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Oral Answers to Questions
(8 years, 9 months ago)
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Richard Graham (Gloucester) (Con)
1. What recent progress has been made on improving access to broadband in urban areas.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
I am very pleased to tell you, Mr Speaker, that the broadband roll-out is going extremely well, particularly in our cities. I am also particularly pleased at the success of our business voucher scheme, under which 50,000 businesses have benefited.
Richard Graham
I make no apology for returning to the thorny issue of the frustrations of e-poverty in the city of Gloucester. In 2013, BT promised to upgrade box No. 90. In 2014, it said it was sorry for the delay, but that it would still happen. In 2015, it changed its mind. In 2016, at a meeting with me earlier this week, it asked, “Could you send us the original emails saying we would ever upgrade this box?” At what stage is a commitment from BT a real commitment that will not result in constituents turning around to me and saying, “You lied”?
Mr Vaizey
I am obviously not BT’s spokesman, but I hope BT is listening to what my hon. Friend has to say. He is a fantastic constituency MP. While I am very proud of the success of our roll-out programme, it is incumbent on BT to get its act together in terms of customer service and delivering on its promises.
Andrew Gwynne (Denton and Reddish) (Lab)
When the Minister boasts that we have some of the best broadband in Europe, who is he comparing us with? Is he aware of the House of Lords report showing that, for broadband speed, we are the 19th fastest in the world and the 12th fastest in Europe? Is that not really abysmal, and can we not do better?
Mr Vaizey
I do not think we could do better than we are already, actually. When I compare our broadband, I do so first with similar countries, such as Germany, France, Spain and Italy, all of whom we are beating. I would not look simply at speed. The hon. Gentleman takes a very narrow view, and does not look at prices. We have some of the lowest prices anywhere in the world. If we look at results—the fact that we lead the world in e-commerce, for example—they show that we are probably the world’s most advanced digital nation.
Ben Howlett (Bath) (Con)
In urban areas, such as Bath, technology is available to skip the roll-out of superfast broadband and go directly to the installation of ultrafast broadband. Does the Minister agree with the logic of that, which will help to reduce disruption and save money in the long term and give businesses in Bath a huge boost?
Mr Vaizey
It is very important to set realistic targets. That is why we dropped Labour’s pathetic 2 megabits policy and went to 24 megabits. Now is the time to start looking at a gigabit Britain. I utterly endorse what my hon. Friend says. Let us not get stuck in the past with Labour; let us go forward to the future.
George Kerevan (East Lothian) (SNP)
Is the Minister aware that the very latest European Commission digital economy scorecard, published in just the past few weeks, ranks the UK below not just the Nordic countries, which we would expect, but countries such as Belgium? Despite the well-known antipathy of his Secretary of State to all things European, will the Minister press the European Investment Bank to put more money into extending broadband, particularly in rural constituencies such as mine of East Lothian?
Mr Speaker
Order. The question is ongoing. People must not beetle out of the Chamber while their question is ongoing. That is a very established principle. I am sure the hon. Member for Gloucester (Richard Graham) is interested in views other than his own.
Mr Vaizey
It may be that BT, having heard his question, is already on the phone to my hon. Friend.
I am surprised at the hon. Gentleman’s tone of contempt for small countries such as Belgium. I think small countries—small and perfectly formed countries—are often extremely successful. Just the other day, I was talking to an investor about the extraordinary digital businesses that exist in Edinburgh, such as Skyscanner. Those really groundbreaking businesses are developing thanks to our digital policies. I know that he will support what we are doing. I have forgotten his original point, because I was going on so much about what a fantastic, digitally innovative country Scotland is.
Mr Speaker
I hope the Minister is right and that the hon. Member for Gloucester (Richard Graham) will get that phone call before very long.
Daniel Zeichner (Cambridge) (Lab)
2. What assessment he has made of the economic and cultural benefits to the UK of public service broadcasting.
The Secretary of State for Culture, Media and Sport (Mr John Whittingdale)
Public service broadcasting is the powerhouse of the UK’s world-class television industry. In 2014, public service broadcasters invested £2.5 billion in original TV content, and accounted for over half of all TV viewing.
Daniel Zeichner
I have had representations from hundreds of constituents in Cambridge who are concerned about the future of the BBC. They are overwhelmingly supportive and positive. We now have the results of the consultation and more than three-fifths of respondents were in favour of continuing with the current funding system. Will the Secretary of State give an assurance that there will be no further top-slicing of the licence fee?
Mr Whittingdale
I hope to be able to update the House on our progress on the renewal of the charter in due course. We are taking all the responses seriously and taking them fully into account. We have already agreed with the BBC that one of the top-slices of the licence fee—the additional amount that is taken for broadband—will come to an end in 2020.
Damian Green (Ashford) (Con)
I know that my right hon. Friend will have noted the BBC’s forthcoming Shakespeare season, which is being held in collaboration with many other bodies, including the Royal Shakespeare Company. It is designed to bring Shakespeare to life for a new generation, using not just TV, but radio and online services. Does he agree that that is exactly the sort of thing the BBC ought to be doing, and something that only the BBC could do?
Mr Whittingdale
I agree with my right hon. Friend very strongly. This year is the 400th anniversary of Shakespeare’s death. It is an enormously important event and the BBC has a crucial role to play. I had the pleasure about 10 days ago of watching the filming of Ben Elton’s new comedy, “Upstart Crow”, which is based on Shakespeare. As my right hon. Friend says, I suspect that that is the sort of thing that only the BBC would do.
John Nicolson (East Dunbartonshire) (SNP)
Does the Secretary of State agree that the proposals of BBC Scotland to strengthen its news output by investing in jobs and production for an entirely editorially independent “Scottish Six” programme, anchored from Scotland, are a development that all of us across the House can welcome as an example of a long-term commitment to public service broadcasting? Will he just promise us that there will be no interference from Downing Street?
Mr Whittingdale
I had a very good meeting with Fiona Hyslop a couple of weeks ago to talk about the way in which the BBC meets the requirement to serve all the nations and regions of the United Kingdom. I obviously welcome any investment at the BBC that will create additional jobs, particularly in Scotland, which I know the hon. Gentleman will value. How the BBC goes about meeting the obligation to serve the nations and regions is a matter for the BBC. Certainly, neither I nor my colleagues in No. 10 would want to instruct it on how to go about it.
Maria Eagle (Garston and Halewood) (Lab)
Eighty per cent. of the 192,000 responses to the Green Paper consultation say that the BBC serves its audiences well or very well, and the majority believe its content to be both high quality and distinctive from that of other broadcasters. The Secretary of State purports to be a supporter of the BBC, so why is he using charter renewal to cut back and restrict what the BBC does, rather than help it to compete in the rapidly changing and increasingly global broadcasting environment?
Mr Whittingdale
I was not surprised to find that the responses showed that the vast majority of people value the BBC. As I have said, I value the BBC. The hon. Lady will have to await the publication of the White Paper, but it is not a question of trying to cut back the BBC’s output. Nevertheless, there is a case, which is borne out by some of the responses and by other surveys we have conducted, for saying that the BBC needs to be more distinctive. That is something that the director-general himself said when he set out his plans for the charter renewal.
Maria Eagle
The Secretary of State’s speech yesterday was rather more about bashing the BBC than anything else. That is what the chair of the BBC Trust said. Bashing the BBC is the one thing the Secretary of State agrees about with the Prime Minister and the Chancellor these days. They all want to use charter renewal to eviscerate the BBC and do its competitors a favour, rather than to deliver what the licence fee-paying public want. They just do not seem to accept that the British people like the BBC and want it to continue what it is doing. When will the Secretary of State accept that charter renewal should be about making the BBC fit for the future, rather than trying to diminish it for the commercial convenience of its competitors?
Mr Whittingdale
The hon. Lady must have looked at a different speech from the one I delivered. It certainly was not about bashing the BBC. Indeed, as soon as I finished making the speech, I had an extremely good meeting with the chairman of the BBC Trust, who did not mention anything about my bashing the BBC and welcomed what I had said.
The charter renewal is precisely about making the BBC fit for the future. I intend to bring forward the publication as soon as is possible, but, as the hon. Lady knows, there are a number of very important contributions, including the 192,000 consultations, that we want to take fully into account.
Andrew Stephenson (Pendle) (Con)
3. What assessment he has made of the level of uptake of the satellite broadband voucher scheme in Lancashire.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
We are making great progress on superfast roll-out. We have reached almost 4 million premises, and it is going extremely well.
Andrew Stephenson
I welcome the Government’s commitment to spreading faster broadband to rural areas, but my constituents have found it difficult to find information about the voucher scheme. Will my hon. Friend commit to working with Lancashire County Council and Broadband Delivery UK to ensure that households that could benefit from satellite broadband are made aware of that important scheme?
Mr Vaizey
In my original answer, I was obviously pointing out how well the satellite broadband scheme is going as well. We launched it at the end of December to ensure that people with speeds of less than 2 megabits per second can get the speeds they need. It was a soft launch, but we will make the scheme much more high profile in the next few months. I will happily work with my hon. Friend to make sure that his constituents can benefit from the scheme, although I note that superfast broadband roll-out will be almost 100% both in his constituency and in Lancashire.
John Pugh (Southport) (LD)
On the subject of uptake, nearby Merseyside authorities are not claiming the millions that BT set aside for non-commercial broadband areas. Will the Minister look into that and put some pressure on the councils?
Julian Sturdy (York Outer) (Con)
4. What steps his Department is taking to support tourism in York since the recent flooding in that area.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr David Evennett)
York, along with other affected areas, is currently being promoted with a £1 million publicity campaign, which was announced by the Prime Minister on 28 January. It is designed to encourage British families to spend their Easter holidays in the north of England. My right hon. Friend the Secretary of State also launched Virgin Trains 30% discount offer on 1 February, as part of his visit to York to promote the city and its wider region as open for business.
Julian Sturdy
I thank the Minister for his detailed response. About 200 businesses in York were flooded after Christmas, and thankfully many are now getting back on their feet. Building on what he said about the recent VisitEngland campaign to encourage families to visit northern tourist destinations such as York, will he consider providing individual grants so that local tourist attractions can market themselves and let everyone know that they are open for business again?
Mr Evennett
I know how assiduous my hon. Friend is in his commitment to the area. I am really pleased that York is open for business following the recent floods and welcoming visitors back. Tourism businesses in flood-affected areas that were directly or indirectly impacted are eligible for the £5 million recovery fund from the Department for Business, Innovation and Skills, and businesses can use those grants to help promote themselves. VisitBritain and VisitEngland are in dialogue with specific flood-affected businesses to spread the message about the areas that are open for business and ready to receive visitors.
Rachael Maskell (York Central) (Lab/Co-op)
It is 1,000 years since King Canute’s accession to the throne. “Campaign Canute” is trying to raise £2 million so that Jorvik Viking Centre can reopen before 2017. What additional support can the Minister bring to that major tourist attraction in York?
Mr Evennett
The Government’s first priority, of course, has been to deal with the physical impact of the floods themselves in the short term, and we have worked hard to make that happen. We now need to make sure that businesses that were affected attract the bookings that they need over the next few months. I have been to the Jorvik Viking Centre myself in the past and was very impressed with it, and I look forward to going again in the future. VisitEngland and VisitBritain are in discussions with such businesses and are using all their channels to support affected areas.
Sir Simon Burns (Chelmsford) (Con)
5. What steps the Government are taking to reduce the number of nuisance calls.
The Secretary of State for Culture, Media and Sport (Mr John Whittingdale)
The Government are taking a range of measures to tackle nuisance calls, including strengthening the regulators’ ability to take enforcement action against organisations that break the law and increasing consumer choice by consulting on making it a requirement for direct marketing callers to display their calling line identification.
Sir Simon Burns
Many of my constituents will be very pleased by that answer, but does the Secretary of State accept that they will hope that the action will be taken quickly? Like me, they are fed up to the back teeth with sleazy calls trying to sell them PPI protection or help with personal injuries that never happened. It is time that something was done to stop those disreputable practices.
Mr Whittingdale
My right hon. Friend and I are constituency neighbours, so I am very much aware of our constituents’ concerns about this subject. I am sure that neither he nor I would ever be guilty of making nuisance calls, either in relation to our own elections or, indeed, on behalf of candidates in other elections across the pond. However, action is being taken. The new measures are taking effect and in just the last week, the Information Commissioner’s Office announced a record fine of £350,000 against one of the leading firms responsible for nuisance calls.
Martyn Day (Linlithgow and East Falkirk) (SNP)
Nuisance calls are increasingly annoying to me and many of my constituents—the problem may affect people in Scotland more adversely, with nine out of 10 residents claiming to have had them in any given month—and 30 March will mark the second anniversary of the DCMS report, “Nuisance Calls Action Plan”. What plans does the Secretary of State have to publish a revised plan, detailing what success the first plan has had and what future action can be taken to tackle the problem?
Mr Whittingdale
We keep the matter under continual review, but we have taken a number of measures, and we will shortly come forward with the outcome of our consultation on strengthening the requirements for direct marketing callers. I am also in contact with organisations such as Which? that have a good record on the matter. If further measures need to be taken, we will certainly do that.
Paula Sherriff (Dewsbury) (Lab)
6. What progress has been made on the roll-out of superfast broadband.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
The roll-out of superfast broadband is going very well and we have reached almost 4 million premises.
Paula Sherriff
Areas in my constituency fall into the so-called “broadband white areas”, where internet access is virtually non-existent. In 2010, the Government committed to providing every home with a basic broadband connection by the end of 2015. Three months on from that date, I have been contacted by many constituents who are still without a decent broadband service to their homes or businesses. Will the Secretary of State look into that and deliver on the commitment that was made five years ago to give every household and business access to broadband, which, in 2016, is surely a necessity, not a luxury?
Mr Vaizey
I am very pleased to tell the hon. Lady that about 96% of premises in her constituency will get superfast broadband, but also, as I said to my hon. Friend the Member for Pendle (Andrew Stephenson), the satellite voucher scheme is now available and all the hon. Lady’s constituents who do not have broadband or have broadband under 2 megabits can apply and have satellite installed for free.
Mr David Nuttall (Bury North) (Con)
Those of my constituents who have missed out on the roll-out of superfast broadband are now pinning their hopes on the universal service obligation, which the Prime Minister announced before Christmas. How far has the Minister got with the consultations that I understand have to be conducted before the USO can be introduced?
Mr Vaizey
I am very pleased to tell my hon. Friend that we are proceeding at pace with our consultation, the results of which we will issue shortly, and we will probably legislate to introduce the universal service obligation in the digital economy Bill. I am delighted that he will get 99% superfast broadband in his constituency anyway.
Jim Shannon (Strangford) (DUP)
I have several cases of superfast broadband not reaching certain constituents, particularly businessmen. In the light of that, what discussions has the Minister had with broadband companies about improving copper cables, thus enabling them to reach further, and connection boxes so that superfast broadband is available to more people?
Mr Vaizey
We constantly challenge the communication providers to provide new technology and I am pleased that Virgin is extending its roll-out and that BT is introducing G.fast. I am also pleased that superfast broadband will approach around 85% in the hon. Gentleman’s constituency.
Margaret Greenwood (Wirral West) (Lab)
7. What recent representations he has received on fixed odds betting terminals.
The Secretary of State for Culture, Media and Sport (Mr John Whittingdale)
Details of all the meetings that I and other Ministers have had with interested parties on this matter are available via the Department’s transparency returns. In addition, my officials engage regularly with all interested stakeholders to discuss gambling policy more generally, including the issue of fixed odds betting terminals.
Margaret Greenwood
In 2014-15, people in Wirral lost more than £2 million at fixed odds betting terminals, and more than £290,000 of that was lost in my constituency of Wirral West. Low pay and insecure work is such a feature of our economy that people cannot afford to lose large sums of money. Will the Government realise the seriousness of the risk that FOBTs pose to people on lower incomes and substantially cut the maximum stake?
Mr Whittingdale
I understand the concern about fixed odds betting terminals, and we keep the issue under review. The hon. Lady may be aware that last year we brought in new requirements that improved player protection, in particular by putting a stop to unsupervised play for stakes of over £50. It is already clear that that has had an impact on player behaviour. As far as we can see, the rate of problem gambling remains at under 1% and has not shown any sign of rising as a result of FOBTs.
Philip Davies (Shipley) (Con)
As the Secretary of State knows, the inconvenient truth is that problem gambling rates have reduced since the introduction of fixed odds betting terminals. The Campaign for Fairer Gambling claimed that each fixed odds betting terminal makes a profit of £1,000 a week. As a betting shop is open for more than 90 hours a week, that works out at an average profit of around £11 an hour. Does the Secretary of State think that that is an excessive profit rate? If he does, what does he think an acceptable profit rate would be?
Mr Whittingdale
An awful lot of claims and counter-claims are made in this area, and not all of them stand up to close scrutiny. The Government intend to maintain a close watch over the issue, and any further changes that we introduce will be firmly evidence-based.
Simon Danczuk (Rochdale) (Ind)
8. What discussions he has had with the Home Secretary on ensuring that social media companies comply with police investigations into online crime.
The Secretary of State for Culture, Media and Sport (Mr John Whittingdale)
I have regular meetings with ministerial colleagues at the Home Office to discuss a range of issues.
Simon Danczuk
Companies such as Facebook often talk about corporate social responsibility, and I can think of nothing more responsible than co-operating with the police about death threats. Greater Manchester police have been waiting weeks for Facebook to help to identify those who made such threats to some Members of this House, not least me. Does the Secretary of State agree that Facebook and other social media need to do more to help the criminal justice system?
Mr Whittingdale
I expect all social media companies to assist the police and uphold the law. Those providing communication services to users in the UK have an obligation to comply with UK warrants that request the content of communications, and with notices requiring the disclosure of data. Perhaps the hon. Gentleman should bring that to the attention of Facebook, and indeed to Greater Manchester police, if such co-operation is not forthcoming.
Mims Davies (Eastleigh) (Con)
Will the Minister join me in roundly welcoming the consultation that is starting today on taking action against cowardly internet trolls who create fake social media profiles and bully, harass and menace others online, and on taking action to help children affected by online bullying?
Mr Whittingdale
I entirely share my hon. Friend’s concern, and it is very distressing when such things happen. I discovered that someone had set up a profile of me without my knowledge a few weeks ago, and I swiftly had it removed. It is clear that we must tighten the law where people are using such profiles to cause distress. In some cases they are breaching the law, so I welcome the new guidelines from the CPS.
John Mann (Bassetlaw) (Lab)
Internet companies are required to respond to requests from the police, but there is no timescale for that. It takes more than three weeks on average before Twitter provides data to the UK police for criminal investigations. What will the Minister and the Government do to force internet companies to respond promptly and immediately to our law enforcement agencies that are pursuing criminals?
Mr Whittingdale
As I said to the hon. Member for Rochdale (Simon Danczuk), I expect all social media companies to comply with the law without any unnecessary delay. If there is evidence that they are delaying, I am happy to discuss the matter with my colleagues in the Home Office and to consider what more can be done.
Nic Dakin (Scunthorpe) (Lab)
9. What steps he is taking to bring about the completion of the EU digital single market with regard to telecoms, audio visual policy, IT security and data protection.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
This Government are a great champion of the digital single market, and I know that all colleagues will have read the Prime Minister’s excellent White Paper. It means, for example, that people will no longer pay roaming charges when travelling across the EU, and once the digital single market is in place, we will see a huge increase in our GDP.
Nic Dakin
According to the No. 10 website, we could create £325 billion of additional growth by fostering a digital single market, and it points to the advantages of that for consumers. Given that, why would anybody campaign to leave the EU rather than energetically work to get the best deal for the UK?
Nigel Huddleston (Mid Worcestershire) (Con)
The Minister will be aware that, at 12.4% of GDP, the UK’s internet economy is by far the largest of all the G20; it is double that of the US, more than twice the size of Germany’s and about four times the size of France’s. Does the Minister agree that getting a good deal on the digital single market is particularly important for the UK, because so many jobs and so much of the economy depend on it?
Mr Vaizey
I agree with my hon. Friend. He points out the share of the internet economy, and it is incumbent on the Opposition to explain why they come to this House all the time to rubbish our digital record and pretend there is no broadband in the UK. How has the digital economy come about if people are not using the brilliant superfast broadband we are delivering?
Tom Pursglove (Corby) (Con)
10. What recent steps he has taken to support tourism in Northamptonshire.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr David Evennett)
Our five-point plan for tourism makes clear the Government’s support for the tourism industry. That includes a commitment to encourage tourists to explore the country beyond London. I am delighted that we have secured the £40 million Discover England fund. That competitive fund will encourage public and private sector partners across the country to come together and improve our English tourism offer.
Tom Pursglove
I thank the Minister for that answer, but what help is being provided to owners of historic homes, such as Rockingham Castle in my constituency, not only to conserve that important historic home and those around the country but to boost local tourism?
Mr Evennett
My hon. Friend is well known as a real champion for his constituency and for Northamptonshire, and I commend him for that. I recognise the importance of privately owned heritage such as Rockingham Castle in supporting tourism. I am pleased to say that historic houses can apply for Heritage Lottery funding of up to £100,000 on projects that are a public benefit. Sites on Historic England’s heritage at risk register can apply for funding from Historic England. [Interruption.] It is very important for the hon. Member for Garston and Halewood (Maria Eagle) to know the facts.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Mr Speaker, before you reprimand me, may I remind the House that John Clare was a Northamptonshire peasant poet? The John Clare Trust has opened his wonderful cottage to visitors and tourists, and the Minister would be welcome to pay an official visit at any time. Will he also tell the world that the trust supports the Every Child’s Right to the Countryside campaign to get kids out into the country and learning?
Mr Evennett
The hon. Gentleman makes a powerful point. I endorse his comments and I look forward to visiting the area.
Mark Pawsey (Rugby) (Con)
15. Northamptonshire and Rugby share a heritage in leather products: in Northamptonshire it is footwear and in Rugby it is balls for the game that bears the town’s name. The town saw 50,000 visitors during the Rugby world cup, which established an interest in sport tourism. Does my right hon. Friend agree that now would be a good time to develop a permanent rugby-themed visitor attraction in the town? When we get that attraction, I will invite him to come along and visit.
Mr Evennett
I commend my hon. Friend’s hard work in ensuring there were visitors to the birthplace of rugby during the Rugby world cup. I am interested in his proposition. I look forward to seeing what progress can be made and to visiting his area.
Andrew Rosindell (Romford) (Con)
11. What steps his Department is taking to improve competition among internet service providers.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
We have a very competitive internet service provider market in the UK. Ofcom has just published its digital communications review. It promises further changes, which we welcome.
Andrew Rosindell
Will the Minister tell the House what discussions he has had with the Department for Business, Innovation and Skills regarding the potential benefits of encouraging alternative investment and competition in the UK’s telecommunications infrastructure?
Mr Vaizey
We have announced a joint review with the Department for Business, Innovation and Skills of business broadband, and the Secretary of State for Business, Innovation and Skills takes a very close interest in that issue. Both Departments are very focused on Ofcom’s recommendations. My message to BT is that I hope it will reach agreement with Ofcom in the very near future.
Christian Matheson (City of Chester) (Lab)
In areas where there is insufficient competition, tough regulation is required to ensure that existing providers are providing a fair service. In parts of rural Cheshire, there is no competition and insufficient regulation because Ofcom allows providers to charge a premium to rural customers because they live in rural areas. Where there is insufficient competition, will the Minister speak to Ofcom to provide that tough regulation and a fair deal for rural broadband customers?
Mr Vaizey
Yes. I met the chief executive of Ofcom yesterday, and I told her that we were four square behind the digital communications review, which includes, as I say, tough measures on BT—we want BT to reach agreement on that by the end of the year—and pro-consumer mechanisms such as automatic compensation, which we also strongly support.
David Rutley (Macclesfield) (Con)
12. What plans the Government has to support the northern powerhouse through funding for the arts.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
I am pleased to say that there is strong support for the arts within the northern powerhouse project. For example, there is investment in the Factory in Manchester, as well as our backing for the Hull city of culture project and, of course, the Great Exhibition of the north.
David Rutley
I welcome my hon. Friend’s statement and his plans for the future. This year sees the return of the Barnaby festival in Macclesfield, with over 100 events, 250 artists and performers—of course, all visitors are welcome. Does he agree that, with £90,000 of Arts Council funding joining the mix of private and public funding, that is a perfect example of how arts funding can help to add fuel to the northern powerhouse?
Mr Vaizey
I agree with that. I understand that the funding has helped, for example, to make the festival director a paid position for the first time. It is a great example of how the Arts Council is working with organisations all over the country, but particularly in the north, to support our world-class arts and heritage.
Judith Cummins (Bradford South) (Lab)
As the Minister will know, the Royal Photographic Society’s archive was recently threatened with being moved from Bradford’s National Media Museum to London. What assessment has he made of the impact of such a move on cultural provision within Bradford, the wider Yorkshire region and, indeed, the northern powerhouse?
Mr Vaizey
I have been closely involved with the Science Museum on the future of the National Media Museum, and I am pleased that it is now being put on a firmer footing. However, I would say to the hon. Lady that there is extensive support for the arts in Bradford, with something like £9 million of Arts Council funding. I point her to the excellent article by the chief executive of the Arts Council about the support it is giving to Bradford.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Minister shows great artistry in the picture he paints, but we know that the regions were already losing out on arts funding by a ratio of 14:1 before the Chancellor chose to chop billions from northern local authorities struggling to maintain arts for all. The Sutton report last week said that the arts are becoming less and less accessible. Does the Minister agree that the arts are far too important to our culture and our identity to be left in the hands of a privileged few?
Mr Vaizey
I would certainly agree with the hon. Lady on that. Our forthcoming White Paper will announce new measures to increase access to the arts, but we have already supported, for example, music education hubs, extended the In Harmony scheme and introduced new schemes for the arts in schools, so I take great issue with her implicit criticism that we are not doing anything to increase access to the arts.
Mr Philip Hollobone (Kettering) (Con)
13. If he will make an assessment of whether further steps need to be taken to investigate allegations of historical sex abuse in the public service broadcasting sector.
The Secretary of State for Culture, Media and Sport (Mr John Whittingdale)
The report published by Dame Janet Smith last week was the result of a comprehensive and wide-ranging review. This is clearly a matter for the BBC, which commissioned the review and is responsible for responding, but I know that the chair and director-general take these issues extremely seriously, and I have already had a discussion with the director-general about them.
Mr Hollobone
This four-year, £6 million inquiry confirmed that Jimmy Savile molested 72 victims, that he raped a youngster as young as eight and that attacks occurred in the corridors and dressing-rooms of every BBC premises over a period of 47 years, yet no senior manager, past or present, has accepted individual responsibility for failing to stop him. Does the Secretary of State believe that this is an adequate response from Britain’s leading public service broadcaster?
Mr Whittingdale
I hope that my hon. Friend will read in full the statement by the director-general, which makes it clear that the BBC takes this matter very seriously. It has offered a full apology and fully accepts the recommendations of Dame Janet Smith. The important thing is that measures are put in place to ensure that this kind of thing can never happen again. A lot has been done already by the BBC, but I welcome the fact that the BBC has also accepted the recommendation that a further review be carried out to ensure that everything possible is being done to stop this kind of abuse ever happening again.
Chris Green (Bolton West) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Culture, Media and Sport (Mr John Whittingdale)
As you will know, Mr Speaker, today is World Book Day.
Since our last question time, my Department has published a summary of the responses to our consultation on the BBC charter review, Sir David Clementi’s report on the governance and regulation of the BBC, and the results of independent research on the BBC’s market impact. All those publications will inform our thinking.
The House will be delighted to hear that the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), has had a baby since the House last met. I am sure that Members will join me in congratulating her, and in wishing her and the new arrival well.
I know that the House will also join me in congratulating the British winners of last weekend’s Oscars, and in wishing our Davis Cup and track cycling teams well this weekend.
Chris Green
The British horseracing industry has an economic impact of £3.5 billion a year, and the Aintree and Haydock racecourses are very popular with my constituents. Will my right hon. Friend tell us when he plans to require offshore bookmakers to make a financial contribution to racing, as those based in Britain already do?
Mr Whittingdale
My hon. Friend is right to draw attention to the importance of horseracing to this country. I can tell him that we intend to introduce a new funding arrangement for British racing by April 2017. We will create a level playing field for British-based and offshore gambling operators, and will ensure a fair return for racing from all bookmakers, including those based offshore. The racing industry will be responsible for making decisions on the spending of the new fund. We will make further announcements shortly.
Clive Efford (Eltham) (Lab)
Four out of five tourism companies surveyed by UKinbound believe that staying in the European Union is important to their business. UKinbound’s chief executive officer, Deirdre Wells, has said:
“Saying ‘yes’ to staying in the EU sends a clear message that we are open for business.”
Why is the Secretary of State so intent on damaging our tourism industry by campaigning for Britain to leave the European Union, against the policy of his own Government?
Mr Whittingdale
I can tell the hon. Gentleman that, whatever the decision on Britain’s future membership of the European Union, this country will remain open to tourists, not just from the European Union but from across the world. We are already enjoying a steady increase in the number of international visitors, and I expect that to continue.
Suella Fernandes (Fareham) (Con)
T2. Fort Fareham is on Historic England’s heritage at risk register; it is listed as priority A. Built in 1861, it forms part of the region’s distinctive naval and coastal history. What support can the Minister give such heritage assets, which are at risk of rapid deterioration, particularly those in private ownership?
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr David Evennett)
I am well aware of Fort Fareham, which is one of several sites that testify to the important role of Portsmouth in the defence of our nation in the past. The purpose of the at risk register is to enable Historic England and other partners to target their advice and support at the sites that are in greatest need. I am pleased to say that Historic England is working with its partners in south Hampshire to make the most of the fantastic history of Portsmouth harbour.
Mrs Emma Lewell-Buck (South Shields) (Lab)
T3. I am sure that the Secretary of State was as aggrieved as I was to learn that late last year the Royal Society of Arts ranked South Tyneside as one of the lowest boroughs in the country on its heritage index. He should know as well as I do that South Tyneside has a huge amount of history and culture to offer. Would he consider accepting an invitation to come to the borough, with members of the RSA? He could take part in our summer festival, explore our ancient Roman sites, or perhaps pull a rabbit out of a hat during the upcoming annual magic show at our brilliant arts venue, the Customs House.
Mr Whittingdale
That is an almost irresistible offer, given the attractions of South Tyneside. The magic show sounds highly enticing.
The hon. Lady is absolutely right to stress the importance of heritage to South Tyneside and, indeed, to the whole country. I hope that I shall manage to accept her invitation in due course, but I know that, in the meantime, the Under-Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Bexleyheath and Crayford (Mr Evennett), is being assiduous in trying to visit as many tourism and heritage destinations as possible.
David Rutley (Macclesfield) (Con)
T5. What steps is my right hon. Friend taking to ensure that all Government Departments get behind the Government’s excellent new sports strategy, particularly in relation to outdoor recreation, with its benefits for physical health and for the tourism economy in rural areas in Macclesfield and far beyond?
Mr Evennett
My hon. Friend makes an excellent point about the value of outdoor recreation and sport. We recognise this and we are committed to working across the Government Departments to ensure that the new Sporting Future strategy promotes opportunities for everyone to get involved in outdoor activities, no matter where they are. Indeed, Sport England already invests millions of pounds in activities as diverse as trail running, canoeing and mountaineering, which provide exciting opportunities. We will continue to work with other Departments to make sure that this happens.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
T4. Across the regions of the UK, there are some 4,500 miles of road with no mobile phone signals, according to a recent RAC report. That includes 452 miles in the highlands without 4G, 3G or 2G, which means that no texts or calls can be made there. Will the Minister commit to taking action to plug these specific gaps in mobile coverage?
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
I am pleased to be able to tell the hon. Gentleman that the emergency services network proposals will see 300 new mobile masts built, and our mobile infrastructure programme will see 75 miles covered. Our changes to the licences of mobile providers will require 90% geographical coverage, which will also result in improvements in mobile coverage.
Stephen Phillips (Sleaford and North Hykeham) (Con)
T6. My right hon. Friend the Sports Minister pro tem will have seen yesterday’s suggestion from distinguished luminaries in the medical world—including from places such as the University of the Pacific, wherever that might be—that we ban any form of tackling in rugby in schools. Does he agree that it is time to stop this mollycoddling of young people, and, while doing all we can to ensure that sport is safe, to let schools get on with teaching contact sports and the values that they represent?
Mr Evennett
My hon. and learned Friend will be well aware that the Government are committed to ensuring that everyone has the opportunity to get involved in sport from a young age, provided that it is made available within a safe environment. The Department for Education is responsible for sport in schools. Rugby and many other sports always carry an element of risk, and we expect those supervising sport at that level to ensure the safety of all participants. He will be interested to note that as part of our strategy on sport and physical activity, a full review of the duty of care in sport is to be carried out, chaired by Baroness Tanni Grey-Thompson.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
T7. Local authority budgets are now under extreme pressure, and the Treasury is urging councils to liquidate all extraneous assets. Will the Secretary of State confirm from the Dispatch Box that that should not include the antiquities, paintings and artefacts in local authority museums and galleries? None of us wants to see a fire sale of our national heritage on the back of this Government’s stumbling economic policy.
Mr Vaizey
One treasure that I hope will not be liquidated is the hon. Gentleman. I hope he will not be liquidated by the Momentum campaign in Stoke and that he will be reselected. We are all praying for him on this side of the House. In answer to his question, it is obviously up to individual local authorities, but they must adhere to the code of ethics of the Museums Association. I take a very dim view of local authorities getting rid of their heritage assets, particularly those that have been left to them by prominent members of the community.
Damian Collins (Folkestone and Hythe) (Con)
There have been numerous resignations from the board of London 2017. Has the Secretary of State had the chance to discuss the reasons for that with London 2017, and does he have any concerns about its working relationship with UK Athletics?
Mr Whittingdale
This is a matter that we keep under review, but I have not had a chance to discuss it recently. I will certainly look into it further and discuss it with the appropriate authorities.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
T8. To prevent our pop charts from being disproportionately dominated by acts from private schools, and to prevent another all-white Brit awards like the event that was criticised last week, would the Minister consider starting a scheme similar to the much missed music action zones that the Labour Government created to encourage creativity and talent in music in non-classroom contexts?
Mr Whittingdale
This country produces some of the finest music acts in the world. A lot of the ones that I go to see certainly did not go to public school, and I am looking forward to going to see Muse and, I hope, Rainbow in the coming months. Of course, I want to see opportunity for everybody who has talent to succeed.
Philip Davies (Shipley) (Con)
Will the Secretary of State join me in congratulating Victoria Pendleton, the Olympic champion, on riding her first winner over fences at Wincanton yesterday, on Pacha Du Polder, a horse owned by Andy Stewart and trained by Paul Nicholls? Her exploits are a big boost for the racing industry. Will the Secretary of State confirm that when he sets the rate of the new levy, he will be taking into account all the current streams of funding that go into racing from bookmakers, such as picture rights?
Mr Whittingdale
I of course join my hon. Friend in congratulating Victoria Pendleton. I heard her talking about her success this morning, and it shows how somebody can achieve great accomplishment in one sport and then go on to succeed in a second. On the specific point he raises about the extension of the levy to cover offshore, the amount will be determined by an analysis, which we have commissioned, of the funding and costs of racing. That will take account of all sources of revenue, including media rights, as he points out.
Clive Lewis (Norwich South) (Lab)
T9. Will the Secretary of State tell the House why his Government have gone from promising victims of press abuse that part 2 of Leveson will happen to saying that it “may” happen? Will he also tell the House how many meetings he and his Cabinet colleagues have had with newspaper proprietors over the past year and whether that was a topic of conversation?
Mr Whittingdale
We have always said that any decisions about whether or not Leveson 2 should take place will be taken once all the criminal proceedings have been completed. We are not at that stage; further criminal proceedings are under way. Once those are completed, we will come back to look at this question. We regularly publish a record of all meetings with newspaper proprietors, with victims of press intrusion and with ministerial colleagues. Of course, I have regular meetings with all of those, and I am looking forward to having a further meeting with Hacked Off to discuss these matters in a few weeks’ time.
Stephen Kinnock (Aberavon) (Lab)
1. What steps he is taking to engage and involve more members of the public in the day-to-day business of Parliament.
The Deputy Leader of the House of Commons (Dr Thérèse Coffey)
The Government are committed to promoting public awareness of Parliament. Much has been achieved in this area in recent years, and this important work must continue. The Government particularly welcome the new e-petitions site, which has increased public engagement with Parliament since it was set up in July. The site collected 7 million signatures in its first six months, and to date 135 petitions have received a Government response and 19 petitions have been debated in Westminster Hall.
Stephen Kinnock
I thank the hon. Lady for her response. One way in which we can ensure that more people engage in politics is by reaching them at a young age, and I therefore welcome the increase in school visits to this place under your speakership, Mr Speaker. What assessment has the Deputy Leader of the House made of the effectiveness of schools visiting Parliament and of the education centre in getting young people interested and involved in politics? In addition, has she given staff their bonuses for now having to try to explain the Government’s incomprehensible English votes for English laws process?
Dr Coffey
I visited the education centre for the first time earlier this week to speak to children from Sandlings primary school in my constituency. It is a really impressive facility and I am sure that Mr Speaker is rightly proud of it. The hon. Gentleman makes an interesting point about our effectiveness at getting children from around the United Kingdom to come here, and as a constituency MP I have written to the Administration Committee to ask it to look at the effectiveness of that programme.
Andrew Stephenson (Pendle) (Con)
Further to the excellent point made by the hon. Member for Aberavon (Stephen Kinnock), will the Deputy Leader of the House join me in welcoming the news that 224 students from seven Pendle primary schools will be visiting Parliament in the next three months? Will she also join me in reminding teachers from across constituencies such as mine, which are more than 200 miles from London, that a travel subsidy is available for school trips to this place?
Dr Coffey
I congratulate my hon. Friend on the fact that he has got so many children engaged in this. Of course, the subsidy regime varies, but this is also about initiatives such as the Speaker’s school council awards. I have written to every school in my constituency encouraging them to enter it, and I think the closing date is in April.
Kirsty Blackman (Aberdeen North) (SNP)
Will the Government look at the level of school subsidies? I looked at it in relation to people from my school coming down, and found that they are only allowed to claim the subsidy if they are coming to the House of Commons as the main part of their business. If they are going to be doing other things in London, they cannot claim the subsidy. There are too many rules for the scheme to work for people in my constituency.
Mr David Nuttall (Bury North) (Con)
Does the Deputy Leader of the House agree that the use of the internet, particularly developments such as parliamentlive.tv, has the potential to increase hugely the engagement of the public in proceedings of this place?
Melanie Onn (Great Grimsby) (Lab)
It will be of great concern to everybody in the House that more and more people think that Westminster politics is remote, corrupt, boring—inexplicably—and unclear. A third of eligible voters in Britain chose not to go down the road and cast a ballot in last year’s general election. What does the Deputy Leader of the House believe are the main problems with Parliament that put people off, and what are the Government doing about it?
Dr Coffey
Voter engagement in terms of general election turnout collapsed in the 2001 election, after four years of a Blair Government. I am pleased to say that voter turnout has increased. The hon. Lady talks about this institution potentially being corrupt. That is not the case, as we have high levels of integrity, but where MPs have been found to break the law, they have been sent to jail and that is where they belong.
Patricia Gibson (North Ayrshire and Arran) (SNP)
2. What parliamentary mechanisms are available to hon. Members to scrutinise Barnett consequentials within the estimates process. [R]
Dr Philippa Whitford (Central Ayrshire) (SNP)
7. What parliamentary mechanisms are available to hon. Members to scrutinise Barnett consequentials within the estimates process.
Steven Paterson (Stirling) (SNP)
8. What parliamentary mechanisms are available to hon. Members to scrutinise Barnett consequentials within the estimates process.
The Deputy Leader of the House of Commons (Dr Thérèse Coffey)
Estimates are formal requests for authorisation of expenditure proposed to the House by the Government. Scrutiny of these, which are effectively departmental budgets, is undertaken in a variety of ways, including debates selected by the Liaison Committee, and it is also open to Select Committees to examine these budgets. The Procedure Committee has recently announced that it will look at the House’s procedures for examining estimates and the passing of legislation that authorises this expenditure—the Supply and Appropriation (Anticipation and Adjustments) Bill, which we dealt with yesterday.
Patricia Gibson
I thank the Deputy Leader of the House for her answer. May we have a commitment today that steps will be taken to modify the estimates process so that Members representing Scottish constituencies can properly scrutinise the impact of legislation on Scotland?
Dr Coffey
I think the hon. Lady is on the Procedure Committee. Is that right? [Interruption.] I think she is. She will be aware of the inquiry that is happening right now. I believe that the Committee is accepting written submissions till 25 March. I really want to emphasise this point: when I served on a Select Committee, we certainly dedicated time to scrutinising budgets. I encourage all Select Committees to do likewise.
Dr Whitford
Yesterday, this House approved a budget spend of more than £600 billion without any real debate or breakdown of the Barnett consequentials. As fewer than half the Secretaries of State have taken oral questions since the estimates were published, how are Scottish MPs—or indeed any MPs—meant to hold the Government to account?
Dr Coffey
I believe that there are avenues to do that. I welcome this inquiry by the Procedure Committee, especially as it might open up some new ideas, and I hope that all political parties will contribute to it. I really encourage this idea that Select Committees are one avenue. Of course Ministers are always held to account at this Dispatch Box, and by written questions as well.
Steven Paterson
The hon. Lady keeps telling us that the Procedure Committee is reviewing the estimates process. Will she tell us whether, when giving evidence to that Committee, she or the Leader of the House will be supportive of reform of the estimates process?
Mr Philip Hollobone (Kettering) (Con)
3. If he will make it his policy to protect the time available for Back-Bench business debates on the Floor of the House.
The Leader of the House of Commons (Chris Grayling)
It is for the Backbench Business Committee to schedule the business for the days allocated to it in each Session, and for the Chair to manage the debates when they take place.
Mr Hollobone
This afternoon or perhaps late this morning there will be a debate on gangs and serious youth violence, which is an extremely important topic. The Leader of the House will know that this debate was scheduled for an earlier day, but because of urgent questions, statements and other business overrunning for legitimate reasons, there was no time left for that important debate to take place. That situation could have been avoided had the Leader of the House allocated that debate protected time. Using that experience, will he look to protect Back-Bench business on future heavy business days?
Chris Grayling
As I have said to the Chair of the Committee in recent weeks, I keep that under careful review. It is certainly the case that the gangs debate moved to today because of a number of other parliamentary events that took place on the original day. However, the Backbench Business Committee has been able to bring the debate back to the House shortly afterwards. and as there are no urgent questions or statements today, there should be a full day available for today’s important debates. I will keep the matter under review, but I will need to be persuaded that things are going badly wrong before we could countenance a change to the way things work at present.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Surely the Leader of the House will agree with me that it is not just Back-Bench business and debates that are affected, but the rights and privileges of Back Benchers. Is he aware that very often the Opposition get squeezed by Front Benchers, with all their privileges, acting as Back Benchers as well, so it is much more competitive for us? Will he also bear in mind the fact that after my point of order to the Speaker, we had better behaviour from the Leader of the House and his Front-Bench colleagues at business questions, but after one week they have reverted to type?
Chris Grayling
Surely the hon. Gentleman is not suggesting that Members on his Front Bench, particularly on this occasion, go on for much too long? That view might not command agreement on the Opposition Benches, but it certainly does on the Government Benches.
Bob Blackman (Harrow East) (Con)
Will my right hon. Friend consider the fact that when Back-Bench business debates are scheduled in this House, Members on all sides take the opportunity to come along to participate? We on the Backbench Business Committee try to arrange for 15 speakers, and if the debate gets squeezed and pushed to another day, that is very unacceptable to Back Benchers who have made the time to speak on important subjects?
Chris Grayling
Of course, that is an important point. That is why I say we will keep the matter under review. This is the first occasion that it has happened in recent times. Clearly, if it becomes a regular feature, we may have to think again, but I do not want to manage processes unnecessarily. We need to see whether there is genuinely a longer-term issue.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
4. When the Government plans to make a decision on future levels of Short money.
The Deputy Leader of the House of Commons (Dr Thérèse Coffey)
The Cabinet Office published a document on 18 February seeking views from members of the parliamentary parties panel, political parties, individuals who were elected to the House of Commons at the last election, and the Clerk of the House, with a deadline of 7 March for written submissions. I understand that there will also be oral discussions. These responses will be considered before any decision is taken. We will then put forward a proposal for Parliament to approve.
Margaret Ferrier
Government consultation is ongoing, but there is clearly a pressing need to know what resources will be available in a few weeks’ time. Can the Deputy Leader of the House assure us that no changes to the Short money allocation formula will take effect until the beginning of the 2017-18 financial year at the earliest?
Tom Pursglove (Corby) (Con)
When making decisions about Short money, will Ministers ensure that appropriate arrangements are put in place for transparency about how those moneys are spent?
Tristram Hunt (Stoke-on-Trent Central) (Lab)
5. What recent assessment he has made of the effectiveness of the introduction of procedures on English votes for English laws.
The Leader of the House of Commons (Chris Grayling)
We have fulfilled our manifesto commitment to introduce English votes for English laws, which I believe will strengthen the Union. We have undertaken two Legislative Grand Committees, and several statutory instruments have been passed without Division. There have been some technical issues, but they relate also to the introduction of electronic counting in this House using iPads, which is routine in the other place now and which the House authorities are working on. Clearly, we would not wish to be left behind by the other House in the technologies that it uses. We will undertake a review of English votes for English laws procedure later this year.
Tristram Hunt
Does the Leader of the House not agree that the current Gilbert and Sullivan system for EVEL is simply unsustainable? It is confusing, haphazard and totally incomprehensible to the public. Will he therefore join my call for a referendum on an English Parliament so that the voice of England has clarity in our representative democracy? After all, we know how much he enjoys a referendum.
Chris Grayling
I am not necessarily certain that that is the Labour party’s policy. It is an interesting concept, but the Government were elected on a manifesto to deliver English votes for English laws in this place. It is set out in detail how we will do that, and we have implemented our commitment, as the electorate would have expected.
Ian C. Lucas (Wrexham) (Lab)
6. Mr Speaker, you will be aware that Coleg Cambria in my constituency has students resident in England who are directly affected by issues you have certified under the EVEL procedure as relating only to England. Will the Leader of the House urgently consider this issue, which is directly affecting the livelihoods of people in my constituency? He is limiting my voice on these matters.
Chris Grayling
I have to admire the hon. Gentleman for his persistence in this matter, but as I have explained to him time and again, he has no say over matters such as health and education in his own constituency. It is not obviously logical that we should make special arrangements for him to have that say across the border in constituencies represented by other Members of this House.
Pete Wishart (Perth and North Perthshire) (SNP)
There has barely been a more disastrous and divisive innovation than English votes for English laws. It is totally unnecessary, and the Tory majority in England and the UK is crushing any hope of a Tory revival in Scotland with this anti-Scottish tone. Is not EVEL now ripe for abolition, and should it not be confined to the dustbin of history?
Chris Grayling
The hon. Gentleman speaks with his customary reserve and understatement. I have to say that I totally disagree with him.
Several hon. Members rose—
Business of the House
(8 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Chris Bryant (Rhondda) (Lab)
Will the Leader of the House give us the forthcoming business?
The Leader of the House of Commons (Chris Grayling)
The business for next week is as follows:
Monday 7 March—Second Reading of the Policing and Crime Bill.
Tuesday 8 March—Remaining stages of the Enterprise Bill [Lords] (day 1), followed by a debate on International Women’s Day, a subject determined by the Backbench Business Committee.
Wednesday 9 March—Conclusion of the remaining stages of the Enterprise Bill [Lords] (day 2), followed by, if necessary, consideration of further Lords amendments.
Thursday 10 March—Consideration in Committee and remaining stages of the Northern Ireland (Stormont Agreement and Implementation Plan) Bill, followed by a debate on a motion on record copies of Acts. The subject for this debate was determined by the Backbench Business Committee.
Friday 11 March—Private Members’ Bills.
The provisional business for the week commencing 14 March will include:
Monday 14 March—Remaining stages of the Energy Bill [Lords].
Tuesday 15 March—Second Reading of the Investigatory Powers Bill, followed by, if necessary, consideration of Lords amendments.
Wednesday 16 March—My right hon. Friend the Chancellor of the Exchequer will deliver his Budget statement.
Thursday 17 March—Continuation of the Budget debate.
Friday 18 March—The House will not be sitting.
Finally, I indicated before Christmas that we would provide regular updates on the situation in Syria. The intention is that there will be a further statement shortly on matters in Syria.
Chris Bryant
There have been two fire alarms in the Palace this week, and on both occasions there was great confusion among Members and members of the public. May I urge the Leader of the House to initiate a review of those arrangements as soon as possible?
Last week I asked whether the Leader of the House plans to delay the Queen’s Speech until after the EU Referendum. He refused to answer, which is of course usual, but we all now know that the Government intend to extend this Session beyond 23 June. We know that not because the Leader of the House has told the House, but because Downing Street has told The Times. I know that, as a Brexiteer, the Leader of the House is not allowed to see Government papers any more, but one would think that the Government would at least allow him to know when the recess dates will be. So come on, just tell us: will the Queen’s Speech be after 23 June, will there be a Whitsun half-term recess, will the House sit during the week of the referendum, and will he give us the dates through to the end of the year? Before he goes all pompous about this—oh no, it is too late for that—I just say to him that Members from across the House, and, for that matter, the staff who work in this building, all want answers to these questions.
The terrible news about the article in The Times is that Downing Street has also said that there is going to be a reshuffle after the referendum and that the Leader of the House tops the list of those who are going to be sacked. I, for one, am beginning to feel very, very sorry for him, so I have been searching the job pages for him. Sadly, the only thing that seemed even vaguely suitable was working as an unpaid voluntary intern for the hon. Member for Bath (Ben Howlett), but unfortunately he says in the job description that he wants somebody who is a “good team player”, so that rules out the Leader of the House. All the other jobs say they want someone with a good sense of humour—need I say more? He need not worry though: I am sure the Prime Minister will give him a glowing reference.
The previous Parliament was the zombie Parliament—for months on end the House had no proper business—and now we have the return of the living dead. They walk among us, they look like Ministers, and they are paid like Ministers, but they are doomed. They hate the Prime Minister; they think he is damaging the economy and putting our security at risk. Frankly, the only thing that is keeping them in the Government is the £23,570.89 in extra salary they will get come 23 June.
How do the Government intend to fill the business between now and then? Here are my suggestions. One: I have married a lot of people in my time—to one another, as a vicar, that is—but it has always seemed wrong to me that marriage certificates include the names of the fathers of the bride and groom but not the mothers. Even the Prime Minister says that he wants to change this, but apparently he has written to one of our Members saying there is not enough time. Well, there is clearly now going to be enough time to do it in this Session. My hon. Friend the Member for Neath (Christina Rees) has a handy private Member’s Bill to be considered tomorrow: why do not the Government adopt it or help it into Committee so that it can be amended?
Two: I am delighted that the Government are no longer going to water down freedom of information, but should we not extend it to private companies engaged on public sector contracts? How much did the Government’s preposterous review cost? The Leader of the House might as well tell us now, because he knows full well that if he does not we are going to put in a freedom of information request and he will have to tell us in the end anyway.
Three: I am glad that Adele did so well at the Brits last week, but tickets to see her live are now selling on the secondary market for up to £24,000. This market pretends to support the arts, but actually it just leeches off them. The Business Department’s review of the ticket resale market closed on 20 November. When is it going to be published, and when will the Government legislate to put an end to this pernicious, parasitical secondary market?
The hon. Members for Daventry (Chris Heaton-Harris) and for Salisbury (John Glen) and I have long been calling for a parliamentary inquiry into concussion in sport. This week, more than 70 doctors and health experts have written to the Government calling for a ban on tackling in school rugby games. I do not want youngsters wrapped in cotton wool, but given that it is 12 years since the West Bromwich Albion footballer Jeff Astle died of chronic traumatic encephalopathy brought on by heading the ball, five years since 14-year-old Ben Robinson died of second impact syndrome, and Will Smith’s new film “Concussion” shows how the NFL failed to protect its players and ended up with a legal bill of $1 billion, is it not time that we set up a proper parliamentary inquiry to make sure that we get all the facts out there?
Next week sees the 100th anniversary of Harold Wilson’s birth. He gave women, for the first time, control over their own property and their bodies; he abolished the death penalty; he decriminalised homosexuality; he introduced the first race relations Act; and he won the referendum to stay in Europe. He ended censorship and created the Open University and the Arts Council. For that matter, under him we won the Eurovision song contest—I know the Leader of the House is obsessed with this—three times: three times more than we have ever won it under the Tories. Is it not outrageous that we have a louring statue of Mrs Thatcher, who made my constituents’ lives miserable, but just a bust of Harold Wilson, who made this country a civilised society?
Chris Grayling
I very much hope that we will win the Eurovision song contest under the Conservative party next year, with that great band MP4 leading the charge for the nation.
In order to understand what does and does not work with fire drills, it is, of course, necessary to carry them out. Lessons will be learned from the experience earlier this week, but I extend my thanks to all the Officers of the House who were involved in the fire drill. They will now work out how to make sure that our processes are appropriate and suitable for the future.
We will announce the date of the Queen’s Speech when we have decided the date of the Queen’s Speech. As always, the hon. Member for Rhondda (Chris Bryant) makes the mistake of believing that what he reads in the papers is what is actually going to happen. We will take a decision on the Queen’s Speech and we will announce it to this House, as usual.
We have to be mindful of the need to ensure the progress of business. The hon. Gentleman cannot have it both ways. It is somewhat ironic that, on the one hand, he asks, “Where are the recess dates?” while on the other he says, “This is a zombie Parliament with no serious business.” He is completely wrong. I have just set out plans for the Second Reading of the Policing and Crime Bill next week. That really important measure will restore a sensible balance to many aspects of our policing and justice system. I have also announced the Second Reading of the Investigatory Powers Bill, which will be crucial in enabling us to defend our country. If the hon. Gentleman thinks that that is a feature of a zombie Parliament, then frankly he does not know what the word “zombie” means.
May I echo the hon. Gentleman’s comments about the work done collectively by Members across the House, including by my hon. Friend the Member for Daventry (Chris Heaton-Harris), on the issue of head injuries? I know how serious an issue it is. The Children’s Trust is situated in Tadworth Court, just outside my constituency, and it does a brilliant job in helping children who have had the most terrible experiences. The issue should be of concern to Members on both sides of the House. I hope very much that the Select Committee will pick up on the work that my hon. Friend and others have done and write a full report. The hon. Gentleman asked for a parliamentary investigation, and the best way to do that is through the Select Committee.
The Welsh affairs debate will take place later today. It was, of course, St David’s day this week, and I extend my good wishes to all Welsh Members of Parliament. I am looking forward to 5 May, when the people of Wales will have the chance to get rid of a failing Labour Administration.
It is a bit of a relief to me to see the shadow Leader of the House in better spirits today than he was yesterday. I do not know whether others noticed that he looked utterly miserable during Prime Minister’s questions, but I understand why. It was not just because the Leader of the Opposition spent last Saturday, just like old times, at a CND rally, or because he has appointed the former Finance Minister of the Greek Syriza Government as his new economic adviser, although heaven knows how any self-respecting Member on the Labour Front Bench could take that appointment seriously. It was not even because a former shadow Cabinet member said of the Leader of the Opposition’s appearance at the parliamentary party meeting on Monday:
“Expectations were rock-bottom—and he fell below them”.
The most bizarre claim to come from the Labour leadership this week was when the Leader of the Opposition said that he gets his moral compass from “Eastenders”. Surely not even the shadow Leader of the House can think that this is a man fit to be Prime Minister.
I understand that it is hard for someone who has decided, as the shadow Leader of the House has, to become a cheerleader for a team he clearly does not support. I would be happy to grant him a debate on learning from the lessons of history, because he is the man who says he is proud to have stuck a knife in the back of Tony Blair. Only this week, however, he seems to have had second thoughts and has started to show signs of thinking again, because he told a group of students:
“‘I’m going to talk about Tony Blair, I think we’re still allowed to speak about him”.
Of course, those were the days when Labour was a serious political party.
Mr Peter Bone (Wellingborough) (Con)
Some French Minister has apparently been saying today that if we have the nerve to come out of the EU, all 4,000 people in Calais will be put on rubber boats and come across to Britain, because the French do not want anything to do with them. If I were a Frenchman, I would be hugely embarrassed by my Government. If a country that is two and a half times the size of this country, with roughly the same population, cannot disperse 4,000 people and look after them, it should be ashamed of itself. Could we have a statement next week from the Foreign Secretary on whether it is the Government’s position that, if we come out of the EU, we would have more rather than less immigration to this country?
Chris Grayling
I am absolutely certain that the Foreign Secretary will be back before the House shortly, so there will be an opportunity for my hon. Friend to put that point to him. In the last couple of weeks, I have heard the French Interior Minister reassure us that the French Government would not wish to put at risk the bilateral agreements over border controls between the United Kingdom and France.
Pete Wishart (Perth and North Perthshire) (SNP)
I, too, thank the Leader of the House for announcing next week’s business. Today is World Book Day, and it is worth noting, especially as I am chair of the all-party writers group, the wonderful wealth of writers that we have in this country and the power of literature to bring joy to people and enhance their lives.
The Leader of the House and I now have a joint experience in fighting referendums. We have both been on the sharp end of various “Project Fears”. In the Scottish referendum, I experienced “Project Fear”, and he is now experiencing the new “Project Euro-fear” as he leads the campaign to yank the UK out of the EU. The scaremongering from the in side is almost straight out of the useless and dysfunctional Better Together manual, and it is likely to cause as much damage to the in campaign as it caused to the massive lead of the no campaign, which was shredded, in Scotland. As a supporter of our place in the EU, I want that counterproductive scaremongering to stop, although I presume that the Leader of the House is quite happy with it, given that it will probably work in his interest. Can we have a debate about positive campaigning, and can we encourage everybody to ensure that when we debate our place in Europe, we do so as positively as possible?
We need an urgent statement from the Defence Secretary on Trident. Apparently, he is just about to declare that Trident renewal is already under way, before we have had the opportunity to approve that in the House. It is absolutely appalling that the Defence Secretary can simply take the House for granted, and he must come to the House and explain himself. Scotland rejects Trident, and we intend to make it a huge issue in the Scottish elections. We simply refuse to have that weapon of mass destruction dumped on our nation without any approval from the House.
What do we do now, Mr Speaker, about large parts of Scottish funding? On English-only legislation, you are to lay aside minor or consequential issues when certifying legislation as English only, even though they have huge Barnett consequentials to Scotland. The Leader of the House told us that the mysteries of the Barnett consequentials lie in the mystery of the estimates. I tried to debate estimates in the estimates day debate, but I was ruled out of order within two minutes and 46 seconds. Somebody, somewhere, has to tell us how we should get that addressed and when we, as Scottish Members, will get to discuss, debate and vote on the critical issue of the Barnett consequentials.
Finally, the irony of last night’s debate on the Lords amendments on the Welfare Reform and Work Bill, in which Tory after Tory lambasted all those wicked Lords, was not lost on Scotland. For the Tories, however, the Lords are only to be chastised when they do not do the Tories’ business, and to ensure that that happens, the Tories are going to introduce another 40 Tory Lords. Why do the Tories not just back us? Instead of trying to gerrymander that bizarre House, how about working with us and getting rid of the whole shooting match altogether?
Chris Grayling
I agree with the hon. Gentleman on the need for positive campaigning, and I hope that all who are involved in the debate over our membership of the European Union in the coming months will take a positive approach and set out the facts so that the British people can take their decisions. I gently chide him for mentioning “Project Fear” when he talked about positive campaigning, and I remind him of the things that he said about the introduction of English votes for English laws. To listen to what he said, one would have thought that about as much doom and gloom and disaster as possible would fall on us, but it is not entirely clear to me that that has happened. The Union has not fallen apart because of the introduction of English votes for English laws, and the Scottish people I know think that it is entirely fair.
The hon. Gentleman raised Trident. If he is concerned to bring the Defence Secretary to the House to explain himself, there are mechanisms in the House by which the hon. Gentleman can do so. He can either seek your consent, Mr Speaker, or use the other avenues that are available to him, and I am sure that he will choose to do so. He talks about Trident being “dumped on our nation”, as he phrases it. I remind him of all the people in Scotland whose livelihoods depend on Trident, and of the people in the north-west of England whose jobs depend on the future replacement of Trident. Is he really saying he wants all those jobs to disappear? Is he really saying he wants the area around Rosyth to end up abandoned and without an economic role for the future? I do not think that is in the interests of those communities. I have to say that it is in the interests of Scotland and the United Kingdom that we retain a nuclear deterrent both for our national security and to ensure there are jobs in the parts of the United Kingdom that need them.
The hon. Gentleman asked about the estimates debates. I simply remind him that he is a member of the Liaison Committee, which chooses the subjects for debate on estimates days. The Committee is perfectly free to hold discussions on any aspects of public spending, and it chose to do so on Foreign and Commonwealth Office matters. It is for the hon. Gentleman, who sits on the Committee, to secure the debates he wants.
The position of the hon. Gentleman’s party on the Lords has been well set out. I must say that I think the Lords plays a role in helping to improve the quality of legislation in this place, but I suspect that we are never going to agree on that subject.
Amanda Milling (Cannock Chase) (Con)
In recent months, five coal-fired power stations have announced that they will close, potentially close or partially close: one of them is Rugeley B. The Government have stated that they intend to phase out coal-fired power generation by 2025, but market conditions mean that the closures may come far sooner. May we have a debate in Government time on energy policy and the role that existing power station infrastructure can play?
Chris Grayling
I understand my hon. Friend’s concerns, and I heard her question at Prime Minister’s questions yesterday. She is freely able to bring forward that subject in an Adjournment debate or to seek consent for a Back-Bench debate to have it discussed in the House. The matter clearly affects the constituencies of a number of hon. Members, and I encourage her to bring that subject forward for discussion.
Frank Field (Birkenhead) (Lab)
If this Session of Parliament runs beyond June, will the Leader of the House consider giving us more days for Back-Bench business and for private Members’ Bills? If he gives us more days, will he put the Bill I am promoting with support from colleagues on both sides of the House—for the automatic registration of children for free school meals and the school premium—at the top of the list on one of those days? That is the one move we could make between now and the summer holidays that would have a real effect on poor families.
Chris Grayling
The right hon. Gentleman has a long track record of pursuing social reforms of that kind, and I will certainly look very carefully at what his Bill proposes. Of course, the progress of business in the House very much depends on our success in getting Government business through. We have a substantial programme—it was set out in our manifesto—to bring forward and complete by the end of this Session. I want to make sure that the dates set for both the Queen’s Speech and for the end of this Session and the recess are consistent with our need to ensure that our manifesto is implemented.
Sir David Amess (Southend West) (Con)
Will my right hon. Friend find time for a debate on the impact of c2c timetable changes on the lives of commuters who live in Southend? The company has at long last accepted that there is overcrowding and it has ordered new rolling stock, but it has just announced that it will not be arriving.
Chris Grayling
I commend my hon. Friend for the work he is doing on behalf of his constituents on an issue that, in different ways and on different lines, affects very many of us. The Transport Secretary will be in the Chamber for questions next Thursday, and I encourage my hon. Friend to raise the issue directly with Ministers. He is doing a good job in keeping the company under pressure at a time when there are clearly serious issues about the delivery of the service on that line.
Ian Mearns (Gateshead) (Lab)
As Chair of the Backbench Business Committee, I wrote to the Leader of the House to look for assistance in getting protected time for particular debates. The debate on gangs and serious youth violence was bumped, but has now been rescheduled for later today. On Tuesday, which is International Women’s Day, we have a particularly time-sensitive debate on International Women’s Day. I asked the Leader of the House to give an undertaking that the time for that debate would be protected. I have received a reply, and I am afraid to say that no such undertaking has been given. That is regrettable, because it is possible that there will be urgent questions and statements and that the Enterprise Bill will run, which would curtail the time for the International Women’s Day debate. We have already seen evidence that such protected time is required from time to time. Will the Leader of the House please reconsider that matter?
Chris Grayling
As I have said, I have given that matter careful consideration. I have looked at the flow of business on Back-Bench days and will watch carefully next Tuesday. I am sure that you and I, Mr Speaker, will want to ensure that there is proper time for debate on that day. At the same time, I have to be mindful of the working hours of staff and of this House, so I do not want to make significant changes without being confident that there is a real problem that needs to be solved, rather than an occasional problem. I assure the hon. Gentleman that I will keep the matter under review, but my hope and intention is that we will have proper time available next week.
Tom Pursglove (Corby) (Con)
In the light of Switzerland’s withdrawal of its application for EU membership after 24 years, may we have a debate next week on why it might possibly have chosen to do that?
Chris Grayling
I think that will simply add grist to the mill of the debate on the European Union referendum. Although I have not scheduled a debate on European Union matters for next week, I am in little doubt that there will be an opportunity shortly for those matters to be raised with Ministers.
Kirsten Oswald (East Renfrewshire) (SNP)
Most Members will be surprised that many current and former service personnel never receive a medal acknowledging their service. All those who served accepted the danger and sacrifice associated with their decision, but they will never receive a medal unless they were actively involved in conflict or served for a very lengthy period. May we have a debate in Government time on the introduction of a national defence medal, which would be a tangible recognition of their service?
Chris Grayling
It is open to the hon. Lady to bring forward an Adjournment debate on that subject if she wishes. From my perspective, I do not think that medals should be handed out without consideration of the contribution that has been made and the individual’s circumstances. If we start to have medals for all, the value of the medals for particular examples of valour and service in particularly tough circumstances will perhaps be slightly devalued. I praise unreservedly all our armed forces, but the medals system that we have always had in this country is designed for those who go beyond the routine and put themselves in danger in the service of this country.
Mr Christopher Chope (Christchurch) (Con)
When will the House have an opportunity to express its opinion on the new fiscal framework for Scotland? When we have a debate on that issue, will we be able to debate Barnett consequentials? For example, when the United Kingdom Parliament gives more money to Glasgow in city grant, there is a Barnett consequential that means that more money goes to the Scottish Government as a result.
Chris Grayling
The Scotland Bill is making progress through the other House. I understand the point that my hon. Friend makes. The agreement that we have reached will provide for a transitional period to a new world for the Scottish Government. The Scottish Government now have to start using the powers they have been given and taking some of the decisions that other Governments have to take, which they have so far insulated themselves from.
Jim Shannon (Strangford) (DUP)
In the last few weeks, there have been many stories in the media about gamblers and addiction. Tony Franklin lost his money, his job and his family, and claims that fixed odds betting terminals were the reason. It is clear that the gambler stands little chance of leaving the roulette table with heavier pockets than when he entered. There is a need to change the legislation on fixed odds betting terminals. Would the Leader of the House agree to a statement or a debate on that matter?
Chris Grayling
Unfortunately, we have just had Culture, Media and Sport questions, when the hon. Gentleman would have had an opportunity to raise that matter with the Ministers concerned. They will, of course, be back before the House in due course. I am aware that this is a matter of concern across the House. It might be possible to take the subject to the Backbench Business Committee if his concerns are shared across the House.
Dr Julian Lewis (New Forest East) (Con)
If the Government persist with their intention of delaying the vote on Trident renewal until after the Labour party conference, it will become harder for pro-defence and pro-Trident Labour MPs to vote in favour of renewal. May we please have the date on which the debate and vote will take place, especially if more time will be made available by extending the length of the Session?
Chris Grayling
I know about my right hon. Friend’s concerns over the timing of the debate. I will make sure that his views are fed into the discussions about when the debate should happen.
Louise Haigh (Sheffield, Heeley) (Lab)
This week, a Select Committee in the Lords found that, contrary to Government claims, the Trade Union Bill will profoundly affect Labour party funding. Previously, the Leader of the House had a letter from the Minister for Skills, the hon. Member for Grantham and Stamford (Nick Boles), seeking to make concessions on the Bill. Will the Leader of House now agree to the concessions and commit to cross-party talks to reach a fair and long-lasting settlement on party funding?
Chris Grayling
Of course, that is a matter of discussion and debate in the Lords, and the Lords Committee has made recommendations. We are trying to provide a sensible balance for the future. [Interruption.] The shadow Leader of the House says, “Oh no you’re not”, but the Conservative party has to seek voluntary contributions from individuals who choose to back it. The Labour party has depended on a system in which people have to go beyond the extra mile to take themselves out of automatic contributions.
Martin Vickers (Cleethorpes) (Con)
One of the major issues to be debated during the European referendum campaign will be the size of the UK’s net contribution. Will the Leader of the House find time for a debate so that those of us who are in favour of leaving the EU can outline the infrastructure projects and improvements to public services on which we could spend that money? It would also provide others with an opportunity to try to defend why money should go to Europe rather than be spent in their constituencies.
Chris Grayling
My hon. Friend makes his point in his customarily succinct way. Of course, we have just had an all-day debate on our EU membership, and I am absolutely certain that it will not be the last time these matters are debated in this House between now and June.
Philip Davies (Shipley) (Con)
May we have a debate on the dodgy dossier that the Government have produced in advance of the EU referendum? I do not know whether you, Mr Speaker, saw the Minister for the Cabinet Office skewered on the “Daily Politics” by Andrew Neil yesterday when he tried to back up his claim that Norway had to abide by three quarters of the EU’s laws. Andrew Neil pointed out that the figure was actually 9%. If the Government are prepared blatantly to lie so badly on that issue, perhaps we need a full debate on the dodgy dossier to see how many other blatant lies they are prepared to resort to.
