benefit the lives of people by providing high-quality homes.
My noble friend Lady Gardner of Parkes raised rogue landlords and sending them underground, and that we need better enforcement. As well as the clauses on banning orders which will ensure that rogue landlords are unable to continue letting out properties, the Bill ensures that local authorities’ powers of enforcement against those who are committing housing offences are greatly strengthened. Some of this is already going on, particularly in London boroughs. Clause 117 and Schedule 9 will enable local authorities to impose a civil penalty of up to £30,000 as an alternative to prosecution and enable provisions which will extend the availability of rent repayment orders.
The noble Lord, Lord Beecham, talked about the right to buy—replacements and figures. There is a rolling three-year deadline for local authorities to deliver one-for-one replacements. So far, they have delivered well within the sales profile. By March 2013, there had been 3,054 additional sales and by September 2015, there had been 4,117 starts.
The noble Baroness, Lady Bakewell, talked about planning competition. I believe that there is an appetite for greater competition in the planning system, although I must point out—a couple of noble Lords touched on this—that the decisions remain with the local planning authorities. We anticipate that a number of ambitious and high-performing local authorities will also want to compete to process planning applications in other areas.
The noble Lords, Lord Kennedy and Lord Tope, raised issues on electrical safety in the private sector. The Government are committed to protecting tenants and have agreed to carry out the necessary research to understand what, if any, legislative changes regarding electrical safety checks should be introduced. The noble Lord, Lord Young of Norwood Green, raised the idea that the Bill should ensure that rented properties are fit for human habitation. Local authorities already have strong and effective powers to deal with poor-quality, unsafe accommodation, and we expect them to use them.
The noble Baronesses, Lady Bakewell and Lady Thornhill, the noble Lords, Lord Kennedy and Lord Cameron, and the right reverend Prelate the Bishop of Rochester were concerned about the level at which people are classed as having a high income. The issue is whether people on those household incomes, which are above the average median wage of £26,000 a year, should automatically benefit from a lower rent than people in comparable private rented housing. Our view is that it is not fair for the taxpayer and that it is an issue that should be tackled. It is also important to recognise that social housing should be prioritised to those in genuine need. There will be households on lower incomes that are more in need of social housing for rent. We do not want to damage work incentives and that is why we are proposing a taper, as mentioned by the noble Baroness, Lady Doocey. That would see rents rise gradually in relation to income. Doing so will ensure that households are incentivised to accept higher-paid work so that they see a range of benefits from that income.
The noble Lords, Lord Cameron and Lord McKenzie of Luton, asked how income will be assessed. The noble Baroness, Lady Lister, asked about ensuring that vulnerable tenants are protected. We will ensure that the implementation of “pay to stay” is fair for tenants as part of our ongoing engagement with local authorities.
I hope that noble Lords will indulge me, given the huge number of questions, for another couple of minutes. If any noble Lord objects, please let them speak now.
On lifetime tenancy, many Members, such as the right reverend Prelate the Bishop of Rochester, suggested that reviews of social tenancies would place undue pressures on local authorities. Keeping that under review should already be part of good tenancy management, but in any case, we expect that savings over the long term are likely to outweigh any additional costs from reviewing tenancies.
Many noble Lords talked about rural impacts. We understand the pressures faced by the rural community, which are many and complex. The Bill allows for certain types of housing to be excluded from being sold when vacant. We will set out our thinking on this in due course. Under the voluntary agreement on right to buy, housing associations will have the discretion not to sell homes in rural areas. We are consulting on planning reforms to allow starter homes on rural exception sites, to help villages thrive. This includes an option to retain local connection tests. We want rural exception sites to continue to deliver housing for rural communities.
On flooding, I welcome my noble friend Lord Liverpool’s comments on local plans. I know that my noble friend Lord Deben, the noble Lord, Lord Krebs, and the noble Baroness, Lady Bakewell, will also keep a close eye on this. Planning guidance is clear, but I am sure that we will come back to this subject in due course.
The noble Lord, Lord Beecham, asked whether adapted housing under regeneration schemes will be excluded under the high-value asset sales. Excluded housing will be set out—noble Lords will groan now—in secondary legislation. The department is engaging widely with local authorities and other stakeholders. No decisions have been made yet on the types of housing that will be excluded or cases where housing would not be considered as becoming vacant. As part of our process of updating data on local authority stock, we are collecting information on the purpose of the stock held to understand more about the types of housing that local authorities own, which will inform decisions on housing that will be excluded.
I conclude with the noble Lord, Lord Best, because he might be thinking that I am ignoring him. The noble Lord made a wide-ranging contribution with a promise of much more to come, which I look forward to, given his wealth of expertise. I share his view that we need houses both to rent and to buy, which is why the package we announced in the spending review includes that significant support of £1.6 billion for 100,000 rented homes. We also committed £4.1 billion for 135,000 shared ownership homes, allowing people to buy a share if they cannot move straight to purchasing outright.
The Bill needs to be seen as part of our wider crusade to get more homes built for all our communities with a planning system that delivers, while managing the homes we already have fairly. I know that we share this ambition to address the housing needs of the country, even if our views may differ around the edges on how to get there. I look forward to working with all noble Lords who have spoken today and other interested Peers as we take the Bill through the House. I beg to move.