Chris Grayling
I would simply say that I hope everyone will set out their views and the facts in a completely dispassionate way.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
Hannah Morris, the fantastic Camden youth mayor, is stepping down later this year. When I have spoken to young constituents, the point has been made to me over and over that young people feel disfranchised from politics and disengaged from Parliament. That has been exacerbated by the Government’s refusal to lower the voting age and their scrapping of policies such as education maintenance allowance. Will the Leader of the House make time for a debate in the House on young people’s worrying disengagement from this Parliament, the mother of Parliaments?
Chris Grayling
We talked earlier about the importance that the education centre plays in this place and the importance of bringing as many young people as possible to Parliament. All of us individually have a duty on this matter, and I spend quite a lot of time talking to groups of sixth-formers in my constituency. I am sure the hon. Lady does the same. Every one of us has a duty to go out and explain why the decisions that we take in Parliament and the issues that we debate are of material importance to young people, and why they should vote and take an interest.
Marcus Fysh (Yeovil) (Con)
Can time be found for a debate on the effects of uncontrolled immigration into the UK, which would be one of the impacts of our remaining in the EU? It has a massive impact on people’s access to services, healthcare, school places and decent wages, and it is extremely important to my constituents.
Chris Grayling
My hon. Friend makes an important point. He may have seen the serialisation of the new book by Tom Bower over the past few days, which has exposed just how complicit the Labour Government were in opening our borders and allowing uncontrolled immigration to this country. Those who were part of that party and that Government should be forever ashamed of the way in which they allowed uncontrolled immigration—not managed immigration or immigration organised in a careful way—as a deliberate policy. They should be ashamed of that.
Tom Brake (Carshalton and Wallington) (LD)
Has the Leader of the House received a request from any Minister to make a statement explaining why the wheels have come off the Brexit BMW, or perhaps a request from an individual Member who has performed a handbrake turn on EU membership to make a statement explaining their diversion? Such statements would provide the public with critical facts about the weaknesses of the Brexit case and the motivation of some people in supporting it.
Mark Pawsey (Rugby) (Con)
Has the Leader of the House seen reports that plans are being drawn up to reclassify e-cigarettes as tobacco products for tax purposes? Vapers and the sector accept that some additional duty should be charged, but the consequence of the proposal is that the price of e-cigarettes to consumers will more than double. Public Health England has deemed e-cigarettes to be 95% safer than tobacco, so may we have a debate to consider taxation of those products to ensure that they remain an effective method of smoking cessation?
Chris Grayling
I know that my hon. Friend raises a matter of concern, which affects a large number of people. I suspect that it is the sort of proposal that causes uncertainty and disquiet about decisions made in Brussels. I very much hope that no decision on the matter will be made without due care and attention, and without due focus on whether e-cigarettes are a good way of enabling people to move away from smoking.
Liz McInnes (Heywood and Middleton) (Lab)
May we have an urgent debate in Government time on the recent Joseph Rowntree Foundation report, which showed that 10 of the 12 towns and cities in greatest economic decline are in the north of England? Not a single town in the south is among the worst 24 listed. That causes real concern about the vision of a northern powerhouse. We urgently need a debate, particularly as Steve Rumbelow, the chief executive of my council, Rochdale—which, incidentally, is listed as the town in the greatest economic decline—has accused the foundation of using out-of-date figures, which mask the progress made in northern regions.
Chris Grayling
It never ceases to amaze me that Labour Members do not understand why the northern powerhouse is needed. It is because, when they were in power, the manufacturing sector of this country almost halved. Northern towns declined steadily—Labour policies failed the north of this country unreservedly. That is why we need a northern powerhouse, which helps to contribute to the significant fall in unemployment across the north of England. We inherited high unemployment in those towns and cities, and we are sorting it out.
Craig Williams (Cardiff North) (Con)
I thank my right hon. Friend for his comments about St David’s day, and I look forward to the Welsh affairs debate later. Cardiff and Wales held the rugby world cup at the turn of the millennium. Since then, we have held the FA cup finals, the Ryder cup, the UEFA super cup and Ashes tests, and played our part in the Olympics. I pay tribute to the Scottish Government for what they did with Glasgow and the Commonwealth games. Is it not time to have a debate about what we can do to chivvy and encourage the Welsh Labour Government to put in a bid for the Commonwealth games to come to Cardiff?
Chris Grayling
London did a fantastic job of hosting the Olympics, Glasgow did a fantastic job of hosting the Commonwealth games, and I would love to see the Commonwealth games come to Cardiff. I echo my hon. Friend’s view and I hope that the Welsh community will come together and find the right moment to make that bid for the future.
Natalie McGarry (Glasgow East) (Ind)
Last week, I discreetly visited the besieged district of Sur in Diyarbakir. I witnessed almost incontrovertible evidence of suppression of civil liberties and worrying signs of the potential for more civilian deaths. Given Diyarbakir’s proximity to Syria, the fact that Turkey is a NATO ally, and emerging evidence that Turkey is targeting US and UK-backed Kurdish forces fighting against Daesh in Syria, will the Leader of the House commit to a debate in Government time to allow Members to discuss the nature of our relationship with our NATO allies?
Chris Grayling
As I said earlier, I have agreed with my colleagues in Government and made provision for a further statement on the situation in Syria shortly. That will give the hon. Lady an opportunity to raise that very point.
Jason McCartney (Colne Valley) (Con)
Tomorrow, I will be at New College in Huddersfield with the Anthony Nolan “Register & Be a Lifesaver” programme. May we have a debate on bone marrow donation, blood donation and organ donation to see how we can increase the number of people involved in those programmes and raise awareness?
Chris Grayling
My hon. Friend makes an important point and I pay tribute to everyone involved in that important work, particularly in his constituency. He raises an issue that has, over the months, been of concern to Members of all parties. Again, it might be a subject that the Chair of the Backbench Business Committee would like to consider as an opportunity for a Thursday.
Paul Flynn (Newport West) (Lab)
Next Thursday will be exactly 29 years since the brutal murder of Daniel Morgan of Llanfrechfa, who was investigating police corruption in south London. This week, “Panorama” gave a vivid account of the extraordinary amount of corruption that existed in the Metropolitan police. I am one of the few people in the House to have read, under strict surveillance, the Tiberius report. It is the most deeply shocking document I have read in my life. Will the Government publish it—perhaps next Thursday—so that the whole country can understand the breadth and depth of police corruption in this city?
Chris Grayling
I will ensure that the Home Secretary is aware of the hon. Gentleman’s concerns. I am not aware of the detail of the report, but I will make sure that she responds to his request.
Henry Smith (Crawley) (Con)
Unfortunately, a number of my constituents have recently been the victim of a substandard building firm that, when challenged, liquidates itself only to quickly re-establish itself in a new guise. May we have a debate on such abuse of company law?
Chris Grayling
It is obviously disturbing when one hears of such incidents. The Business Secretary will be here in 10 days’ time, and current procedures for director disqualification allow members of the public to lodge direct complaints when such issues arise, so that they can be investigated.
Kevin Brennan (Cardiff West) (Lab)
May we debate internet awareness? The Prime Minister’s explanation of his damascene conversion on Sunday trading between April and June last year is the existence of internet shopping—in other words, between April and June he discovered the internet. Is that not just an empty excuse for a broken promise that will affect workers not just in England and Wales, but also in Scotland and Northern Ireland?
Chris Grayling
Those measures also include provisions to improve workers’ rights, and the hon. Gentleman will have the opportunity to debate all those matters when the provisions are brought before the House. If he has concerns, he will be able to raise them then, and vote accordingly.
Mr Nigel Evans (Ribble Valley) (Con)
All Members of the House recognise how sensitive pensions are, and that any changes we make impact on individuals—we have seen that with the raising of the pension age for women. I understand that there may be further general changes to pensions. Will the Leader of the House guarantee that should that happen, we will have sufficient time to debate them in this House, and to consider the impact that they will have on our constituents’ quality of life?
Chris Grayling
I know that the Chancellor will want to take great care when bringing forward any proposals to reform the pension system. I do not know what will be in the Budget, but whatever there is, there will be ample time to debate it in this House. Such matters must be handled enormously carefully, and we do not want to make the same disastrous mistakes that Gordon Brown and the Labour party made when they were in government.
Jim McMahon (Oldham West and Royton) (Lab)
I wish to outline an important case. I am supporting Kath and Tom Leary, who are parents seeking answers following the death of their son, Wayne, who was killed in a hit-and-run accident in 2010. The driver, Colin McDonald, is a criminal with little regard for human life. He was on bail for a serious stabbing, having already been given early release for the manslaughter of Jonathan Tripp. Colin McDonald was sentenced for that stabbing and hit and run, but again he was let out on early release on licence until 2021. Last week he was again sentenced for another manslaughter, of Dominic Doyle. The parents want answers. How can a justice system that is meant to give people confidence do this to people? Will the Leader of the House support me in securing a meaningful debate on the issue?
Chris Grayling
In my time as Justice Secretary I was involved in discussions on a number of such cases, and we introduced measures to tighten the law. We also started a broader review of the laws on motoring, precisely to see whether further steps needed to be taken in tragic cases of this kind. The Lord Chancellor will be here next Tuesday, and from past experience of constituency matters, I encourage the hon. Gentleman to use the Adjournment debate system to bring a Minister to the House, go through the case in detail, and look for changes that can make a difference to families who have been through the most terrible situations.
Mims Davies (Eastleigh) (Con)
Local councils must help to maintain trust in politics by openly discussing and transparently agreeing their budget, and by explaining the savings, efficiencies and programmes that they will undertake. Does the Leader of the House agree that councils such as Eastleigh Borough Council must lead the way, because it is struggling to explain openly its future budgets to the public? May we have a debate on open and balanced council budget setting, so that MPs can highlight the importance of vital local decisions and how they must be clearly and roundly understood by residents?
Chris Grayling
My hon. Friend makes an important point. There is a curious irony, given who controls her borough council. The Liberal Democrats argue for openness, but do not necessarily deliver it when in power. I am sure that if the decisions they take are as opaque as she is suggesting, they will not be holding that power for very much longer. It is of course important that local government is transparent, explains the decisions it takes and sets out why, when it has had to take difficult decisions, it has chosen that route rather than any other.
Clive Efford (Eltham) (Lab)
Yesterday in Westminster Hall we had a debate about the chaos on Southeastern trains. The Minister gave us some reassurances that things were improving, but last night I got a phone call from a concerned constituent who was on a train. He was told by the driver that the signallers had mistakenly put the train on the wrong line, so it would not be visiting any of the stations the passengers on the train intended to go to. My constituent said to me, “We are used to the chaos, but this is downright dangerous.” May we have a statement from the Secretary of State for Transport about safety on our railways and, in particular, Southeastern? This is going too far.
Chris Grayling
Obviously a situation like that is unacceptable. Every service is occasionally subject to human error, but nobody would seek to defend a situation of that kind. The Secretary of State for Transport is here on Thursday and will be able to take questions on the challenges in relation to Southeastern trains. They are, to a significant degree, being generated by the huge investment we are putting into London Bridge. That means some disruption in the meantime, but it will mean a better service for passengers in the future.
John Howell (Henley) (Con)
At the most recent Council of Europe meeting we initiated a debate on the media portrayal of the women abused in Cologne and in other places at new year. The media had not reported the situation fully or in a timely fashion. May we have a debate on that in this House, because the BBC was one of the media groups identified?
Chris Grayling
It is not acceptable for the media, in particular a free media, not to set out the facts when they arise. I commend my hon. Friend for his work in the Council of Europe. I am sure my right hon. Friend the Culture Secretary has taken note of his comments.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
Four weeks ago, in response to my question about the 1955 UK-Malawi tax treaty, the Leader of the House very helpfully replied that he would ask the Foreign Office to give me a detailed response. The quill pens are writing slowly. When can I expect a response?
Chris Grayling
I am sorry about that. I will give the FCO a kick after this session.
Chris White (Warwick and Leamington) (Con)
May we have a debate on the midlands engine, the important role manufacturing plays in our regional economy, and how the Government can provide further support to this vital sector?
Chris Grayling
I commend all those in the midlands who are working so hard to revitalise business in that part of the country. The midlands is another area that was badly affected by the collapse in manufacturing in the years of the Tony Blair and Gordon Brown Labour Governments. We are now seeing real investment and real progress, for example in the automotive industry. In the midlands, we are seeing an expansion of capacity, new investment and new jobs created. It is a sign that the midlands, under a Conservative Government, is going from strength to strength.
Holly Lynch (Halifax) (Lab)
Earlier this week I took part in a workshop delivered by the Alzheimer’s Society. MPs from across the House attended in order to become dementia friends. May we have a debate on what more can be done to support those living with dementia, and their carers and families, and in particular how we can extend the blue badge parking scheme to those facing dementia-related challenges?
Chris Grayling
I commend all those in this House who have trained to become dementia friends. Members of the Cabinet did the same a while back. It is enormously important that we all understand the impact of dementia. I had an elderly relative who suffered from dementia. My understanding of what she went through, having taken the training, is now much greater. I praise all those who deliver it. This is a subject the Backbench Business Committee might like to consider. There is a demand for subjects to debate and the hon. Lady may wish to bring this forward for consideration.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
As my right hon. Friend knows, there is a shortage of engineers in the UK. May we have a debate on career advice for young people who are approaching school-leaving age? After all, how else are we going to have enough engineers to build the network of hedgehog highways around the country?
Chris Grayling
Well, Mr Speaker, we were all waiting—and we were not disappointed. I gather that my hon. Friend has now got his petition past 20,000 signatures, so we are on the way to debating it in the House, for which I commend him. This nation’s hedgehog population has every reason to be grateful to him. On a more serious note, the solution to the problem is very much at the heart of this Government’s strategy, with the huge expansion in the number of apprenticeships. In my view, these provide the best way of ensuring that we have the breadth of engineering skills that we need.
Greg Mulholland (Leeds North West) (LD)
A year ago today, the Tuberous Sclerosis Association started its “fight4treatment” campaign because sufferers of this pernicious disease are currently not able to access everolimus, the life-saving drug that they so desperately need. A year on, may we finally have a statement from a Health Minister about when the sufferers from this ultra-rare condition can finally get access to the treatment that can save their lives?
Chris Grayling
This is of course a matter that would normally go through the procedures of the National Institute for Health and Care Excellence, which decides which drugs it is right for the NHS to offer. I will, however, ask the Department of Health to respond to the hon. Gentleman on the issue he has raised.
Bob Blackman (Harrow East) (Con)
This week we welcomed the new Indian high commissioner to a meeting in the House, and next week there is the celebration across the Indian sub-continent of Maha Shivratri, which commemorates the auspicious occasion of the wedding of Lord Shiva and Parvati. Can we find time—eventually—for a debate on the tremendous links between the UK and India, and the opportunities for business, trade, education and the opening up of services, because it has been a very long time indeed since we have had such a debate in this House?
Chris Grayling
My hon. Friend is a powerful champion for the ties that exist between this country and India. I pay tribute to all members of the Indian diaspora in the UK, who play an important role in our society and our economy. The links of our Indian business community, not just with the sub-continent but with the Asian economy as a whole, are immensely valuable to us. In my view, we should continue to develop the best possible trade links with India for the future.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
May we have a statement on the uses of broadcast footage of the House of Commons? My constituent Charlie Brooker has raised with me—[Interruption.] He has, and he was one of my 270-something constituents who contributed to my majority. He has raised with me the problem that he is unable to use such footage in his programme “Screenwipe”, yet other not too dissimilar broadcasters are allowed to use it. It depends on whether the programme is satire, light entertainment or factual. Given how vague these boundaries are and the fact that these rules were dreamt up some 27 years ago, does not the right hon. Gentleman agree that now is a good juncture to revisit this matter and have a statement on it?
Chris Grayling
If it is a matter of concern to the hon. Lady, she should make a submission to the Administration Committee. However, I think it is very important to ensure that the coverage of this House’s debates is used in an appropriate way, and I am not in favour of making it available to satire programmes.
Ben Howlett (Bath) (Con)
In other referendum news, I know that the Leader of the House will be paying close attention to the outcome of the referendum on the Mayor of Bath and North East Somerset, which is coming up on 10 March. It is opposed by me and my hon. Friend the Member for North East Somerset (Mr Rees-Mogg), as well as by pretty much every other local party. Will my right hon. Friend join me in opposing a Mayor for Bath and North East Somerset, and consider having a debate in Government time on its huge cost and its impact on reducing democratic accountability?
Chris Grayling
I am sure that I could not do a better job of influencing the people of Bath and Somerset than my hon. Friend, so I will leave it to him to make that case.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Yesterday at Prime Minister’s Questions, the Prime Minister admitted that he is going to go begging to the French President to try to get EDF to commit to Hinkley Point C. Later on in the session, he praised the Royal Mint without saying that it has been mooted for privatisation. Hinkley Point C and HS2 can happen only with Chinese investment. “For sale” signs are on the Green Investment Bank, Network Rail assets, air traffic services and Ordnance Survey, among others. May we have a debate in Government time on why the long-term recovery plan means owning nothing and being for ever in debt to other countries?
Chris Grayling
I always thought it was a good thing to attract international investment, but if it is now Scottish National party policy not to, I am sure investors will be able to come to England, Wales and Northern Ireland and not to Scotland. My own personal view is that we want international investment in Scotland, too.
Andrew Stephenson (Pendle) (Con)
Nuisance calls are an annoyance to many Members on both sides of the House, but they can cause real distress to the vulnerable and the elderly. The Government have already taken some steps, but may we have a debate about what more can be done to tackle this menace? [Interruption.]
Chris Grayling
The shadow Leader of the House is chuntering as usual, but I think that this is rather an important issue. Many elderly people suffer from nuisance calls, and the more that we can do to prevent them, the better. A great deal of work has been done by the Government and the regulatory authorities. However, my hon. Friend should take advantage of the opportunity presented by Business, Innovation and Skills questions on Tuesday week, or, indeed, table a written question to the Department for Culture, Media and Sport, to ensure that we do not ease the pressure on sorting the problem out.
Diana Johnson (Kingston upon Hull North) (Lab)
May I request the right hon. Gentleman’s assistance? The 90-strong all-party parliamentary group on haemophilia and contaminated blood has sought a meeting with the public health Minister to discuss the consultation that is currently taking place, but she has refused to meet us. Many of our constituents are rather perplexed: they do not understand why, in the middle of a public consultation, the public health Minister will not meet MPs and listen to what has been said by people who have been affected by the worst treatment disaster in the history of the NHS. Might the Leader of the House be able to intervene and ask the Minister to reconsider her position?
Chris Grayling
I will certainly make inquiries on the hon. Lady’s behalf. In the meantime, I hope that the preparations for the year of culture are going well in Hull.
Patrick Grady (Glasgow North) (SNP)
This morning, in the Vote Office, I picked up a copy of the Supply and Appropriation (Anticipation and Adjustments) Bill, which authorises, for the year ending 31 March 2017, Government spending of £258,322, 682,000. Last night, the Bill received its First, Second and Third Readings in the space of three minutes. When, during those three minutes, did I, as a Scottish MP, have an opportunity to debate and amend Barnett consequentials arising from the Bill?
Chris Grayling
The hon. Gentleman clearly did not do enough of a job in persuading his hon. Friends on the Liaison Committee to secure such a debate. That is the route to decisions on what we discuss during debates on estimates. I advise him to talk to his hon. Friends more closely next time.
Justin Madders (Ellesmere Port and Neston) (Lab)
I was disappointed to learn of the closure of the Fab Lab in Ellesmere Port, which provides advice and opportunities for entrepreneurs to develop their ideas and represents an important part of the future of manufacturing, as well as contributing to the regeneration of the high street. If the Government are really serious about the northern powerhouse, why are they allowing this excellent facility to close? May we please have a debate so that we can ask when Ministers will start putting their words into action?
Chris Grayling
Business Ministers will be here on Tuesday week. I do not know where the funding came from—whether it was national or local—because I do not know enough details of the individual case. However, I can tell the hon. Gentleman that unemployment in the north of this country, and business in the north of this country, are moving in the right direction, not the wrong one.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
Services at popular walk-in clinics in Harrow are being put out to tender under the direction of the NHS procurement authority, including services at the Alexandra Avenue clinic, which is used by many of my constituents. May we have a debate in Government time so that we can discuss the role of the procurement authority, and, in particular, explore the question of why local GPs who are currently running walk-in clinics continue to be granted a stake in the long-running provision of such crucial services?
Chris Grayling
Local GPs are able to have a stake in the future of those services. Local GPs are, typically, private organisations providing services for the NHS, and if those services are put out to tender, GPs are perfectly able to demonstrate that they are best placed to do the work.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Despite his funny ways and daft policies, I have become very fond of the Leader of the House over recent months. One of the things that I think he is very good at is arranging regular debates on Syria, so that we do not put the issue on the back burner but, every now and again, have a good debate about it. Most people in this country would expect us to do the same when it comes to the European Union and the referendum. Every week, surely, we should have a major debate on that subject. Could we begin with a debate on the dreadful impact that leaving the EU would have on our universities? For most of us who represent university towns, the universities are our biggest employers and vital to our future, but not one vice-chancellor has come out in favour of Brexit. May we have an early debate, and a regular debate?
Chris Grayling
I am sure that we will have plenty of opportunities to debate European Union matters. We have just had a series of statements and debates on these issues and I am sure that the future of universities and their means of funding, whether direct or indirect via Brussels, will be a regular subject for debate.
Steven Paterson (Stirling) (SNP)
The Guardians of Scotland Trust is a Stirling-based charity which also involves the excellent Stirling Smith art gallery and museum. It is raising money to create a permanent memorial to Sir Andrew de Moray, who alongside William Wallace governed Scotland following the battle of Stirling Bridge in 1297. May we have a debate on recognising excellent fundraising efforts such as this?
Chris Grayling
The hon. Gentleman is able to use the Back-Bench debate system or the Adjournment debate system to bring forward such a debate. This might also be a subject that he would like his colleagues in the Scottish Parliament to debate.
Simon Danczuk (Rochdale) (Ind)
The Leonard Cheshire care home in Littleborough provides care for 22 people with long-term disabilities. I visited the home last month and was truly taken aback by the lengths to which the staff will go to help their patients. However, Leonard Cheshire has decided to close the home, which is devastating for the patients, families and nurses. May we have a debate on the priorities of such charities?
Chris Grayling
It is obviously disappointing to hear of a change of that kind, although I do not know enough about the circumstances of that particular decision or the reasons behind it. I would encourage the hon. Gentleman to raise his concerns with the charities Minister—the Minister for Civil Society—either in questions or in an Adjournment debate.
Mrs Madeleine Moon (Bridgend) (Lab)
On 17 November, I wrote to the Department of Energy and Climate Change asking for a meeting after DECC officials had met in my constituency to discuss a deplorable situation relating to an open-cast mine that is still not being restored. Despite several follow-up phone calls, I have still not secured a meeting. On 2 November, Her Majesty’s Revenue and Customs promised me a substantive reply by 20 November on the case of Mr Thornhill that I have been chasing since 2010. I am still waiting for a reply. May I ask the Leader of the House to utilise his foot, which he has also offered to the Scottish National party, to assist my efforts to ensure justice for my constituents?
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Yesterday, a train carrying highly radioactive waste travelled through Gilmour Street station in Paisley, causing obvious anger and concern to commuters and residents alike. The Scottish Parliament is against nuclear weapons and new nuclear power, and we do not want those weapons or that waste travelling through our communities. Will the Leader of the House ensure that we get a statement setting out what safety precautions were put in place prior to that nuclear train setting off on its journey?
Chris Grayling
The hon. Gentleman might not remember this, but some years ago there was a very visible public demonstration of the safety of such trains to show just how robust the units that carry the radioactive waste are. Nuclear energy remains an important part of the electricity generation for the whole of the United Kingdom, and the waste will need to be moved around, but speaking as a former Minister involved in the whole area of health and safety, I can assure him that the safety standards are of the highest level.
Paula Sherriff (Dewsbury) (Lab)
Last Friday, I visited Greenhead College, at which many of my young constituents study. Deep concern was expressed about the delays in the accreditation process for some of the Government’s new-style A-levels that are due to start this September. Without that accreditation, planning for the new curriculum cannot take place. This is leaving many teachers in limbo. Will the Leader of the House agree to a debate on this issue so that colleges and sixth forms can make the necessary plans for their new intake of students?
Chris Grayling
This is an obviously important issue. The Education Secretary will be here on Monday, and I will let her know that this concern has been raised today so that the hon. Lady can raise it again and get a proper response at that sitting.
Kirsty Blackman (Aberdeen North) (SNP)
The Leader of the House has yet again failed to announce the recess dates. I can understand the political advantage in failing to announce Prorogation, but hundreds of staff in this place are struggling to juggle their childcare arrangements and will now be unable to take holidays with their partners as a result of this. When will the Leader of the House stop this unnecessary power trip and show some respect for staff members in this House?
Chris Grayling
As I have set out time and again, the Government’s first and foremost task is to ensure the flow of business and to get our business across. We will announce the recess dates as soon as we can, but I am also committed to ensuring that we can deliver our manifesto.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
The Wilton Lane allotments in Guisborough have been used as allotments for more than 100 years, and some families, including the Grouts, have had an allotment there for all that time. Part of that land is in the ownership of the denizens of Guisborough. The Tory chair of Guisborough Town Council wants to sell the land off for development, and went to the extent of asking the clerk of the council to strike a sentence to that effect from the record, so that that information could not be spread around the town. May we have a debate on the powers and responsibilities of town and parish councils across our country?
Chris Grayling
On the matter of town and parish councils, I simply say that it is for the town and parish councillors to decide whether or not to take a step, and of course no individual can take a step without securing a majority vote from their council.
Martyn Day (Linlithgow and East Falkirk) (SNP)
With the working and child tax credit departments accepting only faxes and letters, and not emails, from constituency MPs’ offices, and with the Information Commissioner’s Office defining faxes as an unsecure form of communication, may we have a statement from Ministers confirming a full modernisation programme of upgrading communications to the 21st century?
Chris Grayling
Clearly, each Department has to work out the best way of receiving complaints and information about issues from Members’ offices. I hear the point the hon. Gentleman makes. The relevant Cabinet Office Minister is here next week for questions and I am sure he will want to make that point to him then.
Point of Order
Melanie Onn (Great Grimsby) (Lab)
On a point of order, Mr Speaker. I seek your guidance as to whether I need to ask a Minister to correct the record and, if so, how I go about it. Yesterday, I attended the Committee on the draft Renewables Obligation Closure Etc. (Amendment) Order 2016, with which I am sure you are familiar. I spoke in the Committee, mentioning thousands of job losses in the solar industry. In her response, the Minister of State, Department of Energy and Climate Change, the hon. Member for South Northamptonshire (Andrea Leadsom) said that I was making inaccurate comments and that the losses were not as I had described. I wanted to check that, so I have gone back and seen that the Government’s own impact assessment says that “between 9,700 and 18,700” jobs will be lost in the solar industry as a result of cuts to feed-in tariffs. The Solar Trade Association said in December that it knows of 1,800 redundancies since the general election and of three companies that have folded. To me, that seems as though I have my facts correct, yet I was rebuked for issuing incorrect information. I wonder how I can go about setting the record straight.
Mr Speaker
I am grateful to the hon. Lady for her point of order, of which I did not have advance notice. I make no complaint about that, but I am therefore simply issuing a response off the cuff. She complains that she was “rebuked” for her observation, although she is satisfied, from her inquiries, that her observation was correct. I can say, for the completeness of the record, that she was not rebuked by or from the Chair; she was simply rebuked by an opponent in debate. The matter seems to me to be substantially one of debate and argument; she will say she is right and the Minister may well claim likewise.
When the hon. Lady asks me how she should proceed with this matter, my advice would be that she should go to the Table Office to table a question on the matter and see where that gets her with the Minister. Everybody in this place is responsible for the veracity of what is said in the Chamber or in Committees. It is incumbent upon a Member to correct the record if he or she has misled the House, but it is not for me to arbitrate on whether or not that has happened, especially as I was not present at the time. The hon. Lady is notably assiduous, and I feel sure that she will use the device that I have suggested to try to secure satisfaction. If she does not get that, we will no doubt hear from her again.
Backbench Business
Gangs and Serious Youth Violence
(8 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Chuka Umunna (Streatham) (Lab)
I beg to move,
That this House calls on the Government to establish an independent, all-party commission, involving a wide-ranging consultation, to identify the root causes, effect of, and solutions to, serious youth violence, including knife crime, its links to gang culture and the sale of illegal drugs.
At the outset, I wish to say how grateful I am to the Backbench Business Committee for granting this important debate, and I am also grateful to the 19 other Members of the House who supported this application. In particular, I have worked with my hon. Friends the Members for Lewisham, Deptford (Vicky Foxcroft) and for Westminster North (Ms Buck), my right hon. Friend the Member for Tottenham (Mr Lammy) and my hon. Friend the Member for Croydon North (Mr Reed), among others, for several years on these issues.
The issues that we are discussing today are difficult. There is no single cause for the violence that we have seen, nor one single solution. What we are seeing on the streets of our country is leading to a senseless loss of lives. That perhaps explains why the digital debate organised on Twitter ahead of this debate by the House of Commons digital team was the House of Commons most successful such debate in terms of the number of Twitter accounts reached—more than 8 million. The hashtag for today’s debate is #stopyouthviolence. I recommend that anyone watching this debate uses it.
At the outset, it is important to acknowledge that our young people are among the very best in the world. Their creativity knows no bounds; their energy is infectious; and they put the great in Great Britain. They give us confidence that our future will be even better than our glorious past.
It is also important to note that the violence that we are talking about is committed by a minority—a significant minority—of young people. We should not draw the conclusion that all of Britain’s youth are engaged in serious youth violence. I say that because, too often, the youth of our country are demonised. They are demonised in our national media, and I do not want us to add to that today. It is important in this debate to recognise how wonderful our young people are and to celebrate them. It is because we care so much for them and because we do not want to see their talent and their futures wasted that we are holding this debate today.
In 2007, the violence in different communities—in urban city centres in particular—across our country was put into sharp relief by the shooting, in broad daylight, of a young man, Andre Smartt-Ford, at Streatham ice rink in my constituency. To this day, no one has been charged with Andre’s murder, but his mother continues to fight for justice and is now working through the JAGS Foundation to prevent other families from going through the same thing. Tracey Ford has voiced her strong support for this debate today. She is joined by many other parents, such as Richard Taylor, who also lost his young son, Damilola Taylor, to this violence. He set up the Damilola Taylor Trust, which established the Spirit of London Awards to celebrate our young people. Representatives from SOLA are here today. We pay tribute to all those parents and to those who are working to better the lives of our young people.
What followed from Andre’s death in 2007 was a catalogue of tragedy, with 29 teenagers losing their lives in London alone in 2008. The number of fatalities has abated since that time, but, let us face it, the problem has never gone away. Following falls between 2009 and 2012, we have seen the number of serious youth violence offences in London increase by 13.4% and the number of offences the Metropolitan police tags with its gang violence indicator measure increasing by more than 25% since 2012. Much of this goes unreported. Members can go to any A&E in the kind of communities that I am talking about, and they will hear about all sorts of things that are not reported and that do not feature in the figures.
According to Citizens Report, which is a not-for-profit organisation that collects local data on this issue, 17 teenagers lost their lives to this violence last year, which is up from 11 in 2014. Just two weeks ago, I was notified by police of gunshots being fired on a Friday in a location in the north of my constituency. On the Saturday after, there was a multiple stabbing of a young man in the south of my constituency, and then on the Sunday, just outside my constituency, there was a drive-by shooting. On Monday this week at 5.30 in the afternoon, a teenager was stabbed in the north of my borough, in Oval, after a fight at a chicken shop, and so it goes on.
Catherine West (Hornsey and Wood Green) (Lab)
I congratulate my hon. Friend on securing this important debate. I am so pleased we have been granted three hours to debate a crucial issue not just for young Londoners, but for all communities. Does he agree that there are far too many firearms in circulation in London, and that previously, where a fist or, dare I say it, a knife might have been used, now a very large gun and increasingly sophisticated firearms are being used in these terrible crimes, and that makes the situation even more difficult to manage?
Mr Umunna
I entirely agree. When I was a trustee of a youth charity in Brixton called the 409 Project, I wrote an article in 2007 about the availability of guns and knives, and I did a kind of focus group with some of the young people in our area. What shocked me was the level of detail that some of our young people in Lambeth were able to give me about a gun—they could tell me how many bullets a MAC-10 could spray in a second or in a minute. My hon. Friend is right to raise that issue, and she is right to say that this is not just a London problem. The situation is serious and it is getting worse. It is not confined to London. Last Sunday a teenager was stabbed in Bristol. We hear of this happening all over the UK.
Marcus Fysh (Yeovil) (Con)
In my constituency I have recently seen the impact of large-city drug crime moving into the regional towns, and I am very concerned to make sure that Avon and Somerset police devote enough resources away from the big cities such as Bristol to be able to combat that. I do not want see that deteriorate into violent crime which, thankfully, we have not yet seen, but what the hon. Gentleman is saying about the increase in London and Bristol is a worry.
Mr Umunna
I am grateful to the hon. Gentleman for his intervention, which highlights the suite of issues, including the drug trade, which hang heavy over this debate and will come through as our dialogue progresses.
I want to say something about the title of this debate. I put in for it using the word “gang” deliberately, because we need to talk about the use of this term. We often refer to youth violence and gang or gang-related violence, but it is pertinent for us to question whether we should use the word “gang” at all, in spite of the title of the debate.
Ian Joseph of Middlesex University, who is watching this debate from the Strangers Gallery, has done some very interesting work in this area. He argues that the official definition of a gang distorts the focus of interventions and promotes an understanding of everyday behaviour that does little to permanently avert young people from the real causes of violence. He argues that to be effective, interventions must give greater account to how cultural norms and social processes impact on young people’s friendships and the local neighbourhood-based relationships that they have.
This is backed up by others. The Centre for Criminal Justice Studies has also questioned whether we should be using that term. I wonder whether, by using the term and labelling young people as gang members, we reinforce the notion that they are gangsters. What is a gangster? I wonder how helpful it is for us to use the term. Let us face the fact that using the term enables officialdom to put all these young people in a bracket—“Oh, they’re part of a gang. If they lose their lives, oh well, that doesn’t matter. They’re part of a gang.” I am not sure we should allow this to carry on.
Paul Flynn (Newport West) (Lab)
I regret interrupting the fine speech that is being made. Is my hon. Friend familiar with the work of Harriet Sergeant, a rare journalist who has gone to great trouble to engage with members of this underclass? Perhaps “gang” is the wrong word. From reading her books and articles on the matter, one comes away with a profound feeling of regret at the gulf of misunderstanding between official bodies and those who are part of that underclass, and great sympathy for the problems involved and the depth of suffering of those gangs who, in my view and her view, have been badly neglected.
Mr Umunna
I am grateful to my hon. Friend for referring to Harriet Sergeant’s work. Hopefully, those using the hashtag for this debate can post a link on Twitter so that those watching can read more of her work.
Part of the reason why I am not sure how helpful it is to use the word “gang” any more is that things have changed a lot just in the borough I represent in London. Around the time I was first elected, in 2010, we had mass groups of young people who had labels for their groupings. Now the situation is more parochial: things are often confined more to a particular estate, and we have much smaller groups of young people. The situation is also far more fluid.
Whitney Iles, the chief executive officer of Project 507 —she, too, is watching the debate in the House—works to prevent young people from engaging in this kind of violence. She put things really well when she told me that we give young people this gang label, but we never give them a way to get rid of it. So let us consign it to the bin, and let us not refer to it again in the House after this debate, if we can possibly avoid doing so.
The reasons for serious youth violence are not new, and we know what so many of them are. Yes, some violence is carried out by young people from dysfunctional, often chaotic families with a history of, say, domestic violence in the background. However, very often, a lot of young people who get wrapped up in these things come from quite stable families. Sometimes there is an issue because two parents are struggling to make ends meet and holding down two jobs to pay the bills. There is a link there because, as I heard from some young people this morning, someone will often have a desire to help provide for their family—for their mum—and they get wrapped up in these activities as a way of making money to help mum pay the bills.
I really do not care if the usual suspects in the media start saying, “Oh, you’re excusing all this.” We are not providing excuses today, but unless we look at why these things happen, we will not be able to prevent them. I can see the headlines: “MP says children are trying to pay the bills so they go and knife people”. That is not what I am saying; what I am saying is that we must understand the underlying causes if we want to prevent this violence from happening again.
Bob Stewart (Beckenham) (Con)
I thank the hon. Gentleman for making a very good speech. Is not fear the real reason why people join these groups? A young person who lives on an estate in an area where these groups operate and who is not a member of any group will be fearful that a group will set upon them and do them great damage. In my limited understanding of this problem, it seems that fear is the spur for young people joining such groups.
Mr Umunna
The hon. Gentleman makes a very important intervention. I agree with him: fear is definitely a major factor, and I will come to it shortly. Trauma also plays a role, and I will come to that too.
There is another common theme, which I have talked about with my right hon. Friend the Member for Tottenham and my hon. Friend the Member for Westminster North. Time and again, at every community meeting on this issue, we hear that there are simply not enough things for our young people to do. I get fed up with hearing that every week and every time we discuss this issue in the House, because nothing ever seems to get done about it. We have to ensure that there are more meaningful things for our young people to do outside school hours, and I am not talking about some windy church hall with a table tennis table. We need decent, proper activities that will expand our young people’s horizons and give them things they will enjoy doing in their local areas. Otherwise, we have the problem of collectives of their peers becoming their surrogate family. That relates to the issue that the hon. Member for Beckenham (Bob Stewart) talked about, but I will come on to that in a moment because I want to go through some of the other factors.
In relation to popular culture, it is too easy to blame rap music or whatever, but it is a society thing. We live in a society that promotes and glamorises violence. It is too easy to say that it is the fault of the creative industries. We increasingly have a society where our young people are encouraged to engage in these kinds of violent activities. This is promoted among us and we have to deal with it.
We live in a society that not only promotes violence and too often glamorises it, but promotes an ideal whereby our young people define themselves by reference to what they have as opposed to who they are. There is a consumerism element. Helping one’s family to get on is definitely an issue.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Will my hon. Friend acknowledge that this is not just about young people providing for their family but about their desire to have things, and the role of criminal gangs in offering them a quick buck, so that they are able to earn money to buy things, which because of their low income they are otherwise unable to have?
Mr Umunna
There are so many big elephants in this room of issues, but one is poverty and deprivation. We cannot ignore the part that that plays. My hon. Friend is right to raise that issue. Young people who do not have anything are often robbing from other young people who do not have anything, then there is revenge, and we end up with a cycle of violence. That is definitely part of what we see happening.
Part of the reason that too many of our young people do not have enough money is the unemployment rate among them. Our education system is producing a whole generation who do not always have the skills that our employers need, particularly the technical and vocational skills. Let us face it, this has happened under Governments of all persuasions. I do not see this as a party political issue; I am not interested in scoring any points. We have to deal with the problems in a skills eco-system that is not giving our young people the skills that they need to offer employers to get a job. Let us not forget that hanging over this is the fact that youth unemployment is double the main rate.
The things I have spoken about are fairly obvious—the more talked-about factors—but we need to delve far deeper into the causes than we generally have. The hon. Member for Beckenham referred to the belief of many young people that they are safer in a group than they are on their own. As academics have argued, the perceived need for safety and protection tends to validate behaviour and levels of violence in ways that can obscure the boundary between right and wrong. There is also the issue of being bullied and how that interrelates with carrying or using a weapon. We do not like to talk about that, but we should. There is a semi-formal, often unsupervised daily routine outside school, but sometimes inside school too, that can incubate the production of behaviour and values that lead to a life of this kind of violence, and the expected norms of school and wider mainstream society are juxtaposed to that.
In addition to the fear that the hon. Gentleman talked about, the other big issue is trauma—the sheer trauma that many of our young people experience in their daily lives, which requires much greater consideration than we see reported in our media.
To return to the work of Whitney Iles, this issue needs to be seen as one not just of violence prevention, but of health, particularly mental health. Our young people are being traumatised by some of their experiences, but they are being given no support to deal with them. Unless we start engaging with them, not only on the obvious level, but at a deeper level, we will not be able to resolve the violence on our streets.
What should be done? First, the Labour Government introduced Every Child Matters, which had a strategic aim to provide wraparound care for young people from long before they went to school to long after they left. That did bring in teenagers, but I think we need to adopt an “every teenager matters” approach, with much more targeted schemes and versions of the previous initiative, in order to address problems experienced by teenagers. It must be said, however, that, as my right hon. Friend the Member for Tottenham has said, the problems are impacting on younger and younger children, not just teenagers.
Secondly, we have to elevate the standing of youth work in our country. It is about time that we put it on the same pedestal as teaching. Often, youth workers spend as much time as teachers with our young people, but we do not talk about their profession in the same way. We have to do so and put it on a pedestal; we cannot just look at it as an add-on. Too often, youth work is left to people who have other jobs and who may, through their tenants or residents association, be providing youth work on top of their daily job. It needs proper funding so that people can do youth work full time and so that we regard our youth workers in the same way as we regard our teachers.
Thirdly, I really do think that the Government have done some good things, and that is why I want them to reverse their decision to disband the very important ending gang violence and exploitation peer review network, which spreads best practice to local authorities and others. It is due to end in April—next month—but I really hope the Government will reverse that decision, because it is a good network and I have heard very good feedback about it from all over the country, including Lambeth. I want it to continue.
Fourthly, we have to ensure that our young people are properly taught in school about the consequences of what they do, and that they are provided with support to deal with their experiences outside school as well. I want to see more role models who have been members of groups and who have been victims, or even perpetrators, of acts of violence and suffered the consequences. I want more of them to go into schools and tell their story so that future generations do not take the same wrong turn as they did. There is nothing like having somebody who has lived that life telling young people what will happen if they carry on down that avenue. We need to provide much more support to our schools.
This is controversial, but I do not care and am going to say it anyway: a lot of the young people who get wrapped up in all this ultimately have quite commercial and entrepreneurial instincts. Their energy, however, is simply not channelled in the right way and the result is that they turn to criminality and highly illegitimate, terrible ways of doing things. If many of our young people received enterprise teaching in our schools, and if they were provided with inspiration and more access to opportunities to set up their own business, do their own thing and work for themselves in a way that delivers the goods and some money, perhaps we would be able to stop them taking a wrong turn. I can just see the write-ups saying, “MP says terrible gangsters should start businesses”, but, frankly, I do not care. If they have that kind of instinct, I want to make sure that they do not end up taking a wrong turn and doing illegitimate business, but that they set up a business and become the next Branson. I would like to see many of the kids from the Tulse Hill estate in my constituency going on to be the next Richard Branson.
Ms Karen Buck (Westminster North) (Lab)
My hon. Friend is making a very important point. Does he agree that the Evening Standard should be congratulated on its campaign? He is recommending precisely the sort of work that it has been doing in support of people turning away from gang violence. It is turning young people’s skills and expertise towards business and entrepreneurship, and ensuring that they are able to make something of their lives.
Mr Umunna
I completely agree with my hon. Friend. The Evening Standard has done excellent work in its “Frontline London” campaign, which it has plastered on the front page frequently. I would like to see other publications and media outlets following its example.
None of us is excusing wrongdoing; none of us is excusing the violence that we see; and none of us would argue that for people who commit such offences, there should not be sanctions. Of course there should be sanctions. I suppose the point that everybody will make today is that if we can prevent people from doing such things in the first place, we will not have to apply those sanctions. Too often, the debate is about clamping down, zero tolerance and banging people up. It is harder to focus on how we prevent them from doing those things in the first place.
That is, ultimately, why I would like the Government to set up an independent cross-party commission on these issues, involving a wide-ranging consultation that, importantly, includes young people. Too often, we talk about young people but they are not at the table when we do so. I would like the commission to identify the root causes and effects of, and the solutions to, youth violence so that we do not see more death on our streets.
To wrap up, I think we should be absolutely honest, up-front and frank about the fact that if we were talking predominantly about middle-class children from comfortable, middle-income families and wealthy neighbourhoods, the issue would be much higher up the national agenda. The murder of young people by other young people who fit that middle-income demographic profile would command many more column inches. It is a disgrace and a damning indictment of our society that, increasingly, it is becoming immune to what is happening on our doorsteps. Our society is ignoring the issue, putting a whole generation of young people into a corner and saying, “That is what happens with those kinds of young people from those kinds of areas.” I want to make it very clear in this debate that the House of Commons recognises that no matter what their background—whether they grow up on an estate or in a comfortable neighbourhood—every single young life matters. We will not stand by while violence and fatalities continue to hit the next generation, because it is our future.
Will Quince (Colchester) (Con)
I congratulate the hon. Member for Streatham (Mr Umunna) on securing a debate on this most important of issues. He gave a powerful and articulate speech. Last year, 188 people were killed with a knife and 119 sexual assaults took place at the point of a knife. Attempted murder and threats to kill involving a knife totalled over 2,100 incidents. It is no exaggeration to say that thousands of Britons, many of them young, have feared for their lives through stabbing.
When I was elected in May last year, I pledged to my constituents that I would do all I could to tackle to scourge of knife crime. Why? Colchester has seen too many young lives destroyed by crimes involving weapons. Jay Whiston, James Attfield and Nahid Almanea all lost their lives too early, and each case was a personal tragedy. Too many people, particularly our young people, still feel that it is acceptable to carry blades and knives. They wrongly believe that doing so will keep them safe. Let us be clear. Carrying a knife does not keep them safe; it is illegal and puts them and others in grave danger.
Bob Stewart
I believe that some people carry such weapons because they feel that doing so gives them status.
Will Quince
My hon. Friend makes a valid point, and he is absolutely right. There are many reasons why young people carry blades. Sometimes it is to do with fear—that relates to his earlier point—and sometimes they are a status symbol. We have to hammer home the message that not only is it illegal to carry a knife, but a person is statistically far more likely to be the victim of a knife crime if they do so. We have to get that message out loud and clear.
I believe that the answer to youth violence is threefold, involving deterrence, education and intervention. In the interests of time, I will focus on the first two. I welcome the steps that the Government have taken, such as minimum custodial sentences for repeat knife possession and the commitment on police budgets. I agree with the hon. Member for Streatham on the need for education, which has a key role to play. We need to do far more to educate our young people about the dangers of carrying knives.
I have campaigned for some time with a local knife crime charity, Only Cowards Carry, which provides weapons awareness lessons in schools. The charity, which is based in north Essex in the Clacton area, was set up in 2012 by Caroline Shearer, whose 17-year-old son, Jay Whiston, was fatally stabbed that year. Since then Caroline, who is an inspirational woman, has campaigned to show the devastating impact of knife crime on young lives and families, and she has provided weapons awareness lessons in schools. Those hard-hitting lessons show young people the dangers of carrying knives and blades. I have been to one and, trust me, they leave an impact. Students who are usually cocky and confident finish the lesson shocked and startled at the brutal impact that knives can have on lives. The images of knife attacks and knife wounds on young people hit home very hard. We need to send out the message that all it takes is one moment of stupidity for lives and reputations to be shattered.
We teach our young people about internet safety, road safety and citizenship. There is a strong case for more schools to teach pupils about the danger of carrying knives. As I have found, Ministers regularly throw back the challenge that the demands on the curriculum are great. I accept that point, but, to be clear, I am talking about one 45-minute lesson in year 9 or year 10. That would not be a huge burden on the national curriculum.
Last summer, Caroline Shearer and I presented a petition with 50,000 signatures to Downing Street to call for charities such as Only Cowards Carry to go into schools to give those hard-hitting lessons to our young people. That would be a big step forward in tackling knife crime, not only in Colchester and north Essex, but across the country. The Government should take another hard look at encouraging more schools to introduce weapons education lessons.
According to the crime survey for England and Wales, violent crime is down since 2010, but according to violence against the person statistics recorded by the police, violent crime has increased. The picture is far from clear, and the reasons for spikes and falls in violent crime are not well understood. It is essential that the police, supported by good academic analysis, do the research to enable them to understand what is happening in our towns and cities.
There has been too much speculation about the causes, and we really need to focus on the facts. In Essex, more than half of the notable increase in recorded victim-based crime in the last 12 months—4,463 of 8,165 crimes—was in the “violence without injury” subcategory of violence against the person. That has traditionally covered harassment, shouting and very minor stone throwing, but the Home Office has decided that it should also include online bullying and harassment. That is nonsense, and it will really distort the debate.
I believe that there is a strong argument for a new stand-alone crime type category for recording online crimes. If those crimes continue to be placed in the category of violent crime, it will be difficult to debate violent crime and its specific causes. Of course, online bullying and harassment are extremely serious crimes, which sadly affect young people more than people in any other age groups. However, the steps we need to take to tackle physical violence and gang violence are different from those needed to tackle online abuse and harassment, so it is important to look at recategorisation.
In my constituency, victim-based crime is up by 821 offences on the year. Within that, violence is up by 681 offences. As I have just mentioned, a staggering 93% of those crimes are violence with no injury, and much of the total is made up of online bullying or harassment. That puts the rise in a very different light.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
Does the hon. Gentleman agree that in relation to reported crime, particularly among young people, so much violent crime goes unreported?
Will Quince
The hon. Lady makes a good point. Lots of crimes up and down this country go unrecorded for all sorts of reasons. I very much support police forces, such as Essex police, that are making it easier for people to report crimes, particularly online. We must make it far easier for people to report crimes and give them the confidence that they will be followed up by the police.
To return to the point I was making—I apologise that it is a little detailed—it is really important to be able to base this debate on accurate statistics. It is almost impossible for us to have such a good, clear debate when the Home Office has provided such broad and unclear definitions of violent crime. Better categorisation is needed, including, as I have said, a separate category for online offences.
Another serious concern is to do with geography and location. In Essex, there is very clear evidence of increased violence related to gangs involved in the supply and distribution of class A and other drugs. The hon. Member for Streatham made the point about the clear link between gang or youth violence and class A drugs. Communities in Essex are consistently evolving, as they always have, with the movement of people from London. The sad reality is that some of the gang problems traditionally associated with areas of London are spreading to many, if not all, towns up and down the country, as my hon. Friend the Member for Yeovil (Marcus Fysh), who is no longer in his place, pointed out.
There have been a number of murders, often involving stabbings, where neither the victims nor those arrested and, in some cases, nor those convicted of the offences live in Essex. The London gangs are, without doubt, extending their county lines into Essex. Violent gang members have been using intimidation and violence, often against vulnerable people, to take over properties in towns such as Southend and Basildon, and even as far north as Colchester, to supply drugs to local dealers. This is not just about drugs, but about serious intimidation and threats against vulnerable people. We know what happens in London, and even outside London there is sometimes extreme sexual violence against women and girls who associate with such gangs.
It is essential that our police forces co-operate really closely on this issue. I am pleased that Essex police already co-operates well with the Metropolitan police, but it is extremely disappointing that, in 2016, most police forces still do not automatically share crime data and that they operate on different crime systems. I commend Essex for leading the way in having the first fully collaborative policing IT system, which will soon be used by nine forces. I am also pleased that the very recent report by Her Majesty’s inspectorate of constabulary on police effectiveness judged Essex police to be good at dealing with serious crime of this sort. Other forces quite simply must follow their lead in taking a more comprehensive approach and working more closely together.
To conclude, it is refreshing to hear a sense of cross-party consensus in the Chamber—not entirely around possible solutions, but certainly around a willingness to address this most important of issues. I very much support the call made by the hon. Member for Streatham for cross-party working on this issue. A fact-finding exercise to identify the root causes would be a sensible step. As I have mentioned, perhaps a little long-windedly, better categorisation is important so that we can get to the root causes and have a debate based on facts, rather than conjecture. Education, deterrence and intervention are also absolutely key to reducing violent crime and serious youth violence. For many of our young people, delaying action to address this problem is simply not an option.
Mr David Lammy (Tottenham) (Lab)
I am very grateful for the opportunity to participate in this important debate. I congratulate my hon. Friend the Member for Streatham (Mr Umunna) on holding it. I know that, behind the scenes, my hon. Friend the Member for Lewisham, Deptford (Vicky Foxcroft) has been quietly campaigning in the Tea Room for such a debate because of the concerns in her constituency. It is fantastic to be joined by my hon. Friend the Member for Westminster North (Ms Buck), who has huge experience of these issues and has continually brought them, certainly during my years in Parliament, to the House’s attention.
This is where I start: the issue is not new. In a sense, it is very important not to have this debate as though this is a year zero moment. We have had this problem for several years. Problems with young people getting caught up in crime, particularly in urban and deprived areas, are absolutely not new. Those at home over Christmas who landed on the show “Dickensian”, an adaptation of many of Dickens’s books, and those very familiar with both “Great Expectations” and “Oliver Twist” will know that we had gangs in London. We had groups of young people getting up to criminality in London, and above such gang activity was usually the adult activity running the gangs, so these issues are not new. I was born in the period just after the huge public concern about mods and rockers congregating in different parts—
Mr Lammy
I notice that the Front-Bench Opposition spokesman is absolutely aware of that. She is ever so slightly older than me. At that time, there was real concern about gang activity in seaside areas or in urban areas of the country. The debate in this House about young people and crime and about gang activity is not new, so what is new? I think that the level of violence is new, the age profile is worrying and the geographic spread feels out of control.
On the age profile, the Met police says that its matrix—its central way of recording who is caught up in what it describes as gang activity—had a total of 3,459 individuals at the last time of publication in May 2014. There were 500 individuals under the age of 18: two 13-year-olds, 21 14-year-olds, 71 15-year-olds, 138 16-year-olds and 268 17-year-olds. There were also 356 18-year-olds, while 55% of the total were aged 18 to 22. Something is going on, and it is something we should be very worried about.
Any Members with significant housing estates in their constituency will talk about the arrival in this country of a phenomenon, which we often associate with America, of young people—teenagers—running drug activity on behalf of older individuals.
Helen Hayes (Dulwich and West Norwood) (Lab)
Does my right hon. Friend agree that the serious violence against women and very young girls associated with gang-related activity is not presently recorded appropriately or understood, and that not enough action is being taken on that specific part of this important problem?
Mr Lammy
I am so pleased that my hon. Friend raises that issue, because that is the other factor that is new. I am about to come on to that.
The young age profile has something to do with the fact that enforcement on this national problem is working: the police are locking people up. We are serious about people carrying a knife and, historically, we have been serious about people carrying a gun. The police have locked up some of the older individuals, particularly after the 2011 riots, but all that has done is to drive the crime down to younger individuals.
My hon. Friend the Member for Streatham made a point about the definition of gangs. It is very dangerous to call any congregation of young people a gang. It almost feels as though we call any congregation of young black and brown people a gang. Those of us in the House who have children, particularly children who are getting to their teenage years, know that, to a 12 or 13-year-old, joining a gang is quite attractive. We therefore need to be very careful about the definition of gangs.
Matthew Pennycook
My right hon. Friend rightly raises what happens when the police target older members of criminal gangs—I am talking about criminal gangs, not groups of young people—in operations. It leaves a vacuum that triggers a spike in violence among the younger, lower orders of the gangs, who have been drawn in for the very reasons he cites.
Mr Lammy
My hon. Friend is completely right. What is unfortunately being said about the moral compass of these young people is incredibly worrying. They are impressionable; they are young. For reasons that my hon. Friend the Member for Streatham raised, when I say that they are impressionable, I am referring to the fact that we live in a society that has prioritised choice for the individual above everything else. We live in a society where people have the choice of whether to be exposed to quite serious violence on social media, on television and in parts, although not all, of the games industry. It is hard for modern parents, however much money they have, to distinguish between access to those images and that impression.
We therefore have young people stabbing others, almost as if they do not realise the consequences. It is quite, quite bizarre that someone might not realise that puncturing skin and causing blood loss might lead to a loss of life. I have seen images—they are on YouTube, so we can see them—of young people being stabbed continuously and it being almost like a pastime. My hon. Friend the Member for Lewisham, Deptford is right that much of this goes completely unreported. It never turns up in our hospitals. It is solved by self-medication. People go to the pharmacy and get their band aid. It is sorted out in the community, so there is an indication that this violence is going down.
My hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) raised something else that is new and worrying and that we would not associate, historically, with mods and rockers or Dickensian times: the phenomenon of women, including young women, being at the centre of the action. Again, as some of the older individuals who run the gangs have been locked up—actually, let us be clear that they can still run a gang from prison—they bring in the younger folk. Why? Young folk are less likely to get a sentence if they are caught. They also bring in the women on the estates and prey on the young women. Historically, the Children’s Commissioner has done tremendous work to raise issues such as the sexualisation of women and the way in which women become the victims of gang activity. Someone can hide the knife in their girlfriend’s bedroom or hide their stash with her. She can walk quietly over to the opposite estate and perhaps not get detected or picked up in quite the same way, so the profile is changing.
Mr Umunna
I am grateful to my right hon. Friend for giving way during his powerful speech. The issue is not just girls and women concealing weapons or being used to conceal weapons, but the straightforward exploitation of women in our communities, who are passed from one group of young lads to another. That just does not get talked about nearly enough in my view, as my fellow Lambeth MP, my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes), said.
Mr Lammy
Absolutely; there is a deeply disturbing pattern in the sexualisation of these women, and they are victims. That issue has not been picked up, as has been debated in other places.
All of this leads to a disturbing combination of violence, sexual activity, real victims, both young and female, and criminality in our areas. It is not just Members who are saying that. Dean Haydon, head of Scotland Yard’s homicide and major crime command, said that the presence of 13 and 14-year-olds on the gangs matrix was concerning and warned of exploitation. It is very worrying that 17 men aged 18 or under were fatally stabbed in London just last year.
The Minister published a strategy in January 2016. I ask her as gently as I can, does this problem merit an eight-page strategy or something more considerable? At the back of the strategy in annex A, there is a list of the constituencies that are described as being “Ending Gang and Youth Violence areas”. The first question I have in relation to that is what we mean by “ending”. Are we really dedicated to ending this problem?
I have been in the House for 16 years and this story began around about the time that I came here. In 1994 or ’95, at about the time that Tony Blair became the leader of the Labour party and John Major was coming to the end of his leadership of the Conservative party, we would not have had a debate about youth violence and gangs. It just was not present in the British lexicon at that point in our history. Towards the end of the ’90s, we started to see an upsurge in gun violence and Operation Trident began. I thought this was inappropriate, but it was termed black-on-black violence. That morphed into the strategies that we saw, particularly under Charles Clarke’s leadership as Home Secretary, under the Tony Blair Government. After the riots under the coalition Government, there was also an upsurge.
Why am I talking about annex A? We have to decide whether we want to end this problem. I am afraid that it is going in the wrong direction. I have talked about the young people. I have talked about the women. I have talked about the violence. Other hon. Members have mentioned trauma. Let us look at the geography. In April 2012, the areas that were identified were places like Hackney, Haringey, Islington, Lewisham, Liverpool, Manchester, Nottingham and Sandwell. Hon. Members will not be surprised that those were the areas we wanted to deal with. By December 2012, it had moved on to include Hammersmith and Fulham, Merton and Leeds. When it got to Barnet, Bromley, Havering and Thanet, it started to get quite worrying. Last year, it included Basildon, Grimsby, Harrow, High Wycombe, Southampton and Swindon.
What is going on here? Something that was urban and inner-city has become incredibly suburban. Murders that were traditionally black have become white. It is reflecting on all our young people and they are being caught up in this violence. The picture is not unique to particular communities, but is spreading. There is a geographic spread.
I therefore come back to whether this problem is worth just an eight-page strategy of very anodyne statements:
“We will continue to prioritise the reduction of gang related violence including tackling knife crime.”
How? By when? Local areas are encouraged to continue to follow the approach of
“bringing key partners together and developing an effective local response to gang violence.”
How? Who is going to do that? How do we know what is best practice? We have evidence that some of the gangs straddle different local authorities. There is real spread. Gangs in London—adults, actually—are running young people into the suburbs to sell drugs. How does the strategy in Lewisham or Haringey relate to the strategy in Kent? What is the pattern? That is not mentioned.
Apparently, the Ministry of Justice has brought together analysts
“to examine the evidence base”
and
“ensure responses will be more coherent”,
but how is that analysis being shared? Where do I get hold of it? How are we coming together to deal with it? It does not feel that there is enough of a grip on a spreading epidemic that is taking the lives of young people and inflicting real pain and hardship on differing communities. I believe that is why my hon. Friend the Member for Streatham secured today’s debate.
What is required? We need much better understanding of best practice, and we have to get into the issue of violence in society. Any social worker or youth offending team worker will tell us that domestic violence is often going on in the homes of the people involved. We have the troubled families initiative, but what impact is it having on the problem that we are discussing, given that it seems to be getting worse? The statistics are worrying. The figures up to January 2016 show that there has been an 18% increase in assault with injury and a 22% increase in violence against the person in London. Data from the London ambulance service—we know that there are profound problems with its data, so they are not necessarily the best—show a 9% increase in assaults involving knives. Knife crime is up by 14% in London as a whole over the past 12 months. The situation is urgent, yet it is not figuring in our national conversation and responses in the way that it ought to.
After the 2011 riots, there was huge fanfare, because the Mayor of London, now the hon. Member for Uxbridge and South Ruislip (Boris Johnson)—he is obviously very good at fanfare—brought in Bill Bratton, the commissioner from New York. Hon. Members will remember that he had all the strategies and plans, but what happened to them? There has been some discussion of the model used in Glasgow, where there was a significant problem. What bearing does what Glasgow has done with its violence reduction unit have on the Government’s plans? We have also heard about what has gone on in Chicago and in Boston. The ideas to end the problem are out there, and there are solutions, but where is the coherent strategy to deal with it?
I am sorry to challenge the strategy document, but to people living in or representing one of the areas affected it feels like a civil service exercise, not the deliberate action that we will require. We particularly need not enforcement but diversion activities, especially for our very young souls.
Several hon. Members rose—
Madam Deputy Speaker (Natascha Engel)
Order. Before I call the next speaker, may I say that we want to start the wind-ups at about half-past 1? We have three more Back-Bench speakers to go, so if they can keep to 10 or 15 minutes, everybody will get in.
Ms Karen Buck (Westminster North) (Lab)
I start by congratulating my hon. Friend the Member for Streatham (Mr Umunna) on introducing this important debate and on his powerful speech, which set out the challenges that we face. We have heard some extremely strong speeches, in which Members have made the point that this is not year zero. As my right hon. Friend the Member for Tottenham (Mr Lammy) said, there is a long tradition of violent groups in this country, going back centuries in different manifestations. However, the nature of the problem is changing. It is growing younger and more female, and it is spreading to other areas. Yet it remains true that the crisis largely, but not exclusively, affects black and minority ethnic populations and is one of deprivation.
It is a great shame that we do not have more Members of Parliament in the Chamber to discuss this subject, and I fear that my hon. Friend the Member for Streatham is right that if the problem were not overlaid with that of deprivation, we would have more. It is critical that we exercise our duty as Members of Parliament to all our constituents, and that we echo the cries of pain that we hear in our communities by addressing the problem.
Because this is not year zero, we know that after a sharp increase in deaths from serious youth violence in London in 2007 and 2008, action was taken and the situation improved in the years to 2011 or 2012. The last debate that I secured on gangs and serious youth violence was in 2011, and after that time—I am not saying that the two facts were connected—there was genuine progress. Steps were taken, and there was a welcome reduction in the number of deaths in London. As my right hon. and hon. Friends have set out, that success is now being reversed, which is extremely worrying. As others have said, by no means all incidents are reported to the police.
Westminster North is not Lambeth, Haringey or one of the other areas usually associated with such pressures. It is certainly not south central Los Angeles. However, I will tell the House about some of the incidents that have happened there over the past couple of months. In January, just after the unfortunate removal of security cameras in Church Street in my constituency, a young man was stabbed in the street in front of witnesses. A constituent emailed me to say:
“This brutal and bloody event was shocking to witness and occurred immediately outside two shops that belong to”
the local trading association.
“I understand…that the victim is in surgery, and was lucky that a deep stab wound just missed his heart.”
Two days before Christmas, a young man I know well who did work experience in my office was surrounded by a group of 20 local young people and stabbed in the chest. The knife entered the fatty tissue of his heart, and he was extremely lucky to survive.
A few weeks earlier, a constituent who lives in my road emailed me to say:
“I was awoken by noises in the street outside and some desperate shouting. I got up and looked out of the window and saw a young lad on the phone, he was saying to someone on the other end; ‘I’ve been stabbed’.
I called 999—it took a long time for me to persuade them it was a real, serious incident. I understand that the boy had 4 stab wounds.”
That boy was 16 years old. In October, constituents reported violent clashes in St Mary’s Paddington Green and in Paddington recreation ground, tweeting at me:
“We desperately need police on patrol. The situation is out of control.”
They said that violence was rampant, with drugs and gangs, and tweeted:
“Huge gang fight behind Little Venice Sports Centre”.
That is a few weeks in Westminster North, which indicates how real the problem is.
It is true that, as my right hon. and hon. Friends have said, people can live in the communities affected and be completely oblivious to the situation. As a middle-aged woman, I can walk the same streets and live in a different world from the one in which our young people live in our cities, but increasingly also in some of our towns. Their experience of it is different, and the adult community needs to wake up to the challenges.
It is important to note that although most adults might be oblivious to every single one of those incidents, they have ripples, which spread out. The 20 young people who stabbed the young man who had done work experience in my office know what happened. Their families and relatives know the risks and dangers, and so do the family of that young man himself.
One of the most distressing things that I encounter is when I go into schools in my constituency and talk to eight or nine-year-old children and ask them how they feel about their community. One point they raise is gang violence. They ask whether it can be stopped, because they fear for their relatives.
Dawn Butler (Brent Central) (Lab)
My hon. Friend makes a powerful point. In my constituency, the youngest gang member is eight years old and the oldest is 61. That shows the breadth of the problem in communities such as Brent Central. As she says, many people are oblivious to what happens on the streets.
Angela Rayner (Ashton-under-Lyne) (Lab)
My hon. Friend is making a powerful point. My constituency is in mourning this week because, on Monday, a young, 11-year-old lad was the victim of a hit and run by young people in a vehicle. He was killed outside the mosque in front of his father, and the whole community is in mourning. As I have said before, often our young people do not understand the consequences of using weapons, and they feel that it is just part of being in a gang, or part of youth culture. That has serious consequences for the rest of their lives and for the whole community.
Ms Buck
I absolutely agree with my hon. Friend. I do not want to go into the causes because they have been well set out and time is pressing, but she is right about the lack of understanding of the consequences of violent behaviour. A community group in my constituency ran a campaign called “fear and fashion”, which encapsulates the story perfectly. People are frightened, and “fashion” refers to people knowing that these things are going on in the community and considering them to be normal.
Every single incident, even non-fatal ones, is a tragedy that has ramifications and an impact on communities.
Keith Vaz (Leicester East) (Lab)
My hon. Friend will know, as a former member of the Home Affairs Committee, that the Committee conducted an inquiry into this—I think she was a member at the time. Given the comments of my hon. Friend the Member for Streatham (Mr Umunna), is it not important to revisit some of the conclusions because some of the knowledge is already there and just needs to be revisited and acted on?
Ms Buck
My right hon. Friend is right. As we have heard, there are changes in the way in which gang and serious youth violence is working itself out, but constants remain, and we need to learn from that experience.
Some positive things are going on in the work that community organisations do. I do not often praise Westminster council, but I do when it deserves it, and it has a gangs unit that includes excellent staff, who work intensively with young people. Redthread community organisation works out of four accident and emergency units and tries to catch young people at what it describes as a “teachable moment”, when injury has been inflicted and young people can learn from it.
There is therefore much that is good, but I am going to break a little with consensus by saying how much we are in danger of losing at the very point when we need to gain. I am deeply worried about the crisis in our youth offending institutes, which are ridden with extreme gang violence. The more the cost pressures bite in the youth justice sector, and the more the overcrowding in our prisons and youth offending institutes, the more dangerous the situation becomes. That is at a time when we are spending £138,000 a year in Medway to keep a young person in one of those units. In Feltham, we are spending £69,000 a year. That is kind of money we spend to lock up a young person—obviously not only for gang and serious youth violence—yet we are doing something dreadful: we are removing the investment that is necessary to prevent that behaviour.
I am horrified by my local council, which is not alone, because it is withdrawing all funding from its youth service. If we are talking about intervention and catching young people at a teachable moment, the youth service is critical. My hon. Friend the Member for Streatham made a point about youth workers and the continuity and expertise that they provide in the community. They are critical and we are losing them.
Mr Umunna
My hon. Friend is making a very important point. So many activities that are provided for young people are not statutory. A lot of youth provision is not statutory, so it is often first in line for cuts. I am desperately trying not to be party political, but the 56% cut in the local government grant from central Government to our local authorities will inevitably have an impact on the support that local authorities can give to third sector organisations working on this matter.
Ms Buck
My hon. Friend is right. We are in a dangerous situation as the pressure on youth services bites, because early intervention is so important. We often think of early intervention as being for the under-fives, but it is as important in the teenage and adolescent years as it is for under-fives.
Dawn Butler
My hon. Friend is making a powerful point. When I was the Minister for young citizens and youth engagement, it was our hope that such provision would be made statutory and that youth services would be ring-fenced in each council. It is disappointing that the Government have scrapped that and that we do not invest in all the youth services that have done an excellent job in communities for many years.
Ms Buck
I agree. However, it is not just youth services; there is also pressure on child and adolescent mental health services. For all the talk about giving mental health services parity, there has been an unprecedented squeeze in modern times on mental health services, particularly on CAMHS. My hon. Friend the Member for Streatham made a point about mental health and I want to spend a minute or two on that. Westminster council—again, I praise it when it does good things—commissioned a report on gangs and mental ill health, a vastly unexplored subject that is important in understanding serious youth violence.
The report said:
“Street gangs and associated serious violence have been a growing concern in the UK over the past decade and a specific concern in Westminster. They are concentrated in poor urban areas with high crime and multiple social problems. The mental health needs of young people in gangs have, until recently, been overlooked.”
The report demonstrated extremely high mental health need among those involved in gangs. Compared with non-violent men, gang members had increased rates of antisocial personality disorder—57 times higher than the average. Suicide attempts are 13 times higher, psychosis is four times higher, and anxiety disorder rates are twice the average. Gang members are significantly more likely than non-violent men to have used mental health services, with gang members eight times more likely to have consulted a psychiatrist, eight times more likely to have been admitted as a mental health in-patient and five times more likely to have used psychotropic medication.
We have a mental health crisis that affects the very people that we need to deal with, yet, at the same time, CAMHS are being reduced, and particularly some of the school-based services that can provide early referral. I am especially worried that the mental health intervention in my local authority is half what it was two years ago, and is funded only until next year. Of course, the Mayor’s Office for Policing and Crime—MOPAC—anti-gangs initiative is funded only until next year. There is therefore uncertainty about intervention.
Matthew Pennycook
My hon. Friend is making a powerful case. There have been 35 gang-flagged incidents in Greenwich and Woolwich in the few months since I was elected last May, including far too many tragic deaths in the Woolwich area. Given that, and the epidemic that hon. Members have described, does she agree that it makes no sense for the Government to pull front-line capacity, peer reviewers and national co-ordinators out of the ending gang and youth violence programme?
Ms Buck
I totally agree. We understand a great deal about what is going on, even with a changing dynamic, yet we are in danger of doing all the wrong things. We are scrapping youth intervention in some places; we are closing down the youth service in some places; we are cutting CAMHS and so many other areas of early intervention; and we are—fatally in my view—ensuring that services that work for children and young people who are at risk of gang involvement are short term and end quickly.
I believe two things. First, it takes a village to raise a child. Those of us who live in the city, which is diverse, mobile and disconnected, know that we have to build and rebuild that village every single day. Voluntary endeavour alone cannot do it: our village must include neighbourhood police and the youth service, the national health service, CAMHS and schools, as well as churches, mosques, voluntary groups and individual families. Secondly, we should treat gangs and serious youth violence as a public health emergency as much as a criminal justice matter. Mental health services are on the frontline of that battle.
Ann Coffey (Stockport) (Lab)
I thank my hon. Friend the Member for Streatham (Mr Umunna) for securing this important debate and for his excellent speech, which outlined the complexities and difficulties of the subject. It is a privilege to follow the powerful contribution of my hon. Friend the Member for Westminster North (Ms Buck).
I want to focus on the phenomenon of “county lines”, whereby urban, criminal gangs groom and coerce children and young people into selling class A drugs, particularly heroin and crack cocaine. Young people travel many miles from their home, often to quiet market and seaside towns where they are set up to deal drugs, sometimes from the home of a vulnerable person.
Last July, I attended the launch of the first major report on county lines, entitled “Running the risks: the links between gang involvement and young people going missing”, which was published jointly by Catch22 and Missing People. A month later, the National Crime Agency produced an intelligence assessment that said that county lines affect “most forces”, and almost always involve the exploitation of vulnerable people. It said that children are used
“as they are inexpensive, easily controlled and less likely to be detected by police”.
In January, the Home Office published a report entitled “Ending gang violence and exploitation”, which highlighted the fact that gangs have wised up to police tactics and are operating more covertly, making it harder for the police to disrupt activity and safeguard vulnerable people. The reports also state that young girls are groomed for involvement in criminal behaviour and harmful sexual behaviour as part of the gang culture. Indeed, the recent Rotherham trial showed the connection between organised crime and drugs, and child sexual exploitation.
We do not yet know the scale of the county lines problem, and where it is discovered, agencies are not clear how to deal with it. I have been told about children from Greater Manchester who have been found selling drugs in flats in seaside and other provincial towns, including some as far away as Devon. Children are used to reduce the risk to older gang members, and they may go unnoticed by local police, particularly if they have no record of offending. The gang leaders are rather like modern-day Fagins or Bill Sikes—hard men who groom youngsters and then use them to do their dirty work. There is serious under-recognition of the county lines phenomenon, which I believe is the next big grooming scandal.
Just as with children groomed for child sexual exploitation, we must recognise that young people drawn into criminality and drug dealing have, in the first instance, been groomed and manipulated. Those young people end up being charged with criminal offences, which gives them the same relationship with the law as the adults who groomed them. That leaves them vulnerable to further exploitation, and they continue to be victims at the same time as offending. That must be seen in the context of organised crime and the systematic grooming of young people. Often, those at the centre are long-term hardened criminals.
The Catch22 report stressed the link between gang involvement and young people going missing, and said that too often the young people are criminalised rather than safeguarded. It said that, although missing incidents for children and young people are generally under-reported, that is particularly acute for those involved in gangs. It presented evidence of gang-involved children and young people being placed into care miles away from their home town, with little care planning or support, leaving them vulnerable to getting drawn back into gangs. An additional issue with county lines is that the young people involved may often be aged between 16 and 18. According to the Children’s Society, there is evidence of massive under-reporting of young people who go missing in that age group.
Understanding of county lines is developing at a national level, and the use of young vulnerable people to traffic drugs across county lines is flagged up as a major issue by practitioners. Organisations that work to turn young people away from gang crime—most notably the St Giles Trust, a charity in London that works with young people to break the cycle of offending—have been dealing with the issue for some time and have harrowing stories to share. I was told by the St Giles Trust that young people are using the plastic container from Kinder Egg toys to transport drugs inside their own bodies—a serious risk to their health. It is hard to imagine a more graphic metaphor for the perversion of childhood. The trust also told me about young girls dressed in school uniform who are being used to mule drugs because they are unlikely to be stopped and searched. The age at which young people get involved with gangs is concerning. There have been reports of cases in London involving children as young as nine, and the trust gave at least one example of a child aged 12 being involved in county lines.
Increasingly, there are stories about gangs setting up their own young members to be robbed en route. They are then told that they must work off the debt by trafficking and selling drugs for free, or by engaging in sex. That is nothing less than slavery. The threat of child sexual exploitation for girls involved in gangs is known, but the added factor of being trafficked to remote locations compounds their vulnerability. Those young people are at risk of physical violence, sexual exploitation, and emotional and physical abuse. That model of grooming arguably involves both trafficking and modern slavery.
These children are seen as “bad kids” who have chosen a criminal lifestyle. For example, a national newspaper recently reported a court case involving a 13-year-old Manchester boy who was sent to Barrow in Cumbria by a criminal gang and set up as a heroin and crack cocaine dealer. There was a quote saying that police said the boy “revelled” in his role as a “little gangster”. He was a child.
The recent Home Office report indicates that we still have some way to go in tackling county lines. Action is needed at national level to set out clearly where responsibility lies within law enforcement for detecting and disrupting county lines, and how information should be shared with local authorities and safeguarding boards so that when young people are found they are supported in an appropriate manner.
We need to know the scale of involvement of vulnerable young people in county lines. I asked a number of parliamentary questions to try to establish numbers. The Home Office Minister responded that, because the National Crime Agency does not conduct county lines operations, it does not hold that information. We also need to know how much use is being made of anti-trafficking legislation and modern slavery laws to charge older gang members with grooming younger members. Finally, we need to know how best to support those young people once they have been found.
The police should be using data on missing episodes, and cross-referencing that with information about possible gang involvement, not only to understand trends, but to take an early intervention approach, and to try to disrupt involvement early after missing incidents. I offer the Minister a practical suggestion that would help to disrupt the grooming of children and young people to sell drugs at that early stage. Currently, numerous civil orders are available to the police to combat grooming for child sexual exploitation, including sexual risk orders, sexual harm prevention orders, and child abduction warning notices. I would like similar orders to be created, to be used where children are being groomed by organised criminals and gangs to act as drug runners. Perhaps they could be called “Fagin orders”.
Many children who are initially groomed into criminal activity are often then groomed for sexual exploitation; alternatively, they are initially groomed for child sexual exploitation, and then for criminal purposes. The two forms of exploitation are often inextricably linked, and young people are reluctant and frightened to disclose either. Return interviews with children who have gone missing are an important source of establishing the risk to the young person, and of gathering information about their associates and intelligence about county lines. It is important that that information is used for safeguarding by police and children’s services.
When young people are found and arrested after involvement in county lines, the approach from agencies should be holistic. The St Giles Trust has suggested a pilot in which their caseworkers—who are ex-offenders—accompany police on targeted raids and immediately offer support to the young people, who are more likely to listen to those who have been in the same situation.
To conclude I will return to the point I made at the beginning of my remarks: we must learn from the child sexual exploitation scandals that have ruined so many lives, and we cannot afford to make the same mistakes again, blaming young people, saying that they have made their own bed, failing to ask the right questions, and failing to respond even when we know what is going on. Missing People has been working with a mother whose son started going missing aged 12 and was being groomed by a gang to sell drugs away from home in a county lines operation. The mother was desperate not to lose her son to that, and always reported it every time he went missing. It took her six months to receive any support from services. How can that be right? The boy repeatedly went missing for periods ranging from overnight to up to three months. He ended up being taken into care and had numerous distance placements.
We need a response to county lines that ensures that children are found, safeguarded and supported out of gangs, and that the adults who groom and manipulate them are punished to the full extent of the law. Until then, it will continue to be the young victims who are blamed and punished, as their abusers and puppet masters continue with a trade that nets them thousands of pounds a day.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
As a new MP, nothing can prepare you for receiving the call from the police telling you that a teenager has been murdered in your constituency. Once was hard enough, but within weeks of each other, it happened twice on exactly the same estate. In fact, since becoming an MP last year, four young people from my constituency have lost their lives due to the needless violence on our streets: Shaquan, Naseem, Kabba and Jamar. I have sat down with many of the family and friends left behind. Many of them are here today. Losing loved ones is hard enough. For them to have been murdered, and to not be able to understand what has happened, is even harder.
I have been calling for a debate on this subject since October last year. I am therefore grateful to my hon. Friend the Member for Streatham (Mr Umunna) for securing the debate, and to the Backbench Business Committee for granting it time.
There is so much we could talk about; there is so much that needs to be said—but we also need to listen. We can all stand here and give passionate speeches about gangs and youth violence, but the truth is that nothing will change. There is no speech that any one of us could give today that will stop our young people killing each other. That is the harsh reality, so what do we do? Do we accept that it happens and simply move on? No. Each one of us has an obligation to find solutions. I believe that they will come from building a stronger, more resilient community base for our country—one where we look out for each other.
Do we write another report, pull some words together and call it a policy? No. The Government need to realise that writing down 2,500 words, giving it the grand title of “Ending Gang Violence and Exploitation” and then calling it a policy simply will not work. There can be no more top-down solutions. Things have changed and we must listen and respond. There are some huge Departments looking at this: the Home Office, the Ministry of Justice and the Mayor’s Office for Policing and Crime in London. None of them can possibly understand the issues being faced by young people on a daily basis. They all engage with young people, but they do so in a tokenistic way. They do so to tick the box that says, “Must engage with young people.” They do not engage in a youth-led way; no, they do so in a “led youth” way. This whole approach needs to change.
Young people and our communities have the solutions, because they are the ones facing the problems. We need a far-reaching, youth-led consultation to really get to grips with the core issues that underpin the reasons for and the impact of the violence that is present in young people’s lives. This is not just about gangs. If we ask 10 people what a gang is, we will get 10 different answers. It is not just about youth violence, either. We need to drop the negative language. Young people are fed up with constantly being portrayed negatively by politicians and the media.
Vicky Foxcroft
I agree with everything my right hon. Friend says. As he said in his speech, the document is so brief that it barely defines anything or suggests what any of the solutions should be. We need to transform the debate fundamentally.
Bob Stewart
Further to the point made my friend, the right hon. Member for Tottenham (Mr Lammy), as I understand it these groups often call themselves gangs. That is part of the problem. It is therefore quite difficult to define.
Vicky Foxcroft
The hon. Gentleman makes a good point, but we tag people in certain ways too. We define groups of people as gangs, when they could just be groups of young people hanging about together. That is why we need to transform how we talk about the subject.
Dawn Butler
My hon. Friend is making a powerful speech. I belonged to a gang when I was younger. We had a uniform and a code—it was called the Girls’ Brigade. We have to be very clear when we are defining gangs. It is also our responsibility as MPs to work with everyone. I met my borough commander this week, and I do so every month so that we are all working together and, as my hon. Friend says, we are listening to young people to ensure that they are not criminalised or labelled from a very young age.
Vicky Foxcroft
My hon. Friend makes an extremely good and strong point. We need to talk about violence in our society. We need to forget age for a second. When someone—anyone—gets so angry they end up killing someone, we have failed as a society. We have failed the victim, failed the victim’s friends and failed the victim’s family. We have also failed the killer. What a life they must have led up to that moment when they pull out a knife and stick it into another human being.
What is our answer? What do we do to them? Police, court, prison—we lock them up for a minimum sentence of 25 years and then they are released. Then what? What kind of life have we provided for that person? We can picture the scene: dad out of work, mum an alcoholic; missed by social services, due to cuts; missed by youth workers, because they no longer exist; missed by the local police, because of cutbacks. We are creating a perfect storm. Youth work, cut; police, cut; social services, cut. What hope do we have while this Government are in power?
Shrinking the state—is that really the answer? Of course not. It is the very fabric of society that needs to be fixed in order to stop these events. I do not hold the Minister solely responsible. There is little that she can do on her own that would fix things. The problem is bigger than that. What do the Government do? They spend close to £1 billion on a citizenship scheme. They give it some clever branding and congratulate themselves on building a social movement. But what then? Once young people have completed the scheme, they are still in the same situation as before. The scheme is £1 billion of window dressing; £1 billion to change nothing. We do not need window dressing. We need to change fundamentally the way we approach society. We need to change the narrative. We need to talk about peace. We need to talk about community. We need to promote positive images of our young people. We need to give them a voice.
Running programmes for teenagers—well, that is nice, but it is not going to change much, not fundamentally. We need to start much younger. It is only when we change the lives of the youngest in society that we will see real change take place. Any psychologist or educationalist will say that. The younger we start to effect change, the sooner we can start to make change. So let us change things. Let us change the record, change the narrative, change the future.
This debate calls for a wide-ranging consultation focusing on serious youth violence. I am sure we can all get behind this. Let us do this together, because it is by working together that we will prevent young people from disappearing from our streets.
Angela Crawley (Lanark and Hamilton East) (SNP)
I thank the hon. Member for Streatham (Mr Umunna) for securing a debate on such an important subject, one that is rarely debated in this House.
The reality is that this problem is not specifically about gangs or young people. It is about violence and how we deal with that violence. Violence has a devastating impact on families, communities and young people. It does not affect young people exclusively, but it is their futures and their lives that hang in the balance and change absolutely while we debate this subject.
Despite the difficulty that comes with legislating to tackle the problem, it is through legislating and a variety of other measures that we can deal with this issue. Scotland recognised the need to tackle this issue and to take serious measures, in particular in areas of Glasgow where there were incidents of violence that were recurring, serious and in many cases severe.
Natalie McGarry (Glasgow East) (Ind)
The east end of Glasgow was once almost a byword for gang violence. Significant work, education and a cohesive approach has reduced violent crime, gang membership and weapons possession. I am sure my hon. Friend will join me in congratulating the Scottish Government and the Violence Reduction Unit, who have done sterling work to reduce gang violence in Glasgow. Does she agree that Members across the House could learn some valuable lessons from the work that has been done in Glasgow over the past decade?
Angela Crawley
I thank my hon. Friend for her point. I was intending to come on to Glasgow East later, but the project that took place there in 2008 was a response to the worst instance of gang violence that had ever occurred, which made Scotland, and particularly Glasgow, one of the worst places in western Europe for violence. The more than 600 gang members involved were presented with a choice—to use their experience to educate and train others, or face a zero-tolerance approach and possibly a prison sentence. Through this work and the ongoing commitment and support they received, remarkable results were witnessed. Violence was halved; weapon possession was down by 85%; and this group went on to establish a charity to create employment for other young people. So there are examples of where positive work can be done to reframe and re-approach the problem not just through legislation, but by working with young people to provide the support they require.
Bob Stewart
What was actually done to reduce the violence there? What happened on the streets to reduce it?
Angela Crawley
There are a number of projects, but this particular one focused on bringing the young people in, engaging them and providing them with opportunities to go on to further education or training. They continued to be supported throughout that process so that they could reach sustainable employment and other routes outwith the confines of the environment in which they had grown up and themselves experienced violence or been party to it.
This Government must recognise that where legislation is proving ineffective, they must consider changing course. Lessons must be learned from where we have been successful. I share the sentiments of the hon. Member for Streatham that young people have been given a bad name in this discussion and that more often than not we tarnish them with this reputation that makes them the perpetrators, without seeking to address the root causes of the problem, which many Members of all parties have addressed in their speeches.
I have listened to Members who have spoken of their constituents’ experience of violence and its impact on their lives, and of heart-breaking accounts from loved ones of lost years and lost lives. The hon. Member for Streatham spoke about the level of violence in London, but as has been repeated in the debate, the problem is not unique to one particular area or one particular city, so we must do more to address the problem as a matter of policy. Factors such as poverty, violence and drugs, and the rising incidence of violence against women in ghettos must be looked at in a far more holistic way to address some of those root problems.
Let me acknowledge that it was only 10 years ago, as I mentioned earlier, that Glasgow was named the murder capital of western Europe—something that the then Scottish Executive could not ignore. Despite the number of convictions, there remained a need to tackle the root of these serious problems. Scotland has been successful in reducing the number of incidents. The campaign “No Knives Better Lives” raises awareness and seeks to educate young people about the consequences of knife crime. This is one example of a measure that has contributed to success in reducing violence.
In my constituency in south Lanarkshire, a local community group established a drama workshop known as “The Street”, which has a real-life setting. It is produced by young people, many of whom have been involved in violence themselves, and it tackles issues of violence, knife crime and drug and alcohol abuse, as well as sexual violence. This message can be delivered by young people to young people in a hard-hitting way with a powerful impact, addressing the serious ramifications and consequences of actions occurring on a daily basis on the streets.
Under the stewardship of the former Scottish Justice Secretary, Kenny MacAskill, we focused on early intervention, improving life chances and the integration of the police within the community, working with young people. This resulted in a significant reduction of crime and violence. Let me declare that the incidence of violence continues on a daily basis, but we must continue to tackle these issues, which I hope the Government will take into consideration.
Lyn Brown (West Ham) (Lab)
Let me make it clear that I was not around for the mods and rockers, but heard about them from my mum and dad!
A couple of years ago, I was driving home when, around the corner from my home, I saw to my horror the body of a young man curled up on the pavement. Several police officers were with him, and I could hear the sirens of ambulances on their way. That young man was the victim of a stabbing and was clutching a stomach wound that thankfully proved not to be fatal. That incident shook me to the very core; it was so close to my house and it was not even late on a Friday night.
Some in my community live every day with the pain and worry that results from knife crime and gang violence. They worry about their children’s safety and they have been robbed of a basic sense of security. They want—they need—weapons off our streets and they want their children to be safe.
I am therefore disturbed by the recent rise in recorded knife crime—up 9% in England and Wales last year after a long downwards trend. If we look at the numbers in more detail, we find that rapes involving a knife are up by 26%; threats to kill by 20%; and attempted murder by 24%. Gun crime is up by 4%. Those numbers are absolutely chilling.
I know that we need to treat recorded crime numbers with caution. The police should not be discouraged from improving the reporting or the recording of crime, which can explain such fluctuations, but sadly there is evidence that the increase in recorded knife crime simply reflects an increase in criminal activity using knives. For example, data from the London Ambulance Service shows a 9% rise in incidents resulting from assaults involving a knife.
There is some evidence to show that the rise in knife crime is related to an increase in the number of gangs. Recent Home Office research suggests a sharp rise in the number of gangs in the capital, and the number of offences that the Metropolitan police associates with gang activity has increased by 25% in the last three years. There are 225 recognised gangs in London, with around 3,600 gang members. In a large city, that is a relatively small number people, but they still account for 17% of serious violence in the capital.
Given those numbers, my hon. Friend the Member for Streatham (Mr Umunna) is quite right to draw this issue to our attention and to call for a debate this afternoon. There have been some stonkingly good speeches, and I want to pay tribute to all colleagues who have contributed to such a good debate.
I am aware that a number of police services have chosen to focus significant resources and activity on dealing with the scourge of knife crime. Last week, I visited Bedfordshire police to discover how they had managed to cut knife crime by 21%. Officers from Bedfordshire’s Operation Boson told me that they had adopted best practice from across the country, and tried to attack knife crime relentlessly from every angle. They believe that they have reduced the number of knives on their streets through “secret shopper” inspections and by carefully deployed “surrender bins”, unannounced “knife arches” and the judicious use of stop and search powers. They have also supported diversion schemes in partnership with the likes of Luton Town football club, which are aimed at offering alternative ways in which young people can deploy their abundance of skills and energy.
Bedfordshire’s magnificent performance has been done on a shoestring. The excellent police and crime commissioner Olly Martins told me that balancing all the demands of the service with ever-decreasing funding and resources was like trying to balance spinning plates, always worried that something would come unstuck. It is clearly a testament to his skill and determination and to the commitment and professionalism of serving police officers in Bedfordshire, particularly those in Operation Boson, that Bedfordshire police have been so successful in their assault on knife crime.
However, in the case of much crime, prevention is always better than cure, and I know that some first-class work is already being done throughout the country to try to prevent crimes of this nature from happening. If the House will forgive me, I shall give a parochial plug to the “Carry A Basketball Not A Blade” initiative, which is run by Newham All Star Sports Academy. That charity was started in tragic circumstances by Anthony Okereafor after two of his friends were lost through knife crime. Anthony helps young people by harnessing the power of sport to provide a counter-narrative to the poisonous idea that gang life is in some way glamorous. It is the sort of “peer-to-peer prevention service” that I think works incredibly well, and the Home Affairs Committee thinks that it should be “expanded” and “commissioned more consistently” across the country.
Dawn Butler
My hon. Friend is making a powerful speech. In the context of prevention, may I thank the Reverend Rose Hudson-Wilkin, who is in the Chamber today, for all the work she has done in Hackney, where she has comforted so many families who have experienced violent crime?
Lyn Brown
Absolutely. People of that kind, with commitment of that kind and programmes of that kind, require our support. They require staff who have expertise and the trust of their communities, but they are also seriously in need of investment. Last month, however, we discovered that the Home Office was pulling the plug on funding for the ending gang and youth violence peer review network, a practical programme that brings together academics, local government officials and the police to develop and share knowledge and best practice with the aim of reducing gang violence. The Government’s last annual report on the network described it as “successful” and
“low cost and high impact”,
so why is its funding being cut?
Two weeks after news of the cut was leaked to The Guardian, we were told by the Minister that the network would be replaced by a new “forum”. The network had the resources that were necessary to establish and share best practice; will the new “forum” be equally well resourced, or will its funding be reduced?
I should be very grateful if the Minister answered some of those questions. I can tell her that Deborah and George Kinsella, the parents of the murdered teenager Ben Kinsella, said:
“We are extremely disappointed to hear that the government is making further cuts to funding to tackle serious youth violence when there are so many of us trying to make things better for others after losing our own children.”
June Addai, the grandmother of 17-year-old Marcel, who was murdered by a gang on a Hoxton housing estate, said:
“The government seem to be cutting everything. Children have nowhere to go, they need clubs to go to rather than hanging out on the streets where they can get into trouble. They get left behind.”
Knife crime is beginning to creep up, and it is an undeniable truth that that is happening after five years of deep cuts in spending on youth clubs and crime prevention. There will be naysayers who will claim that the increase in knife crime has nothing to do with the cuts, and that is why I fully support my hon. Friend the Member for Streatham’s call for an all-party commission. We need to get to the bottom of why youth violence is on the increase, so that we can begin to turn the tide. I ask the Minister, who is not a bad woman, “Can we have an all-party commission—please?
The Parliamentary Under-Secretary of State for the Home Department (Karen Bradley)
Goodness me! I do not think that the shadow Minister has ever been quite so nice to me across the Dispatch Box, although I am sure that that will not be repeated. I am speechless, but the hon. Lady will be glad to know that I will not be speechless for long.
I congratulate the hon. Member for Streatham (Mr Umunna) on securing this important debate. It could not take place on a previous occasion owing to time restrictions—a number of urgent questions were granted, which ate into the time—and the fact that the hon. Gentleman has initiated it again today demonstrates his perseverance and his determination to draw attention to this issue. His long-standing interest in tackling gangs and youth violence is well known, and I congratulate him.
I also congratulate the other Members who took part in the debate: we have heard some powerful contributions, which featured the in-depth local knowledge that is key to tackling the issue.
Let me begin by assuring the House that tackling gangs and serious youth violence is a priority for the Government. I have met and spent time with victims of such violence, and I am aware of the devastating impact that it can have on families, communities, and young people whose lives were ahead of them, but may not be so any longer. We must all remember that that is the case.
We have heard many references to the Government’s approach. If the House will allow me, I shall spend a few minutes talking about what we have done, and what the future holds.
The Government published their refreshed approach to tackling gangs in a paper—it was only a paper; I shall return to that point shortly—entitled “Ending gang violence and exploitation”. It explains that the Government’s approach is focused on both reducing violence, including knife crime, and preventing the exploitation of vulnerable individuals by gangs. It builds on the ending gang and youth violence programme that we established in 2012, at a time when many people were only just starting to understand the problems caused by gangs in their areas. The EGYV programme dealt with the need to understand those problems, and to build local resilience. It was due to end in March last year, but because we were beginning to see gangs operating in new ways, and, in particular, the exploitation of vulnerable young people, we extended it for a further 12 months so that we could identify where gangs were operating, and could help local areas to build that resilience.
Melanie Onn (Great Grimsby) (Lab)
I am not sure whether this tallies with what the Minister has just said, but the Government announced in January that they would extend the programme to nine new areas, including Great Grimsby. That came as a surprise to me, because I had not known that our area contained gangs of the nature that has been described by my hon. Friend the Member for Streatham (Mr Umunna). A subsequent conversation with my local police and crime commissioner indicated that the programme might be along the lines of what the hon. Member for Yeovil (Marcus Fysh) mentioned earlier, and might be more concerned with serious organised crime. What criteria were used to decide on the towns that were included in the programme?
Karen Bradley
The hon. Lady makes some important points. The original programme’s work, which included the peer review network, is now complete. Local resilience has been built, and local areas have had that peer review. We have now passed the stage of understanding, and need to proceed to delivery, which is the reason for the new programme. The new areas are areas where, as part of the peer review, we identified possible problems. We spoke to local authorities and local police chiefs to find out whether they wanted to be part of the new programme, which is intended to help local areas to understand the problems and the way in which best practice might work, and to give them the support that they need.
Several hon. Members rose—
Karen Bradley
I will give way first to the hon. Member for Westminster North (Ms Buck), who is my Member of Parliament in London.
Karen Bradley
It is for local areas to determine what works best for them, but the Home Office can help them with resources and best practice from the centre.
Mr Umunna
It is good to see the Minister responding on behalf of the Government. May I make two points?
I do not accept that the work of the peer review network is done, because the nature of what is going on is changing. The programme started in 2012, since when the extent to which social media are used by, for example, the groups of young people who are perpetrating these acts has become much greater, and, as I said in my speech, the nature of the groups has changed. My second point is that the peer review network appears to have been replaced by two civil servants manning a mailbox. I really hope that that is not the case, but that is what I have been told by insiders. This is why I am so concerned about its being disbanded.
Karen Bradley
I want to assure the hon. Gentleman that that is not the case. I spoke at an event earlier this week to try to get more involvement in the forum that we are establishing, and I will say more about that in a moment. I would like to extend an invitation to him to meet me, because there are many things that we need to discuss and we simply do not have time to do that today.
Sir Simon Burns (Chelmsford) (Con)
On the important point about liaison with local police forces and local authorities, may I thank the Minister for the work that she and her officials have done in relation to the horrific knife crimes in Chelmsford over the past 18 months, and for the way in which her Department, led by her, has been willing to liaise with Essex police to see what more can be done to overcome this problem in our community?
Karen Bradley
I thank my right hon. Friend for that intervention. I know that he wanted to take part in this debate, but he has been involved in an important Bill Committee. I thank him for being here now and for the work that he does in Chelmsford. He is right to suggest that the work of Essex police, supported by the Home Office, has played an important part in tackling the issue of “county lines”, which my hon. Friend the Member for Colchester (Will Quince) also raised. [Interruption.] I see the shadow Minister bobbing.
Karen Bradley
I would be delighted to meet the hon. Lady and—I am probably going to regret this; my officials will certainly regret it—I extend that offer to any Member who wants to come and talk about what is happening in their local area. I am more than happy to spend time with Members to help them build local resilience. As the hon. Member for Lewisham, Deptford (Vicky Foxcroft) said, this is about local solutions. This is not top-down; it is not about the Government imposing anything.
Vicky Foxcroft
I thank the Minister for agreeing with me, but part of the problem is about having the funding to enable us to deliver those local solutions.
Karen Bradley
I will come on to funding shortly. I am trying to be non-party political, but I might have to make some comments shortly if I am not allowed to continue in that vein. However, I am trying to be non-partisan and I want to work with hon. Members from across the House. I know that they are facing this problem in their communities and I want to ensure that the Home Office extends whatever support we can in order to get a local solution that is right for their area. That will not be a top-down solution, however, and it will not be one size fits all.
Karen Bradley
I will address that point briefly, but I must make some progress because I am conscious that this debate is to be followed by an extremely important debate on Welsh affairs in which many Members want to take part. On the figures, on which the hon. Member for West Ham (Lyn Brown) commented, we want to see these crimes recorded. We want the police to know about them and we want to understand what is happening. I recently visited the A&E department at King’s College hospital in the constituency of the hon. Member for Dulwich and West Norwood (Helen Hayes). It is absolutely tragic that the first opportunity we get to have a teachable moment with these young people is when they turn up at A&E. They are turning up not in an ambulance—the gangs do not phone an ambulance or any other blue light service—but in private cars and being dumped at A&E, and that is the first opportunity that any agency has to make contact with them.
I want to pay tribute to Redthread, which provides young people’s advocates at A&E departments across London. Those advocates are important in making contact not only with the young person who has been the victim of an attack but with their family when they come to visit. They play an important part in keeping that young person in hospital and getting them to speak to someone they trust. That might be the first opportunity we have to speak to them, and we need to find a way of making that happen sooner. This is about education, about working with schools and about working in vulnerable locations. When I talk about the revised programme, I will mention some of the approaches that we are using in that regard. I want all those hidden crimes that are not being recorded at the moment to be reported and recorded so that we can understand what the problem is. [Interruption.] I sense that the hon. Member for Brent Central (Dawn Butler) might want to intervene on me, but this must be the final intervention as I need to make some progress.
Dawn Butler
I am not sure that I entirely understand the Minister’s response, because there are plenty of opportunities to intervene on these young people. Lots of people and organisations in Brent and elsewhere are intervening at an early stage. Poverty is key, but education and early years provision are also key in providing opportunities to intervene. Perhaps she will get to that point later in her speech.
Karen Bradley
I agree that there are many opportunities for intervention. My frustration is that those opportunities are not taken until the young person is found in A&E. I hope the hon. Lady shares that frustration. I pay tribute to her council in Brent. I met her council leader recently and learned about the partnership working that the council is doing to understand the problem. It was a peer review that assisted in understanding the problem, but now this is about local delivery.
The hon. Lady is right to say that this is about poverty. People in Brent talked to me about the housing estates and the work that they are doing in South Kilburn, which neighbours the Paddington recreation ground, with whose football pitches I have to say I am familiar. They are doing incredibly important work on the South Kilburn estate to transform it into a place to live where gangs will not be allowed to flourish. I pay tribute to Brent and to the many other local authorities around the country that are working hard in this regard. I hope that many others will be able to take advantage of this programme through the support that the Home Office provides.
I want to make some progress now, so that we can get on to the important Welsh affairs debate. First, however, I will just mention that although I understand that the right hon. Member for Tottenham (Mr Lammy) is concerned about an eight-page Government document, this might be the first time that anyone has ever told me that a Government document is too short. We are usually accused of producing too much with too little substance underneath it. The “Ending gang violence and exploitation” document has been widely welcomed. We worked with many organisations and stakeholders to develop this approach. The paper sets out the high-level approach, but incredible amounts of work have gone on underneath that. It has been welcomed by many organisations including Safer London, the Met police and the Mayor’s Office for Policing and Crime.
The hon. Member for Great Grimsby (Melanie Onn) asked why certain areas were involved in the programme. The answer is that those areas have said that they want to be part of it. They want to know what learning is available and to understand the partnership working. For example, they want to learn about working and sharing information with A&E departments. It is vital that we get that information as quickly as possible and share it with different agencies. I also take the point about the definition of a gang. The definition for gang injunction purposes is set out in the Serious Crime Act 2015. That is why there is no separate definition; it is a known definition that has already been set out in legislation.
So, what does our new programme involve? There are six priorities, based on the fact that gangs are operating in different, more covert ways. That is why our first priority is “county lines”, which was mentioned by my hon. Friends the Members for Yeovil (Marcus Fysh) and for Colchester. The hon. Member for Stockport (Ann Coffey)—I think I shall refer to her as my hon. Friend, if she does not mind—also referred to that in her speech. It is important that we help the most vulnerable people in our society who are being exploited by urban street gangs to run drugs and to do many other things, and I am enormously supportive of the missing persons charities and of her work on the all-party parliamentary group on runaway and missing children and adults. That work is vital in helping to find those young people and getting information about what happens to them when they go missing and who is influencing them. She was right to talk about trafficking and modern slavery; this is very much modern slavery and these are trafficking offences. I hope the prosecution services and others will use those modern slavery offences, where appropriate, to get convictions, because I want us to get convictions and stop this happening. If the best and most likely way to get the conviction is by using modern slavery offences, I am all for that and it is what we should do.
The second priority in the programme is protecting vulnerable locations, which again links to the point about missing people and “county lines”. We need to get to the places where vulnerable young people are being targeted—pupil referral units and residential children’s care homes. These are places where young people who are very vulnerable to exploitation find themselves. On the point about young offenders institutes, these are vulnerable locations and, as hon. Members will know, the Ministry of Justice has asked Charlie Taylor to lead a review of this matter. I want to see the results of that review. I also want to make sure that we understand and that those young offenders institutions understand that those vulnerable young people are being exploited, and that they take action to stop that happening.
The third priority is reducing violence, including knife crime. I have listened to many of the contributions about knife crime and I agree that we do not want to see knives on our streets. There are many offences and measures that police, trading standards and local authorities can use, but we are looking carefully at what else we can do to make sure the authorities have all the weapons they need to take knives off our streets. I was at a conference last week hosted by the Metropolitan police at New Scotland Yard with retailers, making sure that they understand their role in a responsible society in ensuring that knives do not hit our streets.
The fourth priority is safeguarding gang-associated women and girls, which has been mentioned by many Members, including the hon. Members for Dulwich and West Norwood and for Streatham, and the right hon. Member for Tottenham. The very idea that girls think that it is acceptable to be exploited in a line-up by various gang members and that this is something they should do is absolutely wrong. I am pleased that the Government—I hope that hon. Members noticed this announcement earlier this week—have committed £400,000 to young people’s advocates to work with all young people, but specifically targeting girls and young women, to try to get that teachable moment. The aim is to get to the young women, educate them and give them the experience and knowledge they need to say no.
Our fifth priority is to promote early intervention, a point raised by many Members. My hon. Friend the Member for Colchester talked about how we have to get in early and educate young people. Finally, our sixth priority is providing meaningful alternatives, and the hon. Member for Streatham made the point on that clearly. We need to show young people alternatives, and he rightly says that that does not just mean a windy church hall. These have to be meaningful alternatives to gangs, so that young people do not feel that gangs are the only place they can go.
I want to touch on some of the specific points that were raised. I am looking forward to discussing the independent commission with the hon. Gentleman. I am not convinced at this stage that a national independent all-party commission is the best way to approach this. We need to get into delivery and make sure that the programme is allowed to deliver. I know that local commissions are being set up. I met the West Midlands police and crime commissioner yesterday, and he is setting up his own local commission. I encourage hon. Members to do that work locally. I hesitate to establish a national commission because, as we have all said, there are different considerations to take into account and different things are going on. The hon. Member for Lewisham, Deptford made the point that local young people and local communities need to be part of this. I would encourage local work and local commissions, where appropriate, but I am not convinced that this is the right time for a national commission. I am, however, looking forward to meeting the hon. Gentleman. May I also ask to meet my hon. Friend the Member for Stockport to discuss her interesting suggestion about Fagin orders? Civil orders have been successful. They are used when we do not have enough evidence for a criminal procedure, and I would be very interested in talking to her about that.
There are many more things I could say and many more points I could make, but I am conscious of the time so I will conclude by repeating my thanks and congratulations to the hon. Member for Streatham on securing the debate. I thank all right hon. and hon. Members who have contributed to it. I wish to finish by assuring everyone that the Government and I regard this issue as incredibly important. It is a continuing priority, and we will continue to work with national and local partners to address these issues.
Mr Umunna
With the leave of the House, Madam Deputy Speaker, I shall speak for a couple of minutes to reflect on the debate. First, I wish to thank all hon. Members who have participated in a fantastic debate, which has done great credit to our House. It sends a message to those watching that the House of Commons takes this matter seriously. Secondly, what has been so interesting in the debate is that a lot of the points made have been ones that have not been made before. For example, I am thinking of the point made by the hon. Member for Colchester (Will Quince) about data collection. I could also mention the good points made by my right hon. Friend the Member for Tottenham (Mr Lammy), and my hon. Friends the Members for Westminster North (Ms Buck), for Stockport (Ann Coffey), for Lewisham, Deptford (Vicky Foxcroft) and for Greenwich and Woolwich (Matthew Pennycook), among others.
I heard the Minister say that she was not convinced at the moment of the need for a national commission, but I am pleased that she has not ruled it out. I agree with her that it would be useful if localities set up their own commissions, and we have already done that in Lambeth. I think it would be useful to have a national commission, because we could share best practice and see what is happening as the situation changes on the ground. That was one thing we tried to do through the London gangs forum, when it was operating—as I said, however, we should not use the term “gang” any more. Not only does having a national commission say that we take this seriously, just as we have commissions in respect of other issues, but it would be very useful in sharing best practice from around the country.
As I said, this has been a wonderful debate and I think that we will all want to reassure those watching that this is not the end of the matter. It is very much the start of this campaign by this Parliament, and we will not rest until we see an end to the violence on our streets, and the opportunities and horizons widened for our young people, who are, as I said, our future.
Question put and agreed to.
Resolved,
That this House calls on the Government to establish an independent, all-party commission, involving a wide-ranging consultation, to identify the root causes, effect of, and solutions to, serious youth violence, including knife crime, its links to gang culture and the sale of illegal drugs.
Nia Griffith (Llanelli) (Lab)
On a point of order, Madam Deputy Speaker. I am amazed to see that the Secretary of State for Wales is not in his place to respond to our next debate today, despite the fact that he made an extremely important announcement about fundamental changes to the draft Wales Bill on Monday, to journalists and not to this House, with the Wales Office tweeting at the time that hon. Members could wait until today to debate these changes. Have you been made aware that the Secretary of State plans to attend today’s debate to answer the important questions that Members have for him?
Madam Deputy Speaker (Mrs Eleanor Laing)
As the hon. Lady knows well, Mr Speaker, or the occupant of the Chair, has no authority to require Ministers to be here for a debate such as this. Mr Speaker has said on many occasions, and I agree with him, that it is very important that this House of Commons is the body that holds Ministers to account and that speeches and announcements ought to be made here. I am not aware of what the Secretary of State said on Monday or of what he is doing today, but I am aware that a very capable Minister is here at the Dispatch Box. On behalf of the House, I trust that he will answer the questions that the hon. Lady and other colleagues will undoubtedly put to him and will draw to the attention of the Secretary of State anything that ought to be drawn to his attention, which will indeed be the whole debate. Mr Speaker has made it very clear, and I reiterate this, that Ministers making announcements should make them in this House and not anywhere else.
Wayne David (Caerphilly) (Lab)
Further to that point of order, Madam Deputy Speaker. I am concerned about not only the Secretary of State’s absence from this important debate, but the fact that he was absent at a St David’s day reception hosted in Lancaster House earlier today. Perhaps he has died or perhaps he has resigned and not told the House. Perhaps you could shed some light on this.
Madam Deputy Speaker
The Chair definitely has no responsibility whatsoever for receptions held outside this House.
The Parliamentary Under-Secretary of State for Wales (Alun Cairns)
Further to that point of order, Madam Deputy Speaker. I can advise the House that the Secretary of State has parliamentary business elsewhere and I understand that he has spoken to the promoter of the debate to explain that that is the case. I should also say that the Prime Minister and the Secretary of State hosted a very successful St David’s day reception on St David’s day at No. 10 earlier this week.
Several hon. Members rose—
Madam Deputy Speaker
Order. We will have no further discussion of this matter, as it is not my responsibility to explain where the Secretary of State is. The Minister has given an explanation and that is the end to the matter.
Ian C. Lucas
It specifically concerns a communication from the Wales Office. On Monday, when the Secretary of State made a closed announcement to journalists, I tweeted that I was surprised that the matter was not being made in a statement to the House of Commons. In response to that tweet, I received from the Wales Office a communication saying that I would be able to raise such matters with the Secretary of State in this debate today. It seems that it is entirely inappropriate for the Wales Office to communicate in that way—
Madam Deputy Speaker
Order. That is the same point of order. If the Secretary of State decides that the Minister should answer these questions today and respond to the points, which I am sure the hon. Gentleman will in due course make, then that is up to the Secretary of State and the Minister. Now we will continue with the debate.
Welsh Affairs
(8 years, 9 months ago)
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Stephen Kinnock (Aberavon) (Lab)
I beg to move,
That this House has considered Welsh affairs.
I can confirm that, this morning, I enjoyed a meeting with the Secretary of State, at which we discussed the crisis in the Welsh steel industry, so he was certainly available for discussions then.
It is a great honour to open this debate today, and I am grateful to the Backbench Business Committee for allowing a St David’s day debate. The debate offers us the opportunity to speak about the challenges and opportunities affecting Wales. I am sure that Members will wish to touch on a wide range of different matters. I want to open today’s debate by concentrating on what I believe are some of the most salient, political, cultural and economic matters facing our country and our people today.
This will be a momentous year for Wales. First, we are on course for a championship-deciding clash with England in the Six Nations. I remind the House that it is traditional for Wales to win the Six Nations after a World cup. Perhaps the most momentous sporting occasion will be when the rugby team’s round-ball counterparts make their debut in the European championships in France this summer. It has been 58 years since we have been at an international finals. That is far too long for a country that has produced footballing greats—such as Allchurch, Rush, Hughes and Giggs—to be absent from major footballing tournaments. “Together Stronger” was the mantra of the team and the supporters through qualification, and it is a philosophy that can be applied across many of the issues that I wish to speak about today.
When Bale, Ashley Williams and Ramsey are flying the flag for Wales in that contest, campaigners from this House and across Wales will be making the case for Wales and the whole of the UK to remain in the European Union. We will do it with special zeal. Wales is a net beneficiary of EU funding. Our membership of the European Union is vital to our economy, security and our place in the world. A Brexit would be a massive gamble for Wales, putting jobs, investment, trade and therefore the safety of our communities at risk. The very last thing that we need now is the instability that the possibility of secession from the EU inflicts on a country that already endures economic fragility and social disadvantage.
David T. C. Davies (Monmouth) (Con)
I am very grateful to the hon. Gentleman for giving way on that point. Does he accept the Library figure that the UK makes a net payment of around £8 billion to £8.5 billion each year to the European Union, and that if that money were taken and Barnettised and 5% of it were handed over to Wales, Wales would become a net beneficiary from exiting the European Union?
Stephen Kinnock
I thank the hon. Gentleman for his intervention, but I am afraid that he is confusing the budget of the European Union with the British economy. The British economy benefits to the tune of £227 billion a year in the exports that it makes to the European Union, thanks to its membership of the single market. If we are looking for value for money, £9 billion to £227 billion looks like a pretty good deal to me.
More immediately, many share my concerns about the months between now and 23 June and ask whether it is realistic to expect rational decisions to be made around a Cabinet table that is beset by mutual loathing.
Hundreds of thousands of Welsh jobs are linked to EU membership, and that membership is our largest source of investment, bringing growth, quality employment and higher wages. Much of our global investment from outside the EU is made possible by the fact that, inside the EU, we provide a gateway to the single market. That is a major reason for international firms such as Tata Steel in my constituency to locate in Wales.
As Members will be aware, the Welsh steel industry finds itself in a precarious position and nowhere in Wales is that felt more acutely than in my constituency. The works in Port Talbot are the productive core of our local economy and community, so the announcement at the start of the year of 750 job losses was a bitter blow, which will be compounded when the impact starts to be felt through the supply chain and the wider local economy.
Although the steel crisis may be partly the result of global trends and events, what cannot be ignored is that the Government have been asleep at the wheel for the past five years. Far more could and should have been done to give the British steel industry a fighting chance. From the blatantly unfair and distortive dumping of Chinese steel to the incompetent and complacent management of public procurement, this Government have failed to give justified support or stimulus to steel.
David T. C. Davies
The hon. Gentleman is being very generous in giving way. May I draw his mind back to the evidence that we took from management and the unions about those terrible job losses? Both said that the European Union had delayed bringing in tariffs on Chinese rebar and had taken a very long time to agree the compensation package—for which the Government had to ask permission from the EU— in order to give back to companies such as Tata some of the money that had already been taken as a result of energy taxes.
Stephen Kinnock
I thank the hon. Gentleman for his intervention. Membership of the European Union is defined by how a country engages and how it works with partners in Brussels—both with the European Commission and the other member states. What we have is a Government who, in 2011, recognised that there should be an energy-intensive industries compensation package, but then failed to knock on the door in Brussels and make it happen. How can it be that it took five years to deliver that deal?
When it comes to the dumping of steel, the British Government are the ringleader of a set of member states that do not want to reform the anti-dumping rules—so we still have the lesser duty rule—and are cheerleaders for China, lobbying for it to have market economy status. I am afraid that we need to draw a line under this constant scapegoating of Brussels. The blame should be laid squarely at the doors of Nos. 10 and 11 Downing Street and the rest of the Cabinet. Unlike other member states, they have failed to engage in Brussels in a way that wins for British business.
The Government operate in a fog of laissez-faire ideology. They pray to the gods of the free market, and then they hope for the best. In reality, the market economy can function effectively only if it is regulated. Just as football requires the off-side rule to ensure fair competition, so our steel industry requires the right regulatory framework, so that it can trade in equitable conditions—on a level playing field. Instead, the Government’s blithe faith in the free market is driving them to lobby for China to be given market economy status, and to refuse to support the scrapping of the lesser duty rule.
I wish to state now, with utmost gravity, that if speedy action is not taken to prevent the dumping of Chinese steel, we will witness the beginning of the end of UK steel making. The Government know full well that this foundation industry is hanging by a thread. Neither free market dogma nor cosying up to Beijing should be allowed to impede their patriotic duty to emulate other EU countries and stand up for the men and women who are the backbone of the British economy.
The Minister for Enterprise and the Secretary of State for Business, Innovation and Skills recently visited my constituency, and I hope they will return so that they can go to the homes of some of my constituents who have lost their jobs. I hope they will look those men, women and families in the eye and explain themselves—explain how they can claim publicly that they are supporting the steel industry, while fighting tooth and nail behind closed doors against the lifting of the lesser duty rule and for market economy status for China.
I hope those Ministers will explain how they can claim publicly that they are changing public procurement to maximise the use of British steel, while allowing the Ministry of Defence to build the latest flotilla of Royal Navy frigates with Swedish steel. I hope they will come to Aberavon and explain the breath-taking contrast between their words and their deeds, for the people of my constituency deserve an explanation.
I am certain that the British steel industry has a promising future if it is given the right support by Government. The men and women at the Port Talbot works make the finest steel that money can buy and they are breaking all production and efficiency records, but the industry requires a long-term industrial strategy based on a sustained, comprehensive approach to skills, investment, regulation, energy and industrial relations. That is why I am proud to co-chair a working group of the all-party parliamentary group on steel, which will produce a report, “Steel 2020”, on formulating a long-term industrial strategy for British and Welsh steel.
Our strategy for the future of the Welsh economy must not be limited to steel. We need a new industrial revolution grounded in the new economy of renewables and connected technology, a fourth industrial revolution such as the one that was spoken of at the recent meeting of the World Economic Forum in Davos. I see Wales at the forefront of that revolution. The Swansea Bay tidal lagoon could transform the energy industry, but frustratingly, its future is under threat owing to the Government’s perpetual flip-flopping. A positive decision on the lagoon would not only put a much needed tick in the Government’s ever-diminishing green credentials, but deliver a massive boost to the local economy. By committing to sourcing as much steel as possible from the UK, it would significantly help the UK steel industry. That project needs and deserves rapid advance. The Government need to get off the fence, and fast.
The Government’s short-sightedness is undermining other forms of renewable energy, such as wind and solar. These are burgeoning industries in my constituency, with hundreds of jobs at stake, but they are under threat because of the Government’s moves to cut price stabilisation mechanisms, such as the feed-in tariffs. The Government have been on a policy descent from “Hug a huskie” to, in the words of the Prime Minister, “Let’s cut the green crap”.
Craig Williams (Cardiff North) (Con)
May I point out the hypocrisy in what the hon. Gentleman is saying? There is a contradiction between supporting steel—Celsa Steel, for example—which uses so much electricity, and putting a price on that electricity for renewables?
Stephen Kinnock
I thank the hon. Gentleman for his intervention. As we have discussed, it is clear that energy-intensive industries require support from Government. That was recognised by the Chancellor in 2011. The support that has come, finally, is welcome. The big question for me is how it could possibly have taken five years to make that happen—to get the state aid clearance that was required from the European Union. Fundamentally, the strategy for energy must be about spreading the burden of the cost more effectively so that our energy-intensive industries are not being hung out to dry by an energy policy that does not make sense. It is also about making a firm commitment so that those investing have a sense of the stability and sustainability of the market in future. We currently do not have any of those things in place, which is why we are in such a mess.
Ian C. Lucas (Wrexham) (Lab)
My hon. Friend makes an important point about stability. Does he agree that the real problem in industries such as solar and anaerobic digestion—on which a reception was held in the House earlier this week—is the instability of the legislative and regulatory framework, which is a deterrent to long-term investment and is costing a large number of jobs in communities right across Wales?
Stephen Kinnock
I agree absolutely. The Energy and Climate Change Committee has just produced a compelling report that clearly demonstrates that we are losing investment and jobs precisely because of the mixed messages and signals that this Government send to investors. Business abhors a vacuum. Business needs stability. It needs to know whether there will be a return on its investments, and at present it sees no evidence whatever of that in the United Kingdom.
Wales, and south-west Wales in particular, can also be at the forefront of an internet revolution. Swansea Bay city region has based its city deal proposal on the concept of an “internet coast” to drive the digital future of energy, health and economic acceleration. All eyes are on the Chancellor. If he really wants a “march of the makers”, he must give his full backing to that exciting vision. The Swansea University bay campus, which, I emphasise, is based in my Aberavon constituency, has a huge role to play in the development of the internet coast. I look at my hon. Friend the Member for Swansea East (Carolyn Harris) for verification of that.
Stephen Kinnock
This outstanding project, made possible by EU and European Investment Bank funding, is one of the largest and most important knowledge economy projects in Europe, producing cutting-edge research focusing on science and innovation.
The “internet coast” is a plan for the future. It is a pity the same cannot be said of the Government’s draft Wales Bill, which does not provide anything like the lasting settlement that it was intended to create. Instead, it has thrown up more uncertainties around the legislative process, and succeeds only in generating reams of constitutional red tape. Just this week the Welsh Affairs Committee, under the chairmanship of the hon. Member for Montgomeryshire (Glyn Davies), called on the Government to pause the proposed timetable for the Bill so that there is opportunity to reflect fully. That is the least that is needed. My specific concern is about ministerial consent and the risk that the process is seen as tantamount to an English veto, but my more general concern is that the Bill has been drafted in a bubble, isolated from the broader debate about the constitutional reform that our country so desperately needs.
The UK is more centralised than any other leading industrialised economy, and the Scottish referendum demonstrated that the constitutional foundations of the UK are cracking beneath our feet. The British people need and deserve better. The piecemeal, make-do and muddle-through approach that is epitomised by this Wales Bill is simply not going to get the job done. We must, therefore, have a full constitutional convention that would formulate a bold, radical, rational, root-and-branch reform of our constitution. The convention would develop a written constitution that is anchored in a confederal UK, an elected senate, a more proportional electoral system, and properly defined devolution of powers to the nations and regions of the United Kingdom.
We have also seen the results of government by muddle in Wales with the Trade Union Bill. Having taken a sledgehammer to crack a nut, the Government have found that the nut is not entirely theirs to crack in the first place. I am delighted that my Labour colleagues have stood eyeball to eyeball with the Government, and it was the Government who blinked first. The Trade Union Bill, coupled with the changes in voter registration and the alterations in constituency boundaries, are blatant and disgraceful attempts to turn the UK into a one-party state, the thinly veiled agenda being to eradicate parliamentary opposition altogether. Vladimir Putin would be proud of such fixing. Wales is disproportionately hit by the boundary changes, losing around a quarter of our MPs, reducing Wales’s voice in the House and marginalising the Welsh people.
There is great potential in Wales, but we will realise that potential only with bold leadership. There is vision and willingness in Cardiff Bay, but we find those qualities abysmally lacking on the Government Benches. As we go into elections in May, we should remember all that we have to be proud of in Wales: a Labour Government delivering for working people, creating 50,000 apprenticeships and getting 15,000 young people back to work with Jobs Growth Wales; ground-breaking legislation on violence against women; a Labour Government who have improved the cancer survival rate faster than anywhere in the UK, and who are training more nurses than ever before; a Labour Government who stood up to Westminster to protect farm workers’ wages; a Labour Government who stood by Remploy, while the Tories were shutting it down across the rest of the UK.
Let us remember that it is the work of the Welsh Labour Government under the leadership of First Minister Carwyn Jones that has enabled the creation of 750 jobs at Aston Martin in St Athan. Under Carwyn, Labour will make use of the Welsh Government’s new powers by cutting business rates for small businesses and supporting entrepreneurship, growth and jobs. That is the kind of leadership we need in Wales.
Mrs Madeleine Moon (Bridgend) (Lab)
I thank my hon. Friend for his wonderful speech and for his important leadership in the whole steel debate—he has been critical in moving in it forward. Will he talk a little about the importance of clarifying what will happen with rail franchising in Wales? Will he talk about whether it is true, as suggested by the Department for Transport, that no trains that start or end in England will be franchised in Wales? We have to know what is happening. Is it not important that we take that issue forward?
Stephen Kinnock
I agree entirely. That comes back to an issue I was talking about earlier: the need for a long-term industrial strategy that connects supply with demand and that gives our steel producers some certainty so that they know what infrastructure projects are coming down the track. They can then configure their production processes to ensure that they make the right kind of steel at the right time. That is about a partnership between Government and business; without such a partnership, industries such as the steel industry will continue to struggle. I hope that we will hear a little more today about the Government’s commitment to such a partnership.
That is the kind of leadership we need in Wales: the kind that creates jobs, opportunity, industry and enterprise and that stands up for all in our nation—the kind we can be proud of. That is why it is vital that we see a Labour victory in Wales on 5 May.
Wales has the talent and creativity to emulate our Celtic cousins Scotland and Ireland in gaining strong recognition in the world. Our people achieve far beyond the nation’s size in rugby, football, athletics and so on. With effort and fair chances, we can do the same politically, technologically, environmentally, culturally and economically. I am proud to be Welsh, to be British and to be European. I am certain that we can make those advances because, in all dimensions, together we are stronger.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I hope we can manage this debate without a formal time limit on speeches. If everyone who has indicated that they wish to speak takes under 10 minutes—that means around nine minutes—everyone will have an equal chance to put their points.
Mr David Jones (Clwyd West) (Con)
May I take this opportunity to wish you, Madam Deputy Speaker, a belated happy St David’s day? May I congratulate the hon. Member for Aberavon (Stephen Kinnock) on securing this important debate? Traditionally, it has always been held close to St David’s day. It reminds the entire House that, even in an age of devolution, many of the most important decisions that affect Wales are still taken in these Houses of Parliament.
There have been busy times recently for the Wales Office. We recently had a very full debate on the draft Wales Bill, so I do not propose to rehearse the remarks I made then, save to tell the Minister how pleased I am that he and his colleagues have taken the opportunity to have a pause in the process of developing what will be extremely important legislation. It was generally agreed by hon. Members, and indeed by commentators outside this House, that the draft Bill was really not ready and not fit for purpose.
I am glad that the Minister and his colleagues are giving further consideration to the matter. They are looking at the issue of the list of reservations, but my concern was not so much with the reservations, as he knows, as with the necessity test, which was rather sketchy and ill-defined. I hope he will be able to come back to the House with something that is more fit for purpose.
I wish to speak—briefly, Madam Deputy Speaker—about north Wales, because that is the part of Wales I come from and in which I have lived all my life. Welsh Members frequently think that north Wales is something of an afterthought in Westminster and in Cardiff Bay. In the case of the Welsh Assembly Government, I think few of its members come from north Wales and understand the peculiar circumstances that prevail there. For example, I do not think it is fully understood by members of the Welsh Government that most of north Wales is, in reality, closely tied to north-west England; in fact, it is fair to say that it is very much part of the north-western economic region. That lack of understanding has resulted in certain problems for north Wales, and I am glad to say that north Wales Members of Parliament are beginning to address that through the formation, under the excellent chairmanship of the hon. Member for Wrexham (Ian C. Lucas), of the new all-party group for the Mersey-Dee north Wales region.
North Wales needs to maintain its close links to north-west England. Traditionally, it has always looked, culturally and economically, to the great cities of north-west England—specifically Manchester and Liverpool. However, devolution carries with it the danger that those historical and traditional links will be loosened. It is important, now that Government policy is firmly focused on developing the northern powerhouse agenda, that north Wales is not overlooked in that process.
One aspect of the northern powerhouse that north Wales needs to link into is the rail network. I was glad when, a few months ago, the Chancellor announced that he was making funds available to upgrade the Halton curve, which many Members on both sides of the border—not least my hon. Friend the Member for Weaver Vale (Graham Evans)—had been pressing for for some time. However, there is much more that needs to be done.
North Wales MPs hear constantly of the wonderful electrification upgrades in south Wales. Before long, the Great Western line will be upgraded to electrified status all the way through to Swansea.
Mrs Moon
Does the right hon. Gentleman share my concern that it appears from announcements by the Department for Transport that the north Wales line to Manchester will be held by an English franchise and that there will be no opportunity for a Welsh franchisee to hold it, because it will not be possible for any franchise that starts or ends in England to be held in Wales?
Mr Jones
I do have concerns about the franchise, but now that the hon. Lady has raised the subject, I am bound to say that the citizens of north Wales would not express much satisfaction with the franchise that has been put in place by the Welsh Assembly Government. Arriva Trains provide a very poor service. It is actually much quicker for me, as a north Wales MP, to travel to London by Virgin Trains than to Cardiff by Arriva. Certainly, issues of topography are partly responsible for that, but they do not explain the appallingly low standards of comfort that one experiences on Arriva. I would certainly hope, therefore, that all aspects of the franchise will be looked at, not least the adequacy of the service that is provided at the moment.
The north Wales coastal line needs to be upgraded. We must not miss out on the opportunity to tap into the new service that will be provided as a consequence of the advent of HS2. It looks very much as if a new hub will be provided at Crewe, and it is essential for the travelling public of north Wales that proper, electrified services connect the whole north Wales coast, from Holyhead, all the way to Crewe.
In that connection, valuable work is being done by the North Wales Economic Ambition Board, and the new all-party group can play a role in that. It is hoped that there will shortly be a meeting that will be attended by the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Stockton South (James Wharton), who is the northern powerhouse Minister. I was very pleased to see the Minister at a meeting organised by the board in Llandudno a few months ago. It is essential that the Government do not take their eye off the ball, because electrification of the north Wales line is fundamentally important to the economy of north Wales and to its connectivity with the northern powerhouse.
Similarly, consideration should be given to the Borderlands railway line that runs between Wrexham and Bidston, connecting the two enterprise zones at Wirral Waters and Deeside. Electrification of that stretch of line, particularly between Bidston and Shotton, would provide a relatively inexpensive, but highly desirable, piece of infrastructure. It would put Deeside industrial estate within commuting distance of the centre of Liverpool, again improving connectivity.
Ian C. Lucas
I thank the right hon. Gentleman for his kind words earlier. He knows that I strongly share the agenda he is outlining. The Welsh Government have invested £43 million in dualling the Wrexham-Chester line, which is hugely important, and we need to do more. Will he join me in pressing the Welsh Government and the UK Government to put their money where their mouth is? The Welsh Government, to be fair, believe in cross-border transport so much that they have dualled the line in the constituency of my hon. Friend the Member for City of Chester (Christian Matheson) rather than in Wrexham, and we want it to run right through to Wrexham.
Mr Jones
Yes, that is the burden of my speech. As the north-eastern part of Wales is so dynamic and so important to the economy of north Wales, as well as that of the country of a whole, and because it straddles a border—a line on the map that was not there in reality until fairly recently—we need to ensure that differing policies on either side of the border do not have any unforeseen effects. Yes, of course it is essential that both the Westminster Government and the Welsh Government should be working extremely closely together in this regard.
Before I sit down, Madam Deputy Speaker—I am very much alert to your strictures on time—I will mention the A55 coast road, or expressway, which is the most important route in the whole of north Wales, linking the areas around the border to Holyhead. The road is now quite old and in desperate need of upgrading. A few years ago, arrangements were made whereby borrowing powers were given to the Welsh Government—in fact, they were given the right to access the old borrowing powers of the Welsh Development Agency—in order to upgrade road infrastructure. That was stated to be specifically for the M4 and the A55. The Welsh Government are taking steps to upgrade the M4 around the Newport area, and that is all well and good, but looking at this from a north Wales point of view, it is rather galling that they do not appear to be accessing these borrowing powers to upgrade the A55. I ask my hon. Friend the Minister to give his colleagues in the Welsh Assembly Government the message that they should realise that the A55 is just as important to the people of north Wales as the M4 is to the people of south Wales.
There is a strong perception among us north Walians that we always get the short straw. I very much hope that the Welsh Government are listening to the contributions made to this debate and will understand that there is life north of Merthyr Tydfil and that the people of north Wales need their own specific economic interests to be reflected—and that means more connectivity and more integration with the great north-west economy.
Wayne David (Caerphilly) (Lab)
I would like briefly to refer to three issues: first, what has happened to the draft Wales Bill; secondly, the importance of the European Union to Wales; and, thirdly, the need for the third runway at Heathrow airport from a Welsh perspective.
I have to ask where the Secretary of State for Wales is this afternoon. Surely this is an important debate and his place really ought to have been in this Chamber listening to what Members have to say and responding to their remarks. It is not asking too much that he show some courteousness and political common sense by coming here. I very much hope that he will learn the lesson from his embarrassment this afternoon. The Under-Secretary will clearly take that message back to him.
Quite a significant decision has been taken by the Secretary of State over the past week—to withdraw the draft Wales Bill—but I am concerned that there has been no oral statement or even a written statement. There has been no communication with the House of Commons. We learned about the decision from the press. That is a gross discourtesy and an undermining of the parliamentary system that we are all committed to.
That brings me to my main issue. I ask the House this question: what do the following individuals and organisations have in common? They are the Wales Governance Centre, the leaders of three political parties in Wales, the Learned Society of Wales, Sir Paul Silk, Sir Emyr Jones Parry, the head of the Wales office of the Law Society, and the professor of governance and constitution at University College, London—and the list could go on. The answer is that they all said that the draft Wales Bill was not fit for purpose. There was relative unanimity on that among those in Wales who follow these issues closely—the objective experts and academics, and the people who are at the sharp end of implementing legislation. I am sure the Under-Secretary will say, “Well, yes, that is why we withdrew the Bill—we listened”, but would it not have been better if he had listened at the start?
Concern was expressed about the draft Bill right from the very beginning, when it was first published. I have a copy here, and quite a heavy tome it is. The Secretary of State said in the foreword:
“This draft Bill sets out in detail how the Government plans to deliver the St David’s Day commitments to create a stronger, clearer and fairer devolution settlement for Wales that will stand the test of time.”
It stood the test of time for four months, and then he recognised what everybody else was saying—that it was not fit for purpose and he should go back to the drawing board and start all over again.
Mr David Jones
I have listened to the hon. Gentleman’s criticisms, but does he not agree that it is far better to get the legislation right than to bring through hasty legislation that does not stand the test of time? In that regard, did he read the recent report by the Public Administration and Constitutional Affairs Committee that bemoaned the fact that the Blair Government of 1997 hastened through legislation that has now resulted in the West Lothian question not being addressed?
Wayne David
I agree up to a point. Pre-legislative scrutiny is good—it makes for better legislation—but it would have been far better if the Wales Office had recognised that meaningful constitutional change can be achieved only on the basis of a high degree of political consensus. It cannot be achieved by a Government—any Government—trying to push through legislation that does not command broad support and is seen by some people as partisan and not properly thought through. That was one of the fundamental problems with the draft Bill. Many people thought it was purely impractical and would therefore lead to bad governance. That lesson ought to be learned.
Paul Flynn (Newport West) (Lab)
That part of the splendid report referred to by the right hon. Member for Clwyd West (Mr Jones) is a fine example of inventing precedent to suit a case. In fact, the words inserted into the report were disputed, because they are a great example of the argument made at the beginning of a splendid book about those times called “Dragons Led by Poodles”, which asserted that only the future is certain, but the past is always changing. That is what the Committee tried to do.
Wayne David
My hon. Friend is too modest to say this, but it is worth pointing out that he was the author of that book. I disagreed with some things in it, but it did have many words of wisdom.
My central point is that those of us who believe in devolution need to recognise that there needs to be a high degree of consensus, dialogue and debate among all politicians involved in the process, both here and in Cardiff Bay. I really hope that when the Government start from scratch, they will have learned the cardinal lesson that they have to consult—genuinely and openly, and on a cross-party basis—opinion here in Westminster. I think that all our colleagues are prepared to contribute.
It is also important that the Government work with the Welsh Assembly. It is very important that we have that dialogue with Cardiff Bay, because, to be frank, it is unthinkable that a Westminster Government could decide a devolution package that is not acceptable to the body to which power is being devolved. If they had proceeded with the draft Bill, we might have been in that situation, ridiculous though it seems. I ask the Government for dialogue not only here, but with our colleagues and friends back in the Welsh Assembly.
My second point is about the European Union. In my view, there is an overwhelmingly strong case for the United Kingdom to remain a full member of the European Union, but that case is particularly strong for us in Wales. There can be no doubt whatsoever that the European Union is vital for jobs, exports and, therefore, prosperity in Wales.
Last week the Prime Minister visited the General Electric aircraft engine maintenance plant in Nantgarw, just outside my constituency. He made his case for why Britain should remain in the EU and why it benefits south Wales and General Electric. Objectively, he had a strong case to make, because General Electric is one of my constituency’s most important employers; many of the workers travel down Nantgarw hill to work there. It recognises how important it is to have a good relationship with the EU and to be an integral part of the single European market. I have no ideological axe to grind; empirically, we recognise that it is good for our economy to be firmly linked to our partners in the rest of Europe. It is as simple and straightforward as that. It is a bread and butter issue.
On Monday night, I met representatives from DS Smith Recycling Ltd, which is a British company with a strong European presence. It is expanding its operations in an innovative way throughout the European Union, and it is a major and important employer in my constituency of Caerphilly. The company is not committed to the left or to the right; it simply wants to expand its work and be a good employer. It recognises that it would be absolute lunacy for itself and the people it employs if we extricated ourselves from the European Union. The message that went out on Monday evening was, “In the interests of the company, jobs and prosperity, please make sure that the strong case is put for Britain to remain in the European Union.”
The two companies I have mentioned have innovative and well-structured training programmes, which the EU’s structural funds contribute to in large part. Wales has been allocated £2.4 billion from the EU structural funds for the 2014 to 2020 period. Indeed, Wales is a net beneficiary—more money comes in than goes out—to the tune of £838 million a year. There are strong practical reasons for making the case over the next few weeks that Britain and Wales should remain an integral part of the European Union. It makes sense for ordinary people and for the country’s prosperity, to which we are all committed.
My final point is also linked to the prosperity of Wales, namely the question of whether Heathrow should be expanded and have a third runway. As a Welsh MP, I believe that the strongest single argument in favour of the third runway at Heathrow is the positive impact it would have on the Welsh economy. That is not just my view. The First Minister of Wales, Carwyn Jones, was clear the other day that the Welsh Government support the expansion of Heathrow because it would provide the best possible support for investment, tourism and jobs in Wales. His comments are informed by hard facts and clear analysis. It has been estimated that 85% of the new manufacturing jobs that an expanded Heathrow would generate would be created outside London and the south-east. Up to 6,000 of those manufacturing jobs would be in Wales, constituting a significant part of the 8,400 Welsh jobs accompanying a total of £6.2 billion of economic benefit.
Those facts speak for themselves. It is essential that the Government stop shilly-shallying and give the go-ahead for the expansion of Heathrow. It makes sense for the country as a whole and for Wales in particular.
Whether or not Heathrow will bring the best possible benefits to Wales depends on access. That is why it is essential that Heathrow’s expansion is accompanied by the electrification of the Paddington to south Wales railway line and the construction of a rail spur directly to Heathrow. I am aware that a consultation began this week.
Craig Williams
On the subject of Governments dilly-dallying, if we are going to have a third runway at Heathrow—which I support wholeheartedly—would it not make sense for the Welsh Labour Government to get on with the M4 relief road and improve the tunnels and the capacity of the M4 so that we can get to the airport?
Wayne David
I am in favour of that, but the decision is not up to the Government in Cardiff alone. A lot depends on what the Government in London do and on whether financial facilities are made available to the Welsh Government. That is important.
It is vital that a message goes out from the consultation that Network Rail is commencing that the Governments in Cardiff and in London are in favour of the spur to Heathrow. When the Minister replies, I would like him to say that strong representations will be made to Network Rail to make sure that we get the spur. We hope that that will be part of a longer-term project for the expansion of Heathrow airport.
I have spoken about three important issues. We want a coherent draft Wales Bill to be presented, and I hope that it will be formulated on the basis of consensus. I hope that in the next few months many Members in this Chamber will decide to pull together and argue the case for Britain’s continued membership of the European Union, highlighting its importance for Wales. I also hope that we will be able to unite in support of an expanded Heathrow airport. That, again, would be of tremendous benefit to the Welsh economy.
Several hon. Members rose—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. My experiment of having a voluntary time limit has not worked. We will therefore have a formal time limit of nine minutes on Back-Bench speeches.
Glyn Davies (Montgomeryshire) (Con)
You just got the nine minute bar in before I rose to speak, Madam Deputy Speaker, which is probably a good thing. This debate is close to my heart. I have always thought we should have a debate in the Chamber as near as possible to 1 March. I always think of it as a St David’s day debate, and that tends to lead me to take a non-adversarial approach.
I opened the debate last year, as the hon. Member for Aberavon (Stephen Kinnock) did this year. In preparation, I remember looking back through Hansard to see who had spoken in similar debates. I was rather hoping that my favourite British politician of all time, David Lloyd George—his statue rightly stands outside the door to the Chamber—had opened a similar debate, but he had not. He was a remarkable politician. A left-wing, radical Welsh speaker from Criccieth in north Wales whom nobody had ever heard of until he came here, he effectively led the Conservative party for six years in this place. Only a Welshman could pull off a trick like that, and he did. It was his daughter, Megan Lloyd George, who opened the first St David’s day debate in 1944; this debate does not have a long history. In her speech she focused mainly on two issues: the dire situation of the farming industry, particularly the dairy industry, and the way in which mid-Wales is ignored. Over the last 70 years, not an awful lot has changed. Welsh dairy farming is in seriously dire straits, and mid-Wales continues to be ignored.
Guto Bebb (Aberconwy) (Con)
Is it not the case that for a short period of time, mid-Wales was given some support by the Development Board for Rural Wales, which did a fantastic job for the locality?
Glyn Davies
I thank my hon. Friend for offering me the opportunity for some degree of self-congratulation, but I had probably better not take it.
I particularly enjoyed one comment from Megan Lloyd George’s speech, which you may enjoy as well, Madam Deputy Speaker:
“No Englishman”—
I think she meant English women as well, but in those days women were not included as they are today—
“can understand the Welsh. However much he may try, and however sympathetic he may feel, he cannot get inside the skin and bones of a Welshman unless he be born again.”—[Official Report, 17 October 1944; Vol. 403, c. 2237.]
That explains quite a lot.
I am supportive of making St David’s day a national holiday, and I support the efforts of the hon. Member for Ceredigion (Mr Williams), who is sponsoring a private Member’s Bill under which that decision would be devolved to the National Assembly for Wales. When I was a National Assembly Member, I declared 1 March to be a bank holiday in my office, and the staff were always told that they need not come in to work. If we are not able to agree a bank holiday, I could certainly do the same again.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I am grateful to the hon. Gentleman for supporting that idea. Would he support Plaid Cymru Members if we tabled an amendment to the Wales Bill to remove public holidays from the list of matters reserved to Westminster?
Glyn Davies
I do not think that the hon. Gentleman would expect me to go further than to say that that may well be an idea that could be supported and looked at.
St David was a great Welshman, pure in thought and pure in deed—a condition to which every good Welshman aspires. He performed awe-inspiring miracles. People usually refer to the most famous one, which was to raise the ground on which he was standing in order to be seen. The First Minister of Wales gave that very example in London today in a speech that I heard. What I find most interesting about it is the reflection made by the late Professor John Davies, another great Welshman, who said that he could not
“conceive of a miracle more superfluous than the creation of a new hill at Llanddewi Brefi.”
That is true, but it was still a very good trick to pull off.
I want to comment on three areas. They are points that I feel I ought to make in this place as often as I can. The first is on culture. I will then make some comments on sport. I also want to comment on the transfer of power, which will take place under the Wales Bill and to some extent under the constituency boundaries review, from this place to the National Assembly for Wales.
Wales is a great nation of culture—it is part of the Welsh DNA—but the one thing that is particularly special is the Welsh language. It makes Wales different. Not everybody can speak it, but it does make Wales very different from any other part of Britain. We can go to certain places and hear the indigenous language of Welsh being spoken on the street. I think that is very special.
A key part of supporting the Welsh language is Sianel Pedwar Cymru—S4C—the Welsh television channel. Every couple of years, we seem to have to fight very hard to maintain the public support that is needed for such a channel to continue. I hope that Members from all parties in this place will acknowledge its importance in ensuring that the Welsh language thrives and keeps Wales the special place that we all aspire to its being.
I want to talk briefly about sport, but perhaps not to say the obvious things. We know about the Welsh rugby team, and we wish them well. We have a magnificent captain in Sam Warburton. I say that not just for the quality of his play, but for the type of man he is. When I look back on everything I have seen in sport, I will never forget how, when he was so unjustly sent off in the semi-final of the world cup, he looked at the referee, nodded his head and walked off. He showed no disagreement with the referee, but accepted a really unfair decision—the referee’s judgment—and went off. That requires a level of self-control that I find absolutely amazing. To my mind, that makes him a magnificent man. I must of course also make reference to the Welsh football team, who are going to France for the European championship. We wish them well.
I want to mention two other sportsmen. One of them is an international figure, John Charles. I am of a certain age—a lot of Members in the Chamber are young—and in my view he was the best footballer that Britain has ever produced. He is never thought of as such and does not come to people’s minds, but he was an absolutely amazing man. He could leap, above everybody, like a salmon. Actually, he was a little bit like St David in that he could rise himself up, but he did not need a hill. He was appreciated across the world. Again, amazingly, he had the same Warburton-like concept of fairness. He was never sent off or cautioned in the whole of his career. How someone could play at his standard—one of the best players in the world—and never be cautioned, or never have an argument with anyone, is amazing.
The other person I want to mention is a local man from Welshpool, Barry Williams. I played rugby in the midlands and the north of England, and I eventually came back to Welshpool, where we had one team. Sometimes, we were lucky even to get out one full team. In terms of the first team, Welshpool is not much different now, but has up to 10 teams of youngsters—under-eights, under-10s, under-12s and under-14s—playing every week. Barry Williams organises all that. To my mind, he is the sort of individual who makes a massive contribution to Welsh sport and, indeed, to the spirit of encouraging young people to be part of society. I think that Welshpool rugby club—it is not the greatest rugby club in the world, although I thought it was when I played there—has the sort of man we need as an example to everyone right across Wales.
Finally, I want to say one or two things about the Wales Bill, which we have not yet seen. I am one of the few people to be disappointed by the pause. In the end, I acknowledge that there has to be a pause because of the delays in getting to where we are, but I would very much have liked it to be a subject for debate during the National Assembly election. It would have been a real issue of contention. Elections very often finish up as a debate about all sorts of things that are very much unrelated to what they should be about. If it had been an issue in the Welsh Assembly election, we could have focused on the future of Wales and how Wales is governed, which would have been very appropriate.
What I have seen of the Bill so far has pleased me. Clearly, the draft Bill did not receive a level of support that would have enabled it to go forward. We still have the reserved powers model, but it seems that the powers that are reserved will be greatly reduced—something we should all welcome. Other parts of the Bill are important. The inclusion of income tax responsibilities for the Welsh Government is crucial. It will give them a financial responsibility, rather than just a spending responsibility. That will enable the Welsh Government to grow up. There are a whole lot of other issues on which there is general agreement across all parties. Hopefully, in the end there will be a Bill that Members from all parties can support and that delivers the stable, long-term devolution settlement that all of us in this place would very much like to see.
Jessica Morden (Newport East) (Lab)
Thank you, Madam Deputy Speaker, for calling me to speak in this debate. It is a great pleasure to follow the hon. Member for Montgomeryshire (Glyn Davies).
Well done to my hon. Friend the Member for Aberavon (Stephen Kinnock) for securing this important time in the Chamber to talk about all things Welsh. He rightly talked about the crisis that the steel industry faces. The issues that he raised in respect of Aberavon also have a huge impact on Llanwern steelworks in my constituency, so I wholeheartedly support the points that he made. This morning, he, I and other Labour Members who are in the Chamber lobbied the Minister for Small Business, Industry and Enterprise on those very points, and we will keep saying those things. I support my hon. Friend’s call for more help to protect our industry for the sake of constituents who work in Aberavon and, crucially, in Llanwern. We must never forget the Llanwern workers, given the announcements on job losses. We are feeling the effects of the job losses, too.
We went into this matter in some depth in the debate on steel on Monday. I know that the Secretary of State and the Minister are extremely mindful of these issues, but on behalf of the steelworkers I represent, I ask the Wales Office Ministers to keep speaking up in Government on behalf of the steel industry. I shall not repeat the five asks because we went through them in depth on Monday, but I ask the Minister to please be mindful of them.
I realise that there is a mixed picture in my constituency in respect of steel, because there is positive news at the Orb steelworks, which is also owned by Tata. It produces some of the best-quality transformer steel in the world and delivered a profit in quarter three last year. Liberty steel, which my hon. Friend the Member for Newport West (Paul Flynn) mentioned in the debate on Monday, has restarted production at the old Alphasteel works and hopes to increase production in the months and years to come. We must acknowledge that news, too.
I know that many hon. Members want to get in, so I want to use this opportunity primarily to bang on about the Severn bridge tolls. I make no apology for doing so again. It is by no means a new issue for the House, but after many years of debate, questions and meetings, it is coming to a head. The bridges will soon come back into public ownership, so we are in the crucial period when discussions are taking place about the level of tolling. We must not miss the opportunity to get the tolls reduced.
As local issues go, the tolls are one of the most frequently raised with me, alongside the overcrowding on the commuter services to Bristol and beyond. Some 12,500 people travel from Newport and Monmouthshire into England every day. There is a transport trap for people in south-east Wales: they can either take the expensive overcrowded train, if they can get on it, or pay the eye-watering tolls on the bridge every day.
If the Minister wants to grant my St David’s day debate wish and, I suspect, the wish of many of my constituents who are commuters or who run local businesses, he will commit to lobby the Department for Transport to slash the tolls to a near-maintenance level when the bridges become publicly owned. The tolls have a huge impact on commuters, and also on access to jobs for many of my constituents, because when people factor in having to pay the tolls, they cannot afford to take many of the jobs that are on offer in Bristol and the surrounding area. There is a huge impact on local businesses—not just hauliers, about whom I will continue to talk in debates on the subject, but other businesses across south Wales that absorb the cost in their bottom line or that in some cases have to relocate to England.
My neighbour the hon. Member for Monmouth (David T. C. Davies) recently discovered in his role as Chair of the Welsh Affairs Committee that the debts on the bridges were due to be paid back earlier than expected—as early as autumn 2017—because of tax changes and increased traffic volume. In an answer to a recent written question, I was told that the concession is due to end in 2018. It is therefore really important that we know the answers to the following questions. Will the debts be cleared by 2017, and is it the Minister’s understanding that the concessionaire has had increased revenue? If so, why will the concession end in 2018, not 2017, and what will the concessionaire recoup in the meantime? What discussions are going on, and between whom, about the date on which the concession will end and the future level of the toll? Will Ministers please heed the calls for the tolls to be slashed?
We know that VAT will have to be taken off the tolls when the bridges revert to public ownership—thanks to kindly EU rules, I might add. What would happen to the Severn bridge tolls if we voted to come out of the EU? That is a new angle. It is important that the Government recognise that the change would have happened anyway, so it is not a great gift. We need some clarity about the money that the concessionaire is recouping from the bridges, the current debt and the money that the Government are getting in from the VAT and other taxes.
My plea today is that the Government involve hon. Members with constituency interests in the bridges in their discussions. I appreciate that the Minister will not have all the answers today, but will he at least commit to getting Transport Ministers to write to me with answers to those questions? Would he be able to broker a meeting between me and other hon. Members and the Department for Transport, so that we can find out what is happening?
My hon. Friend the Member for Aberavon talked about bold leadership in the Welsh Government, and their partnerships and achievements were one of the themes of his speech. In Newport, there is real optimism about the newly opened Friars Walk development.
Jessica Morden
I thank my hon. Friend. All credit is due to Bob Bright and Newport City Council for their brave political leadership in driving the project through at a time when hardly anywhere else in the country was building such projects. It is not a silver bullet and will not answer all of Newport’s problems, but 120,000 more people came to our city centre in November. Along with Coleg Gwent’s hope to relocate to the city centre with the University of South Wales, and other developments and partnerships involving businesses and the Welsh Government, it is bringing real optimism to our city. We need the UK Government to play their part, too, to save, protect and build our manufacturing industries. They have a role to play in allowing our city to thrive and grow, and protecting our steel industry is one way to do it.
Craig Williams (Cardiff North) (Con)
In the spirit of St David’s day, may I first give huge congratulations to the hon. Member for Aberavon (Stephen Kinnock) on securing this important debate? More importantly, I thank my hon. Friend the Member for Montgomeryshire (Glyn Davies) for introducing a bit of consensus just before my speech, which I will build on. In that spirit, I add my name to the lobby of the hon. Member for Newport East (Jessica Morden) on the Severn bridge tolls, which are an important cross-party issue on which we all campaign strongly. I would certainly like to come to the meeting with the Department for Transport if Ministers can arrange that.
I want to touch on several points. I am mindful of the time limit, but as the Member for Cardiff North it would be remiss of me not to start with the Cardiff city deal. I know that my colleagues would be sad if I did not bang on about it for at least half my speech.
It is an important time for Cardiff, and an exciting time to be involved with what I see as the engine room of the Welsh economy—Cardiff and the city region. If the city deal is successful, it could bring a lot of scope, investment and vision together. The next couple of weeks will be incredibly important for our capital city. I want to make a couple of pleas from the Chamber about private sector involvement. I know that the Minister is a champion for us, and I implore him to do anything he can in the spirit of consensus and the framework of the city deal.
The Aston Martin announcement was so welcome and brilliant, and the Minister was integral to that. It resulted from championing by the UK and the Welsh Governments. If we take that partnership approach on many more issues, we could secure much more investment. We are all tempted, so close to an election, to take all the credit for anything positive in Wales, but there are many more companies floating around south Wales—and I hope north Wales, but I am unabashedly the champion of Cardiff—and working together can help secure investment.
Electrification is a key issue. When that happens in Cardiff and then in Swansea, there will be an opportunity to tie into the south Wales metro. I want to work with the Welsh Government and Network Rail to get work in the south Wales valleys into the right control period. I want to be involved in the conversations, for example, about whether the line is heavy or light. I want to do what I can, and I want the spirit of consensus to get into the city deal. I hope that the metro will be at the core of that. I realise that the next couple of months will be difficult and that we might not quite agree on everything in the run-up to the Assembly election. However, in the spirit of consensus. I very much look forward to working with Councillor Jayne Cowan in Cardiff North, who, with 16 years of experience on the council, could help deliver the metro.
I also want briefly to mention IQE in the context of the city deal. It is a great Cardiff and Welsh company that produces the compound semiconductors that we find in most electronic devices. Its relationship with Cardiff University, and the new catapult that the Chancellor of Exchequer launched in Cardiff, are bringing high-end, brilliant manufacturing to Wales—exactly the sort of industry that we need to attract together. By “together”, again I mean the UK and the Welsh Governments.
Without venturing too far into the European debate, I have to say that Cardiff University punches far above its weight. That ties into Horizon 2020 funding and the critical mass we get in the single market for research and development, which I support wholeheartedly. The metro, electrification, IQE and working with the private and third sectors will deliver a Cardiff city deal to rejuvenate south Wales. The valleys are important in the Cardiff city deal, which might start with Cardiff but is incredibly important to that critical work population of about 1.5 million people. Although Cardiff is the engine room of the Welsh economy, we need transformation for south Wales.
Jonathan Edwards
The hon. Gentleman alluded to the importance of the European Union for Cardiff University and research funding. He knows, of course, that the leader of the Conservative party in the Assembly has said that he will vote for Brexit. What impact does the hon. Gentleman think that that will have on higher education policy in the Conservative manifesto for the Assembly elections?
Craig Williams
The hon. Gentleman is trying to ruin the consensus within my party as well as the debate. I will try my best to skirt around that issue. Although I disagree with Andrew R. T. Davies, a good friend and colleague, we will work those things out when he is First Minister. I therefore would not worry about that.
Let me move on quickly to the redevelopment and challenges that I envisage for the south Wales and Cardiff economy. The hon. Member for Caerphilly (Wayne David) is not in his place, but I am sure that he will read Hansard later. The barefaced cheek of saying that we are waiting for some sort of financial package from the UK Government for the M4 relief road is unbelievable. That borrowing power—the old Welsh Development Agency powers—has been available to the Welsh Government for a considerable time and they have not done much to progress that.
Mr David Jones
Does my hon. Friend accept that although the Welsh Government may not have done much in south Wales, they have done nothing at all in north Wales?
Craig Williams
I wholeheartedly accept that, and I feel for the A55 as much as I do for the M4. However, the M4 relief road is key for our links to Heathrow, as is the spur for Network Rail. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) referred to Andrew R. T. Davies—the next First Minister—and he has committed to having, within 12 months, a spade-ready M4 relief road. I massively welcome that and look forward to its coming to fruition.
I am conscious of the time, but I want to touch on the redevelopment of the M4 and the Eastern Bay link road. It is a shame and a travesty that Wales’s capital city does not have a circular road around it, and any visitor to the National Assembly for Wales who comes out of the Butetown tunnels then sees the national disgrace of a road that ends—it is a road to nowhere and it needs finishing. I know that phase 1 is now on the cards, but it is ridiculous to do one phase of a circular road, but to leave out a small section up to what would be an excellent gateway to the new M4 relief road. I have also touched on the metro and the tolls, on which there is cross-party consensus.
Let me briefly mention the Commonwealth games, and a bid that we must champion as a nation. Cardiff is at the core of that, but the games have the opportunity to be a real Welsh national Commonwealth games. When we consider what happened in Glasgow and Scotland, and at the Olympics in London, the kind of economic redevelopment and opportunities that a Commonwealth games presents for Wales cannot be missed. I hope that all parties in the upcoming Assembly election will have in their manifestos a clear commitment to the Commonwealth games. Sports, businesses and Welsh civic society are behind that bid, and we need political vision and leadership from Cardiff Bay. I hope that that will be the only bid within the United Kingdom, and that we can have full support from the UK Government.
I will now touch on sporting success. I asked permission from my hon. Friend the Member for Montgomeryshire to mention one hero, but I will actually mention three. He mentioned Barry Williams. I spent many a Saturday morning more than two decades ago selling match programmes with him, and he is a true champion. We finally have something in common again, because he is up for election in the Peter’s Pie competition for a Welsh rugby hero. Outside of Cardiff North, Welshpool rugby club is the finest rugby club in Wales, and I support his bid wholeheartedly. He is a true champion of Welsh rugby and a great friend.
Lewis Wilkins is a young scientist from my constituency, and he is coming to the House of Commons on Monday as part of the SET for BRITAIN initiative to encourage, support and promote Britain’s early-stage and early-career research scientists. It is a great scheme to get young people into science and research and development so early on. He will be in Portcullis House—I will not give the time and date, but if anyone wants to join me in going to see Lewis Wilkins, they will meet a true champion of science and a true advocate for Cardiff and Cardiff University.
Finally, I want to mention Mrs Beth Baldwin, whose son tragically died of undetected type-1 diabetes. This week she presented a petition to the Assembly on raising awareness of diabetes and on having a simple prick test—perhaps as part of schools’ injection processes—to discover whether children are diabetic. She received the Pride of Britain award, and she is an incredibly brave woman from an incredibly supportive and great Cardiff family that have turned a tragedy into a great campaign. She is a true Welsh hero. I am delighted that she will be coming to No. 10 later this month to present another petition about having a gold standard or minimum for GPs and other health care professionals to routinely test for diabetes.
I hope that I have captured the economic development, excitement and potential of Cardiff and Wales. We should not talk it down too much. We have great opportunities, but a Commonwealth games bid could draw much of that redevelopment together, and I very much want that to happen.
Paul Flynn (Newport West) (Lab)
It is a tad ungracious to complain about the absence of the Secretary of State for Wales without having sympathy for the dreadful week he has had. On Monday, it was the humiliation of having to withdraw his signature Bill. Things then got worse. Humiliation was heaped on humiliation on Tuesday when he lost a competition in which last year he won first prize. This year, he came in an extremely lowly position. This extremely prestigious competition is run by the Beard Liberation Front. Happily, there was one Welsh parliamentarian, with a beard of a different hue, who managed a creditable position. It is quite right that the Secretary of State wants to hide the pathetic starter beard that disfigures his features and not to be seen in public today. We do understand.
The main point I would like to make, after expressing sympathy with the Secretary of State, is one of optimism for the Welsh nation. I recall in 1957 the publication of a book called “Wythnos yng Nghymru Fydd”, a story about the future in which somebody is transported to 2033. It was a dreadful Wales that he saw. It was a Wales that had changed its name to West England. The language was dead and the Welsh personality had gone. There was another depressing moment in 1962, when the genius Saunders Lewis made his speech “Tynged yr Iaith”. He foresaw a Wales where the language would die and not live beyond the 20th century. When we look at the Wales of today, however, there are huge reasons for satisfaction and optimism.
We had a lovely service this week, with Welsh spoken at its beautiful best by the young children, representing the future, from the Welsh school. The fact is that we have succeeded in the dream. In the 19th century, politicians came here in their droves as Welsh patriots and soon became seduced by this place. Wales was let down, generation after generation. Now, however, we can rejoice. We have our own Parliament on the soil of our country, where we speak both the beautiful languages of Wales. I had the pleasure this week of talking to a delegation from the Icelandic Parliament. While we call ourselves the mother of Parliaments, they call themselves the grandmother of Parliaments. They are in Cardiff today. I am sure they will be equally impressed by the young grandchild of Parliaments, a Parliament that started brilliantly and has achieved much in spite of criticism from outside. I think we can all take pride in the Welsh nation.
In this atmosphere of consensus, one person to whom we should pay great tribute is the man who ensured that Welsh is heard on the lips of all our children in Wales, wherever they live. That was a very courageous decision. That was the work of Wyn Roberts, who was called the bardic steamroller. He was a member of the Gorsedd bards and his subtlety was regarded as akin to a steamroller. I think that was a little unjust, but we should remember the vital role of steamrollers in the area of construction. He constructed politics. I watched with great admiration the way he took the policy on Welsh language education through a hostile party of his own. We need to acknowledge that great debt.
The issue I would like to raise is one that was raised by my hon. Friend the Member for Aberavon (Stephen Kinnock). It is the sole point I want to make and it relates to the future of energy in Wales. If we look at our map and our potential, our North sea oil, which is Scotland’s great treasure, is the tide and hydroelectric power. We have allowed this immense source of energy to run to waste untapped. There is an extraordinary devotion to Hinkley Point, which I find inexplicable. It is based entirely on a stubborn view that will not accept the truth and the scientific reality. It will not accept that Hinkley Point is the final manifestation of a technological blind alley. It is an EPR reactor. The one in Finland is now seven years late and €6.7 billion over budget. It will probably never work. The one at Flammanville has had a terrible technological problem in the roof of the reactor’s vessel, and it will probably never finish.
As for finances, if we look on the other side at tidal power and at the source of the energy, we find that it is free, British and of immense power, whereas the source of energy for Hinkley Point is an imported form of fuel that will leave a legacy for all time. The source of the power on the tide is entirely predictable—unlike most other forms of renewable energy such as solar. We can predict precisely how the tide is going to come in and make the energy entirely demand responsive by linking whatever it is—lagoons, barrages or whatever—to electric storage schemes that allow us to pump water up to the heads of the valleys when electricity is required and save the energy when it is not. That is how the Dinorwig power station has provided a vital element in our electricity supply for many years.
Now that it seems we have had yet another year’s delay at Hinkley Point, the Government must come to their senses. They have done an atrocious deal with the French to guarantee them a price of electricity that is twice the present going rate and is guaranteed—and index-linked—for 35 years, yet we cannot guarantee what the price of electricity will be for 35 weeks. This is an extraordinary deal. All the sensible money has retreated from Hinkley Point. Centrica invested £200 million, but it has gone—abandoned the project. All the money left is Chinese, and China is anxious to invest in what it sees as a Hinkley sprat in order to get the mackerel of all the future engineering at Bradwell and everywhere else, in perpetuity. China is stealing our jobs and our skills through that deal. EDF is virtually bankrupt. It has a debt of €37 billion, and its board has now cancelled the project—a further cancellation—for another year.
If we look at the evidence at other EPRs, we see that they are going nowhere, so we should recognise that this investment, taken together, is one of the worst investment decisions since the building of the pyramids—when objects were bought at great cost but had no practical value. It is now becoming clear that the established scientific community, which has been locked in this stubborn view that we had to have Hinkley, is realising that we have an enormous financial disaster on our hands—and that at some time it will be necessary to pull out.
What could be better than investing the money in tidal power? Ignored for so long, this great moving cliff of water that comes up and down the Severn—the second highest tide in the world—could provide energy that is green, non-carbon, predictable and eternal in its duration. We have seen examples where it has worked magnificently. Fifty years ago, a barrage was built in La Rance in Brittany, and it still has turbines in pristine condition producing energy that is the cheapest in the world. That, I believe, is the way forward for Wales.
Guto Bebb (Aberconwy) (Con)
It is a pleasure to follow the hon. Member for Newport West (Paul Flynn), and it was quite a surprise to hear such a consensual speech from him, which leaves me in the position of carrying on in the tradition of this debate and not being too aggressive in the way I behave.
I also thank the hon. Member for Newport West for his comments about my predecessor, Lord Wyn Roberts of Conwy, which I think were appreciated by all Members and I know will be appreciated by my constituents and Lord Roberts’s family. His contribution was indeed significant. My right hon. Friend the Member for Clwyd West (Mr Jones) mentioned the A55, and we should not forget that in addition to the work that Wyn Roberts did for the Welsh language, he was the prime mover for the development of the A55 from Chester all the way to Holyhead. It is remarkable that in his maiden speech of 1970, he stated that his ambition as an MP was to ensure that a general hospital was built in Bangor and a dual carriageway was built from Chester to Holyhead. It is quite an achievement for any Member of Parliament to deliver both the promises that he made in his maiden speech, but Wyn delivered so much more.
Sometimes, in a debate such as this, a Member can feel that, occasionally, he or she can make a difference through membership of a Select Committee. We have heard about investment in the Halton curve railway line to provide better connectivity between north Wales and Liverpool, and I agree that that investment is essential to the economy of north Wales. I remember sitting in the Welsh Affairs Committee back in 2011 when we called for that investment. It is good to know that the work that we do in Select Committees occasionally results in changes.
I can paint an upbeat picture of the current economic situation in Wales. The hon. Member for Aberavon (Stephen Kinnock)—whom I congratulate on securing the debate—spoke of some of the concerns of his constituents, and I am sure that all Members sympathise with them, because what is happening to the steel industry is indeed a matter of grave concern. However, the Government should be proud of the fact that, since 2010—under the coalition and, subsequently, under a majority Conservative Government—we have seen a significant improvement in employment in Wales, and a significant decrease in unemployment. I think that we should be genuinely pleased about the strides that we are making.
I also think that, in the context of a St David’s day debate, it is crucial to emphasise that when the Governments in Westminster and Cardiff work together, we see better results. That co-operation, that willingness to work together, often results in a better performance on the part of the Welsh economy. I am in a staggering position, in that I have only received really bad news, from an economic perspective, on two occasions since my election. One example was the recent tragic fire at Llandudno Junction, which caused 50 people to lose their positions at Express Linen Services. I find it remarkable that, although I have been a Member of Parliament for nearly six years, that is one of the few examples of job losses that I can remember. The story in Aberconwy is of a halving of unemployment since 2010. More and more people are in employment, and when I talk to businessmen, they are very positive about the future. I think we should acknowledge the successes that been achieved as a result of co-operation, with successive Secretaries of State trying their best to work with the Welsh Government.
I think that the present Secretary of State has made the right decision in “pausing” the new Wales Bill, because it is unlikely that there will be any willingness to agree on a way forward between now and the Welsh Assembly elections. That was a mature thing to do. The hon. Member for Caerphilly (Wayne David), who is no longer in the Chamber, should reflect on the fact that it is a brave politician who is willing to pause, and to say that he will look at the evidence and come back with something better. What we want for Wales is a settlement for the long term. Let us be honest: we are building on a devolution settlement that was not about Wales, but all about the Labour party. We are slowly trying to make the settlement more effective and constructive, and I believe that taking time to secure a proper deal is necessary and correct.
The second big issue facing Wales this year is the European referendum on 23 June. I have a long track record as a Eurosceptic. I certainly experienced some difficulties in a former life as a result of my membership of Business for Sterling, a campaign which launched a great political effort to ensure that we did not join the single currency—and no one in the House today would say that we should have joined it. That campaign was correct; we made the right call. Our slogan was simple: “Europe yes, euro no”. Europe is not perfect, but I think that it gives us more than we have to give it, and that we benefit from our membership.
When we are talking about the north Wales economy, it is sobering to reflect that, just last week, the largest company in north Wales, Airbus, stated clearly that it considered membership of the European Union to be important. Moreover, the largest potential investor in north Wales, Horizon Nuclear Power in Anglesey—which is developing what may be the first new-generation nuclear power station, if the hon. Member for Newport West is correct—has also expressed the clear view that it is important for us to remain in the EU.
We should also reflect on the small businesses that benefit from our membership of the European Union. I would like to highlight an example in my constituency. A company called Zip World, run by Sean Taylor, did not exist in 2011. I remember Sean coming to see me and telling me that he was going to set up some zip wires. As someone who is scared of heights, I was not particularly interested, but I can tell the House that that company now employs 240 people from my constituency and those of the hon. Members for Arfon (Hywel Williams) and for Dwyfor Meirionnydd (Liz Saville Roberts). Sean has created 240 jobs from scratch in rural Snowdonia, and that is a huge contribution to our economic wellbeing. Even more importantly—my constituency predecessor, Wyn Roberts, would be proud of this fact—70% of those workers are local Welsh speakers. That company makes a huge contribution to keeping those people in their communities, and it was seed-funded by European money.
I am not going to be quite as reasonable as my hon. Friend the Member for Cardiff North (Craig Williams) on the issue of European grant funding. Wales is a net beneficiary, and it is clear that my constituency of Aberconwy, which is in west Wales and the valleys, is a significant net beneficiary. The figures that I have recently obtained from the local authority, Conwy County Borough Council, show that well over 900 jobs have been created in 240 new ventures as a direct result of the European grant funding of small businesses over the past five years.
Is the European grant spent well in Wales? I do not think so. We could do much better. In a speech at the National Eisteddfod in Denbighshire in 2013, I highlighted the failures of the way in which we spent that European money in Wales, but I started my speech by saying that those failures were a “made in Wales” problem, not a European problem. The problem is the way in which we have used the money in Wales. When we claim that there is waste in the European funding that is allocated on a regional basis, it is important that we highlight where the problem lies. I would argue that the Welsh Government’s lack of willingness to embrace the private sector is more of an issue in regard to the use of European funding than any decision taken in Brussels.
Also on the subject of European grant funding, there has been a fantastic achievement by the Wales Office and the Secretary of State for Wales in at long last establishing the funding floor. We have been asking for that for a very long time. However, I would ask our leader in the Assembly to consider carefully whether he genuinely believes that, with the Barnett floor in place, there would be additional money to make up for the current shortfall if we lost European funding to areas such as mine. I very much question that.
Looking at the European issue from a local perspective, and taking into account agriculture, regional development funding and, more importantly, the trade deals that allow companies such as Airbus and Horizon to invest in north Wales, I believe that despite all the European Union’s flaws, Wales will be stronger in the EU.
Christina Rees (Neath) (Lab)
St David’s day, 1 March, is a national day of celebration in Wales. It is a day on which to celebrate Wales and being Welsh. We are a proud nation of culture, literature, song, art and sport. I congratulate the Wales women’s rugby team on recently beating Scotland and France at the Knoll ground in my constituency and on qualifying for the world cup. That is a great achievement. It would be remiss of me not to mention squash—the game, not the drink—because in a former life I was the national coach for Squash Wales. As a small nation, we have always punched above our weight and medalled on many occasions, including the European Championships, in many countries. That leads me to what I want to talk about today, which is the importance of staying in Europe.
In my constituency of Neath and across Wales, we enjoy great opportunities and great benefits as a result of EU membership. I pay tribute to Derek Vaughan, our Member of the European Parliament for Wales, who is vice-chair of the budgetary control committee in the European Parliament. He has fought for the benefits that Wales receives. He is a former leader of Neath Port Talbot County Borough Council, and he has used his great experience and knowledge as a former leader of the Welsh Local Government Association to fight for Wales in Europe.
Wales is a net benefactor from the EU to the tune of £838 million a year. Moreover, the lower prices, higher job numbers and increased trade and investment that come from our membership of the EU are worth more than £3,000 a year to the average Welsh household. That is 10 times more than the £274 that each household pays in.
The EU is without doubt the biggest, richest market in the world, upon which, according to the Centre for Economics and Business Research, 191,332 jobs in Wales depend. The economic benefits are clear: for the 2014 to 2020 period, Wales will receive £4.9 billion from the common agricultural policy and structural funds. It is estimated that, over time, the UK could lose as much as 6.1% to 9.5% of our GDP following an exit from the EU. In my constituency, the EU has created 1,120 jobs, helped 6,680 people into work, granted access to further education for 3,490 people and helped 13,630 to gain qualifications. The help in my local authority area—that of Neath Port Talbot County Borough Council—that the EU has provided to enterprises has meant that 670 have been assisted and 420 have been created.
One of the best examples of EU funding benefiting my constituency is the newly relaunched Workways Plus scheme, which is led by the local council and has received £7.5 million in EU funding. It offers training and paid work experience opportunities to 4,000 long-term unemployed people to help get them back into work. The support targets disadvantaged people, helping them to take their first steps to re-engage with or enter the labour market; the scheme offers one-to-one mentoring, and support with job-seeking and interview skills. The programme targets individuals affected by work-limiting health conditions and disabilities, as well as those with care responsibilities and low or no skills. It is the perfect scheme to get people back into work, and it continues a similar EU-funded scheme that ran across south-west Wales between 2009 and 2014, which was an enormous success and showed the true benefits that EU funding can bring to our communities.
Not only are there jobs that have benefited from EU funding, but the effects of our membership have benefited the infrastructure in Neath. EU regeneration funds have been used expertly by Neath Port Talbot County Borough Council to regenerate many town centres across the constituency, and this, in turn, has revived the use of these town centres and has helped the local economy get back to strength after tough economic times. Crucially, EU investment and involvement would also help aid the UK steel industry, as my hon. Friend the Member for Aberavon (Stephen Kinnock) said. The UK Government should follow the example of the Welsh Government, who have taken full advantage of our membership of the EU to help fund many of their projects and schemes, such as Jobs Growth Wales, which have helped get the Welsh economy, and the jobs and skills market, back on track.
Business leaders have already warned that leaving the EU would amount to a step into an
“Abyss of uncertainty and risk.”
The path for a potential exit is unclear; it has been likened to getting off a bus and into a car, which sounds a dangerous prospect to me. My constituents cannot afford this uncertainty as the negotiations conclude and then a potential exit is negotiated. The economic reality for Wales and for my constituents in Neath is such that Brexit would be disastrous for our jobs and prosperity, not to mention for the benefits we all enjoy, such as workers’ rights, environmental protections, consumer safeguards and free movement.
The Conservative party has treated the issue of our membership of the EU as a political football for many, many years, and the Prime Minister has put so many jobs, businesses and projects in my constituency on the line just to appease his own Back Benchers. Rather than address the necessary reforms of the EU in a constructive manner from inside, we face the prospect of an exit, which will be a disaster for neath and for Wales as a whole.
I cannot speak about matters important to Wales without mentioning another critical issue—the ongoing farce that is the Wales Bill, which, as originally drafted, met with criticism from all sides, including the Welsh Affairs Committee of this House. To make matters worse, we learn, not in this House but from the media, that the Bill is now on pause, pending a major overhaul. As the First Minister said, we are back to where we started. How can the Conservative party justify putting Wales’s economic development and prosperity at risk with its mishandling of this Bill and of our relationship with the EU?
Byron Davies (Gower) (Con)
I am grateful to have the opportunity to speak today. I congratulate the hon. Member for Aberavon (Stephen Kinnock) on securing this debate. I am very conscious of what he said about different Members having different matters to raise, as I have several areas of concern that I would like to discuss. I thought I would do that by taking Members on a very quick geographical tour of the south Wales coastline.
I will start at Cardiff Bay, the seat of the National Assembly for Wales. During my time as an Assembly Member, I fell upon what must be one of the most scandalous episodes in Welsh devolution. One of the main jobs of any Government is to ensure that the public receives value for money, but I am afraid that, in this tale, the public received absolutely no value from the Welsh Government in the Regeneration and Investment Fund for Wales. It is crucial that Governments attach the highest importance to public assets, but, on this occasion, the Welsh Government not only sold land for an incredible amount under its true value, but seemed completely complacent during the process of the sale.
There was huge weakness in the oversight of this project. It is incomprehensible that the “jewel in the crown” site at Lisvane in Cardiff was sold to a preferred purchaser for £l.8 million, when its potential open market value for housing was at least £39 million.
Craig Williams
The Welsh Government sold the land in Lisvane in Cardiff North, the most valuable land in Wales with the richest agricultural output, for £15,000 an acre, when it is worth £1.2 million an acre. It is a national scandal. If it had happened in this House, does my hon. Friend think that people would have been held to account and that there would have been resignations?
Byron Davies
I am absolutely sure that my hon. Friend is right. I am amazed that the First Minister did not hold anyone to account and sack them. That perhaps speaks volumes.
Indeed, Guernsey-based South Wales Land Developments, the preferred purchaser, which bought 15 sites for £21 million, has made £19 million by selling just a few of them. That casts a very dark shadow over what the Welsh Government were doing during the process. The cavalier approach to the disposal of public assets is quite disturbing. Furthermore, questions must be asked about the valuers, Lambert Smith Hampton, and the fund managers, Amber Infrastructure, which gave the Welsh Government extremely poor advice.
There have been two recent reports on the Regeneration Investment Fund for Wales by the Wales Audit Office and the Welsh Assembly Public Accounts Committee, both of which are damning in respect of all parties involved in the deal. The Wales Audit Office made it clear that effective oversight of the project was difficult because of the governance weaknesses in establishing the RIFW. I know that the Serious Fraud Office has taken a look at the matter, but how deep did it go? I would like it to reassess any new evidence. Anything the Wales Office can do to get to the bottom of the issue would be very welcome.
Moving on further down the coastline, we come to the steelworks at Port Talbot, which plays a huge part in the landscape of south Wales. It is a crucial part not just of the economic fabric of the country, but of the social fabric, and nowhere is that truer than in my constituency of Gower. For decades, the works has provided for people across south Wales. They either work directly at the plant or in the supply chain. Indeed, the community surrounding the steelworks has survived, and indeed thrived, because of the plant. It is a crucial part of the community, and it is vital that we work together to ensure that the industry has a successful and prosperous future.
I have met Ministers and discussed their efforts to help the steel industry win procurement contracts. I am sure that my hon. Friend the Minister will help where he can to stimulate the demand for steel, which will have a positive knock-on effect on opening up opportunities in the supply chain in Wales. I recently visited Rosyth in Scotland to see the new aircraft carriers and was delighted to learn that 94% of the steel used in their construction was British steel.
Continuing our journey around the south Wales coastline, we come to Swansea Bay and the Swansea tidal lagoon. Much political point-scoring has been attempted on this, particularly in the local press, which is rather a shame. We are all at one—we all want to see the scheme developed. It will be a pilot scheme and we should realise that it will cost an awful lot of money to develop. There will be a great deal of public money involved, but it is the first of what could be several schemes. The Government are right to sit down and look at the whole thing in the round. I hope we will see it developed one day, and I know that other politicians in the area share that hope.
I was delighted with the recent announcement from Sir Terry Matthews about the Swansea Bay region. That scheme needs to be pushed along, perhaps through an elected mayor system. I am keen for that debate to be opened in Swansea. We need more infrastructure in Swansea, such as a parkway railway station. At present there is Swansea railway station at one end of the town and the bus station at the other end. For a successful bay region, we should consider that.
I shall move quickly round to the Burry inlet and talk about my constituency and the north end of Gower, the first area of outstanding natural beauty in the UK. I want to speak about the loss of the cockle industry and the loss to the economy of about £23 million over 10 years. That was once an extremely successful industry in Gower that supported the community and was the livelihood of many people. Now there is a 95% mortality of the cockles when they get to one year old. They should live to four or five years old. They are usually harvested when they are 18 months to two years old, but can be harvested up to about five years.
The problem has existed for about 10 years. The cockle beds have never recovered since 2005 when the mortality started. In 2000, this area had the best cockles in Europe and exported to France and Spain, bringing tens of millions of pounds into the region. The cockles are no longer suitable for the high-end market and there is a limit to how many small cockles can be sold. The nucleus of the cockle industry is Penclawdd and there are questions about its viability now that the main processor has been taken over by a Dutch company.
Local cocklers are unable to guarantee a regular supply of cockles to the processors. The season starts in May but is finished by July, whereas it used to be a year-round business. The cocklers believe that the cockles are being killed by discharges of sewage from waste treatment plants on the south Carmarthenshire side and from sewage works at Gowerton. Samples have been taken of dead and rotting cockles and of some live ones and these have been analysed, but we have never seen the results. The cocklers are calling for further scientific research, including a parasitology investigation, which has never been carried out before and requires funding from the Welsh Government. Research has discovered that each cockle in these waters carries up to 29 different types of parasite, many times more than is found in cockle stocks elsewhere in the UK and along the Atlantic seaboard from north Africa up to Scandinavia.
There are 35 licences still in existence in the Burry inlet and 25 of them are still being used. People are paying for licences but cannot make a living. In the 1960s and 1970s, up to 100 people were working there, gathering cockles 52 weeks a year. The licences cost £700 a year but they can no longer be transferred to sons or relatives, who have to go on a waiting list to be given a licence. There are still 120 people on the waiting list in Gower. There is much hope in the community that the industry will recover, and here in this House we must do all we can to support the efforts to help the industry.
When I was an Assembly Member I raised the matter many times in the Chamber. Since I have been a Member of this House I have written to the Welsh Government to try to get them to fund an inquiry into why the cockles are dying. To date I have had no success. We need to find the cause of this problem and ensure that the cocklers whose livelihood has been greatly affected are treated with the respect and dignity that they deserve to get this great product and industry thriving again. Anything that the Wales Office can do to encourage the Welsh Government into action would be very welcome.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock) on securing this important debate on Welsh affairs, which marks St David’s day.
I would like to focus on three issues, albeit briefly. First, there is no doubt that Wales has been hit hard by the UK Tory Government’s austerity measures. In my constituency advice surgeries, the most common theme is the hardship people face due to the welfare reform agenda being pursued by the Tory Government. I think there are Tory Members who do not understand the situation people find themselves in.
Specifically, the spare room subsidy, or bedroom tax, is harming people in my constituency and across Wales. A report by the Welsh Affairs Committee in 2013 showed that Wales was disproportionately affected compared with the rest of Britain, and that remains the case. This tax is, quite frankly, the most unfair and pernicious since Margaret Thatcher’s poll tax.
I have spoken with staff at my local citizens advice bureau in Merthyr Tydfil, who have told me about the many cases they regularly see coming through their doors—people who have nowhere else to turn. Those clients already have a number of other significant issues in their lives, and the bedroom tax only adds to them. Some of those people are now in rent arrears because of it, and some could lose their homes. That could have massive consequences, and for those who are physically or mentally disabled, it could result in even more severe issues, such as homelessness, suicidal thoughts, substance misuse or further debt—a downward spiral.
Unfortunately, in many communities in my constituency, there is not a huge number of smaller properties. Therefore, people affected by the bedroom tax decide either to stay in their property, thus incurring a financial penalty and placing great strain on their ability to manage, or to move to a smaller property, which can often be in a village some miles away. I have spoken with constituents who are in debt for the first time because of having to pay the bedroom tax. Food bank usage has increased massively, which is totally unacceptable in 21st-century Britain.
The second issue I want to focus on is the forthcoming EU referendum. As other Members, including my hon. Friends the Members for Aberavon and for Neath (Christina Rees), have outlined, Wales has benefited considerably from EU investment. Projects right across Wales have been delivered using EU funding, which is vital in helping to create a skilled and inclusive labour market and in driving economic prosperity.
Byron Davies
When we had the first round of funding, the then First Minister, Rhodri Morgan, said it was a once-in-a-lifetime opportunity, but here we are now with a third round of funding. Would the hon. Gentleman like to comment on that?
Gerald Jones
EU funding is important, and it has benefited Wales considerably—the evidence is there in terms of jobs and the businesses that have been supported—but there is still work to do. [Interruption.] If I may, I will carry on.
A key example of the projects I mentioned is the Welsh Labour Government’s Jobs Growth Wales fund, which has supported more than 15,000 young people across Wales since 2012, when it was created in response to the Tories’ scrapping of the future jobs fund. Using £25 million of European funding, the programme has supported countless young people. There are many more examples of how the EU has benefited Wales, which is why it is so important for Wales that the UK remains a strong part of the EU.
I turn now to the Wales Bill. As the party that established the Welsh Assembly, the Labour party supports the additional powers for Wales proposed in the draft Bill, but we had significant concerns about how the Assembly’s powers were rolled back in other parts of the Bill. It is fair to say that the draft Bill was not met with universal support. In fact, despite the Welsh Affairs Committee having witnesses from various aspects of Welsh life, it was a struggle to find anyone who had anything positive to say about it. I am pleased that the Secretary of State has finally listened to the overwhelming body of evidence from experts, lawyers and politicians from all parties, and to the Committee’s recent report. The Bill is deeply flawed and I welcome the fact that he is now not pushing ahead with it in its current form. Labour Members have been raising concerns about the Bill since its publication last October. If those concerns had been listened to then, perhaps we would not be in this situation now. Only last month, in the Welsh Grand Committee, many of the same concerns were again raised with the Secretary of State, who at that point, just a few short weeks ago, was defending many of the provisions he now seems to have binned.
It is only fair, right and proper that Members of this House, and indeed members of the Welsh Affairs Committee, have clarity about the detail of what the Secretary of State announced on Monday. Specifically, we need to know if anything is going to replace the necessity test, what system will be used for Minister of the Crown consents, and how different the list of reservations will be. It is imperative that the Secretary of State gets the Bill right this time and sticks to a timetable. Any delay means a consequent delay in the powers being transferred to the Welsh Assembly. It is also important that the Secretary of State and the Government fully consult the Welsh Government to iron out the practicalities.
The fact that the Secretary of State has presented a radically different Bill from the one that the Select Committee scrutinised may be problematic. The Committee’s report states:
“Whilst this pre-legislative process has flushed out views, it has also made it apparent that the final Bill will be significantly different to that which we have been scrutinising. That is wrong. Whilst changes and improvements are what this process seeks to provide, the weight of the evidence we received has meant we have had to focus on fundamental principles of the draft Bill rather than the specifics of the text. The Government should have focused its effort on resolving these matters of principle, before proceeding with a draft Bill.”
The Secretary of State said that he wanted a lasting devolution settlement that would resolve the constitutional situation for a generation, and I am sure that is what we all want. The best way to get it is to consult and negotiate with all stakeholders, such as the Welsh Government, the Welsh public sector, and other key interested parties to get broad agreement on the direction of travel and iron out the practical difficulties and issues. Ideally that should have been done before the Bill was put to this House, but it should be done now. The Bill is deeply flawed as it stands, and progress is needed. I urge the Secretary of State—who is now, thankfully, in his place—to get things back on track.
Christian Matheson (City of Chester) (Lab)
I am sure that Welsh Members who see me, as an English Member, rise to address this debate will be a little curious as to my intentions. Let me reassure them, and the House, that I am not here to assert my historical right to use my crossbow with extreme prejudice on any of their fellow countrymen I might find within the walls of my beloved city after the hours of darkness. It is a historical right but I certainly do not intend to assert it.
In fact, I hope to give something of a mirror image of the speech by the right hon. Member for Clwyd West (Mr Jones) about the importance of cross-border working between north Wales and my area of west Cheshire and Merseyside. He talked about a border that does not exist. That border might have prevented me from taking part in this debate, but, as he said, it is a border in name only. Indeed, Colin Brew, chief executive of West Cheshire and North Wales chamber of commerce—a cross-border body—tells me that business, in particular, does not recognise the border. When the Minister was at a North Wales CBI dinner just before Christmas at which I was also present, he felt very confident and positive about these matters, and he is well aware of the importance of this strategic area.
Let me give some examples. Of the 5,000 skilled manufacturing workers at Airbus in Broughton—which is, in essence, in Chester but across the border in north Wales—at least 600 live in my constituency. The situation is similar for other major manufacturing employers, such as Toyota and Tata Steel on the Deeside industrial park, which my good friend and parliamentary next-door neighbour, my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), visited last week because so many of his constituents work there.
It works both ways. For example, Bank of America MBNA is one of Chester’s most prestigious employers and is based on Chester business park. It employs about 3,500 people, a third of whom live in north Wales. The cross-border region has a population of about 1 million, 81% of whom work in the region, but whether they live in north Wales and work in England, or the other way around, is scarcely relevant for them.
I was pleased to join noble Lords, right hon. and hon. Members of all parties and local government representatives from the Mersey Dee Alliance at a meeting—this was mentioned by the right hon. Gentleman—of the all-party group for the Mersey-Dee north Wales region, which is chaired by my hon. Friend the Member for Wrexham (Ian C. Lucas) and has been formed to drive forward in Parliament and Government the concept of the Mersey Dee Alliance. The group and the alliance will work together to prevent needless duplication; propel economic growth; provide flexibility for greater cross-border co-operation within the parameters of existing local government frameworks; and, above all, overcome administrative differences created by the national boundary running through a successful and functioning economic region.
I reject the Government’s notion of a northern powerhouse. I believe it is nothing more than a slogan from a Government who are very adept at using slogans to hoodwink and mollify those of us outside London and the south-east of England while our imbalanced economy continues to grow at an imbalanced rate in an imbalanced direction.
Given that economic growth in north-west England is focused on the big cities, there remains a danger that Cheshire and north Wales will be squeezed out. The MDA initiative will give us strength to stand our ground, stand up to that squeeze and punch at our true weight. Discussions are currently taking place about local government reorganisation in England. Anything that would force Cheshire West and Chester to look the wrong way, as opposed to across the border, would be very unhelpful to north Wales, as well as to Chester. I ask the Minister to bear that in mind in his discussions with the Treasury and the Department for Communities and Local Government.
If we are to maximise the natural economic link between north Wales and Chester, we must optimise our infrastructure, which is important to north Wales and west Cheshire. As the West Cheshire and North Wales chamber of commerce has said, this is all about connectivity. I want to give the Minister a couple of examples of how it might be improved.
For starters, the M56 motorway in Cheshire must be upgraded. Although it is in England, it is the main link road to north Wales—people also use it to get to Holyhead and Ireland—and it provides the principal access to industrial zones in Deeside and to industrial parks in Wrexham via the A483. Serious accidents and major delays are a weekly occurrence, but Department for Transport Ministers have declined to include the upgrade of the M56 to a smart motorway in any programmes before 2020. Will Wales Office Ministers have words with their Department for Transport colleagues and impress on them the importance of that link road to north Wales, including its role as a driver of the north Wales economy?
We also hope to get a new bridge over the Dee near Broughton, which would link the A55 and A494, thereby improving access to the industrial zones I have mentioned, particularly near the Airbus site, and increasing capacity and resilience in the network. I have written to the National Infrastructure Commission in support of that major project and I ask Ministers to seriously consider supporting the proposal.
There is also a strong case for the electrification of the north Wales coast line, from Crewe to Chester and on to Holyhead. The Minister and the Under-Secretary of State for Transport, the hon. Member for Devizes (Claire Perry), who has responsibility for rail, attended a meeting in Llandudno last year. She expressed the view that electrification was not the magic bullet that many of us believe it to be. It is the view of Mersey Dee Alliance members, however, that electrification of the line is necessary for performance, capacity and reliability, and to run larger electric trains from Holyhead to London. The right hon. Member for Clwyd West mentioned the importance of linking it to HS2 in Crewe. I do not want the benefits of HS2 to terminate at Crewe; I want them to extend to Chester and north Wales.
It is important for the future prospects of Cheshire and north Wales that the UK votes to remain in the European Union, as other hon. Members have said. So many of our major employers in the Mersey Dee Alliance area are dependent on our relationship with Europe. Airbus is the obvious example. To Members who claim that a so-called membership fee of £55 million a day is the cost of EU membership, I say that every time the Beluga flies out of the Airbus plant into the north Wales skies with products that are the result of skilled manufacturing, the fee, bogus as it is, is paid off.
Bank of America, Tata Steel and Bristol-Myers Squibb all have a presence in the area that is central to their European operations. That is not to mention the countless smaller businesses that trade with Europe but would not have the time or energy to worry about negotiating through trade barriers with each EU country, should we leave. Those businesses simply could not afford to wait for the chimera of a promised free trade deal, which is supposedly the answer to every argument that proponents of our leaving the EU cannot face up to.
I finish by echoing the sentiments expressed by the right hon. Member for Clwyd West and continuing the consensual note that he brought to the debate by daring to suggest that many residents of north Wales feel a stronger affinity with Chester and west Cheshire than they do with Cardiff. We in the region are doing something about that; we are working together to drive forward common economic growth across that border. I hope and believe that hon. Members will be hearing a lot more about the Mersey Dee Alliance and our successes in the years to come.
Mr Mark Williams (Ceredigion) (LD)
I, too, thank the hon. Member for Aberavon (Stephen Kinnock) for spearheading our attempts to secure this debate. It has given hon. Members from across the country a welcome opportunity to debate a rich variety of issues.
I commend the hon. Member for Montgomeryshire (Glyn Davies), who is no longer in his place, for his glowing tribute to David Lloyd George and Lady Megan Lloyd George. Lady Megan Lloyd George strayed a little in later life and became the Labour MP for Carmarthen. The hon. Gentleman failed to mention the word “Liberal”, but for 54 years, David Lloyd George was a Liberal in this House, as was Megan Lloyd George for 22 years. Perhaps none of us aspires to 54 years in the House, but Lloyd George managed it. He is a great hero of mine as well as of the hon. Gentleman’s.
I want to raise a range of issues. I do not have the geographical organisation of the hon. Member for Gower (Byron Davies), who gave us a tour de force around Wales. I will pick randomly on issues that affect my constituency, but which I believe are pertinent to other constituencies across the country.
I believe that the hon. Member for Aberconwy (Guto Bebb) will relate to one issue that cropped up earlier today, because he has done a great deal of work on the mis-selling of interest rate swap products and led our campaign on the matter. I have done a little work on that as well, and I have tried to represent the interests of my farming community. I am concerned about a letter that I saw this morning from a bank to one of my constituents. I had no hesitation in referring my constituent—a farmer, who has worked hard and continues to do so, and who wants to develop his business—to the Financial Ombudsman Service to attempt to get some redress and independent adjudication. The bank wrote:
“If the FOS agrees with us, they will not have our permission”—
so says the bank—
“to consider your complaint and so will only be able to do so in very limited circumstances. If you do not refer your complaint to the FOS within six months, the FOS will not have our permission”.
That is the bank talking, not the independent adjudicator, the ombudsman. I will not go into the specifics of the case, but it is a concerning state of affairs when the banks regard the ombudsman in such a way, and when my constituent is treated with such contempt.
Transport has been a big theme of the debate. I want to raise the issue of physical connectivity. If the hon. Member for Newport East (Jessica Morden) has been, to use her words, “banging on” about the Severn bridge tolls for a long time, I have been talking about the Aberystwyth to Shrewsbury railway for a long time. There have been great advances, and I pay tribute to the Assembly Government for instigating an hourly service and investing in a new signalling system. I very much welcome the fact that Welsh Ministers are likely to be the franchising authority for Wales and the borders by 2017. Negotiations are taking place between the Government in Wales and the Department for Transport. Concerns have, however, been expressed about the remapping of services in the franchise. The Shrewsbury to Aberystwyth Rail Passenger Association is very concerned about consideration being given to splitting the current Cambrian coast and Aberystwyth to Birmingham service, meaning that all trains will terminate in Shrewsbury, rather than going all the way through to the west midlands. I understand the logic of a neat franchise boundary, but that will have an impact on constituents.
We have spent a long time promoting the tourism sector in west Wales and building links between Aberystwyth and west Wales and Birmingham International airport. During the previous Parliament, the Welsh Affairs Committee looked at the direct route through to the airport. It is now a great success, with 50% more trains through to Aberystwyth and a 40% increase in the number of passengers using the service. I hope that the Wales Office will, if it has not already done so, become engaged in those discussions, and at the very least voice the concerns that some of us have about the need for direct services from the midlands to west Wales.
Mr Williams
I am grateful to the hon. Gentleman for making that point. I know he has a potential interest in Aberystwyth University, and I commend it unreservedly to the Bebb family. Whether they come by road or on the train, the issue is important in developing the university.
I commend to the House early-day motion 1073 on the proposed closure and franchising of Crown post offices. The Under-Secretary of State for Wales will be interested in the one in his constituency of Vale of Glamorgan. Both Governments rightly talk about the vibrancy of the high street, and few of us would doubt the economic benefits that Post Office Ltd brings to our communities, so there is an inconsistency in franchising post offices, such as mine in Aberystwyth, out of the high street and into some backwater or into the back corner of a retailer.
There is also the effect on staff. The hard-working staff in Aberystwyth Crown post office were given the choice of redundancy, redeployment to the nearest Crown post office—in our case, that is the one in Port Talbot—or possibly transferring to employment by the retailer concerned, with wages and work conditions that were far from conducive to such a move. I urge Ministers in the Wales Office to look at those issues and to intervene with Ministers from the Department for Business, Innovation and Skills to encourage them to protect such valued businesses on the high street in our communities.
Not only post offices but banks have been leaving the high street. There have been bank closures in rural areas. In my constituency, banks in Aberaeron, Llandysul, New Quay and Tregaron have left the community. One reason why banks leave is that, as they say, so much bank business is now undertaken via internet banking.
I make no apology for talking again about broadband provision and mobile coverage in my constituency. The Under-Secretary of State was very kind to me, or I think he was, when he told me during last week’s Welsh questions that I was persistent. I am persistent, but I am increasingly frustrated, as are many of my constituents. We still have significant problems in rural parts of Wales; this applies not only in rural parts, but I am standing up for a rural area. We fall into the bottom 10% of seats represented in the House for average download speeds and superfast availability. Since Christmas, my constituency office has already had 100 concerned constituents from different parts of Ceredigion coming to us. We sit 639th out of 650 constituencies across the UK for broadband provision, which is bad. There has been some progress and there have been some advances, but, quite frankly, not enough for areas such as ours.
If broadband provision is bad, I must say that the Government’s mobile infrastructure project is far worse. Arqiva, their agents, has identified 24 sites across the Ceredigion constituency for new masts to alleviate the problem of “not spots” and lack of mobile reception. It spoke to landowners, the county council and community councils. It all sounded so impressive at the start:
“A publicly funded project to provide mobile phone coverage by all four Mobile Network Operators in areas that have none at present.”
The scheme ends at the end of this month. We were promised 24 masts; three masts will be achieved, one of which was already there. That mast was built by the excellent Ger-y-Gors community project, under the leadership of Duncan Taylor of Pontrhydfendigaid. One of them was a £60,000 makeover of a mast and just one other mast was built. Nationwide across the United Kingdom, 600 masts were identified, but by the end of March only about 50 will have been built.
This issue is not just about domestic households. We have talked a lot about building our economy and the advances that have been made. Surely the most basic infrastructure in areas such as mine is broadband and basic mobile coverage. My constituency is as vibrant, innovative, creative and entrepreneurial as anywhere else, but it is being denied the most basic infrastructure. That must be addressed by both the UK and the Welsh Governments. If funds have been available to the Assembly Government, they need to publicise them more and make them more available, and there need to be additional resources for rural areas such as mine.
Finally—I will not go beyond the 46 seconds I have left—it came as no great surprise to me that Ceredigion was listed in The Sunday Times as the most pro-European Union constituency in Britain, according to YouGov. That has a huge amount to do with our excellent universities and the collaborative work they are doing with those on the continent. It has a huge amount to do with the fact that we have qualified for and used money from convergence funding over the last few years. That is for good reason, because there are significant pockets of deprivation in the constituency. It also has a lot to do with farmers, who are concerned about the blank sheet of paper being offered to them by the out campaigns and UKIP. I look forward to a massive yes vote in Ceredigion on 23 June, even if I still have some concerns about the date.
Carolyn Harris (Swansea East) (Lab)
We have become very accustomed to waiting for things in Wales. We waited a very long time for rail electrification, we waited patiently to get the Welsh national football team into the Euros, and we waited a very long time for a Welsh premier league football club, but now Swansea City is there. Today, we waited a very long time for the Secretary of State to make an appearance in this very important debate. Either our performances are not up to scratch or he has had a better offer, because he has chosen to leave the Chamber.
The Parliamentary Under-Secretary of State for Wales (Alun Cairns)
I am happy to announce to the hon. Lady that the Secretary of State has an important telephone conversation with the Minister for Economy, Science and Transport in the Welsh Government.
Carolyn Harris
It was nice to see him for a short period of time.
We are now waiting for a review of the Swansea bay tidal lagoon. We waited a full year for the negotiations between the developer and the Government, and now we are being asked to wait while the Government establish an independent review of tidal lagoons nationwide. My first reaction to that news was to ask the very same questions that many of my constituents threw at me. Why are the goalposts being moved again? After so much talking, what is there left to learn? Is it a sign that the Government are serious about the project, or is it an airports-style way of kicking it into touch without losing votes in an election year in Wales?
Having discussed the review with the developer, I am encouraged because although it thinks the wait is frustrating, it is optimistic that the scene is being set for success. It has to be hoped that the launch of an independent review of tidal lagoons represents a new level of commitment from the Government. I hope that if the Government are investing time and money in reviewing the concept, they too can see the potential of this exciting new industry. If the review is genuinely meant to be the vehicle through which this technology can at last be realised, it will be to the good, but if this stalling is just to kick the scheme into the long grass, it will be a travesty.
Wales and my constituency of Swansea East will be the big winners from the launch of a UK tidal lagoon, but the whole country will share the success of this globally ground-breaking innovation. I look forward eagerly to the quick formation of a committee and a chair—a committee that, one naturally assumes, will have Welsh representation among its members. I look forward to seeing the details of how the review will operate, who will be involved and when it will report. I will follow those developments closely, as I know many people here and in the other place will. We also eagerly await updates from the Department of Energy and Climate Change regarding the progression of negotiations on the Swansea bay tidal lagoon.
The UK needs to seize this opportunity. We have to be seen as the leader, not a follower, in tidal power. We have the potential to have the first tidal lagoon in the world to secure planning permission. The project can be delivered, and it could match costs with other energy projects that are springing up around the country. Swansea East is ready to host this new global industry, and Swansea is ready to be that leader.
What may be lost on many Members is the effect that the lagoon has already had in transforming my community. People have bought into the vision in a way that has not been seen before, and as that vision has become ever more real it has brought with it a new high morale and a new can-do attitude. It has given rise to many plans, from small businesses in and around Swansea bay to the industrial facilities that are ready to win contracts for the Swansea bay city region and the Sir Terry Matthews strategy for a city deal. As plans for further tidal lagoons around the Welsh coastline start to take shape, the sense of optimism will spread.
There is growing international interest in the plans, which are putting Swansea and Wales on the map. I conclude my speech in this St David’s day debate with a message for all colleagues in the House: here is an issue on which we can and should all agree. Here is an opportunity that the whole of Wales and the UK can benefit from. Let us work together and ensure that tidal power brings world acclaim to Swansea, Wales and Great Britain, and that we have the first tidal lagoon in the world. On the morning when a tidal lagoon opens for the first time, the words “good morning” need to be spoken as “bore da”, not “bonjour”.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I will start by talking about the European Union, as many Members have during the debate. I will vote yes for a number of reasons. In a previous life I was an international historian in the international politics department at Aberystwyth, a world-renowned department in our country. It was set up in the aftermath of the first world war, following a generous donation of £20,000 by the great industrialist David Davies Llandinam to honour the dead and maimed students of the university. Davies was motivated—I will quote the university’s website, because I could not put it better myself—
“by a global vision, forged in the fires of war, aimed at repairing the shattered family of nations and, more ambitiously, to redeem the claims of men and women in a great global commonwealth”.
My academic speciality was both world wars and the cold war. No one should ever question the vital role played by greater economic co-operation on the continent, and by the European Union, in forging lasting security, prosperity and peace.
I will vote to remain also because Wales is a net beneficiary of EU support, to the tune of £4 billion by 2020 if match funding is added. To its credit, the EU has redistributive mechanisms whereby resources and investment are aimed at the poorest geographical areas—mechanisms sadly lacking in the UK, which I suggest is a matter of shame for Unionists. I have yet to see a contingency plan from the UK for what would happen if they oversaw a calamitous exit from the EU. In contrast to the EU’s mechanisms, the UK fails to allocate spending based on need and instead ploughs its infrastructure investment into already vastly wealthy areas at the expense of those desperately in need of it.
UK membership of the EU has also played an important part in driving social justice, be it in protecting people from discrimination based on age, sex, race, religion or disability, in maternity and parental leave entitlements, or in the right to paid holidays and working hours limited to 48 hours a week.
As a net exporter, the Welsh economy benefits hugely from the single market and its 500 million consumers. The hon. Member for Aberavon (Stephen Kinnock) gave an important statistic about the importance of export trade to the Welsh economy.
Guto Bebb
The hon. Gentleman is making a passionate case for Wales remaining in the European Union. However, can he reconcile that with the fact that his party held street stalls in my constituency to argue that the European Union, in a trade deal with America, would sell our NHS? That is hardly a case for staying in.
Jonathan Edwards
I was not going to mention the Transatlantic Trade and Investment Partnership, but the hon. Gentleman has led me to it. He knows that there are genuine concerns about how TTIP could impact on public services, and about the privatisation of public services. That is one of my concerns about the European Union—I am not an unconditional supporter because it has fostered those liberalising policies that successive Westminster Governments have introduced for our public services. The fear is that TTIP could be a Trojan horse for promoting those liberalising polices even further, especially in public services. That is why I believe that the Welsh Government should have a veto on whether the UK Government sign up to TTIP. I am also somewhat sceptical about the European Union because of its treatment of the Greek people in their hour of need recently.
Although I will vote to remain, I believe that the Prime Minister’s current tactics are dangerous and ill judged. Project Fear 2, and the use of all the assets of the state to ramp up risk and anxiety, may prove to be a short-term success in securing a vote to remain in June. However, a gaping wound will be created when people feel that they have been cheated and bullied. As we see in Scotland following Project Fear 1, the battle might be won from a Unionist perspective, but ultimately the war will be lost. If the UK Government’s position is to settle the European question, they need to fight a positive campaign, and as I have outlined, there are numerous things that they could say.
I welcome the Secretary of State’s decision to delay the introduction of the Wales Bill following pre-legislative scrutiny of the draft measure. I am pleased that the Secretary of State seems to have agreed to remove the necessity tests from the Bill. I hope that he has taken note of the excellent work in the Cardiff University/University College London report, which stresses that the model itself makes the necessity tests unworkable, rather than the choice of words, “necessary” or otherwise.
I also welcome the fact that the Secretary of State has agreed to shorten the list of reservations significantly. However, as always, the proof of the pudding will be in the detail of the Bill when it is published. He will know from the pre-legislative scrutiny that two reservations in particular make the Bill unworkable—the reservations of the criminal law and private law mechanisms. While I am encouraged by his promise to shorten the list, his reluctance to accept the evidence on the need for a distinct jurisdiction leads me to believe that he will not remove criminal law and private law from the list.
Indeed, the Welsh Affairs Committee, which has a Tory majority and is chaired by one of the most prominent anti-devolution MPs, accepted that creating a distinct legal jurisdiction would
“provide a solution to issues associated with the reservation of civil and criminal law and necessity clauses.”
When redrafting the Bill, and the list of reservations in particular, the Secretary of State should ensure that each and every reservation is individually justified. I believe that the Secretary of State is serious about creating a long-lasting devolution settlement and I share his ambition, but unless he fights against his devo-sceptic fringes, he will just be yet another Secretary of State for Wales who creates yet another failed devolution settlement.
The context of the rewriting of the Bill has also been changed by the decision to cut more than a quarter of Welsh MPs. If the UK Government want to make those cuts to Wales’s representation, they must give the National Assembly the same powers as the Scottish Parliament—the number of Scottish MPs was cut following transfer of powers. That means full transfer of responsibility over energy and the Crown Estate, full income tax powers, transfer of policing and criminal justice, the legal system, transport, air passenger duty, and the rest of the provisions in the Scotland Act. The Government cannot expect those responsibilities to remain with the UK Government and Westminster with only 29 Welsh MPs. That would create a gaping democratic deficit.
I want to turn my attention to one economic project in Wales about which I have not had the opportunity to comment in any great detail to date—the Swansea bay tidal lagoon. Despite Wales being one of the most advantageous locations in Europe for renewable energy, just 10.1% of our electricity is generated from renewable sources. That compares with 32% in Scotland and 14.9% for the UK as a whole. Despite Wales being home to the second highest tidal range in the world, and 1,200 km of coastline, we are lagging behind on tidal technology. I understand concerns about the proposed financing model. Proponents of the contract for difference strike price model argue that the Swansea lagoon is nowhere near as big as the planned Cardiff and Colwyn bay lagoons, and that therefore the strike price on a per megawatt basis seems high. However, it must be considered as a long-term investment that will eventually deliver multiple lagoons across the UK.
Funding green energy through a CFD effectively passes the cost of upfront investment on to the consumer, who inevitably will see their bills go up. If I were in the shoes of the Secretary of State, I would make the case that the Treasury should invest in the project by bringing it on to the books directly, as happens for transport infrastructure such as HS2 in England. Raising money on the bond markets has never been cheaper, with 50-year bonds at a negative rate and 10-year bonds at less than 1.5%. Those rates are available only to the Government and not the private sector. Using an old-school financing method—direct public investment—as opposed to an ultimately far more costly financing scheme such as CFD, will be far cheaper in the end for the public, and the UK Government should be honest with the people of Wales about that.
The Treasury will be aware of my early-day motion tabled earlier this week, which calls for a specific Welsh public sector pooled pension fund. Instead of letting the pension assets of Welsh public sector workers be pillaged by a super pooled asset fund based in England, why is the Wales Office not ensuring that Welsh assets are pooled at a Welsh level to invest in Welsh infrastructure such as the lagoon? I recognise, however, that that model would require a CFD. Confidence is the magic trick in any economic policy, and moving forward quickly on the proposed lagoon will be a massive confidence boost for the south and west of our country, stimulating further economic investment and growth.
Nia Griffith (Llanelli) (Lab)
I congratulate my hon. Friend the Member for Aberavon (Stephen Kinnock) on securing this important St David’s day debate, and on his work to champion the steel industry. Today he mentioned not just the steel industry, but the need for clear and consistent messages from the UK Government if we are to encourage more investment from a range of different industries.
The right hon. Member for Clwyd West (Mr Jones) emphasised the importance of transport links to the economy of north Wales. That theme was taken up by many hon. Members, including my hon. Friend the Member for City of Chester (Christian Matheson) who suggested the need to upgrade the busy M6, and to think beyond Crewe for HS2 so that it serves Chester and north Wales. Along with other Members he stressed the importance of staying in the EU, particularly for the success of big companies such as Airbus, as well as a host of other companies in his constituency and over the border.
The hon. Member for Aberconwy (Guto Bebb) reminded us that Gordon Brown was right in keeping the UK out of the euro, and the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) made a strong case for the EU, mentioning peace, political stability, social justice, economic matters, and the fairer distribution of resources from which Wales benefits. My hon. Friend the Member for Caerphilly (Wayne David) explained why it is important to campaign for proper links to Heathrow airport and to support its expansion, and he made a strong case for the need for better rail electrification to Wales. He also referred to the Wales Bill, and the fact that the Secretary of State was not here.
The hon. Member for Cardiff North (Craig Williams) spoke of the Cardiff city deal, as one would expect, and of the importance of interesting young people in science and innovation. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones) spoke of the Wales Bill and thanked the Welsh Affairs Committee for all its hard work on that. He also pointed out some of the considerable problems with the Bill. The hon. Member for Gower (Byron Davies) mentioned the importance of the cockle industry and of getting to grips with the causes of those cockle deaths. We must get more information so that we better understand exactly what is happening.
My hon. Friend the Member for Swansea East (Carolyn Harris) talked about the need to get on and secure the tidal lagoon project and the jobs for the area. My hon. Friend the Member for Newport West (Paul Flynn) also mentioned tidal power, referring to the eternal nature of the tide. He stressed again the importance of the Welsh language. My predecessor as Llanelli MP, Jim Griffiths, was the first Secretary of State for Wales. I know he would very much have approved of my hon. Friend’s speech today.
How could I possibly skip over what my hon. Friend the Member for Newport East (Jessica Morden) said about the Severn bridge tolls? That issue is absolutely crucial for us across the whole of south Wales. She emphasised the point about the end of the concession. When is it happening and what will the reduction in price be? We want something much more substantial than the mere reduction in VAT.
The hon. Member for Montgomeryshire (Glyn Davies) mentioned dairy farming. I am sure he will be supporting the farmers’ march in London on 23 March. We shall certainly be speaking with one voice with them on the need to increase the powers of the Groceries Code Adjudicator to get a fairer price for our farmers. He also spoke of how the ground rose up around St David, propelling him above the crowd. We wondered today whether the Secretary of State is showing himself as a reverse St David, disappearing into the earth and appearing for only a few minutes at today’s debate—that is utterly disgraceful, I have to say. This comes in the week when he has treated the House with complete disdain by announcing a major U-turn on the Wales Bill at a press conference in Cardiff and refusing to come to the House to answer questions. Does the Secretary of State for Wales not think that a debate on Welsh affairs and the Wales Bill are worthy of his time?
I can only assume that the reason the Secretary of State is hiding in the Wales Office is that he is as embarrassed as he should be that his flagship constitutional Bill has run aground. What we saw on Monday was quite remarkable: large parts of the Bill that the Secretary of State was defending to the hilt just last month have now been binned. This amounts to a major change in policy in the one piece of proposed legislation for which his Department is responsible. It is shameful that he was more than happy to take questions from journalists but not from Members of this House whose constituents deserve to know what powers their Assembly will have. The Wales Office even tweeted on Monday to suggest that MPs should be happy to wait until today’s Backbench debate to have their say. I hope he is listening.
It is a shocking discourtesy to Members and is reminiscent of the arrogance the Secretary of State has shown towards the Welsh Government and to those who have disagreed with him. Let us not forget that shortly before we met at the Welsh Grand Committee, he said those of us who dared to challenge his rosy view of the Bill had given up on the Union. We were told that we had basically gone and joined Plaid Cymru because we suggested that the necessity test should go, the rules on ministerial consent should change and that the list of reservations should be drastically reduced. Now, he apparently agrees with us. Has the Secretary of State had a last-minute conversion to the separatist cause, or does he recognise that his hysterical comments were just a desperate attempt to deflect from the shambles of his draft Bill?
I am glad the Secretary of State has seen sense and will not now push ahead with a deeply flawed piece of proposed legislation, but let us not pretend that all this is business as usual. It is not a normal part of pre-legislative scrutiny to then go on and dump the Bill, and nor is this an example of a Secretary of State in listening mode. He wanted and fully intended to go ahead with a Bill that was complex, unworkable and which rolled back the powers of the Welsh Assembly. He only changed course when it became clear that literally no one supported him.
The Welsh Affairs Committee, with its Conservative majority, has produced an excellent report on the draft Bill. I would like to place on record my thanks to the members of that Committee for all their hard work. Their report, like the report of the Assembly’s Constitutional and Legislative Affairs Committee before it, shows that the Secretary of State has mismanaged the process from start to finish. Instead of producing a Bill with a robust set of reserved powers, he allowed Whitehall free rein to decide which powers it thought Wales should have. That resulted in 34 pages of reservations, covering 267 areas. How could the Secretary of State possibly have thought that this was the clear and lasting devolution settlement that he himself promised? We are now told he wants to reduce and simplify the reservations, but why did he not do that to start with? Is it because he did not actually know what was in his own Bill? How else can he explain saying to the Welsh Affairs Committee:
“When I read through the list of reservations I can see for myself that there are things where I think, you know, ‘For goodness’ sake, why is that being held back as reserved?’”?
We have a Secretary of State who did not do his job. He did not make sure that the draft Bill was fit to be published, and that is what has led to this wholly unacceptable state of affairs. We are told that the Bill will now be presented sometime in the next Session, but there are reports that this current Session of Parliament will run until after the European referendum. That means we will not see the Bill until July at the very earliest, with a real possibility that it will slip into the autumn.
So in the Secretary of State’s absence—well, I see him here now and perhaps he will listen—will the Minister respond for him and tell us when he expects the Bill to be published and when its provisions will take effect? Is it not the case that the Assembly will now have to wait even longer before having these powers devolved to it, because of this avoidable delay? In light of the Welsh Affairs Committee’s stinging criticism of the fact that
“the final Bill will be significantly different”
to that which they have been scrutinising, will the new Bill be submitted to the Committee for pre-legislative scrutiny?
I cannot help feeling that if the Secretary of State had spent less time attacking those of us who disagreed with him and more time fixing his Bill, this unnecessary delay could have been avoided. I hope that the Secretary of State will be able to produce a Bill that delivers the powers he promised, but his abysmal record so far hardly fills me with confidence.
On Monday, the Secretary of State also made reference to the Barnett funding floor, which we Labour Members welcome, although we recognise that it makes virtually no difference at a time when the Government are cutting the budget of the Welsh Assembly. In light of recent argument about a fiscal framework for Scotland, we now need to establish a framework for Wales that will underpin our future funding arrangements for the long term. The Smith Commission made it clear that Scotland should suffer no detriment from the transfer of tax-varying powers to Holyrood. It is imperative that the same principle is used in relation to Wales and that any arrangement is subject to review to ensure that it provides a stable financial settlement. Can the Minister update us on what progress has been made?
The Secretary of State and I have our differences, but I think we agree that we want to move past the debate about the process of devolution. We need a Bill that establishes a strong, fair and lasting settlement that achieves what the Welsh people want—a Welsh Assembly, a Welsh Parliament with the powers to make a real difference to the lives of people of Wales.
The Parliamentary Under-Secretary of State for Wales (Alun Cairns)
I start by congratulating the hon. Member for Aberavon (Stephen Kinnock) and other Members on contributing to today’s important debate in Westminster’s calendar—one that underlines the role that Wales plays within the United Kingdom. I welcome all the contributions of right hon. and hon. Members, and I will do my best to cover as many points raised within the limited time remaining.
The debate has been extremely wide ranging and has covered issues across the spectrum of the constitution, the European Union, the economy, public services, the tidal lagoon, the railways, the northern powerhouse and many other issues. I shall canter through as many as I can, but I want to spend some time on the Wales Bill in order to respond to the questions from the shadow Secretary of State for Wales and others. I shall address some other points, too.
Let me start my opening remarks by saying that Wales is in a good place. I am optimistic about our future. As a Government, we have been determined to make a difference to all parts of the UK, and while the job is not complete and there is always obviously more work to be done, we have taken positive action that sets the scene for a bright outlook for Wales. We are determined to work constructively with the Welsh Government, and whatever rhetoric we hear from individuals within Cardiff Bay, we are determined to respond in the measured fashion that the people of Wales deserve.
We want to secure our economic recovery, which was our greatest challenge when we came to office in 2010. Members will remember that unemployment was rising and for too many young people there was little prospect of employment, with the UK and Wales in a precarious financial position. Few Members, however, have mentioned the funding floor, so I was grateful to my hon. Friend the Member for Aberconwy (Guto Bebb) for doing so. This has been called for by Members for well over a decade, and it is only a Conservative Administration who have delivered it—and within the first year of their Parliament.
Glyn Davies
Previously, throughout my time in this Parliament and, indeed, in the Welsh Assembly, the Barnett deficit dominated every discussion, and was often raised by Opposition Members. Now we are in balance. Fair funding for Wales is one of the Government’s biggest achievements, but it is not being properly recognised by everyone.
Alun Cairns
I am grateful to my hon. Friend for emphasising that point. The 115% rate of Barnett consequentials is extremely important—it entirely meets the criteria in the Holtham demands—but one would almost think that Labour and Plaid Cymru Members were disappointed that we had actually delivered on something that they had been calling for. They would far rather be shouting from the sidelines, calling for it in the hope that we would not deliver it. When we respond in a positive way and deliver for the people of Wales, there is complete silence.
Jonathan Edwards
Obviously the Barnett formula is a step forward, but does this not underline the danger of using opaque terms such as “fairness” and “non-detriment”? In my view, a fair funding settlement should be based on need rather than serving to prevent further injustice. As the hon. Member for Llanelli (Nia Griffith) pointed out, the key aspect of non-detriment is the fiscal framework. Has the Minister any idea of the preferred index for which the Welsh Labour Government are arguing with the Treasury? It is clear that different mechanisms will have vastly different outcomes.
Alun Cairns
The hon. Gentleman has made some important points. It is, of course, up to the Labour party to explain its position. All I know is that Labour called for this for decades, we responded within a year, and since then there has been complete silence on the Opposition Benches.
My hon. Friend the Member for Aberconwy was extremely upbeat about Wales’s economic prospects. It is true that, since 2010, the number of people in work has risen by 89,000, unemployment has fallen by 35%, the youth claimant count has fallen by 61%, and Wales has experienced faster growth per head than any other nation or region of the United Kingdom outside London. The hon. Member for Neath (Christina Rees) spoke of the importance of getting people into work. This is action, and this is where it is happening.
We have been getting behind Welsh businesses, and there are 22,000 more small and medium-sized enterprises in Wales than there were in 2010. The hon. Member for Aberavon mentioned the steel sector. I know that he spoke to the Secretary of State and the Minister for Small Business, Industry and Enterprise earlier today about the issues facing the steel industry and, in particular, the communities around Port Talbot, but I hope he will recognise that the Government have gone a long way towards meeting the five asks from the steel industry.
One of those asks was a cut in business rates, which were mentioned by some Opposition Members. That is a devolved matter, and something that the Welsh Government could do. The energy-intensive industry compensation package has been delivered, as has the provision of more time in which to comply with the EU’s industrial emissions directive. As for EU-level action on anti-dumping, the UK Government are leading the pressure that is being exerted in Brussels. I hope that the hon. Gentleman will recognise that, along with a range of other measures that we have taken.
Stephen Kinnock
The Minister was going OK until he got to the bit about dumping. I am sorry, but we cannot let that one go. There are two key facts. The British Government are the ringleader of a group of member states that is blocking the scrapping of the lesser duty rule, which would make a huge difference to the ability to impose tariffs on unfairly dumped Chinese steel. They are also the chief cheerleader for Beijing in Brussels when it comes to giving market economy status to China, which would also dramatically reduce the scope. It must be recognised that, in respect of those two points, it is a case of abject failure.
Alun Cairns
I am sorry to hear that response, which raised two issues. The first is the confusion over market economy status. Russia has market economy status, but that does not prevent the European Union from introducing tariffs or prevent it from taking action. The other measures that the hon. Gentleman mentioned would take three years to introduce. We want to take action before then. We want to continue to be proactive. We want to work with the hon. Gentleman, the Welsh Government and the communities in and around Port Talbot and Newport, because of the importance of the steel industry to them.
In 2014-15 there were 102 inward investment projects in Wales, 98% of which were supported by UK Trade & Investment. That demonstrates the role that the UK is determined to play in supporting the Welsh economy, and in working with the Welsh Government.
The hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) mentioned welfare reforms. Welfare reforms are very important to getting people back to work, but we cannot pick one element individually. We need to look at the wider package, such as the national living wage, which would increase the incomes of 150,000 people in Wales by 2020. That will make someone working full time on the national living wage £4,400 better off, on top of the tax cuts that they will receive as a result of the increase in the personal allowance.
The Cardiff city deal was mentioned by many hon. Members, most notably my hon. Friend the Member for Cardiff North (Craig Williams), who has spearheaded and championed that cause and been persistent at every turn. He has been relentless, first as a candidate and now as a Member of Parliament, in pressing Ministers on this issue. Let me make it clear that we want this deal to be signed as quickly as possible and we are determined to press those involved in order to develop a world-class deal. We want Wales to look outwards and we want it to involve the private sector. We want the city deal to be a world beater in what it delivers. Hon. Members should recognise the fact that the spending review has already announced our “in principle” commitment to support a new investment fund, and earlier this year the Chancellor committed £50 million to establish a UK compound semiconductor centre as a down-payment on the city deal.
My right hon. Friend the Member for Clwyd West (Mr Jones) talked about ensuring that north Wales was recognised and about the importance of the northern powerhouse, a subject that was also raised by the hon. Member for City of Chester (Christian Matheson). There was a focus on the importance of rail links, and I hope that bringing the HS2 investment forward by six years will provide great opportunities for mid-Wales, north Wales and Cheshire through the links to the northern powerhouse. The hon. Member for City of Chester talked about local government reorganisation and the need to look towards Wales. I would also say that local government in Wales needs to look across the border. I think that it does so, but the Welsh Government need to recognise the fact that it is an administrative border and that the way in which people lead their lives means that they cross that border in a much more open way.
I could also go on at length about the investments that the prison in north Wales and Hitachi’s involvement at Wylfa will bring. Much has been said about the tidal lagoon project in Swansea. The Tidal Lagoon Swansea Bay company has recognised the strength of the review and welcomed it. I wish that hon. Members would reflect on what they are saying in this context and support the company rather than seeking to undermine the project, which could involve a significant investment.
In the time remaining, I want to talk briefly about the Wales Bill. We said at the outset that it was a draft Bill and that we wanted to be pragmatic and to use pre-legislative scrutiny positively. Given some of the negative points that have been made, however, I want to say that we will take absolutely no lessons from the party that gave us the Government of Wales Act 2006 and the convoluted and complex legislative competence order system, which has led to a great deal of legislative confusion. We are determined to get this right, and this pause needs to be taken in the positive spirit in which it was intended.
There have been calls to adjust the necessity test, but we plan to go further and to remove it. We will look at the list of reservations, but it also gives clarity. I encourage members to look at the Scotland Bill, which also has quite a long list of reservations, but there have been no complaints because of the clarity that it provides. Many people are calling for a distinct legal jurisdiction, but that would effectively mean a separate legal jurisdiction. That would be dangerous for Wales, in relation not only to the legislative process but to investment. We are also determined to work constructively to clear up the mess that we inherited with the pre-commencement orders. We want to get this Bill right, and we are being pragmatic. If we ploughed ahead, we would be criticised. We are being criticised just for pausing. It seems that, according to Labour Members, whatever the Wales Office does, it cannot win.
Stephen Kinnock
I should like to thank the entire House for an excellent debate today. We have covered a wide range of issues including the economy, the EU, the Wales Bill, the Severn bridge toll, road and rail, city deals and public services. The red threads that run through all these subjects are the ideas of partnership, investment and solidarity. We know that we need to work together with the European Union and across the UK, and we hope that we will see that spirit of partnership from the Government, alongside investments to enable us to take our economy forward to a brighter future. I thank the House for this debate.
Question put and agreed to.
Resolved,
That this House has considered Welsh affairs.
Diabetes Care
(8 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Keith Vaz (Leicester East) (Lab)
Thank you, Mr Deputy Speaker, for giving me the opportunity to debate this important matter. I begin by declaring my interests as a type 2 diabetic and chair of the all-party parliamentary group for diabetes. In 2007, I founded the diabetes charity Silver Star, and I am an active and passionate supporter of Diabetes UK and JDRF—the Juvenile Diabetes Research Foundation—both of which provide secretarial services to the APPG. I would argue that we currently have the best diabetes Minister we have ever had, and I am glad to see her on the Front Bench today. I would like to thank her and her diabetes tsar, Jonathan Valabhji, for all the work that they do.
Diabetes is one of the most important health challenges facing the NHS and indeed the world. Sometimes we get immune to the facts, even though they are so devastating: 3.5 million people in the UK have been diagnosed with diabetes; 700 people a day are diagnosed with the illness; by the end of this debate 15 more people will have been diagnosed with diabetes—that is one every 2 minutes; and it is estimated that by 2025 some 5 million people in the United Kingdom will have diabetes.
Despite the good intentions of the Government, the passion of practitioners and the interest of many Members of this House, I am worried that the prevention, diagnosis and treatment of diabetes is not high enough on the agenda. One in five hospital admissions for heart failure, heart attack and stroke are people with diabetes. Diabetes is responsible for more than 135 amputations a week, four out of five of which are avoidable. Diabetes is the leading cause of preventable sight loss and the most common cause of kidney failure. Every year, more than 24,000 people die prematurely due to diabetes.
Mr George Howarth (Knowsley) (Lab)
I echo my right hon. Friend’s comments about the Minister. He cites statistics, and on the amount of money that is spent on diabetes, £7 billion of the NHS budget is spent on dealing with the avoidable complications to which he has just referred. Yet Department of Health spending on research into diabetes through the UK’s Medical Research Council is just £6.5 million, which is by far the lowest level of almost any developed country. Does he think there is a connection between those two things?
Keith Vaz
My right hon. Friend, who is a great campaigner on this issue, is right to have raised this, because we need to spend much more on diabetes research. One way of doing that is to make sure the funds are available for the excellent researchers and academics we have in this field, because research has indicated that there is an unacceptable and unexplained disparity in diabetes care in our country. We are failing the very people we are trying to help. Secondary complications are largely avoidable through better care, and we need to ask why this is not being provided. Although the NHS currently spends approximately £10 billion on diabetes, it is estimated that 80% of these costs are spent on dealing with complications. The time for conferences, seminars and good words is over—it is time for a new deal for diabetics.
Earlier this year, the Public Accounts Committee published a report on the “Management of adult diabetes services in the NHS”, and I would like to thank those on the Committee for their very hard work. The report found that astonishing variations still exist across clinical commissioning groups: the percentage of patients receiving all the recommended care processes ranged from 30% in some areas to 76% in others; and the percentage of patients achieving three treatment targets ranged from 28% to 48% in different areas between 2012 and 2013. As well as this postcode lottery, the figures were even worse for type 1 diabetic patients.
In response to my recent written question, the Minister acknowledged that there is no specific budget allocation for public health services related to diabetes. It is up to local authorities to
“assess local needs, prioritise and deploy available resources accordingly.”
I believe that is wrong. My own health and wellbeing board was unable to tell me how much it has spent on diabetes awareness. It should be able to do so. I welcome the Government’s inclusion of diabetes in their proposed clinical commissioning group improvement and assessment framework. That is a vital step in the development of a cohesive national diabetes strategy.
There has been much discussion about how effective the framework will be, and whether it will be released on time. We are already disappointed that the publication of the childhood obesity strategy has been delayed, a pertinent issue of concern for me and many other Members, including the Chair of the Health Committee, the hon. Member for Totnes (Dr Wollaston). We need an assurance from the Minister today that both the framework and the childhood obesity strategy will be published before the start of the summer recess.
The burden of care for diabetes is currently left overwhelmingly to one group: the GPs. It is unrealistic to expect GPs alone to manage this. We acknowledge that GPs are under increasing pressure, and the demand for their services far outweighs the supply. In some places, it takes weeks to get an appointment. The financial incentives given to GPs are clearly not working. Some 16% of GPs’ contracts is supposed to be spent on incentives, with 15% of this sum being directly allocated to diabetes testing. That equates to £94 million, yet an estimated 549,000 people have type 2 diabetes, but remain undiagnosed. A recent study by Pharmacy Voice found that 40% of GPs would like more support for their patients in managing diabetes. We need an action plan from NHS England that will assess the practical support that clinical staff need to care properly for their patients.
We are often told that it takes a village to raise a child. That phrase was recently given re-emphasis by Hillary Clinton. In my view, it takes a whole town of healthcare professionals to deal with the diabetes tsunami. Instead of placing the entire burden on GPs, we need to utilise a network of different professionals to attack the diabetes epidemic on all fronts in an efficient and cost-effective way.
At an international conference organised by the all-party group last month, we heard evidence to that effect from specialist GP Dr Paul Newman, endocrinologists Dr Sam Rice and Dr Abbi Lulsegged, diabetes nurse Sara Da Costa, diabetes specialist dietician Julie Taplin and lifestyle expert Emma James. However, we did not have time to hear from other parts of the network—the podiatrists, ophthalmologists and pharmacists. Their enthusiasm knows no bounds, but they are limited by the availability of funds and the lack of specialist staff. We must mobilise our political will to give them the support that they so desperately need.
Diabetes specialist nurses are vital in the fight against diabetes. Evidence shows that these nurses are cost-effective, improve clinical outcomes and reduce the length of patient stays in hospital. I am extremely concerned that the number of trained diabetes specialist nurses has stagnated. The latest national diabetes in-patient audit stated that one third of hospital sites still have no specific diabetes in-patient specialist nurses. With the predicted increase in diabetes cases to 5 million by 2025, it is alarming that forward-thinking plans to train such nurses are not being put in place now. We need a commitment from the Minister that there will be future provision for diabetes specialist nurses.
Community pharmacies are ideally placed to provide care at a time and in a place convenient to patients. The NHS diabetes prevention programme could be a great opportunity to get community pharmacies involved in supporting GPs and other healthcare providers. Janice Perkins, the pharmacy superintendent of Well Pharmacies, advised me that this could be done as part of a care plan package, where appropriate tests are provided to the patient based on their personal need, without their having to access numerous sites.
The proposed cuts to the community pharmacy budget could see the closure of up to 3,000 sites. My local pharmacist, Rajesh Vaitha of the Medicine Chest in Leicester, informed me that up to 60 out of 227 sites could close in Leicester alone. The closure of these pharmacies will have an adverse effect on patients and will place greater pressure on our already strained health infrastructure. Pharmacies are on the high street, and no appointment is needed to see the pharmacist. Like many patients, my late mother Merlyn, a type 1 diabetic, had great faith in her local high street pharmacist. I believe that the cuts to community pharmacies could be shelved if pharmacies were properly utilised in diabetes care.
Last Friday I visited the Steno Diabetes Centre in Copenhagen. Steno is a world-leading out-patient facility that cares for 6,500 diabetics a year. It is a one-stop centre for diabetics, with the main focus on prevention and secondary complications. The Steno centre is run by a team of remarkable diabetes specialist nurses led by Professor John Nolan. This is extremely cost-effective—the centre has an annual clinical budget for 6,500 patients of £9 million. Steno has reduced avoidable blindness in its patients by 90%—a service that is provided by a team of just six nurses and one ophthalmologist. The centre’s foot clinic has reduced avoidable amputations in the past 10 years by 82%. The savings from avoiding just two amputations funds the entire foot clinic’s annual budget. The Steno centre is an ideal model of how diabetes care should be facilitated. I urge the Minister—not that I want her to spend too much time abroad—to look at the incredible work that is being done there and bring a network of such centres to the United Kingdom.
In my own constituency, we are very fortunate to have not only the best football team in the country—many thanks to West Ham, Swansea and Liverpool for what they did last night—but the Leicester Diabetes Centre, a centre of true excellence in diabetes care. It is one of the largest facilities in Europe for clinical research into diabetes. Run by the dynamic duo of Professor Melanie Davies and Professor Kamlesh Khunti, it provides an innovative partnership between the NHS and academia—the very people in whom we should put more faith and behind whom we should put more funds, as my right hon. Friend the Member for Knowsley (Mr Howarth) said. We are extremely fortunate to have such experts, but we need more centres of excellence.
We need an holistic approach to public health, tackling the medical complications of diabetes and the contributory lifestyle factors that increase the prevalence of type 2. Other countries have taken a lead on this issue. Dr Francisco George, director general for health in Portugal, told me that data sharing is one thing we can do. I have also heard from Dr Pablo Kuri Morales, the Minister responsible for health promotion in Mexico, that a sugar tax actually works. Press speculation is that the Prime Minister has shelved the sugar tax until after the European Union referendum. In my view, the two matters are entirely separate, so why can we not have a sugar tax now?
I have been vocal in my support for a sugar tax and for clearer labelling of sugar content. Industry leaders such as Waitrose and Asda have made commitments to reduce sugar in their products, but I am afraid that the Government’s responsibility deal, which pledged to do all kinds of things, has not had much effect in reality, as recent reports by Professor Graham MacGregor and Action on Sugar have shown. We are, however, fortunate to have an NHS chief executive—Simon Stevens—who has imposed his own 20% sugar tax across the NHS, and that is an important start. I call on the Minister, when she returns to Richmond House, to ban high-sugar products from the canteens in her own Department.
I recently visited a brilliant juvenile diabetes centre in Tangiers, which was based in the Centre de Santé Saïd Noussairi. I nearly wept when I saw young type 1 diabetics having to rely on charitable funding just to get their daily insulin injection—something we can get absolutely free from our NHS. Yet, astonishingly, even in our country, whose healthcare system is the envy of the world, we have stark variations in diabetes treatment and unfocused resources.
We have world-leading medical professionals, nurses, healthcare professionals and researchers who are capable of doing, and willing to do, so much more, provided they get the funding and are backed by an iron political will. That is why we need to achieve a new deal for diabetics, and now is the time to start.
The Parliamentary Under-Secretary of State for Health (Jane Ellison)
I should start by saying that, as a Spurs season ticket holder, I shall dwell on the kind words of the right hon. Member for Leicester East (Keith Vaz) about my time in office and ignore his cruel jibes about what can only be described as a disappointing night last night.
I thank the right hon. Gentleman for bringing this important issue to the House for another debate. He has rightly issued a number of challenges to me and the Government, and it is vital that we keep up the drumbeat of debate, which is key to making sure that we keep this serious and increasingly prevalent disease on the agenda.
Fantastic work has been done by the right hon. Gentleman and other members of the all-party group, by the right hon. Member for Knowsley (Mr Howarth), who is also in the Chamber, by the Silver Star charity and by so many others. There is very high awareness of the issue in Parliament, and I will come back to what more we might be able to do to mobilise Members even more on this important subject.
As the House will be aware, tackling diabetes is of great concern to the Government. The Department of Health is committed to preventing type 2 diabetes and to tackling the variation the right hon. Member for Leicester East highlighted in the delivery of care, because we, too, want the best possible care for those with diabetes.
There were encouraging signs from the latest national diabetes audit that progress is being made in some important areas of management and care. For example, there are clear trends of improvement in blood pressure control for people with type 1 and type 2 diabetes and in glucose control for type 1 diabetes. It is also reported that a far greater number of people are being offered structured education within a year of diagnosis. However, I will come back to structured education, because it is uptake, not offer, that I am interested in.
The report again highlighted a concerning and continuing issue of variation in care process completion and treatment target achievement for people with diabetes. I am particularly troubled by the statistics on younger people and those with type 1. The audit found that in 2014-15 just 39% of people with type 1 diabetes received all eight care processes compared with 59% of those with type 2. There is an even greater contrast with regard to age range.
Mr George Howarth
As the Minister will be aware, because I have discussed it with her before, there is a specific group of young type 1 diabetics who manipulate their insulin intake to achieve rapid weight loss. Will she give some thought as to how that group, which is relatively small, can be supported to get out of that problem, which is life-threatening?
Jane Ellison
I will certainly take that issue away and reflect on it, and we will speak about it again.
For people under 40, only 27% with type 1 diabetes and 41% with type 2 received all care processes, compared with 58% and 65% respectively for those aged between 65 and 79. I have some sense of why that is, but it does highlight the challenge we face. Encouragingly, 77% of those newly diagnosed with type 2 diabetes were offered structured education, but again the percentage was lower for type 1. That is clearly unacceptable, because everyone with diabetes should receive the best possible care regardless of age, postcode or the type they have been diagnosed with. That is why, in our 2016-17 refresh of the mandate to NHS England, we have made tackling variation in the management and care of people with diabetes a key priority over the lifetime of this Parliament.
Alex Chalk (Cheltenham) (Con)
Does the Minister agree that we need consistently early diagnosis? Early intervention is particularly important in diabetes care, as it saves the NHS from unnecessary expenditure in the long run, and, just as importantly, saves patients from unnecessary suffering.
Jane Ellison
That is absolutely right. I am going to talk about the national diabetes prevention programme, which goes to the heart of the problem. When I spoke to the all-party group, I mentioned the conveyer belt that can start with weight in childhood developing into type 2 and go through to the serious complications that have been alluded to. At all points along that continuum, there are things we can do, and must be doing, to make life better for people with diabetes.
Because of the mandate, diabetes is now right at the heart of NHS England’s agenda. We want it to lead a step change in preventing ill health and supporting people to live healthier lives. Our 2020 goal is for a measurable reduction in variation in the management and care of people with diabetes. However, there is some way to go, so this debate is an opportunity to update the House on some of the areas where we are going to make progress.
We have increased transparency through the creation of the Healthier Lives website, which is a major online tool from Public Health England. I encourage Members who have not looked at it to do so. It highlights variation in the prevalence and treatment of diabetes, allowing clinical commissioning groups and GP practices to compare how well they deliver diabetes care and so drive improvements and iron out variation. I will come on to the support that we are offering them as well.
The CCG outcomes indicator set provides clear comparative information. As was said, it will soon be replaced by the improvement and assessment framework, which will have two diabetes indicators aimed at reducing variation in the achievement of the NICE treatment targets and the referral and take-up of structured education. Consultation on the framework has just closed, and we expect it be published in the summer. It goes to the heart of tackling variation and the cohesive approach that was spoken about.
The NHS Right Care programme is a very practical approach to tackling variation that uses the “Atlas of Variation”. In the case of diabetes, NHS experts help CCGs and other local health system partners to make the step change they need in some areas to improve care, because transparency alone is not enough if we do not offer people support and hands-on advice. In Slough, for example, huge improvements have been made through a clinical mentorship programme that has upskilled healthcare professionals in general practices. That has resulted in an increase in patients who have had their blood glucose, blood pressure and cholesterol controlled. The Right Care programme will be rolled out across CCGs nationally by 2018.
I urge the all-party group on diabetes and the right hon. Member for Leicester East to continue to engage colleagues. It is absolutely right that Ministers are brought to the House and scrutinised about what we can do, but the very nature of our health system and the variation under discussion are also highly susceptible to pressure at local level from well-informed Members and senior councillors. I encourage him to continue to engage Members in asking the right questions at a local level.
Keith Vaz
I will be brief, because I know that the Minister has a lot to tell us. When Members of Parliament write to local health and wellbeing boards, it would help enormously if they were able to tell us how much they spend on diabetes awareness. They cannot do that at present.
Jane Ellison
Part of the challenge is because much of the effort that is put in relates to the preventive agenda and the contributory factors. That is one of the challenges in teasing such figures apart. However, I will reflect on whether we can do more in terms of health and wellbeing boards.
To incentivise improvements in the treatment and care of children and young people with diabetes, the best practice tariff for paediatric diabetes provides an annual payment for every child and young person under the age of 19 with the condition, providing that 13 standards of care are met. One of those standards relates to structured education. As the right hon. Members for Leicester East and for Knowsley know, I am passionate about making changes to the way in which we do structured education. We know that it works and that it is very good when people do it, but we also know that a lot of people are not accessing it. I am looking really hard at how we could take a new and radical approach, including whether there are any tech solutions, and I look forward to reporting back on that.
Our ambitions extend further than creating a level playing field. We want the management of and care for diabetes to be driven up right across the board in order to improve outcomes. The NHS is working with a number of other organisations to help to promote services that are integrated around patients’ needs across all settings. It is implementing a customer service platform to empower patients with diabetes to self-manage by booking their own appointments, managing their prescriptions, monitoring the care they have received and viewing their personal health records.
I fear that time will not allow me to touch on prevention in as much detail as I would have liked, but I want to emphasise just how seriously we take it. The right hon. Member for Leicester East has outlined the reasons why it is important, including the escalating figures and how much the rising tide of type 2 diabetes associated with lifestyle will cost the NHS in the future. The factors can be modified, and one of the most powerful weapons in our armoury is the NHS diabetes prevention programme, which is the first national type 2 diabetes prevention programme to be delivered at scale. Its aim is to help people identified as at the highest risk of developing type 2 diabetes to lower their weight, increase physical activity and improve their diet through intensive lifestyle intervention programmes. I am pleased to inform the House that the first providers will be announced by the NHS shortly, and the programme will move ahead.
The programme will also link to the NHS health check programme. Almost 3 million NHS health check offers were made in 2014-15 and almost 1.5 million appointments taken up. That is vital for first awareness and my constituency knows how important early diagnosis can be as a result of the checks carried out by Silver Star when it visited us.
The right hon. Gentleman talked about other important referral routes, including engagement with pharmacists, and I will pass on his concerns to the Minister for Community and Social Care, my right hon. Friend the Member for North East Bedfordshire (Alistair Burt), who has responsibility for community pharmacies.
The right hon. Gentleman criticised the responsibility deal, but I think it has achieved a lot. We have made some important gains working in voluntary partnership with industry, such as the voluntary front-of-pack nutritional labelling scheme, which has greatly empowered consumers to know what is in their food. That accounts for about two thirds of the market for pre-packed food and drinks, but I accept that the challenge is to go further.
We will announce more about our childhood obesity strategy this summer. We will also monitor the impact of NHS England’s proposal for the introduction of a sugar tax on the NHS estate. It will be interesting to see the results of that consultation. The Sugar Smart app has empowered 1.6 million consumers to date to know more about what is in their food.
I thank the right hon. Gentleman again for bringing these important issues to the House. I am absolutely sure that we will discuss them again, because this vital agenda is right at the heart of the Government’s health programme.
DRAFT Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2016
(8 years, 9 months ago)
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The Committee divided: - Ayes: 10 / Noes: 8 - Question accordingly agreed to.
The Exchequer Secretary to the Treasury (Damian Hinds)
I beg to move,
That the Committee has considered the draft Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2016.
It is a pleasure to have the opportunity to serve under your chairmanship for what I believe is the first time, Sir Alan. I confirm that the regulations are compatible with the European convention on human rights.
I will set out the purpose of the regulations. As hon. Members will recall, tax credits were introduced in 2003, at which point the income rise disregard was set at £2,500. At that time, the tax credits system was unable to cope and in 2006 the then Government increased the disregard to £25,000. Two families with significantly different incomes could therefore receive the same tax credit award. I will shortly give some examples of how that works in practice. Following the 2010 election, the coalition Government reduced the disregard to £10,000 and then to £5,000. Improvements to stabilise the tax credits system and the increased use of real-time information mean that the system is now able to be more responsive to claimants’ changes of circumstances.
The regulations make a single change: they reduce the income rise disregard from £5,000 to £2,500, taking it back to the level it was set at when tax credits were introduced by Gordon Brown in 2003 and aligning it with the income fall disregard. That change was announced in the summer Budget on 8 July 2015.
The change brings forward some of the benefits of universal credit, which will replace tax credits. Universal credit does not have an income change disregard, so awards will more accurately reflect the claimant’s most recent earnings and overpayments will be reduced. Tax credit claimants will see a change in their award within a tax year only if their income increases in year by more than £2,500, and there will be no cash losers.
The disregard provides a buffer zone in which a family’s income can increase during a year without that affecting their tax credit entitlement. The disregard has been a feature of the tax credits system since its inception in 2003 and, as I said, was set originally at £2,500.
I will explain how the disregard works in practice. Following receipt of a claim, Her Majesty’s Revenue and Customs makes an initial tax credit award based on the claimant’s current circumstances and their income in the previous year. As the tax year progresses, claimants can notify HMRC of changes in their circumstances. Certain changes—for example, a partner moving in with a previously single claimant—must be reported within one month. Other changes, such as changes in income, do not need to be reported until the end of the year, but claimants are encouraged to keep HMRC up to date if their earnings change, otherwise they could end up with an overpayment, which they would need to pay back.
After the end of the tax year, HMRC sends the claimant renewal papers. The purpose of the renewal papers is to determine the claimant’s actual entitlement for the year that has just ended and, if appropriate, to initiate a claim for the year ahead; HMRC does that by asking the claimant to confirm their income and circumstances for the year that has just ended. Where the claimant’s income has stayed the same as the year before or has risen by less than the disregard, the tax credit award for that tax year is not affected, as any such increases in income are disregarded from the final calculation of the award. However, if claimants’ income has risen by more than the tax credit disregard, their award is decreased in year. Those individuals will, of course, still be taking home more money because of the increase in their income.
Either way, in the subsequent year, a claimant’s tax credit award will be calculated in the usual way, with their full annual income used to determine their tax credit entitlement. After the change in the tax year, the disregard is irrelevant; regardless of whether the recipient’s pay rise was above or below the disregard level, their tax credit award for the following year will be adjusted downwards to what it would have been had no disregard existed.
In practice, under the system that we inherited in 2010, where the then Government had set the income disregard at £25,000, somebody on tax credits could get a pay rise of £2,000 a month—which I am sure hon. Members will agree is a significant sum of money—and still be technically entitled to the same tax credit award until the end of the tax year, whereupon they would then see a big drop in their award and in their total income. We changed that, but even under the current, far more equitable system, a household can see its income rise by £400 a month and still be entitled to the same award as they were previously, until the end of the tax year. Claimants would subsequently see their tax credit entitlement reduced in the following year, having become accustomed to that quite large change in income.
Let us assume that that pay rise of £400 a month now means that the household is taking home as much money as their next-door neighbours, whose circumstances are exactly the same in other respects. The next-door neighbours are not entitled to the same level of tax credits, even though they have exactly the same income and circumstances. That is hardly fair; nor is it right. Under the system set out in the regulations, the household with an increased income of £4,800 a year would see its tax credit award adjusted sooner, to reflect its increased earnings. The household’s total income would rise more than the decrease in the tax credit award, which would provide the buffer zone that the income rise disregard is designed for, as well as more closely aligning the award with the next tax year’s entitlement, and making it the same as that of the next-door neighbours.
That example shows how reducing the income rise disregard reduces the unfairness in tax credit awards for families in similar circumstances. This is the right thing to do, to ensure fairness to all tax credit claimants. The principle is already live in universal credit, where a claimant’s award changes each month based on their earnings; this change brings forward some of those benefits. HMRC will communicate the change by providing information in tax credit renewals packs, which will highlight the change to the disregard, what it means when claimants have a rise in income and what they should report to HMRC.
With the introduction of real-time information, employers are now able to submit employee payroll information in real time. As 99% of employers are covered by the scheme, HMRC is now in a much better position to proactively check that it has the correct income details when claimants come to renew their awards at the end of the tax year; it also provides an opportunity to check awards within a tax year. From September 2016, HMRC will use the RTI to conduct automated checks of an individual claimant’s monthly income. Therefore, HMRC will be better able to assess a claimant’s tax credit entitlement in relation to their increased income. Should RTI find that a claimant’s entitlement should be reduced by £500 or more, HMRC will send a letter, text message or automated voice message to the claimant, prompting them to make contact with HMRC within 14 days. If they do not make contact, their income on the system will be automatically amended.
Let me be clear. HMRC will not only tell all claimants up front when they must report changes in their income, but in the majority of cases prompt claimants to report significant increases in income that HMRC picks up through the RTI feed. If claimants do not respond to the prompt, the system will automatically make the change and reduce the claimant’s tax credit award. That reduces the risk of overpayments, while making clear to the claimant their responsibilities.
The disregard reduction will affect only those claimants whose income increases in year by more than £2,500. There will be no cash losers. The change will make tax credits more responsive to income changes, reduce the over-inflated rise and subsequent fall that follows an income rise and reduce the inequality of very different awards to families in similar circumstances, with similar employment incomes. It returns the disregard to its original design and purpose. Now is the right time to do so, because the tax credits system is much more able to deal with income changes. I commend the regulations to the Committee.
Rebecca Long Bailey (Salford and Eccles) (Lab)
It is a pleasure to serve under your chairmanship, Sir Alan, and to debate such an important issue with the Minister.
As all hon. Members here will be aware, the Chancellor deviated—shall we say?—from his original plan for sweeping cuts to tax credits after ferocious opposition from Opposition Members and from some Members of his own party and, of course, after defeat in the House of Lords. However, we are now discovering that the deviation is not quite what we had hoped for; arguably, most of the cuts have been delayed and others are still going ahead.
As we have heard, the regulations seek to cut the income rise disregard, which is the buffer zone that protects families from incurring financial hardship as a result of repaying tax credits in the event that they earn slightly more than anticipated in any given year. It is an element of leeway in the system that allows a household’s income to rise a certain amount in a financial year without affecting the household’s tax credit award for that year.
A household’s tax credit award for the year ahead is based on income in the previous financial year. HMRC finalises the tax credits at the end of the year to reflect the actual income during the course of that year. If income was higher than predicted, the Government deem that to be an overpayment—effectively a debt that must be repaid—which will be automatically deducted from the claimant’s tax credit award for the next year. If the debt is greater than the award the Government will seek to recover it, in some cases potentially using private debt collectors. It is not unreasonable to expect people to repay any tax credits if they earn more than anticipated. However, the Government’s proposed approach to recover such sums appears to present a number of issues, which I hope that the Minister will carefully consider before reaching any conclusions on whether to recommend that the Committee pass the regulations.
Many families will see a change in income for various reasons over the course of a year. A member of the household may find a job or increase their working hours, exactly as the Government encourage them to do. The income rise disregard ensures that a small rise in income is not immediately clawed back, leaving low-paid families in sudden debt. It is important to make it clear that that does not mean that a household’s tax credit award remains unchanged for the following financial year, but simply that they do not have to repay any overpayment that may have occurred as a result of income rising by a small amount during the financial year just ended. The coalition Government had already cut the disregard from £25,000 to £10,000, and then halved that to £5,000 as recently as 2013. Today’s regulations will halve it again. The number of families breaching the limit has gone from 13,000, when the Tory-led coalition took office, to nearly 350,000 in 2013-14—the last year for which figures have been provided.
I ask the Minster to explain the rationale behind the £2,500 threshold. For example, has this figure been determined pursuant to an evidence-based review of all tax claimants’ increases in earnings over a specified period, resulting in a median threshold? Sadly, I do not believe that is the case. I understand that the figure is simply a return to the figure used at the inception of the income disregard in 2003. Although this figure was deemed reasonable at the time, it became immediately obvious to HMRC and the Treasury that it was too sensitive to small fluctuations in hours worked and, as such, was difficult for HMRC to manage efficiently. It also caused disproportionate hardship to many families.
Leaving the management of the overpayments system to one side for a moment, the Opposition are seriously concerned about the impact of the reduced figure of £2,500 on low-income families. The Government have stated that they champion the strivers who want to work hard and get on, but cutting the income rise disregard to such a low level means that people on lower pay are particularly vulnerable to being hit with an overpayment debt should they get a new job, work more hours, or earn a small pay rise or promotion. We are therefore concerned that the change could create a disincentive for people on low pay to take on more hours or move into full time work through fear of being hit with an overpayment debt.
The proposed reduction presents a real dilemma to families, especially those with members in jobs in which additional hours are less stable, such as zero-hours contracts, or where overtime might be offered from time to time. There might be a stark choice for these families: either work a few more hours from time to time and risk future repayments being imposed on the basis of a predicted salary, or simply decline the offer of extra work and ensure stability in long-term financial planning.
Dawn Butler (Brent Central) (Lab)
Is my hon. Friend aware of the extent of the impact assessment that the Government have undertaken on these new limits?
Rebecca Long Bailey
My hon. Friend will hear throughout my speech that I consider that to be a significant issue, which I hope the Minister will address today.
I want to make the Minister aware that our concerns are exacerbated by what can only be described as the Government’s continued silence on the potential impact of these cuts. To date, I am not aware of the publication of a specific impact assessment for these regulations or of an equality impact assessment. The fact that the Government have provided minimal information is reflected in an exchange between the Government and the Lords Secondary Legislation Scrutiny Committee on 28 January. The memorandum submitted by the Treasury stated:
“Next year there are expected to be 800,000 claimants with a reduced award as a result of their income increasing—none will be cash losers”.
But that did not provide an answer to the question posed by the Committee:
“Can you…give an indication of how many people will be affected by the change…and what the financial impact on those people is likely to be?”
I feel equally starved of information in the light of the responses I have received to my own written parliamentary questions. Since the autumn statement in which this cut was first outlined, I have tabled numerous written questions to ask for the details of its impact. I requested the modelling or case studies the Treasury undertook when formulating the policy; the impact on some example claimants; the total numbers likely to be affected; the estimated average change in tax credit award as a result of the change; and the evidential basis for the statement in the memorandum submitted to the other place that there would be no cash losers from this reduction.
I am saddened to inform the Minister that I have not received any satisfactory answers to my questions or to my requests for the case studies used to formulate this policy. I would have expected such case studies to have been undertaken as a matter of course, in the interests of acting prudently, before even drafting the regulations. It should simply have been a case of passing on the information used by the Government as their evidential base for making the suggested changes to the income disregard in the first instance. The Minister may be able to provide such evidence today—I would wholeheartedly welcome that—but from the information I have been able to glean so far, the only example provided was someone who earned £1 over the new disregard. I must flag up to the Minister that the Government have yet to confirm whether they have conducted an equality impact assessment.
I have no doubt that the Minister will understand my feelings of exasperation. Will he confirm today that a proper impact analysis and an equality impact assessment have been carried out in formulating the policy, or are the Government unaware of what the impact may be? The Minister will be pleased to know that from time to time I endeavour to be helpful to him in solving such conundrums. I have commissioned a bit of evidence-based research into the matter from the Library, and it is indeed illuminating. Its analysis of a household with one working adult on the current national minimum wage, over the age of 25 and with two children, demonstrates that, if that adult’s working hours were increased from 16 to 30 and then to 35 over successive tax years, the new disregard would be triggered and an overpayment incurred. That would then lead to their net income actually going down in at least one year, despite working more hours and earning more pay. Indeed, they would have lost £1,000 of income in at least one year, compared with the same situation under the current disregard. The Government’s claim that there are no cash losers would not be of much comfort to that family. Indeed, it would be interesting if the Minister expanded on what the Government mean by no cash losers, because that case study seems to demonstrate that there will be circumstances in which claimants who are increasing their pay could actually end up with a lower income for at least the year in question. That is just one example, of course, but an entirely plausible one.
Unfortunately, we still do not know the Government’s estimate of the maximum amount a family could lose. It would be helpful if the Minister provided that figure today; if not, perhaps he will say why it cannot be provided. He will no doubt appreciate that my hon. Friends and I are not prepared to allow legislation to be enacted that will affect 800,000 working people, without first knowing the potential impact on those people and without evidence that the Government have carried out due analysis.
To return to the management of the overpayments system, the Government have claimed that the updated real-time information system for pay-as-you-earn will make HMRC more sensitive to changes in income throughout the financial year, so that tax credit payments can be adjusted quickly, avoiding a build-up of debt. However, evidence suggests that the system is no more sensitive than it was in 2003-05, when the overpayments were recognised by all sides as excessive, peaking at £1.9 billion. The then Conservative Opposition were highly critical, and for our part, we recognise that there were problems with the initial introduction of the system. Unfortunately, it seems that while we have learnt the lessons, this Government want to make their own mistakes. Perhaps the Minister can reassure me that those fears are unfounded.
Since the coalition Government slashed the disregard to £5,000, the total value of overpayments has rocketed and again exceeded the £1.9 billion that caused the initial crisis. That does not suggest to me that HMRC is any more efficient at adjusting tax credit awards now than it was then. Cutting the disregard by half again adds further administrative burden for HMRC at a time when the Government are closing HMRC offices and reducing staffing levels across the country.
Campaigns such as Child Poverty Action Group have highlighted that people on lower pay tend to see fluctuations in their income from month to month. If the RTI does in fact prove to be effective, that could create huge administrative issues on its own, as people have their tax credit awards stopped, cut and restarted from month to month. Indeed, Mark Willis from Child Poverty Action Group has said:
“It doesn’t really matter what someone’s monthly income is... You always need an accurate estimate of annual income when you’re making these in-year changes. And no-one can really accurately predict the future, especially as we’re often talking here about people with fluctuating earnings”.
The impact on low-paid workers is particularly stark when compared with the money spent on the Chancellor’s tax cuts for the extremely wealthy. For instance, those selling a stake in a business of up to £10 million now pay only 10% capital gains tax on their profits—a tax relief worth £3 billion a year, around three times the amount estimated and dwarfing the savings made by the cut to tax credits. The bulk of this money goes to a very different group of people. The latest analysis suggests that the full £1.8 billion went to just 3,000 individuals who enjoyed a multimillion pound bonanza from selling shares—an incredible £600,000 each.
In conclusion, the Opposition are not sufficiently satisfied that the Government have considered, or indeed carried out adequate analysis of, the impact of the regulations. If indeed they have, I would ask that the information is shared and the passage of the regulations through this House paused until such time as Members have had the opportunity to review such information.
We are further concerned that setting the income rise disregard at such a low level makes people on low pay more vulnerable to accruing an overpayment debt simply by doing what the Government are asking of them. That is a disincentive for those in low-paid jobs to work harder and earn more, and is a punishment for doing so. Quite simply, working people have already suffered enough under this Government, and we will therefore oppose the regulations.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I want to put a few brief points to the Government about the reduction of the income rise disregard in the regulations.
As a constituency MP, I know—I am sure all of us know—just how distressing it is for parents in low-paid jobs to find out they have had an overpayment of tax credits, and the hardship and real anxiety that the recovery of those overpayments causes. These changes will make it harder for some families to budget and will create particular uncertainty for those in seasonal, temporary or otherwise insecure employment. As the hon. Member for Salford and Eccles pointed out, that is very likely to push some of those families into debt.
In 2013-14, there were 138,900 overpayments of tax credits in Scotland alone, which is more than 30% of the total number of awards. I take on board what the Government have said today about real-time information improving that situation for some families, but the new arrangements really will not help people with fluctuating or unpredictable incomes. Increasingly, so many people in low-paid jobs are not salaried; they are working on zero-hours contracts, on hourly rates, and their incomes can vary enormously from week to week. Even real-time information cannot predict the future; in areas such as mine, where many work in seasonal jobs, those people could be particularly vulnerable to the impact of these changes, which cannot predict the future and exaggerate the impact of very minimal changes on people’s incomes.
The reduction of the income rise disregard will make the existing problems more acute for people whose wages are variable. That brings us to what is, in my view, the biggest flaw in this measure: low-paid parents especially will be financially worse off if they take a better paid job, get a promotion, or work overtime. Once their income has increased by more than the disregard, a claimant will lose tax credits of 41p in the pound. That is a colossal rate of marginal taxation. It could also affect a claimant’s level of housing benefit or council tax reduction, leading to perverse incentives and anxiety and uncertainty for low-income families.
The impact assessment process and the inadequacy thereof has already been debated this morning, so I will not reiterate those arguments, but we are indebted to CPAG, which has modelled the impact of the changes on low-paid working families. It contends that a couple with one child, both working full time on minimum wage and with the mother returning from maternity leave, and £100 a week childcare costs—which is probably at the low end of realistic—will be more than £1,000 worse off next year than they would have been under the current arrangements. A lone parent with one child, but no childcare costs, who moves into work next month, doing 30 hours a week at minimum wage, will be nearly £950 worse off over the coming year. I do not think that the Government want to disincentivise work, but that will be the unintended consequence of what the Ministers proposes today. For all those reasons, my colleague and I intend to oppose the regulations today.
Karin Smyth (Bristol South) (Lab)
I wish to take issue with the rationale for why the change is happening and why it is happening now. I am a fairly new member of the Public Accounts Committee, to which HMRC officials are regular visitors, and I do not share the confidence in HMRC’s ability to react suitably in real time. Office closures have caused issues, but its ability to respond to customers through its various helplines and to manage that process is well documented in our reports.
HMRC officials are not the only regular visitors that cause the Public Accounts Committee concern about the adequacy of data collected across Government Departments to manage such changes. Every Department seems to have a problem with data and systems and there is no evidence that real-time information is efficient. Concerns have also been raised about the impact assessment and how the change will affect real people.
Government Members like to report that what we introduced in 2003 did not go well. We hold our hands up. It did not go well. We put in place measures to ensure that things were better, so it is a shame that the Conservatives do not want to learn the lessons of that previous system.
The Public Accounts Committee has also been looking at the roll-out of universal credit. It is thought that some of the changes here will be picked up in how universal credit is rolled out, but the PAC has concerns about how that is going and about the Department’s ability to inform Members of Parliament about when and how the change will reach their constituencies. I have no confidence in the Government’s ability to make this work in practice and urge that an impact assessment be reconsidered.
Christian Matheson (City of Chester) (Lab)
I intend to speak only briefly to seek reassurance from the Minister on one particular matter. My hon. Friend the Member for Salford and Eccles and the hon. Member for Banff and Buchan both spoke eloquently about the problems that this measure may cause to people in insecure, low-paid work or on zero-hours contracts—some of the most vulnerable members of society. We hear a lot from Government about helping such people, but we are seeing less and less practical assistance. My hon. Friend the Member for Bristol South mentioned the problems with HMRC, and anybody who has tried to phone HMRC over the past few years will know of the difficulties there.
It could be that I need to apologise to the Minister as I have may have misunderstood this, but something that has not yet been mentioned is the effect that the requirement for real-time reporting will have on businesses, and small businesses in particular. They may have to report from week to week or month to month on fluctuations or changes in their employees’ pay. I am not talking about large corporations with big payroll departments and good IT infrastructure that can perhaps report automatically. Real-time reporting will be an additional strain on small and medium-sized businesses that are already doing monthly VAT returns and other returns for HMRC. Is not there a danger that, in addition to a burden on the lowest paid, there will be a burden on small and medium-sized businesses, in having to keep up with payment week to week and month to month? I should be grateful if the Minister could clarify that.
Damian Hinds
I thank everyone who has taken part in the debate, which was constructive and useful. I particularly thank the hon. Member for Salford and Eccles, who speaks for the Opposition, for a measured and constructive speech in which she put some reasonable points and questions.
Alongside the broader steps that the Government are taking on long-term reform to welfare, the creation of jobs, and making work pay, the regulations will reduce the unfairness in the tax credits system. The reduction to the income rise disregard will decrease the instances where one family receives a higher tax credit award than another family with precisely the same income and the same circumstances. That is a clear point of fairness, and I hope that hon. Members can agree that on principle it is the right thing to do.
As I have already set out, the provision returns the income rise disregard to the original level; but there is a key difference, compared with 2003. This time the Government are making sure that the system is able to cope with fluctuations in family incomes. The answer to one of the parliamentary questions tabled by the hon. Member for Salford and Eccles would be that we estimate that the income of about 800,000 claimants will increase by more than £2,500 in year, and that therefore they will have an adjustment to their tax credit payments. Those people are doing the right thing, as a number of Opposition Members have said. They are working hard to increase their income. No one will have a cash loss, because their pay rise will always exceed any change to their tax credit award in year; so there will still be a clear incentive for working claimants to increase their earnings, as they will take home more money.
Dawn Butler
As there is no impact assessment, does the Minister agree that the measure will probably affect women and children more than any other group?
Damian Hinds
The 800,000 recipients are households, and the majority of them will be couples. The majority of those couples will be male and female couples. However, let us be clear, come the end of the tax year, whatever the income rise disregard and with or without today’s statutory instrument, their tax credit award will be adjusted downwards to take account of their higher income—by which time they may, of course, have become accustomed to what was to be a temporarily higher award.
The measure ensures fairness to the taxpayer, because a system of large income disregards unnecessarily increases costs. The Exchequer—hon. Members’ constituents— bears the cost of paying tax credit recipients a much higher award than they would get if their increased income were taken into account. Rather than continuing with that, the Government are taking action to make tax credits more responsive to income changes, which ensures that more claimants receive the entitlement that more closely reflects their actual income.
Real-time information will ensure that the changes to income can be identified earlier. From September 2016, the majority of claimants will be prompted to report increases of income to HMRC through a text message, voice message or letter, with the default action, in the event of non-response, that the award will be adjusted to reflect the income change. That will mitigate the likelihood of overpayments, and will make clear to claimants, in a fair way, their responsibility to report an increase in their income.
HMRC will provide information to those affected by the change, in tax credits renewals packs and updated guidance and notes to claimants, as well as in briefing lines for the tax credit helpline, to ensure that claimants are aware of the change and what it means for their tax credit award. The Government are committed to seeing the change implemented correctly, and are taking a considered approach to both the operational IT delivery and engagement with claimants, to ensure there will be a reduction in tax credit overpayments and the number of claimants falling into debt.
I will now answer some of the points raised by the Opposition during the debate. The hon. Member for Salford and Eccles asked about the rationale for the precise number, and we have had a similar discussion in previous debates. There is never one single magic number that can be applied to such a threshold.
As the hon. Lady said, the figure of £2,500 brings the design of the income rise disregard back to Gordon Brown’s original figure. It is a balance between on the one hand making sure that the system adjusts as quickly and smoothly as possible to someone’s rise in income—to reduce the fall they would otherwise experience at the end of the tax year—and on the other not having to make an administrative change, and change the tax credit award, when there is a very small increase, such as from an annual pay award or a small increase in hours. The big change compared with 2003 is real-time information. To answer the hon. Member for City of Chester, real-time information is already operational and has been since 2013. A lot of the debates he mentioned have happened, but it is an important part of the continuing development of our taxation system.
The hon. Members for Salford and Eccles and for Banff and Buchan mentioned people on zero-hours contracts. I think it is always worth repeating this point because sometimes one could get the impression from listening to the Opposition that people on zero-hours contracts are the overwhelming majority when they are not; something like 2.5% rely on a zero-hours contract. Some of those are coming back into the workplace, and some of them are students. On average, zero-hours contracts deliver 25 hours of work a week.
The important point, which also applies to later in the debate, is that tax credits are still based on an annualised estimate of income. It is not necessarily the case that every single time there is a change in someone’s hours in a particular month they will have to say that this year’s permanence level of annualised income has changed. Through the RTI system there is an opportunity for those on PAYE to be prompted to do so, and others still can do so. The point is what they expect their total annual income to be. That is what the tax credit architecture of the system is based on today. It has always been based on an annual view of income.
The hon. Member for Salford and Eccles also asked how we define no cash losers. It is very simple. People’s pay is going up, which is a good thing. Because the tax credits award cannot go down by more than the pay has gone up, therefore these people will be better off.
Chris Stephens (Glasgow South West) (SNP)
I have listened attentively to what everyone has said. We know that a large number of the Government’s employees are on tax credits. For example, the Department for Work and Pensions has 40% of its employees on tax credits. I ask the Minister whether any assessment has been done on what this proposed change would mean for the Government’s workforce.
Damian Hinds
I do not want to repeat myself as though I have nothing new to say. Those are people whose income is going up. This is good news for those people. The change is responding more quickly than would have happened anyway. That is a really important point. It is responding further and more quickly to that change in income, but their income has gone up.
There were quite rightly questions about the equalities impact. In response to the hon. Member for Brent Central, I have already talked about the proportion who are women. We have provided information to the Secondary Legislation Scrutiny Committee. As with all secondary legislation, the Government take into account the equalities impact, as we are legally obliged to do.
I think I have dealt with the questions around fluctuating incomes in relation to zero-hours contracts and the introduction of real-time information. I also want to respond to the point about HMRC and operational efficiency. The hon. Member for Bristol South is right to raise those important points. HMRC’s performance has improved significantly this year, answering more than 90% of calls with wait times averaging under six minutes. Of course, we still want those numbers to improve; do not misunderstand me. It brought in additional staff to cover some of the busiest times, recruited some 3,000 more staff and put on additional training.
In conclusion, this change to reduce the income disregard to £2,500 is fair to claimants, reducing inequalities in the tax credit system, and it is fair to the taxpayer, reducing unnecessary cost. There are no cash losers because these are people whose pay is going up quite substantially. It will reduce the incidence of temporarily inflated awards because the system will respond sooner and further to people’s change in income. I commend the regulations to the Committee.
Question put.
draft Greater Manchester Combined Authority (Election of Mayor with police and crime commissioner functions) order 2016
(8 years, 9 months ago)
General CommitteesRead Full debate Read Hansard Text
The Parliamentary Under-Secretary of State for Communities and Local Government (James Wharton)
I beg to move,
That the Committee has considered the draft Greater Manchester Combined Authority (Election of Mayor with Police and Crime Commissioner Functions) Order 2016.
It is a pleasure to serve under your chairmanship, Ms Ryan. I welcome the shadow Minister, the hon. Member for South Shields, to the Front Bench. This is our first full outing against, or in conjunction with, one another. I do not agree with much that comes from the Labour Front Bench, but I welcomed her appointment when it was announced not that long ago.
The draft order was laid before the House on 1 February 2016. If approved, it will deliver another significant milestone in fulfilling our manifesto commitments—specifically, our commitment to implement the historic devolution deal between the Government and Greater Manchester. That deal is an agreement that the Government will devolve significant new powers and that, in return, Greater Manchester will have a directly elected mayor for the Greater Manchester area, which will give the strong, transparent and accountable governance across Greater Manchester that the significant new powers require.
In November 2014, we agreed that those powers would include control over transport, housing, planning, skills and employment. We also agreed a reformed earn-back deal worth £30 million a year for 30 years. In July 2015, we agreed that the Mayor would have fire and rescue functions, and planning powers on compulsory purchase and mayoral development corporations. In November 2015, we agreed that the Mayor would be able to implement a community infrastructure levy, and we committed to the joint commissioning of certain employment programmes.
The Manchester deal or, more accurately, the Manchester deals—there can be more—are part of the ongoing process of devolution, allowing areas to control their own destiny and their own growth, thus supporting our commitment to rebalance our economy. The deals are part of building the northern powerhouse, which has huge potential to add an extra £37 billion to our national economy by the end of the next decade.
The draft order is the first under the Cities and Local Government Devolution Act 2016. It will deliver three major steps in devolution for Greater Manchester, which reflect the agreement entered into with Government in the original deal. First, it creates the position of a directly elected Mayor for Greater Manchester; the first election is to be held in May 2017, under the 2016 Act. The Mayor will both chair the combined authority and exercise individually those powers agreed in the devolution deals.
Secondly, the draft order specifies that the first mayoral term will last three years, with the next election in May 2020, and that subsequent terms will last for four years. That enables Greater Manchester to align the mayoral election with the other local elections in 2020. Finally, the draft order specifies that the Greater Manchester Mayor will exercise the functions of a police and crime commissioner, and extends the term of office of the sitting police and crime commissioner until May 2017, when the Mayor will be elected.
The draft order is an important step on the journey that will implement fully the groundbreaking devolution deals that we have reached with Greater Manchester. We will be introducing further secondary legislation to confer on Greater Manchester and its Mayor the powers agreed in the deals, including the legislation to provide the detailed arrangements as to how the powers, including the police and crime commissioner functions, will be exercised in practice. The secondary legislation, which of course the House will have an opportunity to debate and, if it so chooses, to approve, will include the provisions necessary on the relationship between the Mayor and the other members of the combined authority.
Devolution has the potential to lay the foundations of greater prosperity and to build a more balanced economy. The draft order is an important step in meeting our commitments and in delivering on our side of the Greater Manchester deal, which is similar to deals made with many other areas. I commend the order to the House.
Mrs Emma Lewell-Buck (South Shields) (Lab)
It is a pleasure to serve under your chairmanship, Ms Ryan, and to be having our first outings in our respective roles. I also thank the Minister for his kind words.
I do not intend to press for a Division, and I will keep my comments brief, but the Opposition have a number of concerns that we would like the Minister to address. Labour has always been a party of devolution. We strongly support the principles of devolution. Absorbing the police and crime commissioner role into the mayoral position certainly has merit when we consider the potential for joined-up services, such as mental health, where there is already close working between the police and local authorities.
While a combined directly elected Mayor and police and crime commissioner will have the opportunity to be more locally responsive and to make joined-up responses on vital areas of governance, it is of paramount importance that a role that commands such power is created through a thoroughly transparent and democratic process. Our greatest concern is that there is little evidence of that.
The significant and worrying lack of public consultation and engagement at all stages of the process, including with today’s order, is well recorded. The Centre for Public Scrutiny and the Communities and Local Government Committee have criticised the fact that far too many deals have been rushed and reached behind closed doors, without a proper assessment of how devolution will improve powers. Not to allow the people of Greater Manchester to assert their democratic right to be involved in a process that will radically change how their region is governed is troubling to say the least. In his response, will the Minister talk about the lack of public consultation?
The present Greater Manchester police and crime commissioner was appointed as an interim Mayor by the combined authority leaders. His tenure was extended to five years. Whatever his merits are, neither that appointment nor the extension were democratic decisions. Turnout in Greater Manchester for the election of the new police and crime commissioner in 2012 stood at just 14%. That shows that the public either did not want a police and crime commissioner or that they were not given enough information to be politically engaged. It is therefore even more important for the Government to ensure that the public are properly included in and informed about the plans we are debating. Will the Minister further explain the basis on which the electoral term was extended from four years to five?
Another concern is whether the public know that a Mayor who is also a police and crime commissioner may also appoint a deputy police and crime commissioner mayor who is separate from the deputy Mayor. That person can take on most of the Mayor’s PCC functions—a non-democratically-elected person selected by the Mayor alone can carry out most of those functions. That becomes more worrying when we consider that the Government intend to enable PCCs to take on responsibility for the fire and rescue services in their area. Can the Minister give us assurances that that will not be used as a smokescreen for further cuts to the fire service? I am curious to know how confident he is that police and crime commissioners will have the knowledge to take on responsibility for fire and rescue services. Can he explain how he envisages the Mayor and their self-appointed deputy being held properly to account?
This is a brand-new post, involving an individual being responsible for a huge brief with complex divisions of responsibility.
Yvonne Fovargue (Makerfield) (Lab)
Does my hon. Friend agree that one of the concerns of the residents of the combined authorities is that this is power without money following it? That was demonstrated in the settlement with the extra £300 million. Very little—almost none at all, in fact—went to the northern authorities and towns that needed it.
Mrs Lewell-Buck
My hon. Friend raises an important point that I have heard others mention. To exercise power, money is needed. If the Government are going to continue taking money away from local authorities, how can those authorities fully exercise their power?
Finally, the Minister needs to explain how he will take some responsibility for ensuring that the changes are communicated in a clear way to the public. Can he guarantee that we will not hear a repetition of the mantra that that is up to local areas and local areas alone? After all, he surely understands as the Minister in charge that he has a role and responsibility here. I do not wish to detain the Committee further, and I look forward to his response.
James Wharton
The shadow Minister raised a number of areas of specific interest on which I will comment. Overall, however, it is right to welcome the broad statement with which she opened. Across the political divide, there is a general consensus that we want to see devolution delivered. We recognise that devolution can bring significant benefits to our communities. We may have differences about how that should be done, but none the less, I think there is agreement on the core principle that devolution is something that we want to pursue. That was demonstrated by the shadow Minister’s comments. We may have differences about how that should be done, but none the less there is agreement on the core principle that devolution is something that we want to pursue. That was demonstrated by the shadow Minister’s comments.
The shadow Minister raised specific issues. She asked why the police and crime commissioner’s term in Greater Manchester is to be extended from four years to five. It is so that we do not have a costly election for a position that will no longer exist only one year later. We have made the change in agreement with local partners, including the police and crime commissioner, the combined authority and local leaders. For similar reasons, the first term of the elected metro Mayor will be set at three years so that future elections will be in line with the local election cycle in Greater Manchester. That will reduce costs and, hopefully, further expand the opportunities for democratic engagement, as other elections are held at the same time.
The shadow Minister asked about the deputy PCC mayor. Of course, police and crime commissioners already have the power to appoint a deputy who can do many of the things that she mentioned, so it is not a departure from the current system. Similarly, on fire and rescue services, we are working to enable local areas to facilitate work across our emergency services to find areas and functions where we can bring together different services and different parts of government, in whatever field they might be, to deliver a better service to the people we represent and the residents we serve. We made it clear in our manifesto that we would enable fire and police services to work together more closely, and that we would develop the role of accountable police and crime commissioners and, in this case, the greater Mayors who take on that role.
A consultation was undertaken in September 2015 on a range of proposals, and there were more than 300 responses. The Government published their response on 26 January 2016. The intention throughout with Greater Manchester, and in those other areas with which we are talking about devolution, is to do things for which those areas ask. Our intention is to do things in conjunction with local representatives, who are best placed to understand the needs of their communities and the opportunities that exist in their local economies, to improve life for the residents they serve. That is reflected both in the content of the deals that have been reached with Greater Manchester and in the way those deals have come about. A number of deals have evolved over time, and we have worked jointly with local representatives to reach broad cross-party agreement on the right way forward.
Mrs Lewell-Buck
I hear what the Minister is saying about discussions with local authority leaders, but does he understand that there is a lot of unrest out there? A lot of people are saying that they simply do not know what is happening. The message is not filtering through; it is not being communicated to the very communities that rely on these services, as borne out by a recent Select Committee report and many other reports. What will the Government do about that?
James Wharton
I understand the shadow Minister’s concern about the extent to which the changes that are taking place are broadly understood by the people in those communities that we hope will benefit. The truth is that, in line with the basic principles of devolution, we have allowed local areas and local authority leaders to consult as they see appropriate before approving devolution deals.
There has been extensive coverage in local media, with debates on both sides of these arguments. There have been many debates in this place, but I recognise that there is—indeed, there always is in democracy—more to be done to continue engaging, to continue explaining and to continue showing why what we are doing is important and why we believe that it will bring benefits.
In part, we are talking about the election of a Greater Manchester metro Mayor in May 2017, and, as we head towards the election, the debate will become more acutely obvious to residents living in Greater Manchester. The candidates, from whatever party and of whatever view, will want to set out their stalls for that election and explain the powers that the Mayor will have and what they want to do with those powers for the communities that they want to represent. That will be true not only in Greater Manchester but more broadly across those areas that have agreed such deals and that will have Mayors in the first tranche of devolution.
I always want to do more to spread the good word of the great works that the Government are doing. I would welcome the shadow Minister’s assistance, wherever possible, in doing that, but I have no doubt that this debate will not only continue but become louder, more obvious and more specific as we head towards the mayoral elections. It is for those reasons that I commend the draft order; I am pleased that the shadow Minister said she does not intend to divide the Committee.
Today marks a significant milestone along the path of delivering the agenda that we are pursuing. It will make a real difference to communities across the UK, particularly in the north of England, where we want to build and deliver on the northern powerhouse and unlock the huge economic potential that we know exists in the economies of the north, in the communities of the north and, most fundamentally, thanks to the people who live in the north of this great country.
Question put and agreed to.
Draft Occupational Pension Schemes (Scheme Administration) (Amendment) Regulations 2016
(8 years, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
I beg to move,
That the Committee has considered the draft Occupational Pension Schemes (Scheme Administration) (Amendment) Regulations 2016.
As always, it is a great pleasure to serve under your chairmanship, Mr Bone. The draft regulations, which were laid before the House on 1 February, respond to stakeholders and interested parties and clarify the Government’s requirements to ensure that regulations work as intended. From April 2015, new governance requirements were introduced in the Occupational Pension Schemes (Charges and Governance) Regulations 2015 for occupational pension schemes providing money purchase benefits. They include: annual statements regarding governance; certain requirements for processing financial transactions; appointing a chair of trustees responsible for signing the annual statement; and further requirements relating to the default arrangement. Additional requirements were imposed on relevant multi-employer schemes to strengthen the independent oversight of schemes used by multiple employers.
Relevant multi-employer schemes must have at least three trustees and a majority of all trustees, including the chair, must be independent of providers of services to the scheme. Trustees must be appointed for limited terms through open and transparent recruitment processes. Those requirements do not apply when the employers are part of the same corporate group, as we consider such schemes to be closer in nature to single employer schemes and thus less likely to require such additional member protections.
We also made a temporary exemption from the additional requirements, until April this year, for schemes set up by statute. That was to enable us to carry out further work on their existing governance requirements before deciding whether the exemption should continue. The National Employment Savings Trust, known as NEST, is also exempt from the additional requirements as it already has rigorous governance requirements set by law.
The governance measures cover occupational schemes offering money purchase benefits regardless of whether they are used for automatic enrolment or not. They also exclude schemes where the only money purchase benefits offered are additional voluntary contributions.
Since those regulations came into force last April, we have received representations that the definition of “relevant multi-employer scheme” had unintended consequences by bringing some corporate group schemes within the scope of the additional governance requirements. The draft regulations will amend the definition of a multi-employer scheme to ensure that normal corporate activity does not bring a corporate group scheme within the additional requirements unless it promotes itself as open to unconnected employers.
The draft regulations will not extend the temporary exemption for multi-employer schemes set up by statute. On balance, we considered that there was no significant reason to provide a further exemption from good governance standards. However, we will give such schemes up to six months to comply with the requirements for the appointment of independent trustees.
The draft regulations will make other minor changes to ease the practical application of the governance standards. They will remove the requirement for the chair of NEST to be appointed within a three-month timeframe, as that appointment is already covered by other statutory requirements. NEST has to comply with the public appointments process. The draft regulations also allow a person or deputy chair appointed by the trustees to sign the annual statement if there is no chair in place—for example, if the chair resigns or is removed.
For some schemes, certain provisions governing the appointment of trustees are set out in their trust deeds and rules, which may conflict with the governance requirements regarding the appointment of independent trustees. To make it easier for those schemes to comply, the draft regulations will apply a statutory override where provisions in trust deeds and rules conflict with the requirements for the appointment of independent trustees in multi-employment schemes. The draft regulations also correct a typographical error in the definition of “default arrangement” in the 2015 regulations, which were inserted into the Occupational Pension Schemes (Investment) Regulations 2005.
Consideration has also been given to the Small Business, Enterprise and Employment Act 2015, so the regulations include a review clause. The review’s conclusions will be set out in a report, to be published within five years after the regulations come into force. Subsequent reports will be published at intervals not exceeding five years. The review will cover both the original governance requirements and the amendments in this instrument. The draft regulations will make important changes to clarify the scope of the governance requirements and will ensure that they are practicable for occupational pension schemes.
Angela Rayner (Ashton-under-Lyne) (Lab)
It is a pleasure to face the Minister again under your chairmanship, Mr Bone. It is rather unfortunate that, as I think one of the Guardian columnists has said, as soon as people see “pensions” in the title of anything in the media today, they glaze over. However, I hope that the Minister will not glaze over during my contribution today, because although the Opposition will not oppose these measures, we want to touch on several important concerns that are related to these regulations.
To put the measure into context, employers have a choice about the kind of pension they make available for their employees, with some choosing to use schemes based on a trust with trustees. Others choose schemes provided by insurance companies, which result in contracts between the providers and the employees. Such schemes include personal pension schemes and stakeholder pension schemes, which employers use for auto-enrolment or otherwise make available to their employees. There is no board of trustees and no fiduciary duty to the scheme member.
The market for multi-employer schemes, known as master trusts, is relatively new and has undergone rapid expansion in the last couple of years. The major players have been open for business only since 2011 and barriers to entry have historically been low. While no official list of providers exists, Professional Pensions sought to compile a definitive list in August 2015 and identified 57, but there could be as many as 70 or even 80 master trust providers in the UK. Employers have to try to distinguish between many offerings of varying quality, and there are concerns across the sector about regulation and governance.
In its evidence to the Select Committee on Work and Pensions’ current enquiry on auto-enrolment, the Association of British Insurers made the point that trust-based schemes, including master trusts, are not
“subject to the same stringent regulatory standards as contract-based schemes, which are regulated by the FCA.”
Instead, master trusts are supervised from a distance by the Pensions Regulator, which does not have the power to check how the pensions are sold or to shut down companies that fall short of basic standards. The Pensions Regulator highlighted the issue to the Work and Pensions Committee:
“94% of employers who chose a trust-based scheme opted for a master trust. Due to their scale, commercial purpose and design for use by multiple employers, master trusts represent different risks to members and consumer protection when compared to other occupational schemes. Unlike pension providers regulated by the FCA, the master trusts themselves are not authorised prior to market entry and the regulatory framework is not designed for similar levels of ongoing supervision. As a way of mitigating this risk, we introduced the master trust assurance (MTA) in May 2014, developed in partnership with the Institute of Chartered Accountants in England and Wales (ICAEW). However, it is a voluntary arrangement”.
Only five master trusts are part of the master trust assurance framework, meaning that they are independently audited.
Andrew Warwick-Thompson, executive director for regulatory policy at the Pensions Regulator, warned that some of the other schemes were too small and had no safeguards protecting their members. Alarmingly, he added:
“There is a risk of these schemes falling over; there is a risk that members might lose their money.”
He went on to warn that the lack of requirements for qualifications or assets meant that some master trusts
“may not be run by competent people”.
The so-called fit and proper person test appears to be even less stringent than that applied by the Football League. HMRC’s guidance suggests that it will automatically assume that anyone who applies is fit and proper. Perhaps the Minister will tell us whether the Government have any plans to change HMRC’s practice or guidance in that regard. Even when directors are qualified, providers do not always make it clear where the savings are invested and who owns the schemes.
The BBC programme, “The World Tonight”, also discovered that at least one master trust seemed to be providing misleading information online. The website, myworkplacepension.com, claims to have £50 million of pensions under management managed by the City firm, Old Mutual. When the BBC scrutinised the whereabouts of that money, myworkplacepension.com admitted it had no such assets. Subsequently, Old Mutual denied handling the company’s account and asked for its name to be removed from its publicity.
According to Companies House records, My WorkPlace Pension Ltd is 50% owned by Gavin McCloskey, who, with an associate, Anthony Okeke, was previously a director of a firm that sold sports fashion clothing. Incredibly, its trading name was Wide-Boys R Us.
Angela Rayner
We may laugh, but it will hardly be amusing to someone who finds their employer has invested their pension with a dubious scheme and without safeguards. Alarmingly, the programme also cited one industry expert who suggested that only around 10 existing master trust schemes could be considered completely safe and reliable. There is a view, therefore, that strengthening the requirements to enter the market, such as with authorisation or licensing, should filter out the least desirable operators. We would like to know more about the regulatory framework within which the Minister envisages today’s regulations will sit.
This issue was raised by my hon. Friend the Member for Wolverhampton South West (Rob Marris), who, as shadow Financial Secretary to the Treasury, represented the Opposition during the Committee stage of the Bank of England and Financial Services Bill. The Economic Secretary to the Treasury responded that the Government would bring forward regulations as soon as practically possible. Can the Minister tell us today what discussions the Department for Work and Pensions has had with the Treasury about that legislation and give us an update? Perhaps he will tell us how such legislation relates to the comments of his colleague, the Minister of State for Pensions, in the press on 1 March. She complained that the Government would not give the Department parliamentary time for pensions legislation specifically in relation to master trusts. She said:
“We need legislation and have been bidding for a bill, a pensions bill but it has been refused. It was refused at the end of last year and it has still not happened…I am hoping we will get one because we can’t do anything properly without it.”
We seem to be in the extraordinary position of the Minister for Pensions admitting that she cannot do anything properly on this issue because she cannot get parliamentary time from her own Government, whose legislative agenda is hardly full. However, this seems to be flatly contradicted by the remarks of the Economic Secretary, so is the Treasury more up to date on pensions policy than the Minister for Pensions, or is that just where the power lies in this Government? Perhaps none of them knows what is going on.
If the Minister knows anything about his own Department’s legislative agenda, perhaps he would clarify whether we can expect a Bill and, if so, when. There are a number of questions about the regulatory framework on which it would also be helpful to hear his views.
Chris Philp (Croydon South) (Con)
With great respect to the hon. Lady, whose comments are interesting, we seem to have strayed a long way from the regulations before us. Does she plan to get back to the matter at hand in the near future?
The Chair
Order. If the hon. Lady had been out of order, I would have said so. I do not need any help from the hon. Gentleman, thank you.
Angela Rayner
I thank the hon. Gentleman for his comments. This is not just interesting; it is alarming for people with pension provision, who want to know that things are being done to ensure that their pensions are protected, so I will carry on.
It may be that some of these issues I am raising could be addressed in the legislation, but I hope the Minister can enlighten us. To start with an obvious point, master trusts are exactly that: trusts. A trustee board sounds friendlier than a governance committee, but there are no requirements for at least one third of the trustee board to be member nominated. Some voices in the sector are calling for a level as high as 50%. Will the Minister give us his view on that?
Master trusts are cheap to join. Currently, large master trusts are subsidising the installation costs from reserves, which gives them a competitive edge in the market. However, like credit cards, master trusts are for life, not just for their initial rates. Does the Minister believe there is any cause for concern there?
The regulations that apply to retail funds do not apply to master trusts, nor does the Financial Conduct Authority have jurisdiction over them. Given the Government’s pension freedoms agenda and the arrival of 1.3 million small and micro-employers, the traditional boundaries between institutional and retail are blurring. That brings us back to the question of who the appropriate regulator is. Are the Government considering giving the FCA regulatory powers or changing the powers of the Pensions Regulator, as the Minister with responsibility for pensions reform seemed to suggest in the media earlier this week?
Unlike insurance arrangements, master trusts are not subject to solvency II and do not even have to undergo the capital adequacy test needed to run an advisory firm. In theory, that makes them nimble and cheap to run, but in practice it means they have little margin for error. If the controls in the master trust assurance framework are not adopted, can the Minister assure us they are as safe as contract-based arrangements? If not, what steps will he take to protect members from failure?
Members of master trusts are not protected by the Financial Services Compensation Scheme or the Pension Protection Fund. Have the Government given any thought to changing that or providing another failure regime? As I said earlier, the Minister with responsibility for pensions reform suggested in the press this week that a compulsory insurance scheme is her preferred solution and that she wants to introduce one in a pensions Bill. Can the Minister confirm whether that was a statement of Government policy?
Similarly, master trusts are not subject to permitted links regulations, which restrict where insurers may invest. That gives master trusts more flexibility, but could make them an ideal vehicle for pension scams. What assurances can the Minister give us that the Government are dealing with that risk?
It has been suggested that employers could use master trusts to de-risk unwanted liabilities from defined contribution schemes. They are taken to be a safe haven for employers but, contrary to what employers may suppose, they cannot just offload their company’s pensioners into somebody else’s master trust and wash their hands of the liability. They remain a participating employer of the master trust for as long as their former members are in it. Is the Minister confident that this issue is being addressed? Master trusts may be being used for auto-enrolment, to de-risk existing schemes, or even as a template for collective DC, but they are not a universal solution and should surely be subject to the same scrutiny as other structures.
As a result of master trusts’ unusual structure, certain practical challenges have emerged with no easy solutions. Given the scale of the operations and the sheer number of employers and members involved, is it not uncommon for contributions to be paid late or in error, or not paid at all? However, the obligation to report late contributions is the same, as are the trustees’ legal obligations to chase up late payments. Is the Minister confident that those obligations are being fulfilled?
Some master trusts have no mechanism to bulk transfer-out members once they are in if the scheme does not perform as expected. Does that issue need regulatory action? The default fund for an employer may not be chosen by trustees who are familiar with their membership. Indeed, how can it be possible for a default fund to be appropriate for more than 1 million members from diverse industries, of different ages and with different earning capacities? In short, can one size fit all? I would welcome the Minister’s observations and any answers to how that fundamental question can be addressed.
Rapid growth in the last four years has been fuelled by a steadily increasing market of employers who need providers. That will likely dry up in 2018, once auto-enrolment has been rolled out fully. After that, only acquisition will fuel growth, and we can expect consolidation, which makes the question about size all the more important, while also raising concern at the other end of the market about any weaker performers who may be too small for safety while not presenting an appealing target for acquisition. In the battle for market space, both the contract providers and the master trusts are in danger of cutting corners and taking risks that will compromise scheme members.
Given that DC scheme members should be the beneficial owners of their assets, the Government have left too many pension futures in doubt without a clear plan to deal with the issues. On top of that, we are in a situation in which no scheme member can know the true costs. How much someone pays to invest has a huge impact on the net returns they receive when they retire. Indeed, some analyses suggest that, after costs, only a small minority of managers actually deliver any value at all, and just 25 out of more than 200 fund houses have signed up to a statement of principles, introduced by the Investment Association, that included a commitment to put the interests of clients ahead of their own.
The Government, the IA and the FCA have been talking about transparency for some time, but when can we expect action? What steps are the Government taking to protect the security and fiduciary interests of scheme members in both master trusts and contract-based schemes? Does the Minister agree that DC schemes should have boards of trustees in which scheme member representatives should be in the majority and that they should be chosen by the scheme members themselves? That would be one way to give scheme members assurances that their money and their assets were being looked after in their interests. That is vital to the people who are listening to this.
In contract-based DC schemes, there are no requirements for trustees to act in the fiduciary interests of members, and in his recent written answers the Minister fell short of pledging any action to rectify this. Given the history of financial services scandals, is that not one way in which we could prevent the abuse of scheme members’ money? The Government have also failed to legislate for cost transparency for pension scheme members. In DC schemes, all costs are borne by the individual member. Will the Minister encourage the Investment Association to provide the data sets needed for transparency and say where he stands on new legislation?
Finally, as a former Unison shop steward in local government, I note that the Minister’s colleagues in the Department for Communities and Local Government have moved to require scale and cost transparency in the local government pension scheme, so will the Department for Work and Pensions act to provide the same protection for other savers? The measure before us today is technical, and we do not intend to oppose it, but the wider context of these regulations is of far greater concern. I hope the Minister can address those concerns for us all now.
Mr Vara
Those who take the trouble to look at the regulations before us will find that they are specific and narrow. I intend to address the issue before us, rather than go into a general debate on pensions.
The revisions proposed today are a specific response to stakeholders and interested parties, and they are intended to improve the system that exists at the moment. I like to think that the public will welcome them, given that we are responding to the points made by them.
Mark Field (Cities of London and Westminster) (Con)
A relevant point was brought up by the Opposition spokesman in relation to a “fit and proper person”. Although I appreciate that the Minister wants to go on to a specific area, it would be useful for the Committee to be aware of some of the potential concerns. I suspect that whatever the Government are doing in this regard will be rather more robust than it is for the Football Association, for whom “fit and proper person” seems an almost meaningless phrase. None the less, given the large sums of money being held on trust for many of our constituents, it is important that at least some thought is put into that, so I look forward to hearing the Minister’s views on the matter.
Mr Vara
My right hon. Friend makes a good point, and I did intend to touch briefly on the governance of master trusts and fit and proper individuals. The hon. Member for Ashton-under-Lyne spoke at length about master trusts and raised several concerns, so I assure her that master trusts already have to meet a number of governance requirements under the current law. A voluntary master trust assurance framework has been developed by the Institute of Chartered Accountants in England and Wales in partnership with the Pensions Regulator. It is designed to help trustees to assess the quality of their scheme against an industry-wide quality benchmark. It also helps employers to find a well run pension scheme that can be used to comply with their automatic enrolment duties. The Department for Work and Pensions and the Pensions Regulator are exploring whether additional protections would be appropriate for the future regulation of this part of the market.
Well run master trusts can and do offer good deals for consumers and employers, and we are keen that the market develops in the right way. We are aware that potential issues have been suggested and we are working with the Pensions Regulator to ensure that the right protection is in place. Once the measures are firmed up, we will inform the public.
Angela Rayner
Does the Minister know how many master trusts have signed up to the voluntary arrangement and how many are yet to do so?
Mr Vara
I do not have a specific figure to hand. The hon. Lady suggested a number of figures, but I want to be careful before I commit myself to any specific number—[Interruption]—although it is my understanding that it may be five. That is my present assumption.
The Government agree that it is important that members’ interests are represented and their views considered. Requirements from April 2015 ensure that independent governance committees and multi-employer scheme boards have arrangements in place to ensure that members’ views are directly represented. Annual chair statements must also include the details of those arrangements. As for contributions paid, the Pensions Regulator works with the industry to monitor the ongoing payment of contributions.
I am grateful for Members’ contributions this morning. The regulations that we have put forward will improve the management of the pensions industry generally. Good governance is fundamental in securing good outcomes for members, and the regulations will help ensure that schemes are well run in members’ interests.
Question put and agreed to.
High Speed Rail (London - West Midlands) Bill (Third sitting)
(8 years, 9 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 5 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 9 - Question accordingly negatived.
The Chair
We begin with the question that clause 37 stand part of the Bill. To help matters, I have decided that it will be convenient to consider the schedules, and therefore schedule 27 will be considered with clause 37.
Clause 37
Local Acts
Question proposed, That the clause stand part of the Bill.
The Minister of State, Department for Transport (Mr Robert Goodwill)
Good morning, Mr Hanson. Clause 37 introduces schedule 27, which contains provisions to disapply various controls imposed by local Acts relating to London, Oxfordshire, Staffordshire and the west midlands. Similar provisions were included in the Crossrail Act 2008, with regard to the enactments having effect in London. I will briefly list the Acts that the clause will include: the London Squares Preservation Act 1931; the London Overground Wires &c. Act 1933; the London Building Acts (Amendment) Act 1939; the West Midlands County Council Act 1980; the Staffordshire Act 1983; the Oxfordshire Act 1985; and the Greater London Council (General Powers) Act 1986.
Why have we disapplied those Acts, and what does that mean in practice? Those local Acts provide a range of geographically specific restrictions that are not appropriate in the case of a major railway project such as phase 1 of High Speed 2. The restrictions include provisions such as the control of dust, and lighting, which would impede or delay the construction of phase 1 and which are rendered unnecessary by the environmental minimum requirements.
Question put and agreed to.
Clause 37 accordingly ordered to stand part of the Bill.
Schedule 27 agreed to.
Clause 38
Objectives of Office of Rail and Road
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 38 relates to the duties of the Office of Rail and Road, as set out in section 4(1) of the Railways Act 1993, and ensures that the requirement for the ORR to facilitate the construction of phase 1 of HS2 is explicitly set out as one of its objectives. The ORR must consult the Secretary of State about how it should carry out that objective. That will ensure that HS2 is considered by the ORR in exactly the same way as any other rail project, and that the ORR balances the needs of HS2 with those of the wider network. Similar provisions were, unsurprisingly, included in the Crossrail Act 2008.
Question put and agreed to.
Clause 38 accordingly ordered to stand part of the Bill.
Clause 39
Disapplication of licensing requirement in pre-operational phase
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 39 has the effect of removing the need for an operating licence under section 6(1) of the Railways Act 1993 for the HS2 infrastructure or train operator when the line is being tested prior to opening in 2026. The exemption means that the testing of phase 1 of HS2 will have the benefit of the defence against nuisance provided by the 1993 Act. During that period, the railway will not have commercial services and therefore there would be no cost, income, services or passenger elements to regulate.
Question put and agreed to.
Clause 39 accordingly ordered to stand part of the Bill.
Clause 40
Disapplication of statutory closure provisions
Andy McDonald (Middlesbrough) (Lab)
I beg to move amendment 17, in clause 40, page 15, line 7, after
“discontinuance which the Secretary of State,”
insert “reasonably”
This amendment would require the Secretary of State to reach a ‘reasonable’ decision on closures, which could be challenged under this act if not reached reasonably.
The Chair
With this it will be convenient to discuss the following:
Amendment 18, in clause 40, page 15, line 8, leave out from “expedient” to “High Speed 2” and insert
“in relation to the Northolt and Acton Line (also known as the Wycombe Single Line).”
This amendment would limit the Secretary of State’s powers to close any line or station and restrict it to the Northolt and Acton Line (also known as the “Wycombe Single Line”).
Amendment 20, in clause 40, page 15, line 10, at end insert—
“(1A) If the Secretary of State makes a direction under subsection (1), he must make a written statement to Parliament within 28 days, setting out his reasons for making such a direction.”
If the Secretary of State makes a direction under subsection (1), this amendment requires the Secretary of State to make a written statement to Parliament within 28 days, setting out the rationale for his decision.
Amendment 19, in clause 40, page 15, line 15, leave out
“sections 29 to 31 (discontinuance of use or operation of stations),”
This amendment would remove the station closure powers in this Clause.
Andy McDonald
As drawn, the clause gives the Secretary of State power to disapply the closure provisions of the Railways Act 2005 and enables the Secretary of State to close existing services, stations or parts of the rail network that are necessary or expedient because of the construction or operation of phase 1 of HS2. Amendment 17 would require the Secretary of State to reach a reasonable decision on closures that could be challenged under the High Speed Rail (London - West Midlands) Act if not reached reasonably.
Clause 40 states:
“The Secretary of State may at any time before Phase One of High Speed 2 is ready for commercial use direct that the statutory closure provisions…are not to apply to any discontinuance which the Secretary of State considers necessary or expedient because of…the carrying out…of works”.
Although we understand and accept that it is necessary for the Secretary of State to disapply statutory closure provisions, we are concerned that the powers granted by the Bill as it stands would be too far-reaching and are unnecessary. We are attempting to place some proper and reasonable parameters around the powers that we agree the Secretary of State should have.
When the Minister responded to our concerns in previous clauses about excessive powers granted to the Secretary of State, he explained that the Government have taken a belt-and-braces approach. There seems to be a proliferation of belts and braces. Perhaps it is time to think about getting a better-fitting pair of trousers rather than to keep adding different pieces of apparatus to keep them up.
The HS2 project shares cross-party support. Labour supports the Government’s efforts to pass the legislation necessary for us to start constructing this important and transformative piece of national infrastructure. We do not disagree that, in some instances, it is better to be safe than sorry. However, it is our job as legislators to ensure that unnecessary powers are not granted under the guise of erring on the side of caution, which is the case with clause 40. The disapplication of statutory closure provisions means the closure of existing services, stations or parts of the rail network right up until the Secretary of State has informed Parliament that phase 1 is ready for general use. The clause exceeds the belt-and-braces approach so we have tabled a series of amendments that would particularise the limit of the powers granted to the Secretary of State and increase accountability and transparency.
Amendment 17 would introduce the familiar concept of the Secretary of State having to reach a reasonable decision on closures that could be challenged under the Act if not reached reasonably. It demands a short examination of what constitutes reasonableness, to which lawyers have given a great deal of attention over the years. I will submit that it is not a daunting concept, nor one that should in any way trouble the Minister. Our legal system has defined reasonableness, quite sensibly, as,
“Whether a belief is reasonable is to be determined having regard to all the circumstances”.
In making that assessment, the judgment of a reasonable person has to be applied.
We are in Clapham omnibus territory. To reject the notion of reasonableness would be to imply that the way was clear for the Secretary of State to behave unreasonably. We would not wish to see our Government Ministers behaving unreasonably—perish the thought. Let us consider “the man on the Clapham omnibus”, or London bus route 88, to be more precise. Given the progress we have made since 1871, when that phrase is thought first to have been coined, we should be describing this hypothetical individual as “the person on the Clapham omnibus”—or better still, “the reasonable person travelling on HS2 from London to Birmingham”. In any event, the judgment of the reasonable individual was originally described as being the judgment of
“a reasonably educated and intelligent but nondescript person”,
against which a decision could be measured.
Reasonableness is an important measure for introducing some transparent objectivity into the decision-making process. When significant and wide-ranging statutory powers are created, it is important to ensure that there are proper checks and balances. It is an important principle in our legal system, and was considered again quite recently in paragraphs 1 to 4 of the UK Supreme Court judgment on the case of Healthcare at Home Ltd v. Common Services Agency [2014] UKSC 49.
The concept of reasonableness as a prerequisite for decision making is well embedded in many legal jurisdictions, notably in Canada. It is also described, with some local adaptations, in Australia, where in New South Wales the Clapham omnibus traveller has been replaced by “the man on the Bondi tram”, a now disused route in Sydney. One can only hope that the Bondi man’s judgment was applied in deciding whether it was reasonable or otherwise to close the Bondi tram route. In Melbourne, Victoria state, it is the person on the Bourke Street tram whose judgment is applied. We can only hope that that tram service is still running. In Hong Kong, the equivalent expression is “the man on the Shaukiwan tram”, although I think I might be running out of track now.
By introducing the word “reasonably”, we merely wish to ensure that, on any objective assessment, the decision to close a service, line or station can be readily identified as having been reached properly and reasonably on the basis of all the information that the Secretary of State has in his or her possession at the time. The amendment to insert the concept of reasonableness is the model of reasonableness itself, and I trust that it can command the support of the Committee.
Amendment 18 relates to a specific issue concerning a particular line. It would limit the Secretary of State’s blanket power to close any line or station by restricting the power to the Northolt and Acton line, which is also known as the Wycombe single line. The way the amendment would work speaks for itself. HS2 Ltd’s information paper B6 states:
“The only line that would close is the eastern end of the Northolt and Acton Line…between Old Oak Common and Park Royal.”
As there are no plans to close other lines, the onus is on the Minister to justify the Secretary of State receiving that broadest-ranging blanket power, if he does not support the amendment to limit the power to the specific plan to close the Wycombe single line. In short, that is the one we know about—the only closure being contemplated —so why not say so and limit the power?
Mr Goodwill
I am pleased that the hon. Gentleman mentioned the Clapham omnibus. I had the great pleasure last week of visiting the Wrightbus factory in Northern Ireland, which builds the Boris buses that ply their trade so successfully around this city, although I must add that other double-decker manufacturers are available, including, dare I say, one based in my constituency.
May I allay some of the hon. Gentleman’s fears about the reasonableness of what we intend and the proportionality of what we are doing? It is reasonable for him to raise these issues, but I hope that I can allay his fears. Clause 40, to which the amendments apply, deals with the disapplication of statutory closure provisions and provides that the Secretary of State may, before phase 1 of HS2 is ready for commercial use, disapply the closure provisions of the Railways Act 2005 in the case of closures that are necessary or expedient due to the construction or operation of phase 1 of HS2.
London TravelWatch, the passenger representative body for the capital, asked for an explanation of the power and its expected use. We have already responded, stating that there are no station closures planned as part of the construction and operation of phase 1of HS2, and that the only line that would close is the eastern end of the Northolt and Acton line, known as the Wycombe Single, between Old Oak Common and Park Royal, which currently carries one weekday passenger service from London to West Ruislip.
The disapplied closure provisions set out what must be done in terms of notice, consultation and provision of information in the event of a proposal to close existing services, stations or parts of the rail network. There are services that may run with a reduced frequency as they are replaced by alternative services in phase 1 of HS2. The power in the clause does not apply to such services, as the Secretary of State may not exercise the power after he has notified Parliament that phase 1 of HS2 is ready for commercial use. Once it is commercially open, the Railways Act 2005 procedures come back into force.
The clause ensures that phase 1 of HS2 can be built efficiently, as the decision to construct phase 1 of HS2 will have been approved by Parliament. We believe it is reasonable to disapply the closure procedures during construction. The proposed closure of the “Wycombe single” and its impact were set out in the environmental statement, on which the public were consulted. The issue of the Wycombe single was also raised in petitions, meaning that Parliament had full opportunity to consider it. All of that means that going through the full closure procedures would be an unnecessary duplication. Phase 1 of HS2, of course, is about adding capacity to the rail network, not reducing it. The power can be used only for closures that are necessary for the construction and operation of phase 1 of HS2, and currently we have identified only one that is necessary.
Turning specifically to the amendment, as I said, clause 40 is essential if phase 1 of HS2 is to be delivered efficiently and effectively. However, I understand the importance of getting the clause right to ensure balance. As I mentioned, London TravelWatch asked for an explanation of the power, and I responded separately. It is important to remember that clause 40 as proposed would apply only during construction. When the line is operational, it will not apply.
As I said previously, we have sought not to legislate unless necessary. I do not believe that it is necessary to insert the word “reasonable” into the clause, as in amendment 17; it is inherent. Inserting “reasonable” in that context would cast doubt on other provisions of the Bill. Similarly, I do not feel it necessary to remove the word “expedient” as amendment 18 would do. We would still behave reasonably. As to amendment 20, the Secretary of State would need to be satisfied that any closure was appropriate, having worked closely with the relevant railway operators, so I do not think any such closures require a parliamentary process.
Amendments 18 and 19 would, in relation to the line and the stations respectively, limit the power to the closure of the eastern line end of the Northolt and Acton line—known as the “Wycombe single”—which currently carries one weekday passenger service, and remove the ability to close stations. I repeat that at present there are no station closures for the delivery of HS2, and the Wycombe single is the only line that we expect will need to close. That was outlined in the environmental statement. However, I must stress that the design of HS2 is at an outline stage, so we cannot guarantee that other closures will not be necessary. Therefore a level of flexibility is involved. Currently there are no stations that have been earmarked, or are being contemplated, for closure. The provision is purely about allowing some flexibility, should unexpected situations occur.
I hope that what I have said reassures the hon. Member for Middlesbrough that the amendments are not needed, and that in some cases they could not be passed if we are to deliver HS2, and that he will withdraw the amendment.
Mr David Anderson (Blaydon) (Lab)
To take the Minister back to what he said about flexibility, which I understand, if it were decided that some stations needed to go, what degree or level of consultation would take place?
Mr Goodwill
As I say, we are not proposing that. There would certainly be wide consultation. In this theoretical case that we cannot actually identify, there would need to be provision for the passengers who used that station. Indeed, if there were plans to build a new station, of course that would mean closing the old station that it was to replace.
As I have said, the provision is purely another example of braces and belt, in case we should find ourselves in the unexpected situation of needing to close additional lines or a station. The clause would allow us to do that, but I have not heard even a hint that we might need to close stations. Indeed, HS2 is about increasing capacity on the line, and people’s opportunity to travel. That is why it has been welcomed across the political divides in the House.
I hope that the hon. Member for Middlesbrough will withdraw his amendment and accept at face value my assurances—“reasonably” is my middle name, for goodness’ sake—that we certainly do not have a hidden agenda that the clause is intended to facilitate.
Andy McDonald
I would not suggest any hidden agenda at all. If “reasonable” is the Minister’s middle name, why not put something in the Bill? To suggest that doubt might be cast on the ability to construct HS2 is something of a stretch. Surely we should all behave reasonably. To reject the amendment is to leave the way open to do otherwise.
I am not particularly persuaded by the argument about a need for flexibility, when no closures have been identified. The Bill has been pored over in minute detail. The plans are extraordinarily well known. A suggestion by the Minister that as construction develops something might be unearthed that would demand the closure of a station would send shockwaves around the communities along the lines. He has mentioned the very line that has been identified—the Wycombe single; and that is good. What I am driving at is that we should be specific about the closure plans.
I hear what the Minister says, and that he has requested me to withdraw the amendment, but in the first instance the insertion of the word “reasonable” is eminently reasonable. I see no reason to withdraw that.
Mr Goodwill
The point I was trying to make was that the specific use of the word “reasonable” in the clause might throw doubt on the reasonableness of other areas where we have not used that word. I stress that this Government will behave reasonably at all times; that reasonableness contributed to a large degree to the electoral success we had last year. We are always reasonable in all things.
Andy McDonald
I am grateful to the Minister for that, but putting this requirement in the Bill would leave the matter in absolutely and utterly no doubt, and it would put in that check and balance to ensure that is possible to have an objective examination of the decision to close. Without it, the Secretary of State is beyond criticism and incapable of being held to account. It is a basic principle of English law that Ministers in these circumstances should behave with all reasonableness.
That is why I indicate now, Mr Hanson, that I wish to see amendment 17 put to a vote; if you wish me to continue with my approach towards the rest of the amendments, I will. It has been very clearly established that the current intentions only extend to the Wycombe single line and I am content with what the Minister has had to say about that. So it is not my intention to trouble the Committee any further with amendment 18.
I turn to amendment 20. A simple requirement to make a written statement to Parliament following the making of such a decision is hardly an onerous provision and I would expect the Government to make such a statement in any event, but putting the requirement in the Bill would leave absolutely no doubt about it.
Mr Goodwill
There is no shortage of parliamentary procedures that could be used, including urgent questions, Opposition day debates and all the other tools in the toolkit of an MP to raise issues in Parliament. So, although I understand the points that the hon. Gentleman is making, I do not think that we need to include this measure in the Bill.
Andy McDonald
I am grateful to the Minister for that. I have only been here a very short time—three years or just a bit more—but there have been so many occasions when I have gone back to my constituency on a Friday night and seen an announcement made that has snuck out when we are not here, or that has been made during a recess. I am very much aware of the parliamentary procedures available to us all to seek an urgent question, or hopefully the Minister would come along and make a statement, but this amendment would leave it in absolutely no doubt that there was a formal, statutory requirement for a Minister to come along and make a statement when any of these plans were being contemplated, and that would put it in the Bill and give it a degree of certainty that otherwise would not exist.
For those reasons, I would like us to have a vote on this particular amendment.
Question put, That the amendment be made.
Mr Goodwill
I shall be brief. Clause 41 relates to other railway legislation, etc. It introduces schedule 28, which sets out the application of general legislation relating to railways to phase 1 of HS2. That includes certain disapplications and incorporations.
For example, paragraph 1 of schedule 28 disapplies the Highway (Railway Crossings) Act 1839, which requires the railroad provider to maintain gates at each end of the crossing and employ a person to open and close said gates. That, of course, is not required today.
Conversely, schedule 28 incorporates provision that makes it an offence for a person to obstruct the lawful construction of the authorised works. All of those are to ensure that the HS2 railway can be constructed, maintained and operated effectively.
In some instances, modifications have been made to reflect modern times, such as increasing the maximum fine for trespass under the Railway Regulation Act 1840 in its application to phase 1 of HS2. I could go on to talk about the restriction of diesel locomotives at the North Pole depot but I will spare the Committee that particular interesting detail.
Andy McDonald
I was looking forward to hearing about the diesels at the North Pole depot; I feel cheated. I was a little surprised when I first saw that the schedule referred to the application of other railway legislation, etc., but it would be churlish of me to say that shows a lack of precision, because it is perfectly clearly set out what the “etc.” is all about.
I would like the Minister to consider this point. He has highlighted that with HS2 there will not be roadworks and barriers; it is a continuous route. Will he comment on the issue of safety and trespass around the HS2 line? It is markedly different from a conventional line. What specific measures have been introduced? It is clearly an offence to trespass upon a railway. Are there any additional provisions specific to HS2 that we should consider?
Mr Goodwill
I am happy to comment on that. Safety on the railway is of vital importance, not just for those who travel on the railway but for those in proximity to the lines. One real issue that affects our rail network in this country is suicide. Network Rail, on the existing classic network, and I am sure HS2 will be aware of what we can do to try to detract from that—for example, to ensure that crossings over the railway are not easy to use in that regard.
The line will be secure, unlike some of the traditional network. There will be no level crossings or points crossings on the railway. We will be using flyovers, so the trains will not need to slow down to use points. However, the hon. Gentleman is absolutely right that we need to ensure that safety is paramount. One has only to look at HS1 or, indeed, infrastructure around the world to see that high-speed railways are very safe railways and it is very difficult for members of the public to gain access. Modern railway regulations specify safety standards in great detail, and we will of course comply with all those regulations.
I hope that allays the hon. Gentleman’s fears, but he is absolutely right: safety is paramount. Having seen some of the issues on our rail network in the past, I am delighted that there will be state-of-the-art rolling stock and state-of-the-art signalling systems. The training that will be available to staff will be second to none and, indeed, the British Transport police will be receiving training in operations on this part of the line, as they already do in delivering such a fantastic service.
Question put and agreed to.
Clause 41 accordingly ordered to stand part of the Bill.
Schedule 28 agreed to.
Clause 42
Co-operation
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
The clause refers to co-operation. That is a wonderful word and, given the political consensus across Parliament, it would be a very good word to describe how we are making progress on this great project, which will benefit the whole country.
Clause 42 enables the nominated undertaker to require other railway facility operators to enter into agreements to support the expeditious delivery of phase 1 of HS2. Similarly, the controller of a railway asset may require the nominated undertaker to enter into such an agreement. In default of agreement between the parties, the terms of such an agreement will be determined by arbitration under schedule 29, which is introduced by subsection (4). The arbitration process is outlined in schedule 29 and is in addition to the arbitration process outlined in clause 63. However, this does not apply to any matters of agreement that are within the remit of the ORR. This arbitration process is to determine agreements that govern relationships between railway operators where particular policy issues apply.
Andy McDonald
The Minister said earlier that reasonableness was his middle name—well, co-operation is mine.
The Chair
Following that enlightening discussion, we move to the Question that clause 42 stand part of the Bill.
Question put and agreed to.
Clause 42 accordingly ordered to stand part of the Bill.
Schedule 29 agreed to.
Clause 43
Transfer of functions relating to works
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
The clause provides for the transfer of functions relating to works. It provides that if the Secretary of State acquires any land from a railway operator on which there are works that are already authorised, the Secretary of State may, by order, transfer the responsibility for those works to the Secretary of State. Conversely, if a railway operator acquires land from the Secretary of State on which there are any works authorised by this Bill, the Secretary of State may, with the railway operator’s consent, transfer any responsibility relating to those works to the railway operator.
Question put and agreed to.
Clause 43 accordingly ordered to stand part of the Bill.
Clause 44
Nominated undertaker
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
The clause applies to the nominated undertaker, which is not a funeral director, as I think we mentioned on Tuesday. It allows the Secretary of State, by way of an order, to appoint a nominated undertaker or undertakers to build phase 1 of HS2. The nominated undertaker would therefore be able to draw on Bill powers on behalf of the Secretary of State to deliver the railway. Delegating authority to a delivery body is common practice on major rail infrastructure schemes. Subject to readiness, we would expect HS2 Ltd to take on that role. However, we have yet to fully determine who the nominated undertaker will be. For example, it may be prudent for different bodies to build different elements of the railway.
Andy McDonald
We are talking about Bill Powers, not the left half for Aston Villa in 1956—no, he does not exist—but the powers contained within the Bill. My singular concern is about the wording of subsection (1)(a), which says:
“The Secretary of State may by order…appoint a person specified in the order as the nominated undertaker for such purposes of such provisions of this Act as may be so specified”.
The Minister made clear in his opening remarks—but I want to impress this on him—that this is about building HS2 and nothing more. By trying to extend the remit of the clause, we could give the nominated undertaker carte blanche in terms of all the powers in the Bill. It is probably not the Minister’s intention that the powers be limited during the building of phases 1 and 2. I have a slight anxiety that, if read in another way, those powers would extend beyond building to compulsory purchase and acquisition, development and even the closure of stations, which we discussed a few moments ago. Will the Minister help me with that now, or should we return to it at a later date so that he can look into it? I have a slight anxiety that the phraseology is far too wide.
Mr Goodwill
If I may reassure the hon. Gentleman, as I said in my opening remarks, the clause is about undertakers to build phase 1 of HS2. It is not about the operation of the railway. Later, we may have an opportunity to discuss the way the operation of the railway may be delivered, but it is early days to rush those fences. In this case, we expect spades in the ground next year and, therefore, the nominated undertakers will be those charged with the delivery of the railway. There will be a number of works, not only the basic construction. A lot of the environmental works could well be given to other undertakers in some cases. At the moment, HS2 Ltd will be the main delivery body and that should be made clear.
Question put and agreed to.
Clause 44 accordingly ordered to stand part of the Bill.
Clause 45
Transfer Schemes
Andy McDonald
I beg to move amendment 21, in clause 45, page 17, line 33, at end insert—
“(2) If property or rights are transferred from HS2 Limited or a wholly-owned subsidiary of HS2 Ltd to any body that is not a public body as defined by section 25(1) of the 1993 Railways Act, a fee must be received which reflects a fair market evaluation of that property or right.”
Clause 45 allows the Secretary of State to transfer HS2 Ltd’s property and rights to any other body. This amendment would prevent the Secretary of State from transferring assets to a private body without receiving a fair price.
Clause 45 is critically important and will undoubtedly be a matter of some contention between the Front Benchers. I want to explore it in some detail. Although we will have an interesting discussion about how railways ought to be owned and operated when we discuss new clause 21, the amendment is unashamedly hewn from the same wood. There is a huge amount of consensus on the need for the construction of HS2, but the issue of whether the railway service—its infrastructure and its operation—should be owned by the British public and run as a publicly owned operation represents clear blue, or red, water between the Government and Her Majesty’s Opposition. We will return to that fundamental issue in due course.
The amendment speaks to the concerns that property or rights that are transferred from HS2 Ltd, or a wholly owned subsidiary of HS2 Ltd, to any body that is not a public body might not be in return for a fee that is a fair market evaluation. The Railways Act 1993 sets out which those bodies are in clear detail: a Minister of the Crown, a Department or any “other emanation” of the state, a local authority, the Greater London Authority, Transport for London, any metropolitan county passenger transport authority, any body whose members are appointed by a Minister of the Crown, and so on.
I will make myself abundantly clear: we in the Opposition do not want any of the considerable publicly funded investment finding its way into private hands. We are vehemently opposed to any break-up and/or privatisation of our railway infrastructure and we fear that the power in the clause may be used, in part, in pursuit of that objective. The public will have paid a handsome price for HS2 and they should not have it or any part of it taken from under them at a knock-down price.
Sir Simon Burns (Chelmsford) (Con)
I understand the point the hon. Gentleman is making. So we can understand the extent, will he tell us how much the public will have paid, or will pay?
Andy McDonald
Yes. By the time the process is concluded, we are talking somewhere in the region of £55 billion. I hope that answers the right hon. Gentleman’s question—
Andy McDonald
I can see that the right hon. Gentleman is content.
The amendment is about working in the best interests of taxpayers and to ensure that they are not sold short. The taxpayer is our concern, not the private entity that might have transferred to it property and/or property rights which of themselves had been the product of the taxpayer’s significant investment—the sum of £55 billion, or thereabouts. Calls upon the nation’s tax receipts are onerous and to be used wisely, so it is essential that we ensure that those moneys that have created such valuable assets—money that could have served other urgent and serious demands in our communities—are not simply siphoned off into the private sector.
Our concerns are not idle ones, but are extremely well founded. We are dealing with a potential asset sale as I speak, namely the announcement by Network Rail of its intention to sell some 18 railway stations on the existing network. It is of immense concern that, should any such sales go ahead, the receipts will be those of a fair market valuation and not simply from a fire sale to reduce Network Rail’s debts. In advance of the Nicola Shaw review, we hear that Network Rail is to sell off 18 major stations, including Waterloo, Reading and Leeds, in an effort to cut its £50 billion debt. If memory serves me right, Reading has benefited from public investment of some £897 million. I am sure that the public will be watching carefully what happens to the ownerships of those and other named stations.
The same concerns apply to HS2. I am afraid that the Government have form and that we have less than good experience, to say the least, of sell-offs of publicly owned assets that failed to secure fair or market value for the taxpayer. We need cast our minds back no further than the disastrous sell-off of the Royal Mail, which is still fresh in the minds of millions of voters. The Select Committee on Business, Innovation and Skills found that taxpayers may have lost out on about £l billion from the undervaluing of Royal Mail. Apparently, the Government feared failure and acted on bad advice over the Royal Mail stock market flotation. As we know, the shares fluctuated widely with an initial price of 330p which jumped as high as 618p and now stands somewhat lower than that. The then Business Secretary, Vince Cable, said:
“They”—
presumably meaning the BIS Committee—
“now have the benefit of hindsight, which we didn’t have at the time. We sold at a price that was regarded as the best that could be achieved in the context in which we sold it.”
But the Chair of the BIS Committee, my hon. Friend the Member for West Bromwich West (Mr Bailey), said:
“It’s very important that when the government does sell off a government asset, it does so through a process that quite clearly demonstrates that nobody selling it, nobody advising it, has a conflict of interest”.
We do not want a repeat of the conduct of the likes of Lazards who were working on the inside on the sale of Royal Mail as Government advisers and then, because of the erection of an invisible virtual Chinese wall, were able to fill their boots on the acquisition of Royal Mail shares from the profits they achieved in a few short hours after launch. A number of individuals, some with high-profile political associations, also personally cashed in. We simply do not want HS2 to be turned into a profiteering exercise at the public’s expense.
You will recall the evidence unearthed by the Public Accounts Committee under the expert chairing of my right hon. Friend the Member for Barking (Dame Margaret Hodge). It revealed that Lazards advised the Government not to increase the price of Royal Mail shares, despite widespread fears they were hugely undervalued, and made a profit of more than £8 million by immediately selling the company’s stock. My right hon. Friend the Member for Barking said that Lazards
“made a killing at the expense of the ordinary taxpayer that lost £750 million in one day”.
A subsequent report by the National Audit Office found that the Government decided against increasing the flotation price of Royal Mail beyond 330p a share because of warnings from Lazard & Co. Government advisers were asked point blank at the Committee chaired by my right hon. Friend the Member for Barking how they could get it so wrong that it cost the taxpayer £750 million on that one day.
Vince Cable, the then Secretary of State for Business, Innovation and Skills, said that the postal service should,
“start its new life with a core of high-quality investors who would be there in good times and bad”.
So much for that hope, Mr Hanson. As you and I both know, the road to hell is paved with good intentions.
Mr Anderson
Will my hon. Friend also recall the fact that it is not only the Royal Mail? The coal industry was privatised in 1994. One of the arguments for privatisation was that it would transfer the risks from the public sector to the private sector. We had the situation where a company was importing coal from places like Colombia, which uses child and slave labour to dig coal out of the ground. The Government presided over the closure of the last deep mine colliery in Kellingley at the end of 2015, but the people who bought the coal industry have used assets in land and estates which have multiplied massively from what was paid for them in 1994.
Andy McDonald
I am grateful to my hon. Friend for making that point. It is absolutely imperative that we learn lessons from previous experiences, and that is what the amendment is intended to address. We do not want to keep repeating these errors and finding the taxpayer short-changed. Certainly, when there is something so prestigious and ambitious and it has widespread support, we do not want its reputation tarnished in any way. We want it to be sustained.
Ben Howlett (Bath) (Con)
The hon. Member for Blaydon just raised the issue of land prices. Obviously, land prices are increasing. Even if it meant more money would be raised for UK taxpayers, would the hon. Member for Middlesbrough still disagree with the clause?
Andy McDonald
Perhaps I have not made myself clear. The purpose of the amendment is to ensure a fair market price. We are trying to ensure that if the circumstances outlined arise, the process is carried out entirely properly and we are not complaining after the event that we have been badly short-changed. The intention is simply that.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I agree with the hon. Gentleman on obtaining a fair and reasonable market price, and I agree about the problems he highlighted about previous sales. I agree with the amendment, but first, is there not a wider issue on transparency; and secondly, even with the amendment, the Government could be completely subjective in how they advise and how they interact with the advisers on what advice to take. That will be crucial as well.
Andy McDonald
The hon. Gentleman makes a very valid and powerful point, but I will come on to deal with the objectivity that he wants to see if such matters ever come to fruition.
We in Parliament clearly have many opportunities to monitor and scrutinise the sales of publicly owned property, but one could be forgiven for questioning whether all our parliamentary devices really produce any proper advance policing of such activity. We appear to be ever-wise only after the event, and the amendment is a modest attempt to address that failing.
It is worth paying some attention to what is meant by a “fair market evaluation”. I note that the international valuation standards define market value as
“the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing, wherein the parties had each acted knowledgeably, prudently, and without compulsion.”
That is immensely helpful, and the international valuation standards give further guidance that market value is a concept distinct from market price, which is the price at which one can transact. Market value is the true underlying value, according to those theoretical standards.
Given the terms of our amendment, we could have a lengthy and interesting debate about what constitutes a fair market evaluation, but the public know only too well, especially given that the Public Accounts Committee pores over deals after the event when it is of course far too late. The bottom line is that the British public know when they have been scammed, and we do not want to be crying foul after a damning PAC report on the sale of HS2 assets in the years ahead.
I am sure that all members of the Committee unequivocally endorse the need to ensure that the taxpayer receives a fair deal should any assets be sold. Given that, I trust that our amendment will have the full endorsement and unanimous support of the Committee. We consider the amendment to be hugely important, so I intend to press it to a vote, although I look forward to hearing that the Minister accepts the reasonable point we are making and our reasonable amendment to secure fair market prices for any assets sold.
Mr Goodwill
I get the impression that we are now into territory that is not as consensual as it was, although we would all agree that it is important to get the best possible value when assets owned by the state are transferred to a buyer or via a share issue to the general public. It is absolutely right that if someone is selling off what some people might call the family silver they get a fair value, although that perhaps would not apply to the family gold under the Brown Government—in hindsight, that was not such a good deal.
I will not speculate too much on some of the issues that the hon. Gentleman raised, such as Royal Mail, but the process of privatisation has been successful. British Airways is now an international group. Engineering companies such as Rolls-Royce, and others such as BT and British Gas were all state owned, and all have gone on to become international companies unfettered by the restrictions that the state can often impose.
Clause 45 allows the Secretary of State to make schemes to transfer property rights and/or liabilities from HS2 to another person, which includes the Secretary of State. This power also allows the transfer to take place mid-delivery should it be required. Subsection (3) introduces schedule 30, which makes further provision about transfer schemes made under the clause.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I am listening to the Minister very carefully and I agree that there are many good examples of British industries that have performed very well in the private sector from the ‘70s and ‘80s. But he would surely separate that out conceptually from ensuring that a fair price for the taxpayer is raised at the initial point of issue of those shares in the private sector? If he reflects, he will admit that in various high-profile cases, particularly under this Government and the coalition Government, there was a feeling out there that state assets were undersold to increase the gain as quickly as possible for the people buying them. Those two issues are surely separate.
Mr Goodwill
Well, yes, often hindsight is a marvellous thing and markets move in different directions. It has always been the Government’s intention to ensure that we get best value, but also to ensure that share issues are taken up. There is a difficult balance between pitching a price at such a level that the shares are taken up and pitching a price that achieves best value. However, the track record of this Government shows that we have been stalwart custodians of the public purse. We have not wasted money. We have borne down on the deficit. We have got sound money back again in our economy and there is confidence around the world that we are sound managers of public finances. Indeed, in the Budget later this month, we will see more examples of that being delivered to the House.
Andy McDonald
Does the Minister not have just a glimmer of concern about my example of how the sale of Royal Mail was conducted? Will he not put some distance between him and his Government and that arrangement whereby a Government adviser, Lazard, was right at the heart of the sale of publicly owned assets and yet at the same time was next door deriving significant profits of immense proportions from that sale? Does he not agree that there is something wrong with such an arrangement? We had scrutiny after that event and we should have such scrutiny before the event with HS2.
Mr Goodwill
If I may, I will turn to an example more closely allied to the matter before us today, which is the case of HS1. We sold a 30-year concession on HS1 to operate and maintain the infrastructure for £2.1 billion. The Ontario Teachers’ pension fund took that concession for a 30-year licence. After the 30 years, the HS1 line returns to the Government, and we will have the opportunity to sell another concession; to keep it, possibly within Network Rail; or to give it to another operator such as, as I have said, Network Rail. The sale of the HS1 concession involved a rigorous bidding process to ensure best value. No decisions have been taken on the commercial model for HS2. It should also be noted that if any transfer of assets, rights or liabilities occur, the Secretary of State can impose conditions such as restrictions on the sale of assets, which will protect assets if that is thought appropriate.
We would always seek to get best value in the sale of the concession, and the value of the concession will take into account the value of the assets being transferred as well as the liabilities and revenue, and this would therefore be priced in. I hope that that clarifies the position so that the hon. Gentleman understands the purpose of the amendment, but, given the political differences between us on this issue, I suspect that I will not be able to satisfy him and he will press his amendment to a Division.
Mr Anderson
The Minister talked about the issue of privatisation and how successful the businesses have been, but consumers might have a slightly different view about the prices charged by companies such as British Gas and British Airways and whether they are doing a great job. They might also have a different view on the fantastic performance of the Government. Figures released today say that the national debt is now £1,580 billion, having increased by 50% on his and his Government’s watch.
We can have the political debate later on about ownership, and I am sure we will, but what I am trying to get my head around is what the problem is with the amendment. What the Minister is saying is what we are asking for: automatic best value and so on. Is that not exactly what the words on the amendment paper say? I cannot get my head around why on earth we cannot just say that if and when it happens, the Government will get best value for the customer, the taxpayer.
If we leave the clause as it is, it more or less says that the Secretary of State has the power to give away parts of the system, or all of the system, to anybody, without any price whatever. I know—I hope—that that is not the intention, but the clause at the minute says exactly that, and the amendment tabled by my hon. Friend the Member for Middlesbrough would prevent that from happening.
Mr Goodwill
I will respond briefly to that point. This Government always seek to get best value for the taxpayer. There is an important debate to be had, although maybe not at this stage, about how the railway will be delivered—whether we operate a traditional franchising process, run the line directly for a while to demonstrate its ability to raise revenue for a future operator or let a concession, as we have done with HS1, to allow an investor to come in and benefit from the income from the operator. There are a number of issues that we should consider to ensure that we get best value, but those decisions need to be made at the start of the next decade, so I think we would be rushing our fences to do it now.
Once again, I underline that this Government will always seek to get best value for the taxpayer. The previous coalition Government’s record of doing so was a major contributor to the results we achieved last year in May, when the British people had confidence that a Conservative Government could be a sound custodian of the public finances and come to grips with the economic mess that we inherited in 2010. That is a debate for another day, but I assure the Committee that we will always seek to get best value, and the clause—without the amendment, which is superfluous—will do precisely that.
Andy McDonald
The Minister is right to identify this as an area of stark political differences between us, but we have been able to discuss it civilly, recognising that we have distinct positions. I will try not to go into the whole business of what happened at the last election, but we lost 900 votes across 12 seats; I do not think the Conservatives should be crowing too much about that. Be that as it may—
The Chair
Order. With all due respect, that is not in the amendment either. We should stick to the amendment.
Andy McDonald
We are debating the potential privatisation of an asset in the public hands, and that is what the amendment tries to address. It would be remiss of me to fail to comment that the Minister may be misreading the mood about how the public perceive the ownership of such assets, both going forward and in relation to some privatisations that occurred in the past. I do not think it is quite the rosy picture that he paints.
My hon. Friend the Member for Blaydon makes a key point. We have heard at length from the Minister that his Government, and his party in coalition, were assiduous—that is effectively his claim—about achieving a fair market valuation of assets sold. He says not only that that happened, but that it will happen in future for sales such as may be contemplated under the clause. If that is the position, why on earth would he not send that message out to the nation, which has a long memory about Royal Mail? The Government would be acknowledging, “We can do better, and we will reflect that in the Bill, so that we give an unerring, unequivocal commitment that that is what has happened. It is simply not good enough to say, “That is what we do anyway.” Say so, make it clear, so that nobody is any doubt that there is no other purpose intended.
Andy McDonald
The Minister is shaking his head, which disappoints me gravely. I suggest, Mr Hanson, that we put the matter to a vote so that the Committee can make a decision. I am sure that hon. Members on the Government Benches have listened carefully and will express themselves in an independent fashion.
Question put, That the amendment be made.
Mr Goodwill
Clause 46 deals with extension of planning permission for statutory undertakers and introduces schedule 31, which provides for the extension of planning permission to the statutory undertakers.
Paragraph 1 of schedule 31 disapplies certain limitations of permitted development rights for statutory undertakers, therefore allowing them to use the planning permission granted by the General Permitted Development Order 2015 for works that form part of or are in connection with HS2.
Paragraph 2 of the schedule sets out the condition that the works that are carried out are in accordance with any undertaking given by the Secretary of State to the Select Committee of either House during the Bill process, which includes the commitments given through the controls of the environmental minimum requirements.
I should explain that the certain works carried out by the statutory undertakers referred to are generally the required utility diversions.
Andy McDonald
The Minister referred to schedule 31(2), which sets out the condition that the works be carried out in accordance with any undertaking given by the Secretary of State to a Select Committee of either House. We have been through that process. Can the Minister provide some information about the undertakings that have been given to help Opposition Members understand what the provision encompasses? I am not aware of the nature of any such undertakings.
Mr Goodwill
A number of additional provisions have come before the House, many of which are diversions of utilities and are the result of petitions or concerns raised with HS2 Ltd as part of that process. In every case I can think of, the diversions are intended to facilitate and help the landowners or the owners of the infrastructure. We can probably provide several dozen examples of where that has been done in response to the sensible concerns that people have raised.
Question put and agreed to.
Clause 46 accordingly ordered to stand part of the Bill.
Schedule 31 agreed to.
Clause 47
Protective provisions
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Following on from what we just discussed, if the hon. Member for Middlesbrough is interested in utilities and diversions, the undertakings are published on the Parliament website. If he has a sleepless night, he can always find a way to fight the insomnia.
The Chair
Order. He can do so, but we have moved on from that subject. We are now on clause 47. I suggest that the Minister writes to the hon. Member for Middlesbrough with details about that.
Mr Goodwill
Thank you, Mr Hanson. You are absolutely right to call me to order.
Clause 47 concerns protective provisions and introduces schedule 32, which contains provisions protecting the interests of statutory undertakers and other bodies that may be affected by other provisions of the Bill. These provisions are similar to those in the Crossrail Act 2008 and the Channel Tunnel Rail Link Act 1996. The protective provisions of the schedule cover highways and traffic; electricity, gas, water and sewerage undertakers; electronic communications code networks; the Canal and River Trust; and land drainage, flood defence, water resources and fisheries. I commend the clause and the associated schedule to the Committee.
Andy McDonald
I am grateful to the Minister for that helpful explanation. We are talking about nominated undertakers and statutory undertakers—there is a lot of undertaking going on. Does the Minister envisage that there will be better co-ordination between the nominated undertaker and the statutory undertaker? Members across the House will be besieged with complaints about the myriad works by a succession of statutory undertakers in their own territory. What I am saying in words of one syllable is that the works involving statutory undertakers will be better co-ordinated if they are done in one go. That is better than multiple moving activities and many holes being dug.
Mr Goodwill
Much of the work that will be carried out in the construction of this railway will be on the land we have acquired, and therefore will not affect those going about their everyday lives. However, from time to time work will need to be done on highways or other rights of way that could disrupt their lawful use. I know that, in those cases, HS2 Ltd is determined to minimise the disruption. Indeed, we are already working with local authorities to ensure we can deliver these changes sympathetically, as we are doing for lorry movements and the other potential disruptions to which this project will unfortunately give rise.
Question put and agreed to.
Clause 47 accordingly ordered to stand part of the Bill.
Schedule 32 agreed to.
Ordered, That further consideration be now adjourned. —(Jackie Doyle-Price.)
High Speed Rail (London - West Midlands) Bill (Fourth sitting)
(8 years, 9 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
That hour for lunch was all too brief, but I managed to meet Holywell High School from north Wales—just to get them on the record.
Clause 48
Compulsory acquisition of land for regeneration or relocation
Andy McDonald (Middlesbrough) (Lab)
I beg to move amendment 22, in clause 48, page 18, line 8, after
“if the Secretary of State,”
insert “reasonably”.
This amendment would require the Secretary of State to reach a “reasonable” decision when deciding whether to exercise his power to acquire sites for regeneration purposes, and would allow the decision to be challenged under this act if not reached reasonably.
The Chair
With this it will be convenient to discuss the following:
Amendment 24, in clause 48, page 18, line 10, after “any land” insert—
“within the Act limits or in the vicinity of any station or depot the construction of which is authorised by the Act”.
This amendment would limit the Secretary of State’s power to compulsorily acquire land for regeneration purposes to land within the Act limits or in the vicinity of any station or depot, the construction of which is authorised by this Act.
Amendment 25, in clause 48, page 18, line 11, at end insert—
“(1A) Before acquiring land compulsorily under subsection (1) the Secretary of State, following consultation with the relevant local authority, must be satisfied that—
(a) the regeneration or development accords with the relevant development plan; and
(b) that there is no realistic prospect of the local authority exercising powers of compulsory purchase of the land within a reasonable time.”
This amendment would require the Secretary of State to be satisfied that any compulsory land acquisition for land regeneration accords with the relevant development plan and that there is no realistic prospect of the local authority exercising powers of compulsory purchase of the land.
Amendment 23, in clause 48, page 18, line 11, at end insert—
“(1A) The Secretary of State must define the term ‘an opportunity for regeneration or development’ in regulations for the purposes of subsection (1).
(1B) A statutory instrument containing regulations under subsection (1A) may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”
This amendment would require the Government to define the term “an opportunity for regeneration or development” by statutory instrument.
Andy McDonald
Good afternoon, Mr Hanson. I hope that everyone else had a wonderful lunch; I didn’t.
The amendment would require the Secretary of State to reach another reasonable decision—the man on that omnibus keeps coming back—so we are proposing to insert “reasonably”. Although reasonableness is the Minister’s middle name and everything that the Government do, we are told, is reasonable, there appears to be a curious reluctance to deploy the term in the Bill and to make the obligation reasonably clear and obvious. I implore the Minister, at least in this narrow context, to embrace the concept.
Without doubt, one of the primary benefits of investment in infrastructure projects such as High Speed 2 is the opportunity for transformative redevelopment in affected areas. HS2 has presented a number of opportunities that have been grasped. We also appreciate that projects on the scale of HS2 will be ongoing for a significant time. Not all opportunities for redevelopment of land can feasibly be identified in the early stages, so further opportunities might present themselves over the coming months and years.
In principle, therefore, we support a power for the Secretary of State to acquire land compulsorily for the purposes of redevelopment, but with certain caveats. The clause as drafted will grant the Secretary of State wide-ranging, blanket powers to acquire land, with little accountability or restriction. Our amendments seek to particularise and limit the powers granted and to ensure greater accountability if he or she chooses to exercise the powers. The amendment is self-explanatory. We have had a healthy discussion about reasonableness, but it is also worthy of note that the wording of subsection (1) simply states:
“If the Secretary of State considers that the construction or operation of Phase One of High Speed 2 gives rise to the opportunity for regeneration or development of any land, the Secretary of State may acquire the land compulsorily.”
We expect the construction phase to last some 10 years. Earlier, we had a discussion about the good sense of covering contingencies, although the Opposition have failed to convince the Government that such powers should not be totally and utterly open-ended. As drafted, the clear import and effect of the clause is not only on the construction phase, but on the operation of HS2—it states “or operation”.
The HS2 project has been planned for the long term. We salute our Victorian forebears for their engineering skill, invention and ingenuity. However, the network and the services on it have run for the best part of 200 years; it will soon be the 200th anniversary of the Stockton-Darlington line, the world’s first passenger train. The journey between Stockton and Darlington on Stephenson’s Rocket must have been something to behold. It would have been very dramatic with the man with the red flag walking out in front of the train as it made its way; it was not known what effect—
The Minister of State, Department for Transport (Mr Robert Goodwill)
I think the hon. Gentleman might find that it was Locomotion No. 1 on the first run.
Andy McDonald
I stand corrected. The Minister is entirely right. The Rocket gets a lot of acclaim; it used to occupy pride of place in Darlington railway station, but it is there no more—there is a mere representation on the wall. I bow to my friend’s greater knowledge.
Mr Goodwill
The Rocket, as the hon. Gentleman will no doubt recall, was the successful engine in the Rainhill trials, beating the Sans Pareil, which came second.
The Chair
Order. I remind hon. Members that we are discussing the amendment but also that William Huskisson, a former Secretary of State, was killed by the Rocket on its first day out. I think that is a warning to Members of Parliament to stay away from this area and stick to the amendment.
Andy McDonald
The point is that the man with the red flag was there to slow down the train because it was not known what impact the speeds would have had on the human form. If we do not get rid of the Pacers quickly, I think that man might have a job again. We need to move on.
Andy McDonald
Indeed. The point is that the Victorian railway has been around for a very considerable time. We have benefited enormously from Victorian innovation and taken it forward into the next generation of high-speed rail travel. Once completed, phase 1 will surely be in operation for hundreds of years—we all agree that it will be operational for two centuries. That is a wonderful prospect.
However, under the current drafting a Secretary of State will be able to enjoy compulsory purchase powers over the land for the entire duration of phase 1. That is a hugely significant power and I trust that the Minister can see the merit in qualifying that wide-ranging power. The amendment will not inhibit in any way the development or operations of phase 1. It will simply introduce some degree of reasonable objectivity into the Bill, so that in years ahead—we could be talking 50, 75 or 100 years—landowners can be assured that their land and property, left intact until then, is not unfairly or unexpectedly drawn into the operation of compulsory acquisition under the Act.
Thus far, there has been no such qualification. I trust that the Minister will agree with the logic of our position and accept the amendment.
Mr Goodwill
As we have just heard, clause 48 refers to compulsory acquisition of land for regeneration or relocation. It enables the Secretary of State to promote a compulsory purchase order if he considers that the construction or operation of phase 1 of HS2 gives rise to an opportunity for regeneration or development of that land. The clause further enables the Secretary of State to promote a compulsory purchase order to acquire land to relocate all or part of an undertaking where, as a result of the exercise of powers under the Bill, the former site is no longer reasonably capable of being used for the undertaking. Subsection (4) provides that the normal process relating to compulsory orders is to apply.
The power is included in the Bill because Ministers wish to maximise the potential economic benefits from phase 1 of HS2 to ensure that local areas make the most of the opportunities that the railway will provide and to support relocation of businesses. It is considered that phase 1 of HS2 will give rise to significant opportunities to promote or facilitate regeneration development. However, assembling a coherent and developable site is an essential part of bringing forward such development and that would not be possible without the ability to have recourse to the powers of compulsory purchase.
As we say in information paper C11, we see this as a backstop power. It would normally be for local landowners and local authorities to come together to assemble land to bring forward regeneration. However, that may not be possible in some cases and regeneration opportunities could be lost. Ebbsfleet is a good example because development, although now under way, has been much delayed and such powers could have enabled more effective land assembly earlier.
Of course, all that does not mean that phase 1 of HS2 will be able to take land wherever it wants. All the measure does is enable the Secretary of State to promote a compulsory order when the construction or operation of phase 1 creates regeneration or development opportunities. Such an order would then need to go through the normal process, including a local inquiry, if there were objections.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I think I get the gist of what the Minister is saying. When a regeneration project, perhaps in Manchester or on another part of the line, is connected to the benefits that HS2 will bring, does he expect the normal process of land accumulation and scheme formation to occur? Is this measure a reserved power should there be a legal problem in assembling the site? “Backstop power” was the phrase he used. Does he envisage that the normal process would apply for regeneration work to occur in a local area?
Mr Goodwill
The hon. Gentleman is right. The owners of land close to HS2 stations or areas where HS2 will have an economic benefit will be grasping such opportunities with both hands. The land will have achieved an uplift in value and the opportunities will be fantastic. Problems might include a particular landowner not wanting to co-operate or another acquisition problem. This is not just about land development, but about the relocation of businesses, and I can think of one or two such examples. We need to be sure that we can bring forward viable opportunities for businesses to be relocated, which will protect those particular jobs.
To promote a compulsory purchase order successfully, the Secretary of State would need to demonstrate three things. First, that a private purchase is not possible, so the land should be taken compulsorily. Secondly, that there is a reasonable prospect of the proposed development coming forward—in other words, that there is no obvious reason why planning permission would not be granted if has not been already. Thirdly, that there is a compelling public-interest need for the land. Taking an individual’s land interferes with their fundamental human rights, so it is only right that significant protections should be in place. The power does not change those protections at all. Although it extends beyond the construction period into operation, checks and balances will continue to be in place.
Although local authorities already have the power to make compulsory purchase orders, it does not always happen. The power is there to ensure that development does happen, and we would expect local authorities to take the opportunity to lead development in their areas. However, in certain circumstances local authorities might be unable to do so, either because regeneration opportunities straddle local authority boundaries or because a local authority does not have the specialist resource to undertake the compulsory purchase order process. In such circumstances, if development is not coming forward in a timeframe that maximises the opportunity, the Government will be able to use this power to accelerate the process, following consultation with the relevant local authority.
Of course, there are safeguards to protect landowners. Planning permission for any developments would need to be obtained in the usual way, and the compulsory purchase order would be made only if there was a reasonable prospect of obtaining planning permission and the compulsory acquisition could be justified as being in the public interest.
I turn to the amendments. The purpose of clause 48(1) is to ensure that the development and regeneration opportunities that HS2 presents are maximised in a timely manner. However, it is a backstop power. We expect local authorities or landowners to be able to capitalise on any opportunities. Indeed, that is already happening. For example, Birmingham City Council has already published its plans for the development of the Curzon Street area, and we support it on that. However, in the event that there are issues that impede development, such as effective land packaging, regeneration areas straddling different local authority boundaries and so on, we will have the ability to step in and to help the development progress. Any such developments that require land outside the Bill limits would require the promotion of a compulsory purchase order and, as I have explained, the rules are tightly drawn and must be adhered to.
Andy McDonald
I may have misunderstood, Mr Hanson. I thought that we were paying our attention exclusively to amendment 22. I realise that the Minister has spoken to others as well.
The Chair
I said that the other amendments were grouped with amendment 22. The hon. Gentleman may speak to all amendments and vote on them individually.
Andy McDonald
I am grateful. I will touch on the Minister’s remarks about the description of the backstop power. I fully understand the way in which he is presenting that and it appears eminently sensible to me. He set out a good case for that approach.
My only concern is that the measure is unlimited in time. I have said to the Minister that the HS2 operation will run for a considerable time, well in excess of 100 years, and my concern is about the principle of that power hanging around for that length of time. However, he has given me certain assurances on that.
Amendment 24 deals with geographical limit. My point is a similar one. I do not know whether the Minister can provide clarification, but at the moment there is no such geographical limit in the description of “any land”, which concerns the Opposition.
Mr Goodwill
Relocation of businesses might not be limited to areas close to the line. Indeed, I can think of one business that needs a railhead, so any relocation could be to a different place in the region to enable continued access to a railhead.
Andy McDonald
That is helpful insofar as it goes, but in the Bill the implication is much wider. I understand that land could be identified for development in London or Birmingham, but the Bill will allow the Secretary of State to acquire land in the Outer Hebrides or the constituency of the hon. Member for Kilmarnock and Loudoun; he might welcome such acquisitions, but I am not sure that was ever the intent. I ask the Minister to think about whether there should be some qualification because, as the Bill stands, the Secretary of State could acquire compulsorily land that had absolutely no connection whatever with the HS2 project.
On amendment 25, the Minister gave a very full answer about the way in which local authorities can be engaged. If he is not going to accept the amendment, as he indicated he will not, he should understand that it does speak to some important issues. There is the method of local authority engagement that he described, which I welcome, but there is a risk of conflict between settled local development plans and the Secretary of State’s coming along to exercise these powers. They could find themselves directly in conflict.
If I heard the Minister correctly, he outlined how that engagement might take place and how matters might be resolved. Nevertheless, as it stands, the clause would give the Secretary of State pre-eminence over the wishes of the local people expressed through their representatives by way of their development plan or its equivalent.
Everyone in this place favours increased and greater devolution in one form or another. Unamended, the clause has the potential to drive a coach and horses through the principles of devolution and local accountability and power, because the pre-eminence is with the Secretary of State. The Minister has already commented, so I hope he will forgive my asking him to consider those remarks. I do not seek to press the amendment to a vote. The Minister might be able to offer some words of reassurance: that the Government do intend to work with local authorities in the full spirit of co-operation that we referred to earlier.
Amendment 23 deals with the better definition of the term “opportunity for regeneration or development”. I am not sure we have had that better defined today. The Minister has said there is no need for that to happen, but I can foresee circumstances where an objection would be raised. Might it not be better to have that settled as a definition, so that there can be no doubt once land has been identified for regeneration on those terms?
I do not intend to press these matters to a vote, but I would be grateful for further comments from the Minister.
Mr Goodwill
By all means. I have been trying to think of situations where land may need to be purchased a distance away from the line. I can think of two in particular. One involves businesses. There is a large car dealership, for example, at Old Oak Common; we will work with them to relocate so that the other development can take place. I am also thinking of the Hillingdon outdoor activity centre, which has been a particularly difficult community enterprise that we are seeking to relocate. It could be that the alternative site would be some distance away from the boundaries of the line.
The other issue is depots. Some of the work we are doing means that depots for other rolling stock facilities have to be displaced some distance away. In the case of businesses, the company might want to relocate tens of miles away, if that is convenient, although we would generally need to work with businesses that wish to retain their workforce and, therefore, not move particularly far away.
On timing, I am pleased the hon. Gentleman is confident that the line will run for several centuries. It is important to remember that local authorities already have compulsory purchase order powers and they could promote an order at any time. The clause, as drafted, would not create any additional uncertainty.
On geographical location, the compulsory order checks and balances would, of course, provide appropriate limitations. It would need to be demonstrated that the land did need to be purchased under CPO powers. Indeed, it could be argued that if the site were challenged by the landowner, they could come forward with alternative concerns.
I am pleased that we managed to react to the points the hon. Gentleman sensibly raised in amendments 24 and 25. Following the proceedings in the Hybrid Bill Committee, the Secretary of State is required to consult local authorities.
The co-operation and engagement of local authorities, particularly in the great cities of the north that will primarily benefit from this, have been outstanding. I pay tribute to the hon. Gentleman’s colleagues in those Labour administrations that have engaged with us so effectively. They understand the importance of this for the north.
Andy McDonald
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 48 ordered to stand part of the Bill.
Clause 49
Power to carry out reinstatement works
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 49 applies to the power to carry out reinstatement works. It allows the nominated undertaker to carry out reinstatement works within the Bill limits in relation to property, including a business or facility that has been discontinued or substantially impaired, in whole or in part, arising from the exercise of any power under the Bill. The clause aims to assist those affected by the construction of HS2 by providing an efficient mechanism for moving properties such as businesses and reducing the requirement for extinguishment, thus protecting jobs.
Subsection (4) allows the Secretary of State to direct that the deemed planning permission under clause 20(1) does not apply in relation to particular reinstatement works. That will enable the Secretary of State to grant deemed planning permission for the development, subject to conditions to be discharged by the local planning authority.
Question put and agreed to.
Clause 49 accordingly ordered to stand part of the Bill.
Clause 50
Enforcement of environmental covenants
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
I am particularly enthusiastic about clause 50, which relates to the enforcement of environmental covenants. It enables the Secretary of State to ensure that following the construction of the scheme, he may impose conditions on land released where such land contains environmental mitigation for HS2. This is to ensure the maintenance of mitigation measures, upgrades to the mitigation if required and prohibition on uses of the land where such uses would detrimentally affect the measures in place.
The clause binds successors in title into any covenant agreed with previous landowners. The Secretary of State or an authorised person may enforce the agreement.
Question put and agreed to.
Clause 50 accordingly ordered to stand part of the Bill.
Clause 51
Works in Scotland for Phase One purposes
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 51 gives Scottish Ministers an order-making power relating to carrying out works in Scotland for phase 1 purposes. As phase 1 of HS2 will also operate classic compatible trains, some services will continue north from Birmingham at conventional speed to Scotland. Some existing infrastructure in Scotland may, therefore, need alteration—for example, platform lengthening or amendments to depots where the classic compatible rolling stock will be stabled.
Subsection (2) sets out that specified provisions relating to section 1 of the Transport and Works (Scotland) Act 2007 also apply to an order made under the clause.
Andy McDonald
I rise to take the opportunity to highlight the fact that phase 1 will ultimately be running further north into Scotland on conventional lines once HS2 is completed through to Manchester and Crewe. Scotland will directly benefit from this investment, which will considerably reduce times back on to the conventional lines from HS2 when it is completed.
Mr Goodwill
Yes, the plan is that there will be two types of rolling stock on the line. There will be the high-speed captive trains, which can operate only on the new lines, but classic compatible trains will also run through. From day one, trains will be running through to Glasgow and possibly beyond. Crews will be placed in Scotland on day one manning those trains as they leave to come down and seamlessly transition on to the high-speed line to complete their journey. HS2 will be very good news for the north of England—and Scotland, that very important part of our country.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I welcome that example of Scottish Government forward planning for high-speed operation. This is just a reminder, but between Crewe and Scotland the trains will actually run slower than they do at present. Overall the journey time will reduce, but this is a wee reminder to the Minister that we need to look at some improvements on the existing line between Crewe and the border in order to try to allow compatible trains to run fast as well. I appreciate that overall there is a shorter journey time, and I do welcome that.
Question put and agreed to.
Clause 51 accordingly ordered to stand part of the Bill.
Clause 52
Power to apply Act to further high speed rail works
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 52 gives powers to apply the Act to further high-speed rail works; possibly the sort of works that the hon. Member for Kilmarnock and Loudoun referred to. It allows the use of a Transport and Works Act 1992—TWA—order to gain the necessary provisions for extensions or additional works relating to phase 1 of HS2, beyond the works outlined in the Bill. That relates to relatively minor transport works, such as an additional track to connect to rail sidings. This power would not be used to promote future phases of HS2. Those would be subject to the hybrid Bill process. A TWA order cannot apply the provisions of the Bill that enable the Secretary of State to extend the time limit for the exercise of compulsory purchase powers or the provisions relating to listed buildings or ancient monuments.
Question put and agreed to.
Clause 52 accordingly ordered to stand part of the Bill.
Clause 53
Rights of entry for further high speed rail works
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 53 concerns rights of entry for further high-speed rail works. It allows a person authorised by a justice of the peace or sheriff, for residential properties, or by written consent from the Secretary of State, for non-residential properties, a right of entry to properties within 500 metres of the centre line of future high-speed rail phases or projects, for the purposes of undertaking surveys or environmental assessment.
For future HS2 phases or other high-speed rail projects, this power is exercisable only if the Secretary of State has proposed to introduce a Bill promoting a high-speed railway by means of a Command Paper. The power is exercisable only within five years of the publication of that Command Paper. It does not apply to a railway wholly in Scotland.
The clause makes it clear that a warrant may be issued or authorisation given only where it appears that there is a genuine need to enter the land relating to the construction of the high-speed railway line, and all reasonable attempts have been made to obtain consent to enter the land.
The Secretary of State may, by order, change the distance of 500 metres. The order is subject to the affirmative resolution procedure, unless it provides a different distance only in relation to a specified category, such as noise surveys, in which case the order is subject to the negative resolution procedure.
Question put and agreed to.
Clause 53 accordingly ordered to stand part of the Bill.
Clause 54
Exercise rights of entry
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 54 relates to exercise of rights of entry. It sets out the process for exercising the rights of entry under clause 53 and provides safeguards for property owners.
The validity of any warrant obtained under clause 53 is time-limited to six weeks from the date issued. A right of entry under clause 53(1) is exercisable at any reasonable time. A person authorised under clause 53 to enter land must ensure that the property owner is given at least 14 days’ notice before entry is sought. If a person wilfully obstructs any authorised person exercising this right of entry, they are committing an offence.
Andy McDonald
We had a lengthy discussion about time limits. On the face of it, this proposal of six weeks for validity of the warrant seems curtailed and short. I do not know whether that is how such things are ordinarily done, but can the issue be returned to and subsequent warrants sought if it is not exercised in the six-week period?
Mr Goodwill
May I explain why we have to do this? While we were developing route options for the stage that is under consideration at the moment, a number of landowners did not allow access to land. That gave us some very real problems, particularly in the way that we surveyed some of the ancient woodland and environmental features. It was only when we subsequently could survey the land that we understood the problems in more detail. The proposal would also apply to some of the noise modelling that we need to do, because it is often important to be able to do that work.
We also have a particularly intractable problem in the London borough of Hillingdon. In the Hillingdon outdoor activities centre, we want to go into the lake to carry out some boring to see how a viaduct that we wish to construct in the lake can be done, and the London borough has prevented us from going on to that land. That is very disappointing indeed, because the organisation concerned—the charity that runs this fantastic activities centre—will lose the money that we were going to give them for the disruption that the work would cause, which is between £20,000 and £40,000. It will also mean that we cannot get access to that land until the Bill gets Royal Assent, so we will not be able to draw up as detailed a viaduct design as we would like. We want these viaducts to be designed in an exciting way, so it is disappointing that this has happened. With these powers, it will be possible in future cases to get on to the land to carry out the surveys, whether for engineering, construction or environmental reasons.
The short answer to the hon. Gentleman’s other question is yes: another warrant can be applied for, but an explanation for why the initial warrant was not exercised would need to be given.
Question put and agreed to.
Clause 54 accordingly ordered to stand part of the Bill.
Clause 55
Grants for affected communities and businesses etc
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 55 allows the Secretary of State to award grants to add benefit over and above committed mitigation and statutory compensation to local communities and economies that are demonstrably disrupted by the construction of HS2.
As announced in October 2014, the Department introduced the Community and Environment Fund and the Business and Local Economy Fund and allocated £30 million in total towards those funds to support local businesses and employment, or to improve local community facilities or the environment. Those funds will allow local communities who know their areas best to implement what they think will work for them. Further details are outlined in the HS2 information paper C12, which was published in November 2015.
Question put and agreed to.
Clause 55 accordingly ordered to stand part of the Bill.
Clause 56
Application of powers to Crown land
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 56 permits the authorised works to be carried out by the nominated undertaker on Crown land, or Crown land to be entered with the consent of the relevant Crown authority.
Question put and agreed to.
Clause 56 accordingly ordered to stand part of the Bill.
Clause 57
Highways for which Secretary of State is highway authority
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 57 relates to highways for which the Secretary of State is the highway authority—the strategic road network springs immediately to mind. It provides that the powers conferred on the nominated undertaker with respect to works may be exercised in relation to roads under the responsibility of the Secretary of State, subject to his agreement. Subsection (2) states that the Secretary of State can impose conditions in such an agreement.
Question put and agreed to.
Clause 57 accordingly ordered to stand part of the Bill.
Clause 58
Crown Estate
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 58 applies provisions of the Crown Estate Act 1961, which contains limitations on the powers of disposal of the Crown Estate Commissioners. The limitations are removed in relation to Crown Estate land within the Bill limits that appears to the Crown Estate Commissioners to be required for phase 1 purposes. Similar provisions were included in the Crossrail Act 2008.
Question put and agreed to.
Clause 58 accordingly ordered to stand part of the Bill.
Clause 59
Royal parks
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 59 will enable the Secretary of State, with the approval of the Secretary of State for Culture, Media and Sport—the Minister responsible for Royal Parks—to grant a lease or right over Royal Park land where that is required for phase 1 of HS2.
Question put and agreed to.
Clause 59 accordingly ordered to stand part of the Bill.
Clause 60
“Deposited plans” and “deposited sections”
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
This clause is not the most exciting one. It makes provision regarding the terms “deposited plans” and “deposited sections” for the purposes of the Bill.
Question put and agreed to.
Clause 60 accordingly ordered to stand part of the Bill.
Clause 61
Correction of deposited plans
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 61 contains provisions for correcting the plans or book of reference to the plans that have been deposited in Parliament with the Bill, should that be required. There are similar provisions in the Crossrail Act 2008 and the Channel Tunnel Rail Link Act 1996.
Andy McDonald
I rise to comment on the deposited plans. The Minister and I visited Camden a short time ago, where we saw a centre devoted to communicating information to the local area and local community. What mechanisms are in place to ensure that any amendments or corrections to the plans are properly communicated to the people in the local area affected by them?
Mr Goodwill
The majority of people access plans using the internet. Of course, when corrections are made, they will immediately appear on those online plans. This is not about making changes but about making corrections where mistakes have been made. There have been more instances than I would have cared for where we have made minor mistakes on the plans, but if one looks at the extent of environmental information and the amount of mapping, it is almost inevitable that some mistakes will be made. The clause will ensure that those mistakes can be corrected after the plans have been deposited in Parliament.
Question put and agreed to.
Clause 61 accordingly ordered to stand part of the Bill.
Clause 62
Environmental Impact Assessment Regulations
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
Clause 62 provides that where a building not forming part of the phase 1 works authorised in the Bill—for example, a building over a station—is built to replace a building demolished or substantially demolished under the Bill, the planning application for that replacement building must be accompanied by an environmental assessment subject to certain conditions set out in subsection (1). It is a very sensible provision.
Andy McDonald
I am grateful to the Minister for supplying me with the weighty tome of the environmental impact assessment. To show that I have started to read it, I should tell the Minister that I noticed that the assessment came about because of a European Union directive dealing with matters such as damage to the environment and air quality. That was a very welcome intervention by the European Union in protecting our environment.
Mr Goodwill
There has been debate as to how far the Government have complied with the Aarhus convention with regard to some of our environmental considerations. The Aarhus convention is separate from the European Union, although I have to agree with the hon. Gentleman —as someone who believes Britain is better in the European Union than out of it—that much of the EU’s environmental legislation is protecting people’s health here.
When representatives from the Commission came to the UK and saw the extent of our environmental work and consultation, they were very happy indeed that we were fulfilling all our obligations. A number of people have said that it is difficult to build anything in this country because of all the environmental legislation, but I think it is important that we protect our environment. Some of the areas through which we are building the line have particularly sensitive ecosystems. I am therefore proud that we have managed to do this with no net environmental loss, which is fantastic, and that 2 million trees will be planted, which will further enhance the environment.
Question put and agreed to.
Clause 62 accordingly ordered to stand part of the Bill.
Clause 63
Arbitration
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
The clause sets out how disputes are to be dealt with by arbitration under the Bill. Similar provisions were included in the Crossrail Act 2008.
Question put and agreed to.
Clause 63 accordingly ordered to stand part of the Bill.
Clause 64
Notices and other documents
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
The clause relates to serving notices or other documents on any person where required or authorised under the Bill. The clause allows a document to be served by email or other electronic means where the recipient has agreed to that electronic means of service. However, a notice seeking a right of entry for the purposes of further high-speed rail works under clause 53 cannot be given by electronic means.
Question put and agreed to.
Clause 64 accordingly ordered to stand part of the Bill.
Clause 65
“Phase One purposes”
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
The clause defines “Phase One purposes” as used in the Bill. The hon. Member for Middlesbrough asked earlier why the definition had been drafted to include references to further stages of the HS2 project and expressed concerns that the power to acquire land for phase 1 purposes under clause 4(1) might be extended to lands and plans that have not been specified at this stage.
Paragraphs (b) and (c) of the definition have been included to refer to things that need to be done as an integral part of phase 1, to enable HS2 trains to use the HS2 route as a whole or to continue on to the existing rail network, such as the provision of sidings in Manchester; or to ensure that ancillary works provided for phase 1, such as signalling and electrification works, have sufficient capacity to cater for the wider route. The purposes under clause 4(2) for which land acquired may be used therefore include the construction of ancillary works that are designed to cater for both phase 1 and further phases of the HS2 route.
I can reassure the hon. Gentleman, however, that the power to acquire land is tightly constrained, because the power under clause 4(1) applies only to land within the Bill limits—that is, land within the boundaries shown on the plans deposited with the Bill. Most of the land within the limits are also within the limits of deviation from the works specifically described in schedule 1 to the Bill. Any additional land within the Bill limits required for ancillary works, accesses, construction sites and other ancillary purposes is identified in schedules 5, 7, 8, 11, 12 and 16, together with the purpose for which the land is required.
Andy McDonald
I thank the Minister for that thorough and comprehensive explanation. The definition was a matter of concern, although it might have been my interpretation of the drafting. It struck me that “Phase One purposes” had an elasticity that we would not ordinarily expect to see, but I fully accept the explanation given by the Minister. It is entirely logical and sensible, and I support the clause.
Question put and agreed to.
Clause 65 accordingly ordered to stand part of the Bill.
Clause 66
Interpretation
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
The clause defines various terms used throughout the Bill.
Question put and agreed to.
Clause 66 accordingly ordered to stand part of the Bill.
Clause 67
Financial provision
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
The clause is a standard one that appears in Bills to provide for the expenditure of public money—the careful expenditure of public money. It simply provides that any expenditure incurred by the Secretary of State under the Bill shall be paid out of money provided by Parliament.
Question put and agreed to.
Clause 67 accordingly ordered to stand part of the Bill.
Clause 68
Commencement and short title
Question proposed, That the clause stand part of the Bill.
Mr Goodwill
The clause is a standard one that appears in Bills. The provisions of the Bill will come into force on Royal Assent, except for clause 11 and schedule 14, which will come into force under regulations made by the Secretary of State after the Housing and Planning Bill comes into force.
Andy McDonald
I thought that the Minister might propose to the Committee that the name be changed to the Elizabeth II line. I am disappointed that it will stay so boring and business-like, but be that as it may.
Question put and agreed to.
Clause 68 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Jackie Doyle-Price.)
Westminster Hall
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Backbench Business
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Offshore Oil and Gas Industry
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Peter Aldous (Waveney) (Con)
I beg to move,
That this House has considered the offshore oil and gas industry.
It is a pleasure to serve under your chairmanship, Mr Walker, for this important debate. I am grateful to the hon. Members for North Tyneside (Mary Glindon) and for Aberdeen North (Kirsty Blackman) for the work they did in helping to secure it.
The North sea oil and gas industry is a significant employer in my constituency, with Lowestoft and its port being an important service centre. It is important to have this debate now as the industry faces major challenges that need to be addressed urgently. Further fiscal measures need to be introduced in the Budget on 16 March, and the debate provides us with an opportunity to consider what such measures should be as well as the industry’s longer term framework.
First, the industry must survive. We must then ensure that everything possible is done so that it can thrive. We owe that to those who work in what is in many respects a dangerous industry, to their families, to the communities from which they come and to those businesses who are making investment decisions in a risky and unpredictable market—particularly so at this time—to give it that sustainable and, I think, exciting future.
The oil and gas industry on the UK continental shelf faces serious challenges. It is fighting for its very existence and tens of thousands of people’s livelihoods are on the line. About 75,000 jobs have gone in the past 15 months, primarily due to the collapse in oil prices and the increasing maturity of the UKCS as an oil and gas producing basin. The industry is drowning in a tsunami of oil and gas supply just as demand is cratering around the world.
In mid-2014, oil was trading at in excess of $100 a barrel, but today the price is between $30 and $35 per barrel. At the beginning of the year the combined market value of 112 publicly traded oil companies—the entirety of the UK’s oil and gas industry excluding Shell, BP and GP—had the same value as Marks and Spencer: £7 billion. Two years ago, just one of those companies, Tullow Oil, was worth more than Marks and Spencer: it had a market value of £8.2 billion.
Oil & Gas UK’s recently published activities survey for last year confirms the serious nature of the situation. While production on the UKCS rose by 9.7% in 2015 to 1.64 million barrels of oil equivalent a day, revenues fell by 30% between 2014 and 2015 to £18.1 billion, and although the industry has been successful in achieving significant cost reductions and efficiency improvements, 43% of the UKCS oil fields are likely to be operating at a loss in 2016 at prevailing prices. Oil & Gas UK estimates that, in the southern North sea, 51 fields may cease production by 2020. That is a third of the fields in that area and equivalent to 51 factories closing their gates.
Oil and gas companies are cutting almost all of their discretionary expenditure to survive in a $30-a-barrel world. Intense global competition for capital and contraction in expenditure is leading to a major downturn in activity and subsequent job losses across the sector. There is concern that the situation will get worse over the coming year as companies in the supply chain complete contracts commissioned in better times and the insulation provided by price hedging taken out by many operators disappears. The industry is used to working with great uncertainty and risk, but with greater market volatility and lower prices likely to prevail for much longer augmented by the challenges of working in a mature basin, there is a need for a more robust framework. There is a moral imperative as well as a business imperative to manage the industry better.
Some might say that, with all those challenges, why does it matter? It really matters. The industry is vital to UK plc. Despite the job losses, 375,000 people are employed in the industry, its supply chain and ancillary service industries, with those jobs concentrated around Aberdeen, on Tyneside and Teesside, and in East Anglia around Great Yarmouth and Lowestoft. If we do nothing, in effect we will be hollowing out those communities.
There will also be a knock-on effect on other areas of the economy such as steel production in manufacturing and in the City, where oil and gas company shares figure prominently in many pension funds. The industry has also built an integrated supply chain that is the envy of the world, which produces exports worth an estimated £39 billion a year. We have great depths of knowledge and expertise built on decades of experience that we must nurture and cherish, not throw away.
In 2014, UK oil and gas provided 68% of the UK’s total primary energy and, in the same year, 45% of the oil we used came from the UKCS, 48% of natural gas came from UK natural gas production and the industry provided £2.2 billion in taxation to the Treasury, though that was the lowest figure for 20 years. The situation has deteriorated in the past 18 months, but, despite the serious challenges, the UK offshore oil and gas industry has a vital role to play in the next 30 years. There are numerous reasons for that.
First, energy security must be a priority for the nation. We need to be able to maximise production of oil and gas at home to reduce our dependency on imports in an increasingly uncertain world. Secondly, while 42 billion barrels of oil equivalent have been produced from the UKCS in the past 50 years, there are known reserves of 20 billion barrels of oil and gas to be recovered from our offshore waters. Of that, there are 8 billion barrels of natural gas. As the Secretary of State set out in her reset speech for energy policy in November, gas has a key role to play in keeping the lights on in the immediate future. Recovery of those reserves, and hopefully others, is a prize worth fighting for.
Thirdly, the Secretary of State in her reset speech also set out an exciting future for offshore wind, an industry that is bringing exciting opportunities to East Anglia. Offshore oil and gas in many respects complements offshore wind because their supply chains overlap. The transition to a low-carbon economy will not take place overnight, and oil and gas production on the UKCS has a vital role to play in securing a smooth transition and helping to build another world-class industry of which Britain can be proud.
Fourthly, I do not wish to be unnecessarily negative about another technology, but we must be realistic about the role that onshore fracking will play in the immediate future. It will have to overcome planning hurdles, and it should be pointed out that in the US they have known about large tight gas fields since the 1930s. They are working those now because new technology has made that viable. In the UK, first we must establish the extent of those fields and then we must assess their full economic viability and establish the infrastructure to service them. We already have that infrastructure in the North sea, so it makes sense to make best use of it.
While the industry’s challenges have come into stark focus in the past 18 months as the price of oil has plummeted, its structural defects have been evident for some time. That is why the previous Secretary of State, Ed Davey, instructed Sir Ian Wood to conduct a review. Sir Ian published his findings in February 2014. They were endorsed across the industry and across this House, and form the basis of much of the Energy Bill. His main recommendations were to commit the industry to the principle of MER—maximising economic recovery from the UKCS—and, to achieve that, to create a new arm’s-length regulatory body to provide effective stewardship and regulation. That body is the Oil and Gas Authority, which is the cornerstone of a new strategy: a tripartite approach of industry, the OGA and Treasury working together. The OGA will promote collaboration, which is vital to ensure that infrastructure is used and shared on a fair basis and that decommissioning takes place at the right time, not prematurely, which would undermine the objective of MER. The OGA will give greater security to those working in the industry.
Some might say that Sir Ian wrote his report in a different time, when the industry was not facing the acute challenges it is today, and that his recommendations are out of date. I disagree. The framework he recommends provides the industry with the best chance at survival and at realising its potential over the next 35 years. Time is of the essence, as Sir Ian stated in his report, and it is vital that the Energy Bill receives Royal Assent as soon as practically possible in the next few weeks.
Sir Ian stressed the importance of the industry collaborating. I will come back to that theme quite a lot over the next few minutes. It was a theme taken up by Deloitte in its recent publication, “Making the most of UKCS: Collaborating for success”, which highlighted that all too often in the past, collaboration in many oil and gas companies has been left to a few heroes—the few trusted individuals who
“actively look for opportunities to collaborate and ensure that their partners share the benefits.”
Deloitte points out that
“companies should do more to foster a collaborative environment through leadership, targeted strategies, allocated resources and personal objectives linked to rewards. Successful collaboration depends on encouraging workforce to focus on the end-result, sharing goals and empowering staff to accept compromise, rather than systems and processes.”
Deloitte adds that while there are good examples of collaboration, there are clearly opportunities for improvement for both operators and those in the supply chains, which should be doing more to
“improve financial incentives and contractual terms to encourage collaboration.”
It adds that
“operators especially need to improve in areas that foster innovation—such as seeking out new ideas and solutions, or implementing change effectively.”
It is vital that instead of a few individual heroes, there is a whole legion of them operating throughout the industry.
I will provide a quick comic interlude. On Saturday, on the eve of the Oscars ceremony, the actor George Kennedy died. He won an Oscar in 1967 for his role in “Cool Hand Luke”. For people of my generation, he was perhaps better known for what was a less challenging role in acting terms, playing Carter McKay in “Dallas”, in which he spent most of his time fighting with the Ewings for control of both Ewing Oil and WestStar Oil. While “Dallas” was glamorous fiction, it parodies what some people say the oil industry used to be about: aggressive competition and greed descending into criminality. Those days, if they ever existed, are long behind us.
The ethos that must be installed across the industry going forward is one of collaboration—collaboration between the OGA, industry and the Treasury, with the OGA providing the framework for that collaboration. We now have a regulator with the same bite as its counterparts in Norway and the Netherlands. That collaboration must involve industry, building on the significant progress it has made in the past year in reducing operating costs from an average $24.30 per barrel to $20.95 per barrel. Yesterday, at the Southern North Sea conference in Norwich, the ambition of reducing costs to $15 per barrel was stated. One operator, in what I should emphasise was very much an isolated case, explained how it was achieving costs of $7 per barrel.
In this tripartite approach, the Treasury needs to deliver its side of the bargain, providing a taxation framework that shows real confidence in the industry’s long-term future and helps to attract global footloose investment. However, collaboration must not stop there; it must permeate the industry and beyond. Operators must collaborate with operators. That is evidenced by the partnership currently being operated by Faroe Petroleum, Petrofac and Eni Hewett, about which I also heard yesterday.
Trade organisations must also collaborate with one another, which again was evidenced yesterday in Norwich by the signing of a memorandum of agreement between Oil & Gas UK and the East of England Energy Group. Operators must collaborate with their service providers, building long-term partnerships and learning lessons from other sectors such as the aviation and car industries. Small and medium-sized enterprises operating in the sector have a proven track record of driving innovation and achieving efficiencies. Operators now need to work with them.
Finally, the sector needs to work with other sectors, in particular the offshore wind sector, with which it has a great deal in common. The oil and gas industry post-Piper Alpha has a good track record of operating safely in what is a hazardous and dangerous environment. That must never be compromised, but one has to ask: is it necessary to have two separate regimes—one for the oil and gas industry, and one for the offshore wind industry? Going forward, collaboration must underpin everything. It is probably too late for the Budget in under two weeks’ time, but for the autumn statement, consideration should be given to introducing measures that encourage collaboration—for example, tax breaks and incentives to carry out seismic work that can lead to new discoveries.
Alongside the implementation of Sir Ian’s recommendations and the move towards a more collaborative approach to business, changes to the fiscal regime are imperative, not only to get over the immediate challenges the industry faces, but to provide a framework to attract global investment. That is already acknowledged by the Treasury. Its “Driving investment” plan, which came out in December 2014, recognised that substantial improvements in the oil and gas fiscal and regulatory landscape, including a reduction in the overall tax burden, are required for the UKCS to remain globally competitive and to attract international capital.
When the “Driving investment” plan was published, the oil price was around $60 a barrel. Given that the price is now in the range of $30 to $35 a barrel and that the observed impacts of prevailing low oil prices and the depth of the downturn in the UKCS are considerable, those improvements are even more imperative. There are huge pressures on company and project financing, and more job losses and company defaults are a real worry. Further fiscal measures are now required as a matter of urgency to support the industry, and I urge the Government to bring such measures forward in the forthcoming Budget.
The package included in the March 2015 Budget was very much welcomed by the industry and should now be the foundation for further measures. Such additional measures would also help the industry’s supply chain and therefore meet the second principle in the “Driving investment” plan: revenues. In setting further reforms, we must have in mind the requirements of the secondary industries. I would therefore be grateful if my hon. Friend the Minister, along with her Treasury colleagues— I am delighted to see one such colleague, the Exchequer Secretary to the Treasury here today—included Oil & Gas UK’s proposals in the Budget. I will not go through them, because Members will have seen them, but they set out the situation clearly and speak for themselves.
In addition, Oil & Gas UK has requested two non-fiscal measures to be introduced. First, access to finance is a major problem at the current time. That could be overcome to a large degree by the introduction of a Government loan guarantee scheme, which would help companies to access affordable working capital, which is vital for their survival in the downturn. Constraints on expenditure and an increasing unwillingness among finance markets to lend are currently resulting in a liquidity crunch across the sector, which is driving a further downturn in activity.
It is also very important, out there in the real economy in the regions in which we operate, for businesses and their representatives to talk to their banks, to explain their problems and to work with them. The feedback I am getting in East Anglia is that at the moment the banks are being responsible, but in other sectors in the past—whether it was the dairy or the house-building industry—when times have got difficult, the banks have sometimes panicked.
Kirsty Blackman (Aberdeen North) (SNP)
I was at a meeting last week with a local supply chain company, which said it was finding it difficult to get finance and that although a number of banks were saying to Government that they are still lending, they were saying to local oil companies, “We are not lending to oil right now.”
Peter Aldous
It is very helpful to have that feedback. I raised this at the New Anglia local enterprise partnership oil and gas taskforce meeting last week, and the feedback I got from people was that they had spoken individually to all the banks in the region and that the banks were being co-operative. However, it can, of course, vary from region to region, and that is what we have look out for.
I have talked about the short-term measures. Secondly, in the longer term, the Treasury needs to work with the industry on producing an overall road map for fiscal change. That would include not only the fiscal changes in this Budget, but a longer-term blueprint for further reductions in the fiscal burden as the basin matures. That would help to provide greater clarity for all those working in the UKCS at a time of uncertainty, and it would boost investment and hopefully give confidence to banks. In short, the industry needs its own long-term economic plan.
It is also important that local initiatives are put in place to support people and businesses at this uncertain time. The New Anglia LEP oil and gas taskforce, of which my hon. Friend the Member for Great Yarmouth (Brandon Lewis) and I are members, has developed a package of measures to provide advice and support to businesses and their workforce. The taskforce commissioned research that showed that 26 companies have filed for administration in the Lowestoft and Yarmouth area between April and October 2015 and more than 1,000 people directly employed—that is, directly employed people only—in the industry have been made redundant, with many companies asking staff to take unpaid leave or salary reductions. As a result of that research, the taskforce has agreed a package of measures prioritising two areas.
First, for oil and gas businesses, free initial face-to-face assessments will be provided, followed by, if required, a 50% discount towards a more intensive support package that will be provided by specialist consultants. That will include advice on diversification, restructuring and alternative growth opportunities, as well as on developing business plans. Those discounts will be funded by Norfolk and Suffolk County Councils and by Waveney District Council and Great Yarmouth Borough Council, which have set aside £80,000. In addition, the LEP is modifying its growing business fund grant scheme to support and sustain future business plans, with £250,000 being set aside.
Secondly, those losing their jobs are being provided with support to retrain, find alternative employment or maintain their industry certificates. Assistance will be provided via Jobcentre Plus to ensure that displaced workers are properly supported to access new job opportunities in the local area. The taskforce is also working with local colleges and training providers to ensure access to relevant training courses.
It is important to acknowledge those in the New Anglia LEP and the East of England Energy Group who have worked tirelessly to come up with this package, as well as the four councils and the LEP for providing the funding at a time when their budgets are under great pressure. It is right that such packages are worked up locally, so that they are tailored to the specific needs of those in the local areas, but there is a role for Government. First, they should co-ordinate such initiatives across the country—I understand that Scottish Enterprise is doing something similar, although I am not aware of the position in the north-east and in the north-west. Secondly, if the schemes are a success but the downturn goes on for longer, the Government should look to provide the funds for these initiatives to continue.
If you will bear with me for a few minutes, Mr Walker, I am getting towards the end of my speech. Let me say a few words about the urgent need for a regional plan for the southern North sea, on which the OGA has started work. Sir Ian Wood recommended that regional plans should be developed for the different areas of the UKCS. There is a vital need to do that in the southern North sea, where there are significant potential reserves of gas remaining to be recovered. That is evidenced by the Cygnus find—the largest gas discovery in the last 25 years; work is due to start later this year—and the potential of the Tolmount discovery. With gas continuing to play a key role as the main fuel source for UK electricity generation, this plan is important to maintain security of supply.
Today, gas is very cheap and it is readily shipped around the world in liquefied natural gas form. Seventy per cent of gas is currently imported, but much of it is from countries that have an unpredictable political outlook. However, the gas price is increasingly volatile and we need to have our own domestic source of supply. Although the southern North sea still has significant potential, it is particularly vulnerable to premature contraction and decommissioning. We need to ensure that the existing infrastructure is fully utilised and not placed at risk, and that licences are in the hands of those prepared to invest.
The price of gas used to be closely tied to the oil price. With the rise of shale gas in the US, that is no longer the case, and I am advised that there is now a closer link to something called the “Henry Hub”. That leads one to consider whether there should be a different fiscal regime for gas in the southern North sea. Industry opinion is divided; some say that the fuel should have its own tax framework, whereas others say that would be complicated and that we need to move to a simpler system. On balance, I am coming round to favouring the latter, but I urge the Treasury to look at this issue closely.
Although the southern North sea is a mature basin and, in many respects, we are embarking on the final chapter of oil and gas recovery on the UKCS. In some respects this voyage is a new venture, with a new business model built on a cornerstone of collaboration. Up until now, the big oil companies have led the way in pursuing innovation, efficiency and cost reduction. With the industry in future likely to be made up of a larger number of smaller businesses, a new way of harnessing the drive for innovation needs to be found. The offshore wind catapult has been very successful in promoting innovation and driving down costs. I would be grateful if the Government considered setting up a similar catapult for the oil and gas industry.
In conclusion—I sense I have tried your patience for a little too long, Mr Walker—the North sea oil and gas industry is a great British industry, which has given so much to the UK over the past 50 years. It is currently facing extreme challenges, but it can play a key role for the next 35 years. That key role involves keeping the lights on, providing good and exciting jobs and making a significant contribution to GDP—to Great Britain plc. Three ingredients are required for it to do so: the right regulatory framework—Sir Ian has provided us with that particular framework, which we now need to move forward with—the right fiscal framework and, above all, a spirit of collaboration.
Mary Glindon (North Tyneside) (Lab)
It is an honour to speak under your chairmanship, Mr Walker. I apologise that, having left a Bill Committee to speak in this important debate, I will have to return to the Committee when I have spoken here. I hope that the Ministers and other hon. Members will excuse me.
It is difficult to speak after my friend the hon. Member for Waveney (Peter Aldous), who encompassed so much of what I want to say. I thank him for taking the lead at the Backbench Business Committee to help to secure this debate. My friend the hon. Member for Aberdeen North (Kirsty Blackman) and I were both pleased to support this timely application. The hon. Gentleman’s passion for oil and gas and his great knowledge of the subject were well demonstrated in his very thorough speech. He has left little for us to add, except to express our own passion for our regions and describe how we are affected by the downturn in oil and gas.
I am sure the Minister of State, Department of Energy and Climate Change, has heard, and indeed heeded, many times the points that are being raised today. I thank her for re-establishing the cross-party oil and gas group, which functioned so well in the last Parliament after being established by the then Secretary of State. It helped to promote fabrication in a way that brought jobs to Tyneside particularly, and that was very welcome. I reiterate the appreciation and relief that the group has been re-established. The Minister intends the group to focus on improving the competitiveness of the UK fabrication sector in this very hard climate. I am sure our next meeting with the fabrication forum will be fruitful. The way the hon. Lady chaired the first meeting shows that we will have a busy and productive time ahead.
Cheaper oil at the pumps is welcomed by the majority of people in this country, but the dramatic fall in oil prices is a disaster for industries in places like Tyneside. Twenty years ago, our shipbuilding industry finally closed with the loss of the great Swan Hunter on the Tyne. Many workers were left with no jobs, but others were able to secure a future by transferring their skills to the offshore oil and gas industry. Instead of the building of great oil tankers, we saw with awe the fantastic platforms that dominated the skyline, amazing all who saw them. It was a wonder they ever got off the river, but they did. That was a new era which we hoped would last a long time, but given the way things are, that does not seem likely. I hope there will be some reversal of that fortune.
In my Adjournment debate on this issue just over a year ago, I quoted the then chief executive of Oil & Gas UK, who said at the time of the organisation’s 2015 activity survey:
“This offshore oil and gas industry is a major national asset.”
More relevant than that is the fact that, for each of us taking part in this debate today, the industry has a special relevance to the economic prosperity of our communities. Over the past few years, I have followed the fortunes of the oil and gas industry via the success or otherwise of businesses on the Tyne—companies such as Barrier, W.D. Close, SMD, Shepherd Offshore Services, Wellstream and OGN, the last of which I have worked with most regularly. I will say more about OGN to show how its fortunes mirror those of the oil and gas industry generally.
In 2012, when I asked the Prime Minister to consider tax incentives in the Budget, the workforce at OGN stood at around 1,500. Last year, that workforce stood at 2,500, thanks to a contract for fitting the EnQuest producer FPSO—floating production, storage and offloading vessel. That contract, secured with the help of the cross-party oil and gas group, was completed last March, and sadly, in the last few months, despite valiant efforts by the company to find work, the yard has shed all those jobs. Men and women in my community of Wallsend are out of work, despite being highly skilled.
I take this opportunity to commend the Department for Work and Pensions on the helpfulness of its rapid resource team. The Department commended OGN for letting the team have access to workers long before the nail was in the coffin, with the result that many of the workers have been able to upskill or transfer skills to get different employment. That should be noted in these hard times.
In a letter to the Chancellor in December 2015 about the future of the UK continental shelf, Dennis Clark, the indomitable chairman of OGN—everyone in the business has probably met him at some point—stressed that the way forward was to improve the long-term investment potential of the North sea and that this had to be done by larger operators because smaller ones are struggling. As ever, Dennis believes that there needs to be an overhaul of the tax structure to help North sea operators. In his letter to the Chancellor, he highlighted the fact that in some mature fields like Forties and Beryl, in-field drilling supported by 3D and 4D seismics has resulted in identifying and exploiting new reservoirs. He believes that that could mean there is even more oil than we think in the North sea. He urged pursuing this course of action to be a focus of attention for the newly formed Oil and Gas Authority.
Announcements made by the Government in January will certainly help the industry in these hard times and are welcomed, but the importance of the Government’s support for the industry is strengthened not just by comments from people in the industry such as Dennis Clark, but because of the 2016 activity survey, which was published last week by Oil and Gas UK. I commend the industry’s efforts and success in reducing operating costs and increasing production, as set out in the report, but I am very concerned that the survey outlines the fact that exploration is at an all-time low, with little sign of improvement. According to the survey, this year only £l billion will be approved for investment in new projects compared with £8 billion per year in the previous five years. It can only be described as soul-destroying that, despite efficiencies and resulting successes, because the price of oil has fallen 70% since summer 2014, it is likely that 43% of UKCS fields will be operating at a loss, further deterring exploration and investment.
The UK still has up to 20 billion barrels of oil and, as my friend the hon. Member for Waveney said, can provide a secure source of energy for our country for years to come. That should not be forgotten. I agree with Oil & Gas UK that we must exploit to the full the advantages that come with having a mature province on our doorstep. That must be made known worldwide. Let us exploit our skills, technology and engineering. We cannot waste this resource—that would be a travesty.
The Minister will be aware that Oil & Gas UK has made Budget representations to the Treasury in a bid to help our industry to survive. I particularly note the idea of making loans to enable the industry to have money to invest. Fabricators like OGN in north Tyneside need to see that investment is taking place; otherwise, they will have no hope.
I started by speaking about how the fortunes of the industry are mirrored in OGN. In the last few days, OGN has sent a letter to the unions advising that it will have to market the site. It hopes that it may get a last-minute reprieve by going into the offshore wind industry, because it has the capacity, skills and ability to do that. I know that the Exchequer Secretary to the Treasury, who is here today, has promised to meet OGN to discuss some of the things that are causing it problems there.
It is great that the industry is looking forward; it is terrible that more than 2,000 jobs have been lost in recent months. We cannot even imagine what it is like for people who work in these industries, who were highly paid and usually able to enjoy quite a good lifestyle, being reduced to not having an income and perhaps having to work away from home. At the moment, people are able to work in their local communities, but if they lose that job and are fortunate enough to get another, it could be on the other side of the world. That is a loss socially as well as economically to our communities.
I ask the Minister of State to continue on the road that she has started on, to make the case for oil and gas and to plead with the Exchequer Secretary to listen to the recommendations that have been made by Oil & Gas UK and all the hon. Members who are representing the interests of their communities here today.
Kirsty Blackman (Aberdeen North) (SNP)
It is a pleasure to serve under your chairmanship, Mr Walker. With my fellow MPs, I am pleased that this debate was chosen by the Backbench Business Committee and I appreciate the fact that it agreed that the debate could be held today.
I represent Aberdeen North, which is obviously one of the places most heavily affected by the current downturn. Last summer, when we were first meeting oil companies and talking to industry bodies about what was happening in the oil and gas industry, they were talking about the oil price being “lower for longer” and about being cautiously optimistic about the future. There has now been a shift in the feeling: it feels as though the price will be lower and lower for longer and longer. They are not talking just about being robust at $60 a barrel; they are talking about being robust at $50, and there are even whispers about people trying to be robust at $40. It has become a completely different feeling, even in the few months since the summer, because the global oil price is so unpredictable and it is not something that we can do anything about. One industry leader, when asked the other day what we could do about the oil and gas price, said, “Hope.” That is the only thing that we can do about the price.
There are other things that can be done, though. I want to talk about the situation in Aberdeen and how we are feeling now. I read an article from a couple of years ago that said that about 40,000 people were employed directly in the oil and gas industry in Aberdeen and Aberdeenshire. Aberdeen is a relatively small city; only 225,000 to 250,000 people live there, so if 40,000 are directly employed in the oil and gas industry, that is a massive proportion of our employment.
I grew up in Aberdeen. It was always the case that the dads of people I knew were away offshore, working in the oil industry. Now, people I know are themselves away offshore, or their husbands are away offshore, working in the oil industry. It is every second or third family. The oil and gas industry is not a small employer in the city; it is massive. I was talking to Scottish Enterprise the other day, and it reckons that there have been 10,000 direct job losses in the industry.
Looking more widely, Aberdeen and Grampian chamber of commerce did a survey last November that found that hotel occupancy was down by 15%. The people working in hotels are finding themselves squeezed as a result of the downturn; those are indirect job losses. Housing sales in Aberdeen are down by 14% in the course of a year. Taxi drivers are complaining like crazy—they always complain, but they are complaining particularly about the downturn. One of the local food banks made money by selling fruit to companies. Those companies are no longer buying that fruit because they have cut back on the extras, so the food bank, as well as seeing extra people coming through the door, is suffering on the basis that it does not have the revenue streams that it had before. We are not just talking about direct job losses in the oil and gas industry in Aberdeen; this a real issue for our whole city.
When oil and gas operators were surveyed in November, 85% of them foresaw further redundancies in 2016. This is not the end of the story for Aberdeen; the bottom has not been reached yet. We do not know what the oil price will do in 2016, but we are pretty sure that it will not get back up to $100 a barrel.
The job losses are a major issue, but there are many people in Aberdeen who have never worked in the oil and gas industry. Despite it being so important for our city, there are many people who have never had those high salaries and who have always struggled. Because we had the industry and the high salaries, they have had to struggle against massive house prices and, for example, a pint of beer in a pub in Aberdeen costing much more than it does down the road in Dundee. Having struggled with all those issues, the knock-on impacts from what is happening in the industry now are hitting them even harder, even though they never had the high salary beforehand to back them up. Therefore, this is a very big issue for our city—for our micro-economy in Aberdeen.
I do not want to carry on being quite so gloomy. There are patches of light—good things happening in the industry and in the wider economy in Aberdeen. We are seeing a degree of resilience in Aberdeen. Aberdeen has been through downturns before. It has not been through any big ones in the times that I can remember, but it has been through downturns before; we have suffered before. One big issue that we are struggling with involves those companies that are becoming market leaders in things such as decommissioning. We are now what is called a super-mature field in the North sea and we are getting very good at and ahead of the curve on things such as decommissioning, but there are issues.
The hon. Member for Waveney (Peter Aldous) mentioned the banks. Although the banks say that they are lending, the people from the companies I have been talking to say, “Yes, the banks say that, but they are not actually following through and it is not happening.” There is an issue there. The banks are not lending to the companies, so the companies are in a shakier situation financially, so they are less likely to get money from the banks. If the Government showed confidence in the oil industry and made it clear that they would support the long-term future of the industry, we would get out of the current cycle of banks refusing to lend and then the companies not being so financially viable—and on and on.
The Scottish Government are doing a huge amount to try to inspire confidence in Aberdeen and to make people realise that things are good in Aberdeen. The Scottish Government, along with the UK Government, have signed the city deal, with each putting in £125 million for the city. The Scottish Government are also putting in extra money that will particularly benefit the city. They are putting in £254 million of infrastructure investment, which is additional to the Haudagain roundabout improvements—people who have been to Aberdeen have probably heard about the Haudagain. Also, there is the Aberdeen western peripheral route, which has been on the books—in the pipeline—for an awfully long time. Basically, in Aberdeen we do not have a bypass—our current “bypass” goes through the city. The new road will actually go around the city. It is a huge infrastructure project and it is doing its bit to help the economy and increase confidence in north-east Scotland.
We in Aberdeen have been shouting for many of these infrastructure improvements for a very long time, and now they are finally coming through. I am particularly pleased to see that measure of confidence from the Scottish Government. There has been a slight measure of confidence from the UK Government, I agree, but we would like more. We would like more support for the industry in general and for Aberdeen in particular.
I have spoken about confidence and the effect that that will have on things such as the banks. There are a couple of other issues. What if the big companies decide that the North sea is too difficult? Many of these companies are global companies. They can choose to invest elsewhere; they can choose to put their money elsewhere. That is bad for the UK because the UK does not get the tax take anymore, but something that is a major problem is if people start to decommission too early. If people know anything about the infrastructure of the North sea, they know that if we start to decommission one place, the satellites are scuppered and further out fields are less viable as a result. This is what the maximising economic recovery report was about. If we think about it purely in fiscal and financial terms, it is hugely important to push decommissioning out as far as possible, to maximise the amount of money that the Treasury will take, to increase jobs for the long term and to become the market leader in the supply chain and the decommissioning sector.
What can the Government do about the fiscal regime? We would really like them to look at the supplementary charge and at the tax regime around late life assets, to ensure that assets can be transferred to smaller companies that can prolong the life of the assets to get as much as possible out of the fields before choosing to decommission. Also, any pressure that the Government can put on the banks actually to lend, rather than just to say that they are lending, would be fantastic.
I have another wee ask for the Government although it is not really for either of the Ministers present to answer. Will the Government ensure that the jobcentre gives my guys the correct advice when they walk through the door? There are lots of things going on for people who have been made unemployed in the offshore oil and gas industry. I am sure that my hon. Friends will talk about Scottish Enterprise’s taskforce. Jobcentre staff need to know all that information, so that when somebody walks through the door, they can give them all the information about the taskforce and about where to go for extra training.
Aberdeen has not been in this situation before. We are talking about highly skilled people, some of whom have never been unemployed in their lives. They need to be given the right support because we cannot afford to lose them from the oil industry or from Aberdeen. People are making the choice to go to Dubai and to other countries to support their families financially, but we do not want to lose them and their expertise from this country. We do not want them to have to go to another industry if there is a job opening in the oil and gas industry here. If there is a job opening in renewables—fantastic—we can get them moved to that field and improve our standing in it. We need these people to be pointed in the right direction to make our economy, particularly our micro-economy, as prosperous as possible
Every company and industry body that I have spoken to thus far is cautiously optimistic about the OGA. Everybody says, “It looks like the OGA is going to do the job that it is setting out to do. Let’s see if it follows through.” The Government have backed the OGA and I hope that they continue to do so. We will continue to back the OGA and support it in whatever way we can because its work is vital and it has been very good at listening thus far.
What about the legacy? What happens to Aberdeen? In Aberdeen, we are good at a number of other things. We are getting particularly good at biopharmaceuticals, which is terrible because I cannot spell it—every time I try to write it down, I have a major problem. We are very good at food and drink, and are world leaders in nutrition. Apparently, we are getting very good at big data, which I will have to learn about very quickly because I do not know much about that. There are two world-class universities in Aberdeen. In transferable skills from the oil and gas industry in a city that has been a world leader in innovation, we will be top of the pile when it comes to renewables, especially if the Government support and give investors confidence in renewables in general, and particularly in Scotland.
I appreciate the chance to have this debate and to talk not only about the offshore oil and gas industry, but about Aberdeen, which I cannot help but talk about whenever I stand up to speak.
Mr Alan Campbell (Tynemouth) (Lab)
As ever, it is a pleasure to serve under your chairmanship, Mr Walker, in what will be a brief contribution. I congratulate the hon. Members for Waveney (Peter Aldous) and for Aberdeen North (Kirsty Blackman) and my hon. Friend the Member for North Tyneside (Mary Glindon), who is my very good friend and neighbour, on securing this debate on an important and timely subject. They have made a strong case for the industry; I will concentrate very much on my locality.
Hundreds of jobs in my constituency depend on the oil and gas industry, where times are, to put it mildly, very tough. Sixteen years ago almost to the day in this very Chamber, I initiated a debate on the plight of the shipbuilding and offshore industry on the River Tyne, because there were similar concerns about jobs being lost and an ageing workforce. We feared losing skills but, as my hon. Friend the Member for North Tyneside said, the offshore industry has provided some continuity. The situation at the time was alleviated by the then Government, who placed warship orders on to the Tyne. Of course, that is not an option for any Government when it comes to the oil and gas industry, because no Government procure rigs or jackets. The common theme in that debate, as in this one, was the vital importance of jobs and the concern at the loss of jobs, whether those jobs were in Waveney, Aberdeen or North Tyneside.
As MPs, in our surgeries and postbags, we receive letters and emails often from the wives and partners of men who work in the industry and who have lost their jobs. The importance of jobs was well understood by the former owner of Swan Hunter, Jaap Kroese, who asked me, following that debate 16 years ago, to chair the then new North East Maritime and Offshore Cluster. I am sad to say that he died at the end of last year. Although he was Dutch, he was an honorary Geordie for the way he championed the maritime industries on the River Tyne, and we shall miss him very much indeed. In all the work that was done, his emphasis was, “Can we bring jobs to our communities and can we safeguard jobs in our communities?”
Those involved in the offshore oil and gas industry—those in fabrication and those who work offshore—in the north-east face serious challenges. The decline, as the hon. Member for Waveney said, partly reflects the maturity of the industry in the North sea, but the scale and speed of job losses reflect the collapse of oil prices. The situation requires action now on a number of fronts. In these particular circumstances we need action, but we also need to ensure when we emerge from this period that companies are competitive, so that the North sea remains competitive and we can keep those jobs.
There is a role for the Government. A number of measures in the Energy Bill currently before Parliament are very welcome indeed. In particular, the establishment of the OGA is important. Of course, the immediate opportunity comes with the Budget, where steps are needed to further alleviate pressure and boost investment. I will not go through each of the tax measures—I could not even if I tried—but I was very pleased that, until a moment ago, the Exchequer Secretary to the Treasury, was in the debate. I am sure the industry is talking to the Government, and I do hope the Government are listening.
I want to make one general point and one specific point about the tax framework. It seems that although there have been changes—I accept that the Government have done a great deal to help—the overall tax regime has not really kept pace with changes in the price of oil. It cannot be right that a tax regime with supplementary charges reflects a time when oil prices were higher than the $30 to $35 or so that they are now. I hope the Chancellor has at the forefront of his mind the need to take action to create a tax environment more in keeping with the current situation than the one that prevailed earlier.
A specific area that I hope the Chancellor will look at—and which was mentioned by the hon. Member for Aberdeen North—is the issue of asset transfer. If companies wish to leave the North sea, we need to ensure that it is easier than it is now to transfer assets, whether to companies that are already in place or, indeed, to people who want to enter the oil and gas fields. Sometimes, those are acorn companies. In my experience, they are people who have worked for bigger companies and who see an opportunity for applying technology in a better way. They are welcome additions and we should not put any barriers in their way. If it were possible to transfer decommissioning tax relief with the asset, that may boost activity, and that would come at little or no cost to the Treasury.
If the Treasury is to play its part, so too must companies. Many are trying to reduce costs below the point at which it is necessary to get a profit if oil is $30 a barrel, but that leaves margins very tight indeed. As my hon. Friend the Member for North Tyneside said, if the price of oil remains at its current level for the rest of 2016, almost half of North sea oil fields will operate at a loss, and that simply is not sustainable.
Advanced Industrial Solutions, which I am pleased to say is an expanding company in my constituency, is working hard, particularly on skills training, but also on supplying equipment and components to the oil and gas industry, especially the offshore industry. By working with major companies, it is cutting costs without cutting standards or cutting health and safety, which is the kind of collaboration that the hon. Member for Waveney mentioned at a local level. The company is upskilling workers for a time when the industry recovers—as we hope it will—or at least for a time when oil prices begin to rise again. It is also upskilling workers who have worked in the offshore industry for new and emerging industries such as onshore and offshore wind turbines and the construction industry. Many jobs that can be done offshore are valued in those industries and in construction. My hon. Friend the Member for North Tyneside and I watched people being upskilled to use complicated rope methods of painting and repairing. If people can use those skills offshore on rigs, albeit in a more dangerous situation, they can use them in construction, and on onshore and offshore turbines too. Such skills are very transferable.
Sometimes, the cost of training is paid by employers, but often it is paid either by employees or by former employees who, if they have been made redundant, pay for it from their redundancy or from their own savings. If someone is willing, has worked hard and saved money, and wants to upskill because they want to work hard again, make money and pay taxes, it cannot be right that the course they go on to upskill is subject to VAT. It just does not make sense that we are putting VAT on such businesses. I understand that any Government will say that once VAT is on, it has to stay on, but—this is my plea—we have previously reduced VAT in some situations. I would ask the Government to consider that.
Finally, I have followed carefully what the hon. Member for Waveney is trying to do. I said earlier that my debate was 16 years ago, which sadly makes me an elder statesman, if that is the right phrase—it is simply code for getting on a bit. I am slightly cynical when I hear the word “taskforce”, which is a bit like “action plan”, where the emphasis is on the plan and often not on the action. I honestly hope that he will be successful with his taskforce, and I wish him well. I am interested in the Government’s view on taskforces and whether they favour the establishment of taskforces locally, or whether it is up to local areas themselves and that the Government do not have a view. Should such taskforces be focused on skills? Previously, in 2000, I would be knocking on the door of the regional development agency and saying, “What are you going to do about retaining skills, and how are you going to show the world that the River Tyne is a centre of excellence for shipbuilding, and for the offshore industry, too?” I am not convinced that the local enterprise partnership is as well placed or is set up in that way. Even if it is, I wonder whether the Government will consider extra resources in some areas for taskforces, perhaps based on local enterprise partnerships, because some areas have been affected worse than others.
I reiterate: we need action, and we need action now. We may talk about the price of oil, about millions and billions of barrels left in the North sea, and about billions of pounds of investment, but ultimately it comes down to jobs. We have to be doing, and be seen to be doing, everything we can to safeguard those jobs, because they are some of the most highly skilled and dangerous jobs, and they are done by some of the most hard-working people I know.
Hannah Bardell (Livingston) (SNP)
It is a pleasure to serve under your chairmanship and to speak in this debate, Mr Walker. I am the Scottish National party Member for Livingston, which does not have an obvious connection with the oil and gas sector, although we have some businesses down the supply chain, and many of my constituents work in the oil and gas sector, as do people across the country.
I spent the last three years of my career before coming to this place working in the oil and gas industry in Aberdeen. I spent seven years of my working career in Aberdeen and the north-east of Scotland, so it is an area and an industry that is close to my heart. I will take a little walk down memory lane, as it is appropriate to the topic. I spent the last three years of my career in the service sector. I worked for a year in a subsea company and then for an asset integrity and construction company. The last company I worked for was the biggest supplier of people power and scaffolding offshore. From speaking to many of my friends and former colleagues, many of whom have lost their jobs, I know the impact of job losses on family life and on communities, which is substantial. We have heard extensive information about the industry today, but it is always important to remember that there are lives behind every job loss and every company shutdown, but there is also hope, because there are so many people in this industry.
We talk about the UK’s exports and how we are not doing as well as we could, but we do not just export products and innovations; we export people. I have travelled to a number of countries and cities across the world, and in every oil and gas city, whether it is Houston, Abu Dhabi, Dubai or Perth, I hear an Aberdonian accent, which is a fact. Aberdonians have worked for generations in the oil and gas industry, and they have been exported all over the world. Scotland has a long tradition of innovation. I think it was Arthur Miller, the American writer, who said that Scotland invented the modern world. Well, it is true that Aberdeen and the people of the north-east of Scotland pretty much invented the oil and gas sector and many of its technologies and innovations.
I worked with one guy in my last company called Jim Chalmers, who worked on the hook-up of the Brent Delta, which was the platform for which Brent crude was named. Before I left, we were working on the decommissioning of that platform. He has literally spent his entire career in the sector and in the industry, and he has some frankly incredible stories to tell. He also lost many friends in the Piper Alpha disaster, which I will mention later.
On global markets and pressures, we have seen market oversupply and a trading war between shale oil and the middle east. That has put pressure on oil, causing it to drop to a 12-year low, although it is bouncing back somewhat. Lower and lower for longer and longer, as my hon. Friend the Member for Aberdeen North (Kirsty Blackman) said, will be the norm. I have been to many Oil & Gas UK events over the years, and the business breakfast I went to last week was one of the most entertaining and informative. An independent analyst, Beth Mitchell, talked about some very dry and technical information with significant wit and flair, so I pay tribute to Oil & Gas UK not just for the way it presented its activity survey but for the way that Beth presented the information. One thing the activity report drew on was the challenges and pressures put on the shale industry and how the industry has responded in the US. The industry has developed new innovative technologies. It has gone back and re-fracked wells and has been able to operate at a much lower price than anybody had expected, which has been causing additional pressure. She highlighted how the oil and gas industry could learn from that.
As we approach the Budget, I follow everyone in saying how important it is that the Government listen. One key thing that happened in a recent Budget announcement was the cancellation of the carbon capture project, which was a huge blow for us in Scotland and the north-east. I understand that the Government have their books to balance, but we are looking to maximise recovery and to do all we can for this sector, for the energy industry and for innovation and new technologies. It was a hammer blow to the north-east of Scotland and to Scotland’s industry, and we urge the Government to reconsider this technology and the removal of the investment.
I have spoken briefly about innovation. I will touch on a couple of innovations with which I was directly and personally involved. One of them, at the subsea company I worked for, was called the autonomous inspection vehicle. For those who know what an ROV is—a remotely operated vehicle—an AIV is tethered to a boat, and it goes around inspecting in areas too dangerous for divers. The company where I worked developed one that was tetherless. It was basically a remote-controlled car under the sea, which was incredible technology. The company put in a lot of investment, and the company with which it had partnered, SeeByte, developed the technology. SeeByte was a spin-off from Heriot-Watt University.
Interestingly, just before I left, I got news that SeeByte, which had been a Scottish firm, would be sold to an American firm. That was particularly disappointing, because we see it over and again: companies in Scotland and the UK get to a certain level, and there is just not enough angel or equity investment to get them over the line to the next step, so they go to, or are bought by, American firms. It was disappointing to see that happen. I know that there have been changes to innovation grants. We have gone from grants to loans, and we are now hearing companies talking about moving abroad. That is disappointing, and I urge the Government to rethink.
The other technology was called ERBAS, or extended reach breathing apparatus system. A couple of guys in a workshop came up with a piece of technology to help the guys—they are largely men—who go down the leg of a platform. For those of us who cannot imagine it, I have a friend whose father was one of the last coal miners in Scotland, and then went on to work in the oil industry at Sullom Voe in Shetland. He said that although he had been in a roof fall in an underground coal mine, he had never been as scared as he was going down the leg of a platform. The technology that the company developed was to stop those guys having to carry their air. Instead, they could make a free descent, plugging in as they went, so they could breathe going down and coming back up. The company was investing in the technology and trying to get it to take off, but was unable to get external investment.
Those are just a couple of examples, but they are significant. Companies across the oil and gas sector are developing similar technologies every single day, and we need to do as much as we can to support them and their opportunities.
Callum McCaig (Aberdeen South) (SNP)
The hon. Member for Waveney (Peter Aldous) and my hon. Friend the Member for Aberdeen North (Kirsty Blackman) have discussed access to finance. My hon. Friend is making a powerful point about how innovation requires financing. Does she agree—I am sure she does—that access to finance is critical to maintaining that drive for innovation?
Hannah Bardell
I absolutely agree. It is critical that we send the right message not just to the industry but to the markets that we are there for them and will invest in the technology. Again, as our exports drop, we must consider how we can do better. This is an area where we are leading the world, and we must invest.
Another innovation developed was the rebreather. As I am sure many Members remember, there was a series of helicopter accidents in the North sea, and in August 2013, a helicopter went down off the coast of Shetland. I was part of the emergency response team for my company at the time; sadly, we lost someone in that accident. That experience changed me and everybody else involved, and I will certainly never forget it, but the industry’s response—we had the support of Oil & Gas UK, the police and all the various bodies—was incredible. It showed the industry’s robustness and ability to respond. Ultimately, getting in a helicopter is pretty much the only method of transport for people who work offshore. The industry’s response—developing a new breathing system and new ways to get people offshore—was important, because the accidents put significant pressure on production and on the ability to get people out and back safely.
I will touch briefly on the apprenticeship levy, which was introduced by the UK Government to deliver 3 million more apprenticeships. We welcome anything that can deliver more apprentices. However, there is a lack of clarity on the issue and a concern in the industry, which I have raised and will meet the Minister about shortly, regarding double charging. Some parts of the industry are already paying a levy to the Engineering Construction Industry Training Board for apprentices.
I urge the Government to do all they can to ensure that the levy is clear, concise and simplified, and that it delivers what it promises. Scottish Ministers have had concerns about the lack of consultation, and they are still not clear how the new body being created will work. It is important that people do not end up being put into apprenticeships that are not real apprenticeships but low-paid jobs. We must do our best to get young people into this important sector and many others. I welcome the Minister’s willingness to meet me, and I thank the Aberdeen and Grampian chamber of commerce, which has done a lot of work to bring together people in the oil and gas sector on that issue.
Oil & Gas UK’s operating expenditure report for 2017, the activity survey, says that the industry has made substantial progress. We must commend it on reducing operating costs, with total operating expenditure falling by around 15% to £8.2 billion. The industry has the wit and will to do so. Clearly, innovation comes not only in technological form but in terms of expenditure. Under massive pressure, the industry has led the world in innovation. We must do all that we can, in terms of the tax regime and the field allowances that Oil & Gas UK has called for, to reform the special taxes paid by the industry, to promote investment and maximise capacity during the downturn.
Other hon. Members and I recently met the Underwater Centre in Fort William, which trains divers across the globe, particularly in the UK and Scotland. We must remember that diving is one of the most dangerous jobs that anybody can do. The Underwater Centre told us that the average age of a diver is now more than 50. What is happening is that although people are still coming through for training from Scotland and the UK—less so globally—the centre is seriously concerned that when the upturn comes, not enough people will have been invested in and not enough divers will have been trained, and we will get back into the same cycle that we have seen before, in which only certain people have certain skills, and companies must pay a fortune for them. I saw it happen in the industry when I was there: people were paid phenomenal salaries for specialist skills, because we had not had the foresight to invest in training.
I come to the work that the Scottish Government have done with Scottish Enterprise and Scottish Development International. I know from having tried to open an arm of a business in Norway—and succeeded—how important Scottish Enterprise and SDI were. They gave us support and financing to attend, for example, the Offshore Northern Seas conference in Norway and get business, and helped us understand how to operate in a different country. The Scottish Government have been doing everything that they can to support the industry in its time of need. First Minister Nicola Sturgeon set up a jobs taskforce in January 2015 in collaboration with Scottish Enterprise, chaired by its CEO Lena Wilson. It is only fair to pay tribute to Lena Wilson, who has done a huge amount of work on the issue. She has worked tirelessly with the Oil and Gas Authority, Oil & Gas UK and many others.
The Scottish Government are also running an “adopt an apprentice” scheme through Skills Development Scotland to re-employ any modern apprentices in the industry who have lost their jobs or apprenticeships. On 1 February 2016, the Scottish Government announced £12.5 million for oil and gas innovation and further business support, including £10 million in Scottish Enterprise funding to help reduce the risks associated with carrying out research and development and enable access to specialist exports to help kick-start innovation projects in Scotland.
Finally, I would like to make a point about health and safety or, as it is often called in the oil and gas sector, HSSE or HSSEQ—health, safety, security, environment and quality. The right hon. Member for Tynemouth (Mr Campbell) also mentioned it. At a time when costs are under such huge pressure, it is important that health and safety are not compromised. I have seen the results personally, and had to deal with incidents. The industry has come a long way since Piper Alpha. It is hugely innovative and it continues to invest, but it is important that we send the message that health and safety must not be compromised in these difficult times.
In conclusion, there is a huge amount being done by Government, by industry bodies and all across the sector, including by companies and individuals, but we have to send the strongest message possible that this industry has a prosperous future and that we need to do all we can to support it. The oil and gas industry matters and the message that we have to send to our banks and to investors is that it is open for business and is here to stay.
Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)
It is a pleasure to serve under your chairmanship, Mr Walker.
What can I say that has not already been covered today? Many people who work in the oil and gas sector live in my constituency of West Aberdeenshire and Kincardine, and those in my constituency who do not work in the industry almost certainly have a family member who works in it. I have close friends and family who work in the industry, for Shell, KCA Deutag, Technip, Conoco, Total, Stena and shipbrokers attached to the industry, or even in Aberdeen harbour itself. I said in my maiden speech that I would argue for better support for the industry, and along with my colleagues from the north-east and my hon. Friend the Member for Livingston (Hannah Bardell) I have done so and will continue to do so.
The recent drop in oil prices that has been described today has had a big impact in the north-east. It has affected not only those working directly in the oil and gas sector but those working in hospitality, leisure, tourism, food and drink, and many more. At one time—indeed, very recently—in Aberdeen, it was said that it was cheaper to get a hotel room in the city at the weekend than it was during the week, because of the number of business people staying in Aberdeen during the week.
That is why I welcome the recent investment that has been made in Aberdeen city and shire through the city region deal, and additionally from the Scottish Government. I am particularly pleased about the money earmarked for key projects such as the Laurencekirk junction in my constituency and—to my further delight—for broadband infrastructure.
I also welcome the support that has been provided through the Energy Jobs Taskforce and the Transition Training Fund to those who have lost their jobs, which will allow oil and gas workers to retrain as teachers in STEM subjects—science, technology, engineering and maths. Local institutions in the north-east are also pitching in to lend their support to the sector, with unemployed oil workers being offered a 20% discount on energy-related postgraduate courses at Robert Gordon University.
It has been said that there is a moral imperative to help the oil and gas sector, and I agree with that. Oil and gas workers, particularly those who work offshore, have to spend weeks at a time away from their families, living in one of the most inhospitable places that I can think of. That puts considerable strain on families and communities. These workers have to take a survival course just to go on their commute to work and, as has been said by my hon. Friend the Member for Livingston, there are often accidents on those journeys.
Consequently, when we ask for support for the industry, we do so because we recognise the sacrifices that are made by the men and women who are on the rigs, day in and day out. We recognise their hard work, which has brought billions to the UK Treasury. So, when the industry faces hard times, as it does just now, it should be able to expect support from the UK Government to get it back on its feet and to restore confidence in it.
The oil and gas industry is incredibly innovative and entrepreneurial, with whole businesses in the supply chain being created out of simple solutions to all manner of problems faced by the industry. Last Friday, my hon. Friend the Member for Aberdeen North (Kirsty Blackman) and I visited an international company that started as an idea in a garden shed. It is that kind of company that make the oil and gas industry so unique and so important.
I cannot speak about the oil and gas industry in my constituency without mentioning Westhill, which is the global centre of excellence in subsea engineering. It is also known as “SURF City”, which refers to “subsea umbilicals, riders and flowlines”—I do not really know what that means either—and it also does a lot with remotely operated vehicles, as mentioned by my hon. Friend the Member for Livingston.
The subsea sector has pioneered game-changing technology and innovative thinking during the past 40 years. The theme for this year’s Subsea Expo was “Time for Transformation”, which aimed to recognise how the industry needs to change, including considering what can be done more simply and more effectively.
The last day of Subsea Expo was about encouraging young talent in the industry. Led by OPITO, which is the oil and gas skills body, the “Energise Your Future” campaign inspired secondary school students to engage with the oil and gas industry and find out more about the opportunities available within it. That campaign, along with initiatives such as the Energy Schools Challenge, allows young people to gain an insight into the industry, show off their general knowledge and get heard on the great Northsound 1.
Finally, the Industry Awareness Week, which will take place in Aberdeen in June, follows the Oil and Gas Authority’s call-to-action paper and allows young people aged 16 and over to engage with different areas of the oil and gas industry, showing the next generation the career choices that are available in the industry. As the oil and gas industry looks to become more innovative and efficient, it may be that it is the younger generation who will come up with the solutions to ensure that it survives and thrives.
Callum McCaig (Aberdeen South) (SNP)
Me? Right. [Laughter.] Thank you, Mr Walker, for calling me to speak. I was not quite expecting to be called and there are other people in the room who I assumed were speaking before me; clearly, I assumed wrongly.
I commend the hon. Members for Waveney (Peter Aldous) and for North Tyneside (Mary Glindon), and my hon. Friend the Member for Aberdeen North (Kirsty Blackman), for securing this debate at the Backbench Business Committee. One of the unique frustrations of having the privilege of being my party’s Front-Bench spokesperson in this area is that I could not add my name to those of the Members who secured the debate, such is the importance of this industry to my constituency, to Scotland and—as we have heard today—not only to large regions of the United Kingdom but to the United Kingdom as a whole.
We have heard from the three key areas: Aberdeen; north-east England; and south-east England. We have heard of distinct challenges facing these areas and we have heard accounts in different accents from the different areas, but let us be clear that those of us here who represent these areas speak with one voice about what is required.
I add my backing to everything that has been said about support for the industry. For all of us who represent constituencies with an oil industry, whether job losses in the industry are in Aberdeen, East Anglia or the north-east of England, we all feel them. They are hugely damaging to communities and it is incumbent upon us to do everything we can to secure the bright future that I believe this industry has; with the right support, I am absolutely sure that it will have a bright future.
The hon. Member for Waveney made an absolutely superb speech to kick off this debate, covering the issues in great detail: the challenges; the opportunities; and the solutions that exist. Let us be clear—the Government do not have the silver bullet that is the cure to the industry’s ills, but they have a significant remit in terms of tackling those ills.
There are three key areas around which there are challenges facing oil and gas. The first is price, which we can do nothing about. The second is the industry’s costs, which the industry is doing its bit on; it is doing it well, but that will result in job losses as money is taken out of the system. Nevertheless, that process is required to get the industry to that bright future. And the third factor is tax.
It may seem slightly perverse that at a time when companies are not making profits and when taxes are not flowing into the Treasury that we should be calling for tax cuts, but it is precisely at this time that we need to call for tax cuts and it is at this time that they will not come at great expense to the Treasury. It will not cost the Treasury anything, or it will only cost the Treasury little, to make tax cuts, but the benefit of making them will be substantially felt in the wider economy, as they will support employment and unlock the finance that we have talked about, which in turn will drive the innovation to support our supply chain in delivering the changes, the innovation, the skills and the expertise that this industry is already world-class in and world famous for.
[Philip Davies in the Chair]
What is at stake here? As we have heard, the industry has produced 42 billion barrels. The reasonable estimate is that there are another 20 billion barrels left. Even if we do nothing, a number of those barrels will be produced; the investment has gone in and the existing platforms will continue to produce. The projects that are in development at this stage will happen.
However, a considerable amount of those reserves that are left in the North sea might not be extracted, and if they are not extracted the cost will fall upon us all. There would be a loss of jobs, particularly in the areas represented by those of us who have spoken today. That would have a knock-on impact on the wider economy—the supply chain that stretches the length and breadth of these islands.
Kirsty Blackman
Specifically on the point about the barrels that are still to be extracted, does my hon. Friend agree that some of them are in more difficult types of field and so are more difficult to extract? The innovation, the research and development and the funding towards that are therefore hugely important for those fields.
Callum McCaig
I agree wholeheartedly. The make-up of the North sea is different from what it was and what has gone past. As well as the innovation and expertise, there is also the infrastructure that is already there, as a number of Members have mentioned. Once that is gone, there are fields that will go from being marginal on the positive side to being marginal on the negative side or just entirely uneconomic.
Returning to the point I was making on the missed opportunities, every single barrel of oil that we do not produce from the North sea we will need to get from somewhere else. We import oil and gas, and we should not underestimate the importance that being an oil producer has for the UK’s balance of payments, which, frankly, are not great as it is. If we have to rely more on imported oil and gas for our supply, it will further exacerbate that issue. If we miss the opportunities to further develop and support the supply chain, the ability to provide the project management, skills, expertise and technology will go with it as oil and gas is exploited in other, perhaps more favourable basins. The prizes are clear: jobs, energy security and support for our balance of payments and exports. Those huge prizes are there, and if the industry is given the right support, they can and will be obtained.
The Prime Minister has talked about building a bridge to the future, and that is necessary and required. The same turn of phrase has been used by my colleague, the Scottish Government’s Energy Minister, Fergus Ewing. We have left a period of very high oil prices, but as day follows night, oil prices will go up. None of us can predict when that will be, but at least until now it has been the case that they have always gone back up again. The difference in supply and demand that we are talking about is not huge, but the impacts that that has over a sustained period of time change the price and make it far more volatile and far lower.
It is a curious situation, but Aberdeen is probably one of the few places in Europe where the local radio stations tell their listeners what the oil price is. At the end of every bulletin, the newsreader will say something like, “Oil trades at $36 a barrel”—folk are happy with $36 a barrel, because it is better than the $29 a barrel it was at. That is strange, and on the face of it that seems like a slightly useless snippet of information, but it signifies how important the industry is to the city that I am proud to represent.
What would a tax cut do? It would provide the clearest signal that the Government can offer that they believe in the future of oil and gas and will do everything they can to ensure that that future is realised as well as possible. We are talking about a multibillion pound investment in a platform 40 or 50 miles out into the North sea, and that is a significant investment. That investment is likely to have a lifespan well in excess of 20 years—potentially, it is 30 to 40 years. In the time that that field will be looking to make its money back, the oil price will go through many ups and downs, but when many international companies are looking across the globe at where to invest their ever-shrinking piles of capital—the oil industry globally is facing a crisis of investment—we need to be at the most competitive we can be. Part of that is the skills, innovation and expertise that I am absolutely certain we have, but that change in the headline rate of tax over the lifespan of a field can put the decision from being, “We do not proceed,” to, “Yes, let’s press the button and go ahead and develop this field.”
Reducing the headline rate of tax is the clearest single way that we can boost the efforts in exploration and in developing the fields that we know about, and it will provide the clearest way forward on the bridge to the future. It will require people to invest. Whether that is companies using the strength of their balance sheet—some are doing that, buying up other operators and such like—or whether it is borrowed money, if we can de-risk the investment decision as much as possible, there is a greater chance that someone will invest that money in the UK continental shelf, as opposed to one of the other basins.
Stuart Blair Donaldson
Does my hon. Friend agree with the assessment of Oil & Gas UK that to transform the basin, the UK continental shelf needs to become the most attractive mature oil and gas province in the world in which to do business? That is not just one of the most, but the most attractive place to do business.
Callum McCaig
I agree with my hon. Friend and Oil & Gas UK on that. The North sea, particularly at Aberdeen, benefits from being the best place to live to work in the oil and gas industry, but it needs to be the best place in terms of the assets and the tax regime.
George Kerevan (East Lothian) (SNP)
Does my hon. Friend also agree that another reason for having the best possible tax position is that the existing companies, particularly the smaller companies in the North sea sector, are under threat from the international credit rating agencies that, since Christmas, have been downgrading them? That worsens those companies’ ability to raise capital. Anything that puts confidence into the companies and keeps their credit ratings high gives confidence for the longer term.
Callum McCaig
Yes, absolutely. The international creditworthiness of the companies is fundamental to their access to finance. Speaking to the financial providers and asking that they look favourably on the sector because it has the support of Government would have an automatic benefit for their creditworthiness. Were we to do that, it would be a win-win in the clearest sense.
We should be looking to do an awful lot more exploration, and reducing the headline rate of tax is the best way of doing that. There is undoubted potential to the west of Shetland and in the Atlantic margins, but we should not give up on the core parts of the North sea, whether that is the central North sea or the southern North sea. I met with representatives of Statoil earlier this week, and they were discussing a field where they have found 2.8 billion barrels of oil and gas. That is next to the Oseberg field in the Norwegian sector, but it is in one of the most heavily explored areas of the Norwegian continental shelf. The exploration that happened in large parts of the UK side of the line happened a long time ago. The advances, whether those are in drilling technology or seismic technology, mean that we should be looking to go back around some of the old ground to see what we have left there. There is a chance that there will be significant finds, and we need to ensure that that exploration is properly incentivised, so that the companies going out to look for oil and gas get as big a return as possible. That will make it economically viable.
The asks are on tax and access to finance, as we have heard. There is a key point on the transferability of tax liabilities when it comes to decommissioning. The ability to bring new players into the market is important. Each time there has been a downturn in the North sea, there has been a reconfiguration of the companies operating, and largely speaking that has been positive. We have gone from the big US companies to the majors to the middle-ranking players, and we are perhaps looking to go to smaller players still. Those at the cutting edge of innovation are the smallest companies. Their bread and butter is making the most of ageing or smaller fields. They can devote their time, expertise and capital to doing that and getting it right.
Finally, I want to talk about Aberdeen. It has felt the impact, and my hon. Friends the Members for Aberdeen North and for West Aberdeenshire and Kincardine have touched upon the impact on our constituents. It has been significant and for many of them it has been painful. However, on the investment made by both Governments, the city deal shows proper collaborative working. Although I am disappointed that it is not bigger, there is no politician who has ever represented anywhere ever who has not wanted more from the Government when it comes to financing. I recognise it is a significant commitment. The work to establish the oil and gas technology centre is a smart use of money and builds on the expertise that is already there within our universities, making sure that we make that box a little bit more clever.
Investment in infrastructure in Aberdeen is hugely important. When we discussed the issues of oil and gas a year or more ago at the beginning of the downturn, the previous head of Oil & Gas UK said that Aberdeen was part of the problem in terms of the competitiveness of the North sea and in terms of our infrastructure, both physical and digital. Steps are under way to put that right, but we cannot rest on our laurels, and we have to up the pace of investment in infrastructure to unleash the potential that Aberdeen has.
There has been much talk about the tax regime. Again, we welcome the efforts made in last year’s Budget. I read this morning that the head of Oil & Gas UK had described the tax cuts as “so last year”, but I think the headline writer has taken a bit of a liberty because, having read the article, I am disappointed to say that she did not say that. However, because she did not, I shall. What was done, although important, was done last year; there need to be efforts this year. The Budget is coming upon us. It was welcome that a Treasury Minister was here for the opening remarks; he has not missed much by not staying to hear what I have to say. I know the Minister of State, Department of Energy and Climate Change, understands the industry and is well regarded there. I hope that she is having conversations with her colleagues in the Treasury around the same issues; I would expect nothing less.
Time is of the essence. We are at a crossroads here. There is a future for the North sea, and the Governments in Westminster and in Holyrood should make every effort to make sure that that future is the brightest possible. That requires action in the Budget and I very much hope that we will not be disappointed.
Dr Alan Whitehead (Southampton, Test) (Lab)
I, too, congratulate the hon. Member for Waveney (Peter Aldous) and my hon. Friend the Member for North Tyneside (Mary Glindon) not only on securing this important debate, but on conducting it with such evident good sense. That is not something I always experience on occasions such as this, but everybody in the debate this afternoon has spoken the most extraordinary good sense about the circumstances of the North sea and its future, and what our imperatives should be over the next period to make sure we get the best possible out of the North sea for the long-term future.
As my hon. Friend the Member for North Tyneside and my right hon. Friend the Member for Tynemouth (Mr Campbell) have emphasised, this is about jobs, about UK plc for the future and about the question of investment in a smart and different way that recognises the different realities of the North sea. It is about efficiency and making sure that the North sea remains a really good place to invest in because it works to the best of its capacity and ability for its own future. As hon. Members have reflected, circumstances are different now and will probably always be different. So we are not just talking about a circumstance of the moment; rather, this is something we need to think about for the much longer term.
I am not remotely as well versed in “Dallas” as the hon. Member for Waveney, but I recall that one particular series turned out to be a dream and they got on with business in subsequent series. That is not where we are now as far as the North sea is concerned. Obviously, we face circumstances right now in which, as hon. Members have reflected on, Brent crude is trading at the mighty high price now of $36 a barrel, up from $29 just recently, but it was $50 or so before the new year and much higher than that before then. Many industry experts are stating that that circumstance, albeit with some changes, is likely to remain with us for a long time to come. It is not thought likely that we will see sudden, volatile spikes and rising prices—that it will all turn out to be a dream and we will be back to business as it was. It is a different series of circumstances.
There is a second set of circumstances. The North sea is indeed a mature basin. That does not mean there is not a lot to do, not a lot to find, and not a lot to exploit. However, the reality is that we are two thirds to three quarters of the way through what there is in the North sea, and what will be there for the future is likely to be of a different order from what has been there in the past. A recent Oil & Gas UK report looked at the number of marginal fields that were discovered some time ago and are still there waiting to be exploited, but which are not at the moment likely to be exploited, because there are infrastructure problems in terms of access to those small and marginal fields—there are most certainly considerable investment problems in getting people to invest in and exploit those fields in the way they should be over the next period. It is likely that the 300 discoveries that Oil & Gas UK talked about—mostly of under-50 million barrels of oil equivalent—will be followed by other small discoveries.
The hon. Member for Aberdeen North is right that it is possible that there remain considerable discoveries within the areas that have already been exploited. I think it is possible, but it is probably more likely that there will be a large number of much smaller discoveries. We have to be clear about how we go about exploiting and supporting them, and making sure we get the best out of them over the next period. The hon. Member for Waveney emphasised that collaboration is absolutely essential over the future period. The assumptions made some while ago about who should do what to whom in relation to the North sea will be different. All sorts of collaboration will be needed, in equipment, infrastructure, joint working and standardisation. A whole range of things will be necessary to ensure that exploitation can be undertaken in the best possible way.
That also means something else—something that my right hon. Friend the Member for Tynemouth mentioned. He emphasised the question of asset transfer and how we should make things as easy as possible when existing assets have been under-utilised, or even when people have decided they no longer want to be part of the process. Not only should it not be difficult for asset transfers to take place; there should be mechanisms to make a transfer as smooth, efficient and productive as possible, so that the collaboration proceeds in the best way.
With a very mature field, there is the inevitable issue of decommissioning, which the hon. Member for Aberdeen North mentioned. On the one hand, bearing in mind that there is about £35 billion to £50 billion of decommissioning to be undertaken in the next period, there may be a temptation to say, “That is a new industry in its own right; let’s all get going on decommissioning. It will be important for jobs.” It will be important for jobs, but if there is an emphasis on decommissioning instead of the collaboration necessary to secure the exploitation of the fields in the next period, we will live to regret it fundamentally. That is precisely because, as the hon. Lady said, we have the benefit in the North sea, particularly in relation to exploiting additional small fields, of a mature infrastructure, which can come to the aid jointly of a number of the new discoveries and explorations. If in the mean time we decommission the nodes that would lead to that potential support, we will not just take away the installations; we will shoot ourselves firmly in the foot as far as future discoveries and activities are concerned.
I welcome what is being done under the aegis of the Oil and Gas Authority, which is being set up in its final form under the Energy Bill, towards ensuring that the process works well and that there will be proper consideration, before decommissioning is undertaken, of alternative uses for that infrastructure, and not just in future exploitation.
George Kerevan
On the point about decommissioning versus future exploration, the hon. Gentleman might like to know that Denmark has gone for the future development strategy, and this year had a successful seventh round of issuing new licences for prospecting in its sector of the North sea.
Dr Whitehead
I thank the hon. Gentleman for that information, which emphasises what the prospects can be if the process is undertaken carefully. I do not say that there should not be decommissioning, because clearly there will be a substantial amount to undertake, but it should be undertaken in the full knowledge of what is in store if it is not done carefully and of whether there may be different uses in future for elements of what is in the North sea, particularly for carbon capture and storage and gas storage. The infrastructure could assist with that in the future, establishing jobs and skills for the long term, when different circumstances may apply.
The theme that has come out of this afternoon’s debate on the future of the North sea is collaboration. As for what we and the Government should be doing, what has emerged is that support needs to be given now for careful investment in collaboration, and for establishing the circumstances for a bright future in the North sea, in the context I have set out. One of the investments that the Government have already considered is the question of joint seismic work for possible explorations, whose results will be publicly available—a point that highlights collaboration in exploration for the future. Investments and assistance with that approach in mind seem to me to be the most important way forward.
In the light of the good sense and harmony that have prevailed this afternoon, I should perhaps not venture down this route, but I wonder whether I should remind the House that as late as 2011 Her Majesty’s Treasury imposed a windfall tax on North sea oil and gas, by putting up the supplementary levy from 20% to 32%. One thing I must say to the Treasury about future arrangements and assistance for the North sea is: “Don’t do that ever again.”
Peter Aldous
I was a relatively new Member at the time and remember distinctly the unsettling impact that that measure had on the industry, because it came completely out of the blue. This is a risky business anyway, so it really knocked confidence. To be fair—I remember exactly what happened—the Treasury got the message from that very clearly. I remember attending the conference in Aberdeen that September, and the present Secretary of State for International Development, who was Economic Secretary to the Treasury, was surrounded by people from the industry. She brought the message back here, and it has been here ever since. We need to build on the new regime that we have had since then.
Dr Whitehead
I thank the hon. Gentleman for that intervention, which reminds us of the circumstances in which that began and the lessons learned fairly early on. Certainly, over the past year or two the Government’s activity and their approach to taxation and investment in the North sea show that the lesson was taken on board. I just want to make sure that we build on it. We should bear in mind the need for investment, to bring new players into the field and ensure the longer-term certainty and security of those investments for the future. Perhaps some kind of floor and cap investment arrangement might be undertaken, whereby, should volatility return to the North sea, there would be guarantees for the Government and, if it does not, there would be guarantees for the investor.
We need to think about new forms of investment for new times in the North sea to make sure that its long-term legacy will be that it did its best for UK plc, both for the jobs and skills that now exist, which it is vital to retain, and in making sure that the UK was fuelled as well as possible. I hope that it will be entirely uncontroversial if I conclude by saying that we are engaged in a joint enterprise that it is in all our interests to get right.
The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)
It is a great pleasure to serve under your chairmanship, Mr Davies. I echo the hon. Members for Aberdeen South (Callum McCaig) and for Southampton, Test (Dr Whitehead) in saying that the good and unusual thing about this debate is that we are all on the same page. We all absolutely agree that the oil and gas industry is vital for the United Kingdom. It is currently in great difficulty, but we are all united in our determination to do everything we can to see it get through this period and continue to thrive.
I was slightly concerned to hear the hon. Member for Southampton, Test raise the question of joint enterprise and mention “Dallas” in the same speech. We will of course all remember the question, “Who shot J. R.?”; I would not like to think that there was any joint enterprise whatever.
Callum McCaig
I should make it clear to the Minister that some of us are not old enough to remember “Dallas”. [Laughter.]
Andrea Leadsom
I take that extremely personally. That is going to cost the hon. Gentleman chocolate raisins in our next debate—he knows what I mean. I am watching him very closely.
Like other Members, I was delighted that my hon. Friend the Exchequer Secretary to the Treasury was able to join us for much of the debate and hear the views of several Members on the needs of this important sector. The North sea is a mature basin, yet it is still meeting the equivalent of around 65% of the UK’s oil demand and 55% of its gas demand. As many Members have said, there is no doubt that oil and gas will remain central to the UK’s energy mix as we make the transition to a low-carbon economy in a cost-effective way for consumers, so investing in domestic oil and gas production is essential. It helps to reduce our reliance on energy imports and provides a significant input to our economy, supporting hundreds of thousands of jobs directly and indirectly.
As all speakers have pointed out, over the past year oil prices have continued to fall, dropping to below $30 a barrel earlier this year. The impact of the fall on the industry was reported last week in Oil & Gas UK’s annual activity survey, which also indicates that investment in new projects has fallen from approximately £8 billion a year over the past five years to an expected £1 billion in the coming year, and that the number of wells drilled to explore for new reserves is low. It is therefore vital that industry and Government step up and respond to the challenges facing the industry.
I assure all Members that the Government are committed in their support for the industry and have already made significant changes to the fiscal regime. In the March 2015 Budget, the Chancellor introduced a £1.3 billion package of reforms, including reductions to headline rates of tax, a new investment allowance and £20 million of funding for seismic surveys to support exploration. In fact, no other Government have made fiscal changes as extensive as the UK’s in response to falling oil prices. Both the Government and the Oil and Gas Authority will continue to listen to the industry’s views on further reforms in this area, but, as the Wood review made clear, fiscal changes are not the only solution to the issues the industry currently faces.
Several Members, including the right hon. Member for Tynemouth (Mr Campbell), spoke about the need for fiscal measures to be taken in the next Budget. I hope that he and others were reassured by the presence of my hon. Friend the Exchequer Secretary. The changes announced in the 2015 Budget were obviously significant. Several large projects have already gone ahead as a result of them, such as Maersk’s Culzean project—an investment of £3 billion in the UK, supporting 6,000 jobs—and BP’s eastern trough area project, which is a £670 million investment. In response to the March 2015 Budget package, the then CEO of Oil & Gas UK, Malcolm Webb, said:
“These measures send exactly the right signal to investors. They properly reflect the needs of this maturing oil and gas province and will allow the UK to compete internationally for investment.”
That is what we were setting out to achieve, and I think those measures were very well received.
Members have highlighted what the industry is asking for: that we address the remaining fiscal barriers to late-life activity; that we abolish the supplementary charge, or at least reduce it by 10%; that we bring the rate of the investment allowance for offshore expenditure in line with that for onshore expenditure; that we temporarily remove all special taxes from exploration, so that only basic corporation tax will apply for all discoveries made over the next five years for the whole life of the field; and that we introduce a Government loan guarantee.
The Government have been building on the evidence gathered at working groups that met over autumn 2015. The Treasury, supported by the OGA, is conducting internal analysis of the findings of the three workstreams on barriers to exploration, infrastructure access and new entrants for late-life assets. As usual, should the Chancellor make any decisions, the announcement and implementation of any changes to the tax regime will follow the fiscal policy-making process. I hope that that reassures Members, but they should understand that I cannot make any further comments. It is not a matter for me anyway, but the Budget is coming the week after next.
In addition to looking into and undertaking further fiscal reform, the Government are supporting the industry in a number of other ways. The OGA has been established as an independent regulator and asset steward for the UK continental shelf. The Energy Bill before Parliament will provide the OGA with the powers it needs to maximise the economic recovery of oil and gas from the continental shelf. The OGA is working with the industry to identify opportunities to reduce costs, and good progress has already been made, with Oil & Gas UK’s recent activity survey showing that production rose by 10% in 2015, while production costs fell by a third. That is an impressive achievement.
As the hon. Member for North Tyneside (Mary Glindon) pointed out, we have recently re-established the cross-party oil and gas group, and we are aiming to promote the competitiveness of the offshore fabrication sector. Our first meeting, in January, was very productive. I am grateful to my hon. Friend the Member for Waveney (Peter Aldous), the hon. Member for North Tyneside and other Members for their involvement in the forum. As the hon. Lady mentioned, our next meeting will be with fabricators, and we will be looking at new opportunities not only in the traditional oil and gas sector but outside it.
Supporting the industry’s supply chain is crucial at this time, as it is a vital and integral part of the UK oil and gas industry. As those Members who have constituents who work in the industry and others who themselves have worked in the industry will know, it has suffered job losses and revenues falling by around a quarter last year. We must acknowledge that. The hon. Member for Aberdeen North (Kirsty Blackman) asked whether enough is being done about job losses. I can tell her that in intergovernmental ministerial meetings, and particularly in the work I am doing with my right hon. Friend the Minister for Small Business, Industry and Enterprise, we are examining what more can be done to view the energy sector holistically to see how job losses in the oil and gas sector can be a win, not only for offshore and onshore wind but, for example, for the new nuclear efforts. We are looking at what more can be done to provide new opportunities in the energy sector.
Despite the low oil price and the downturn of work being contracted offshore, there are steps we can take to support our supply chain and put it in the best position to win contracts. The OGA is actively involved in promoting future success through its supply chain strategy and board, for which unlocking new investment and future work is a priority. The OGA is working closely with the Department for Business, Innovation and Skills and with industry to make sure that companies remain competitive. The Government are working to further develop mechanisms to provide greater transparency about upcoming business opportunities to companies in the supply chain.
I am delighted to be able to inform Members that over the past few days I have held meetings with several offshore wind developers to emphasise to them that I want to see them do more to make the industrialisation of the UK offshore wind supply chain happen. In particular, the industry needs to work collaboratively to deliver a UK jacket foundation solution and competitive UK tower solutions. Successful delivery of towers and jacket foundations will create opportunities for fabricators and enable people with the right skills to transfer across to the offshore wind sector.
In the past 48 hours, I have met a couple of developers, one of whom told me that they have been very successful in winning overseas offshore wind business by using onshore Aberdeen-based oil and gas consultants with expertise in engineering, if hon. Members can follow that tortuous thought process. Rather than using offshore wind consultants, wherever they are based, they are using the UK’s long-established expertise in onshore oil and gas to win overseas wind business. That is important, and we need to do more to promote that interesting opportunity.
I am working with my hon. Friend the Minister for Skills to develop a national college for wind energy to provide people with the right skills to work in the sector. I had a meeting yesterday with a number of hon. Members from across the House to talk about what more we can do to get it up and running. Retraining is required if we are to take the people who lose opportunities in the oil and gas sector into offshore and onshore wind and other renewables sectors. There is a big opportunity there.
The UK has a strong record on manufacturing jackets and topsides for offshore wind substations. The majority of those items are manufactured in the UK. Sembmarine SLP Ltd, which won a contract from Siemens Transmission and Distribution in 2014 to design, engineer, procure, project manage and construct its platform’s jacket substructure and topside, has begun fabrication. The offshore transformer station, which is being constructed at SLP’s yard at Lowestoft on the Suffolk coast, is providing work for up to 300 employers for the next 21 months. I encourage all hon. Members—I know they are already doing this—to work with Ministers, cross-party groups and the OGA to look at other opportunities in the energy sector, not only on direct workforce re-engagement but on supply chain opportunities. That is really important. The Government and the OGA are continuing to work with initiatives such as the Scottish energy jobs taskforce and the New Anglia local enterprise partnership to support those who have already, sadly, lost their jobs. We need to continue that work.
In addition to those measures, during his visit to Aberdeen in January, the Prime Minister announced a package of measures to support the industry, including £20 million of Government funding for a second round of new seismic surveys to unlock new exploration activity in the UK continental shelf, which is the lifeblood of the basin. That funding, together with the OGA’s flexible and pragmatic licensing strategy for frontier and mature acreage, is designed proactively to influence and incentivise exploration on the UKCS. To back genuine innovation, the data from those new surveys will be made publicly available and £1 million will be allocated to fund innovative uses of data to unlock new fields. That additional investment will help to accelerate the drilling of new wells, which will replenish our reserves and lead to new infrastructure projects.
In addition, £700,000 is to be invested in the development of world-class 3D visualisation facilities at the Lyell centre at Heriot-Watt University in Edinburgh. The appointment of a new oil and gas ambassador will help to ensure the best possible access for UK companies to markets overseas, promote the North sea around the world and boost inward investment. The new strategy to maximise the economic recovery of offshore oil and gas in the UK will, subject to the will of Parliament, come into force soon. I share the sense of urgency of my hon. Friend the Member for Waveney, who rightly pointed out that that needs to happen as soon as possible.
In addition to all those measures, Innovate UK is set to launch an energy game-changer, which will make £1.5 million available to encourage innovators, microbusinesses and small and medium-sized enterprises from outside the energy sector to come up with radical solutions and disruptive technologies in response to challenges set by the energy industry. The Natural Environment Research Council will also allocate an additional £1 million investment in the successful oil and gas centre for doctoral training, led by Heriot-Watt University in Edinburgh. Aberdeen University is another core partner. That further investment will enable the programme to be extended for another year and will take the total number of PhD students funded under the scheme to 120 by 2017.
The Government are committed to supporting regional development. Aberdeen is Europe’s energy capital, and has rightly received a package of investment through the Aberdeen city region deal, which included funding for an oil and gas technology centre that will help to strengthen the UK’s position as a global centre of expertise for offshore oil and gas and encourage future investment in the UK. However, that is not the only area that contributes to the industry. Although Scotland supports 45% of the UK’s oil and gas jobs, largely in and around Aberdeen, 55% are located in England, with concentrations in the south-east, the north-west, the west midlands and the north-east. Those areas all support thousands of highly skilled and well-paid jobs. I was very pleased that my hon. Friend the Minister for Housing and Planning was able to join us for part of the debate and that he lent his support for our doing all we can to ensure the success of the sector. It is crucial that we have a joined-up approach across the Government, the OGA, industry and the regions.
As my hon. Friend the Member for Waveney made clear, the southern North sea off the coast of the east of England is a vital part of our industry. For that reason, we are moving forward with our regional development plans. This year, the OGA will carry out an evaluation of the potential for transforming the southern North sea into an energy hub.
As many hon. Members pointed out, although the industry faces challenges, we must remember that there are still opportunities out there. It is definitely not all doom and gloom. As Sir Ian Wood pointed out recently, there is still a huge prize out there. There are still up to another 20 billion barrels of oil equivalent to recover, and 10 new developments will come online in the next two years, which will create much-needed jobs. There is a strong portfolio of new projects in the planning stage just waiting for an upturn in the oil price.
Kirsty Blackman
Sir Ian Wood also said recently that we needed drastic changes to the fiscal regime to ensure the oil and gas industry’s future.
Andrea Leadsom
I am grateful to the hon. Lady for reminding us of that. The Budget is coming up soon, and I am sure Ministers are listening to what she has to say.
Production on the UK continental shelf rose by 10% in 2015 to 1.64 million barrels of oil equivalent a day. Almost 43 billion barrels of oil equivalent has been recovered so far, and there are up to 20 billion barrels—about a third—to be recovered. The UK remains the second largest producer of oil in Europe after Norway, and the third largest producer of gas after Norway and the Netherlands. The UK remains in the top 25 of global producers of oil and gas—for oil we were 21st in 2014, and for gas we were 22nd in 2014—despite the decline in production in recent years. The opportunities remain, and we still have every chance of success.
Although we wish to avoid premature decommissioning, it is a big business opportunity for the future, and £1 billion is already being spent per year. Many suspended wells are waiting to be permanently abandoned. We hope to stimulate that market and, in doing so, provide a valuable market for the supply chain. The OGA will publish a UKCS decommissioning strategy that will enable the UK service sector to become a hub for decommissioning and help UK firms to be ready to capitalise on the huge opportunities that are coming in the years ahead. That will be supported by the National Environmental Research Council, which is also investing up to £1 million in a cohort of new projects to support the development of expertise in the UK on decommissioning and its environmental management. With that proactive approach, we seek to position the UK so that it can be an early mover in that emerging market and establish a highly competitive and capable new sector.
I am grateful to my hon. Friend the Member for Waveney and the hon. Members for North Tyneside and for Aberdeen North for bringing this important debate to the House. The discussion has been constructive and I have listened with enormous interest to what right hon. and hon. Members have had to say. I congratulate the hon. Members for Livingston (Hannah Bardell) and for West Aberdeenshire and Kincardine (Stuart Blair Donaldson), but particularly the hon. Member for Livingston. She has a huge amount of experience in the oil and gas sector and it was interesting to hear her contribution. The hon. Member for West Aberdeenshire and Kincardine spoke of the importance of oil and gas to Aberdeenshire, but their importance has also been made clear by Members representing other areas.
There is no doubt that the industry is facing particularly testing times, not only in the UK but globally. As I have outlined, the Government are working hard with the Oil and Gas Authority and the industry to provide the right support to this vital sector during the current oil price crisis. There is of course more to be done, and I assure right hon and hon. Members that the Government will continue to do all they can to support this great British industry during these challenging times.
Peter Aldous
This has been a collaborative debate, so we are hopefully starting off here as things will move on. Over the past 50 years, we have perhaps taken the industry and what it produces in terms of our energy security for granted, and I sense that the Treasury automatically ticks off an enormous great dividend from the industry in the Budget every year. Then, when we have a shock to the system, we suddenly realise how important the industry is to the UK. We also need to focus on how important it is to the areas that are represented around this Chamber. If we do not get it right, we will hollow out those communities. The area that I represent is perhaps a little better off than other areas, in that our economy is a little more diversified, but the effects could nevertheless hit hard if we do not get this right.
The foundations have been laid over the last 18 months or so. The Treasury is in listening mode and my hon. Friend the Minister from DECC is in listening mode. They get it. The setting up of the Oil and Gas Authority has been so important. The Budget 2015 laid down some important foundations, and the Prime Minister delivered the right measures and packages during his visit to Aberdeen in January. I know that we cannot say much about the Budget that is coming up in two weeks, but it is important for the future of the industry that we get both the short-term measures we need to get through this particular challenge and retain the infrastructure, and the clear long-term message that this is the place to invest. People have invested here over the last 50 years and we want them to invest with confidence over the next 25 to 30 years.
I picked out three themes from today’s debate. The first is the importance of finance and bringing the banks with us. Secondly, innovation will be important moving forward. The industry has been innovative over the last year or so. It perhaps took things a little bit for granted up until then and was not the industry that it should have been, but it has responded. I listened at the conference in Norwich yesterday and the industry is full of ideas for moving forward. Finally, we need to send out a message of collaboration. I see the fabrication yards in my constituency daily—I suspect that the hon. Member for North Tyneside (Mary Glindon) and the right hon. Member for Tynemouth (Mr Campbell) see such things daily, too—but they go from feast to famine. I see the marvellous things being built and the lights shining on them at night. It makes me feel good; and then, all of a sudden, they are gone. We go from feast to famine too often. If we can build a spirit of collaboration, we could perhaps get the yards to have a steady book of orders. They could then invest in skills and infrastructure to make themselves world class. That is what we need to achieve.
If we look at this in terms of seasons, I sense that oil and gas production on the UKCS has rapidly moved out of summer and now faces autumn. Perhaps one good thing about climate change is that we get Indian summers. We want to secure a long Indian summer for the industry—Indian summers sometimes last into November. What I do not want is a harsh, bleak winter arriving too early.
Question put and agreed to.
Resolved,
That this House has considered the offshore oil and gas industry.
Written Statements
(8 years, 9 months ago)
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Business Impact Target
(8 years, 9 months ago)
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The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
I am today publishing the Government’s target in respect of the economic impact of new regulation on business for this Parliament, along with related matters as required under section 21 of the Small Business, Enterprise and Employment Act 2015 (“the Act”). The current Enterprise Bill will extend the scope of the target to include statutory regulators, as well as Ministers. This statement takes account of that proposed extension.
Business impact target[1]
The Government’s target is for a saving of £10 billion to business and voluntary or community bodies from qualifying measures that come into force or cease to be in force during this Parliament.
Interim target[2]
The interim target covers the savings to be achieved from qualifying measures that come into force or cease to be in force in the first three years of this Parliament. The Government’s interim target is a saving of £5 billion.
Qualifying regulatory provisions[3]
Under the Act, the measures that are in scope for the business impact target are described as “regulatory provisions”. That includes both legislation, and the activities of regulators—meaning Ministers, and in due course statutory regulators.
As with the one-in, two-out system that operated in the last Parliament, the Government must designate the categories of regulatory provision that are to be scored against the target (“qualifying regulatory provisions”). Qualifying regulatory provisions are those that do not fall within any of the exclusions set out below.
(a) Exclusions carried over from last Parliament
A number of the categories of regulatory provision that were excluded from the one-in, two-out system in the last Parliament will also be excluded from the business impact target. The exclusions are:
Regulatory provisions that implement new or changed obligations arising from European Union regulations, decisions and directives, and other changes to international commitments and obligations, except in cases of gold-plating.
Regulatory provisions specifically relating to civil emergencies.
Regulatory provisions concerning fines and penalties, and redress and restitution.
Regulatory provisions that promote competition (where these result in an increase in a direct net burden on business).
Regulatory provisions that enable delivery of large infrastructure projects.
Regulatory provisions that implement changes to the classification and scheduling of drugs under the Misuse of Drugs Act 1971, or to national minimum wage hourly rates, where these follow the recommendations of the relevant independent advisory body.
Regulatory provisions relating to systemic financial risk.
(b) New exclusions applied in this Parliament
The remaining exclusions arise from the extension of the target to include regulator activity, and one legislative measure (the national living wage) where the offsetting measures—changes to national insurance and tax—are also excluded from the target under the Act.
In order to capture all relevant regulator actions the statutory definition of a regulatory provision is drafted in such a way that every action of a regulator in the discharge of its statutory duties potentially falls within scope. The exclusions are intended to ensure that the qualifying provisions scored under target are focused on regulator policies and practices rather than day-to-day activities. Certain activities related to economic regulation are also excluded. The exclusions are:
Regulator casework including specific investigation and enforcement activity, individual licence decisions, and individual advice.
Education, communications activities, and promotional campaigns by regulators, including media campaigns, posters, factsheets, bulletins, letters, websites, and information/advice helplines.
Policy development by regulators, including formal and informal consultations, policy reviews, and ad hoc information requests.
Changes to the organisation and management of regulators, except for those resulting from legislative changes or another policy change that is a qualifying regulatory provision.
Regulatory provisions applying to certain business activities of operator(s) of a network or system where the operator(s) are deemed to be a monopoly or to have significant market power, specifically:
regulatory provisions that concern the terms upon which access is provided to those networks and systems; and
regulatory provisions that concern effective network and systems operation and co-ordination.
Regulatory provisions that are price controls, except for the introduction of price controls to previously unregulated activities, or removal of pre-existing price controls.
Changes to industry codes, except those arising from regulator action or new legislation.
Regulatory provisions that introduce the national living wage[4],
Methodology for the assessment of the business impact target[5]
The impact of each qualifying measure will be assessed on the basis of its equivalent annual net direct cost to business (EANDCB) measured in 2014 prices and with a 2015 present value base year. The contribution to the business impact target will be the sum of the EANDCB over the first five years for which the measure will be in force, or the sum of the EANDCB over the full lifetime of the measure for measures that are in force for less than five years.
The EANDCB is an estimate of the average annual net direct costs to business in each year that the measure is in force. It is calculated as the present value of the net direct cost to business divided by the sum of the discount factors appropriate for the length of time the measure is in force. The discount rate used is determined by the Green Book.
Direct impacts are those that can be identified as resulting directly from the implementation or removal/simplification of the measure.
[1] As required under section 21(1)(a) of the Act.
[2] As required under section 21 (2) of the Act.
[3] As required under section 21(3)(a) of the Act.
[4] Future annual changes to the national living wage that do not follow the recommendations of the Low Pay Commission will be in scope for the target.
[5] As required under section 21(3)(b) of the Act.
[HCWS574]
Green Investment Bank
(8 years, 9 months ago)
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The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
In June 2015, I announced plans to move UK Green Investment Bank plc (GIB) into the private sector. The company’s success means there is strong market interest in GIB from private sector investors and 100% Government funding is no longer needed.
The company fully supports this move which will give GIB the freedom it needs to grow and increase its impact with access to much more capital than if it stayed in Government hands. And it will further demonstrate that green investment can be profitable for mainstream investors and is not just the preserve of Government.
Today, I am formally launching a sale of GIB by inviting expressions of interest from bidders. Any parties interested in acquiring GIB are now invited to come forward. Interested parties will need to respond to a bidder information form which is being published today on the gov.uk website.
I am today laying a report to Parliament on the proposed disposal of shares in GIB with information on the kind of disposal intended, the expected timescale for the disposal, and our objectives for the disposal. This report is provided in fulfilment of provisions in the Enterprise Bill and is also being provided to Ministers in the devolved Administrations.
The report includes details of our plans to create a special share in GIB as part of the sale process. This will provide protection of the company’s green purposes following a sale by granting the independent holder of the share the right to approve or reject any proposal to change the green purposes of GIB. I first announced these plans in Parliament on 2 February, when opening Second Reading of the Enterprise Bill. Details were also set out in the Government’s response to the Environmental Audit Committee’s December 2015 report on the future of GIB which was published the same day and further details are provided in letters from GIB chairman, Lord Smith of Kelvin and from Baroness Neville Rolfe, Parliamentary Under-Secretary of State for Business, Innovation and Skills—copies of which will be laid in the Libraries of both Houses.
[HCWS573]
Successor Submarine Assessment Phase
(8 years, 9 months ago)
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The Minister for Defence Procurement (Mr Philip Dunne)
The Government were elected with a manifesto commitment to build a new fleet of four successor ballistic missile submarines. On 23 November 2015, the Government announced in the strategic defence and security review (SDSR) that the Successor submarine programme would cost £31 billion, and that the first boat was expected to enter service in the early 2030s. We will also set a contingency of £10 billion.
As part of his statement on the SDSR, the Prime Minister announced that we needed to implement a number of changes to the Successor submarine programme, which included plans to invest more than £600 million in the design phase.
I am today confirming our plans to invest £642 million to supplement the current Successor assessment phase of £3.3 billion. This will bring the total assessment phase commitment to £3.9 billion as announced in the SDSR, and will provide a sound foundation for the next phase where we will be taking a staged investment approach.
The assessment phase has identified the need to invest now to prepare for an efficient and effective submarine build. The £642 million will be spent on facilities at BAE systems in Barrow, essential long lead items for the four submarines and the nuclear propulsion programme.
In the UK, a number of key suppliers directly support the delivery of the Successor submarine programme who, in turn, depend heavily on a network of hundreds of sub-contractors. The Government’s further investment in preparation for a four boat Successor fleet should be welcomed by all suppliers as helping to secure vital skills for the UK in the long term.
[HCWS576]
EU Environment Council
(8 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rory Stewart)
I will attend the EU Environment Council in Brussels on 4 March, along with the Parliamentary Under-Secretary of State for Climate Change, Lord Bourne,
The Scottish Minister for Environment, Climate Change and Land Reform, Dr Aileen McLeod MSP, will also be attending Council.
Following adoption of the agenda, the list of “A” items will be approved.
Under non-legislative activities, the Council will debate the EU action plan for the circular economy and the follow-up to COP21 (climate change). There will be an exchange of views on the European semester/annual growth survey 2016 and the contribution of the environment and climate to growth and jobs. The Council will adopt a draft statement on endocrine disruptors.
Over lunch Ministers will be invited to discuss the ratification of the Paris agreement (climate change).
The following items are due to be discussed under any other business:
Energy transition—promoting environmentally friendly forms of energy in the EU.
Implementing the 7th environmental action plan.
Minamata package (i) proposal for a regulation of the European Parliament and of the Council on mercury, and repealing regulation (EC) No 1102/2008; (ii) proposal for a Council decision on the conclusion of the Minamata convention on mercury.
Real driving emissions (RDE).
EU action plan on wildlife trafficking.
Innovation deals.
[HCWS575]
Justice and Home Affairs Council
(8 years, 9 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
A meeting of the Justice and Home Affairs (JHA) Council took place on 25 February, which I attended on behalf of the UK.
The Council began with a discussion on the European Commission’s proposal for an amendment to the Schengen border code to make systematic checks on EU citizens mandatory at external borders. In response to calls from member states, the Council agreed a six-month transitional period for implementation at air borders.
While the UK does not participate in the border elements of Schengen, I welcomed the action by the Schengen states to introduce systematic checks on EU citizens including at airports. This is something the UK already does. However, I noted two other areas where further action is needed to strengthen the external border. First, to further improve the exchange of information on the Schengen information system on entry bans and immigration data. Secondly, following the attacks in Paris, I urged the Commission to promote the phasing out of non-biometric, non-machine readable documents and to support member states to bring their identification documents into line with International Civil Aviation Organisation (ICAO) standards. The Council agreed a general approach on the Schengen border code measure.
This was followed by an update from the presidency on the proposed draft regulation on the European Border and Coast Guard Agency. Given the UK’s position in relation to Schengen we will not participate in this measure, but I highlighted the importance of the UK being able to co-operate effectively with the future European Border and Coast Guard, in line with the support the UK has provided previously to Frontex, while also ensuring that the new agency did not impact on non-Schengen states’ border controls. The presidency is now aiming for a general approach on this proposal at the April JHA Council, with political agreement with the European Parliament by June.
Finally, there was a discussion on migration, as a follow-up to the European Council. The Commission called for efforts to avert a humanitarian crisis in Greece. The Council received an update on the recent Vienna conference, and the steps some member states had taken to manage the movement through the EU of illegal migrants, and to ensure that public order and security were maintained. A number of member states highlighted the importance of implementing decisions already taken in line with February European Council conclusions, and pointed to the new NATO mission as a means to reducing flows at the source. Member states also discussed the importance of ensuring registration of all migrants on arrival. I welcomed the new NATO involvement in the Aegean, and noted that policies based around redistribution would exacerbate the pull factor and would not help prevent secondary movements. I highlighted that the EU also needed to consider whether the current EU and international migration frameworks were adequate for tackling abuse.
The discussion on migration continued over lunch, which was also attended by the deputy Turkish Interior Minister and the United Nations High Commissioner for Refugees. There was consensus on the need to support the action under way to reduce flows across the Greek-Turkish sea border and to implement the EU-Turkey action plan.
[HCWS578]
Building a Prosperous and United Community: Progress Report
(8 years, 9 months ago)
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The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
Today the Government and Northern Ireland Executive have published a progress report on the Northern Ireland economic pact. The “Building a Prosperous and United Community: 2016 Progress Report”, highlights our successes since the economic pact was first signed in June 2013. I have placed a copy of this report in the Libraries of both Houses.
The Government and the Executive continue to work together to advance our shared aim to strengthen the private sector and rebalance the Northern Ireland economy. The economy is growing, there are 46,000 more people in employment today than in 2010, wages are up more than 5% over the year, and exports are up 4%.
Through the economic pact the Government and the Executive have helped deliver the Corporation Tax (Northern Ireland) Act 2015. This provides the legislation to devolve rate-setting powers to the Northern Ireland Assembly. The commencement of these powers is subject to the Executive demonstrating that their finances are on a sustainable footing for the long term. Through the Fresh Start agreement the Executive reaffirmed their commitment to take the necessary actions to demonstrate this and also set out its intention to have a Northern Ireland rate of 12.5% from April 2018.
Through the joint ministerial taskforce on banking and access to finance the Government have worked with the Executive to help deliver approximately £60 million in finances to Northern Ireland businesses. The Green Investment Bank has now committed to invest over £70 million to projects in Northern Ireland and over 450 start-up loans have been approved in Northern Ireland.
The Executive continue to make use of the additional borrowing the Government made available through the economic pact including to improve facilities at integrated primary schools and increased provision of shared housing. Last month the Ministry of Defence announced its intention to gift 59 surplus properties to the Executive. These properties will be used to increase the provision of shared housing and the Ministry of Defence will continue to explore whether it might be possible to transfer further surplus properties in the future.
The progress report also sets out the British-Irish visa scheme is now operating allowing recipients to travel to both Ireland and Northern Ireland on the same visa. There has now been approval for Government funding for a space propulsion test facility in Crossgar as well as a further €5.5 million for engine design in Northern Ireland. Furthermore the report sets out that Northern Ireland will significantly benefit from the Government’s regional air connectivity fund.
The economic pact sets out a new approach for the Government and the Executive to work more closely on our joint objectives. We will continue to work hard towards rebalancing the Northern Ireland economy and building a shared future.
[HCWS577]
Light Dues 2016-17
(8 years, 9 months ago)
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The Minister of State, Department for Transport (Mr Robert Goodwill)
The Government are focused on delivering maritime sector growth in the United Kingdom. This includes enhancing Government leadership and creating a supportive environment that will enable the sector to thrive. The vital work of the general lighthouse authorities, which provide and maintain marine aids to navigation around these islands, forms part of this vision.
Continued real terms reductions in the three authorities’ running costs in the UK means that I am able to reduce light dues by a further penny, to 38p per net registered tonne, on 1 April 2016. This will be the third successive year in which the UK light dues rate has been cut, and means that light dues have fallen by 20% in real terms since 2010.
The Government are committed to providing long-term stability for light dues payers, so they can plan budgets effectively. To support that objective, I have set the UK general lighthouse authorities new five-year efficiency targets, succeeding those set in 2010, which require net running costs to continue falling in real terms, by on average two percentage points below the retail price index.
Ships using our busy waters depend on the effectiveness of the service provided by the general lighthouse authorities as much as their efficiency. As the authorities continue to work assets harder, harness new technology, and procure goods and services collaboratively, our common aim will be to reduce the risk to navigation and the cost of doing so effectively.
[HCWS572]
Employment, Social Policy, Health and Consumer Affairs Council
(8 years, 9 months ago)
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The Minister for Employment (Priti Patel)
The Employment, Social Policy, Health and Consumer Affairs Council will take place on 7 March 2016 in Brussels.
The Council will be invited to seek a general approach on the proposal for a Council decision on guidelines for employment policies in member states.
The Council will be invited to adopt draft Council conclusions in response to the Commission’s strategic engagement for gender equality, the Commission’s list of actions to advance LGBTI equality, and the 2016 annual growth survey. The Council will also be invited to adopt the draft joint employment report.
There will be policy debates on the European semester, for a contribution to the March European Council, and on the progress towards a new skills agenda for Europe.
Regarding the implementation of the country-specific recommendations, there will be a contribution from the Employment Committee (EMCO) on labour market segmentation and contractual arrangements.
The Council will be asked to endorse the key messages from EMCO on the way forward regarding the implementation of the youth guarantee.
The European Commission will make presentations on the 2016 country reports and the labour mobility package. The presidency and European Commission will make a joint presentation on social dialogue and the tripartite social summit.
Under any other business, the presidency will present information on legislative issues currently on their agenda. The Commission will present information on the European pillar of social rights, the state of play regarding the European social fund and youth employment initiative implementation, the employment and social dimension of the Energy Union, and the Istanbul convention on violence against women. Information on the 2016 work programmes of EMCO and Social Protection Committee will be presented by the committees’ respective Chairs.
[HCWS571]
Grand Committee
Armed Forces Bill
(8 years, 9 months ago)
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The Deputy Chairman of Committees (Baroness Henig) (Lab)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Amendment 10
Lord Craig of Radley
“Limitation on prosecutions of members of the armed forces
No member of the armed forces may be prosecuted for any offence alleged to have taken place more than 20 years ago while the member of the armed forces was engaged in military operations outside the United Kingdom.”
Lord Craig of Radley (CB)
My Lords, this is clearly a probing amendment. It flies in the face of the norm that there is, in general, no time limit on investigating or bringing a charge for alleged criminal behaviour. My reason for tabling such an amendment is to encourage debate and a reasoned response from the Government. I shall not repeat my arguments, given at Second Reading, for bringing this to the Committee now. Noble Lords are well aware of the industrial growth in historical cases of alleged criminal behaviour of service personnel, going back over time not just years but decades. The Bill clearly indicates that it is acceptable for the Armed Forces to be treated differently in legislation where there is a military operational reason for so doing. An amendment on these lines, not necessarily using my precise words, would fit that purpose.
The growth in the number of historical claims now being dealt with by the MoD has been the topic of recent media coverage, which has quoted the irritation of Ministers and even the concern of the Prime Minister. Therefore, I hope to hear not only that the MoD is well aware of the growing problem but that it has specific plans in mind to tackle it. If it is to be by some form of inclusion in the Bill of Rights that we have recently heard about in the Chamber, I urge that it should be in the form of an amendment to the Bill before the Committee today. Better still, as I have already proposed—although I do not do so now with great hope—why not include the relevant part in the Bill before the Committee?
Wherever possible, legislation that applies to the discipline and behaviour of our Armed Forces should be contained in one Act. Not only will this alleviate the problem of potential conflicts between Acts, as has been happening with the Human Rights Act, it will make it easier for the Armed Forces themselves to be aware of and to be dealt with by their own specific legislation. I look forward to the Minister’s response on that point. I hope he will be as forthcoming as possible about the Government’s intentions in this area so that the opportunity to debate and help form acceptable legislation is not missed. This should not be in any way a party matter and I hope the debate will avoid any such approach. The Armed Forces are ultimately responsible to the Government of the day, regardless of which party may be in power. I look forward to the noble Earl’s response. I beg to move.
Lord Hope of Craighead (CB)
I just want to make one or two short points. It is interesting that although the noble and gallant Lord is perfectly correct that it is not the practice in the United Kingdom for there to be any statutory limitation on prosecution for crimes other than summary crimes, it is quite commonplace in the civil law countries for there to be limitations. So our allies in France or Germany, for example, would, I suspect, be protected by a limitation of the kind proposed. I am not suggesting that we should adopt that philosophy, which is quite contrary to our practice, as we can see in cases of historical child abuse. I wonder, however, whether the wiser course, rather than going into the area of limitation, which is so difficult and would be seen as an invitation to start doing this for other crimes, would be simply to have a blanket immunity for our servicemen when engaged in military operations, of the kind that I think used to be the case—I stand to be corrected—before the law was changed some years ago by the previous Armed Forces Act. This is certainly an important point to consider, but I favour doing so not by way of limitation but by way of exclusion entirely for acts of that kind while engaged on military operations, while making it quite clear that we are not dealing with cases of one serviceman on another—let us say of one serviceman assaulting another, stealing from him or things like that.
Lord Brown of Eaton-under-Heywood (CB)
My Lords, as I indicated at Second Reading, I, too, am entirely sympathetic to the general feeling underlying this amendment. As the noble and gallant Lord has said, he is not wedded to this language. I am not clear, for example, whether,
“engaged in military operations outside the United Kingdom”,
would include peacekeeping operations in Northern Ireland, or matters of that character. However, I also see the basic difficulty, as my noble and learned friend Lord Hope indicates. This is certainly contrary and alien to English law down the years. We recognise the problems of delay, and if you can show plain and incurable prejudice through delay, you might well get the cases struck out. One would hope for a measure of fastidious thought before anybody launches prosecutions in these cases. It is deeply offensive to people that, in relation to the problems in Northern Ireland, amnesty was given to a whole lot of terrorists, but there is still a risk, apparently, on the part of the soldiers who were acting on our behalf.
I am a bit troubled by my noble and learned friend Lord Hope’s suggestion of a blanket immunity. What happens if there is a clear case of murder on the face of it? Should we really, with ample evidence and so forth, say that there can be no prosecution? I do not know: would Sergeant Blackman have taken the benefit of that? One must have regard to where these things go, but I certainly hope that the Government will give very sympathetic thought to this. A clever and ingenious lawyer might be able to find some formula whereby what I suspect all of us here feel could be reflected in some form of protection for those on active service abroad.
Baroness Smith of Newnham (LD)
My Lords, I was not able to speak at Second Reading, and I would like to briefly reassure the noble and gallant Lord, Lord Craig, that the Liberal Democrats have no intention whatever of trying to sabotage this Bill in any vainglorious or other way. We are committed to the Bill, and, like other Members of your Lordships’ Committee, to ensuring that the Bill becomes as good as it can be.
We do not wish to civilianise the Armed Forces, as the noble Viscount, Lord Slim, said on Tuesday: we certainly have no intention of doing that. However, there are some concerns about this amendment. Although I accept that it is a probing amendment, we share the concerns of the noble and learned Lord, Lord Brown of Eaton-under-Heywood, that there is a danger in either a blanket limitation or looking at things that are any sort of military operation. There may be cases that clearly should not be dealt with after 20 years; there may be other cases that need to be looked at. In cases of murder, rape or the sort of crimes that we were talking about in previous amendments, it would seem extremely strange to service men and women and their families if we somehow said, “If this happened in civilian life, you might get closure, but if it happens while your son or daughter is overseas engaged in military operations, there is a 20-year cut-off, and the rule of law no longer holds”. I ask the Minister whether it would be possible to find a way of dealing with the genuine concerns that have been put forward in the amendment that would ensure that service men and women and their families felt reassured that they were not going to lose the rule of law as would normally be expected.
Earl Attlee (Con)
My Lords, I share the concerns of the noble and gallant Lord, Lord Craig. I am particularly concerned about putting retired servicemen in the frame again after there has been a judicial inquiry. It might be that a subsequent judicial inquiry comes to a different conclusion, but once you have had a judicial inquiry and no prosecutions have arisen, servicemen ought to be able to carry on with their duties, retire and not worry about further legal action; they should not be worrying about further legal action for the rest of their natural lives. I very much support the general thrust of his amendment, therefore, but perhaps it needs some more tests—in particular, in relation to the case we are obviously talking about but not mentioning, that there has been a judicial inquiry.
Lord Tunnicliffe (Lab)
My Lords, we recognise that there is an issue in this area, but, according to my understanding of the law, this is not the way to address it. As I understand the application of the law to service personnel, they come under both the military law—the 2006 Act—and the general law of the land. This is not generally a problem, as, by arrangement between the two authorities, a decision will be taken about which law someone is prosecuted under.
I understand—I may not be right—that there are statute of limitation provisions in service law but no significant statute of limitations in English criminal law. There is a considerable statute of limitations in civil claims—a great big schedule—but the application of a statute of limitations in criminal law is limited to summary offences only. In practice, from my brief research this morning, that generally seems to mean motoring offences in magistrates’ courts. To introduce a limitation of this magnitude into the normal body of English law, which is what we would be doing, would be a radical change, and I do not believe the Bill is the right vehicle to introduce such a radical change for one narrow purpose.
Many would argue that we should rethink the whole issue and that the prosecution of historical cases is not sound. The only time I have been in court as a witness, my evidence was useless, because it referred to things that had happened at a meeting—one of about 400 I would have had that year—six years before. I was asked for precise details, and my standard, and absolutely honest, answer was, “I cannot recall”. I have trouble remembering most of the details of last week, never mind 10 years ago. So there is a real evidential case for looking at that issue.
Nevertheless, public opinion is, in many ways, the very opposite at the moment. In many ways, public opinion, particularly in the sexual cases coming before the courts at the moment, is in favour of pursuing historical cases—in one case related to this House, even after the death of the supposed perpetrator. There is a real tension between public opinion and the whole “old evidence” issue, which I think has some validity and which I suspect wider society will need to debate in the years to come.
In our view, a change as radical as this—as I understand it—for such a narrow purpose should not be in the Bill and should not go forward without wide public discussion and analysis and a recognition that it would have to flow right through criminal law. It cannot realistically be related to this single, narrow area.
Lord Thomas of Gresford (LD)
My Lords, there is no limitation on serious criminal cases, and that is part of the criminal law. In this area, I think of the war crimes that, until very recently, were still being brought forward relating to the Second World War as a result of investigations into the actions of German soldiers in prison camps and elsewhere. The thought that that type of case would be barred through limitation would have a very unfortunate effect on the victims of the Holocaust, who feel those crimes so strongly, and rightly so.
As a result of the debates we had on Tuesday, and this debate, my view is that the clever and ingenious lawyers in the Ministry of Defence should be thinking about putting the concept of combat immunity into some statutory form, to define the boundaries of it so that commanders who are engaged in warfare know that if they are in a combat situation they do not have to worry about criminal civilian law affecting them personally, and so that the soldiers involved do not subsequently face criminal charges as a result of their conduct in the clash of arms—the warfare itself. But “military operations” as in the amendment can cover such a wide area and I do not think that we should go against the whole thrust of the common law and the whole purpose of the criminal law by an amendment of this sort. There are other ways. What is combat immunity? What are the boundaries? They may be fuzzy at the edges but I am sure they are capable of statutory definition.
Lord Brown of Eaton-under-Heywood
I do not want to be tiresome but combat immunity, as I understand it, has never applied in the context of criminal law at all. It is a purely civil law concept.
Lord Thomas of Gresford
Perhaps it could be used as a criminal law concept. Perhaps the lawyers would like to think about it. I follow what the noble and learned Lord says on that.
The Minister of State, Ministry of Defence (Earl Howe) (Con)
My Lords, this amendment would introduce a time bar on bringing prosecutions against members of the Armed Forces, shielding them from prosecution for their actions while engaged in military operations outside the United Kingdom. The time bar would apply to their acts where more than 20 years had passed since those acts took place.
It is important to be clear, as noble Lords have observed, that the amendment would prevent personnel being prosecuted under either the service justice system or the civilian criminal justice system. It would cover all offences, not only against civilians or prisoners of war but against members of our own Armed Forces; for example, if evidence eventually came to light that a soldier had murdered another soldier while on operations, there could not be a trial if more than 20 years had passed.
I have much sympathy with the reasons that I know underlie the amendment. If criminal allegations are raised many years after the events in question, witnesses may be dead, memories may have faded and documentary evidence may have been lost. Indeed, those difficulties can be encountered even after a few years, never mind many years. However, I was grateful for the comments of the noble Lords, Lord Tunnicliffe and Lord Thomas of Gresford, and the two noble and learned Lords, among others. Members of our Armed Forces engaged in military operations must be subject to the rule of law and I cannot support a blanket ban on prosecutions of members of the Armed Forces after a stated period.
As the Committee is aware, the Armed Forces Act 2006 contains a system of service law that applies to members of the Armed Forces wherever in the world they are operating. This makes provision that a member of the Armed Forces commits a service offence if he or she commits any act overseas which would be an offence under the law of England and Wales were it done here. I am afraid I cannot see on what principle we should make an exception from the criminal law for those in military service overseas.
It is worth emphasising that, in both the civilian and service justice systems, when considering any case prosecutors are required to consider not only whether there is sufficient evidence to provide a realistic prospect of conviction but whether a prosecution is in the public interest. It has never been the rule that a prosecution will automatically take place once the evidential stage is met. Similarly, in the service system prosecutors are required to consider whether a prosecution is also in the service interest, including service interest factors. Clearly, if the offence is more serious, the public interest for a prosecution is more compelling.
It should also be noted that before a former member of the Armed Forces can be prosecuted for a criminal conduct service offence in respect of things that they did during their service, the consent of the Attorney-General must be obtained if more than six months have passed since they left the Armed Forces.
I am of course aware of the concerns expressed by the noble and gallant Lord over investigations by the service police of events in Iraq many years after those alleged events. In many of these cases, the allegations were not made immediately—for reasons which are not always clear. I assure the noble and gallant Lord, and the Committee, that intensive efforts are being made to bring these investigations to a conclusion as soon as possible. We are investing considerable resources in this area. We are looking at streamlined processes to ensure that those cases without substance are weeded out quickly, and so on. The Iraq Historic Allegations Team is doing an excellent job given the difficulties it faces. It has completed a number of investigations.
I do not believe for a moment that this process will still be in progress when the 20-year limit envisaged by the new clause would be reached. Indeed, the only theatre in which, so far as I am aware, criminal investigations or prosecutions of soldiers or veterans are in progress relating to events from more than 20 years ago is Northern Ireland, which is excluded from the scope of this clause because it covers only operations outside the UK.
I also assure the Committee that, while the Ministry of Defence will discharge its duty to provide any information in its possession relevant to such police investigations, it will also provide effective support, legal and pastoral, to veterans who may find themselves facing investigation for matters related to their duties. Although, I repeat, I sympathise with the concerns behind the new clause, in principle it would be wrong to provide an exception to the criminal law for members of the Armed Forces serving overseas in this way. On that basis, I hope that the noble and gallant Lord will agree to withdraw his amendment.
Lord Empey (UUP)
The noble Earl referred there to hoping that investigations would be brought to a speedy conclusion. Could he confirm that the Iraq investigation team will continue its operations until at least 2019? Also, on Northern Ireland, the noble and learned Lord, Lord Brown of Eaton-under-Heywood, pointed out that some 40 years or more after the event a team of 30 detectives has been operating for the last three years doing nothing but pursuing these particular individuals, whereas the people who were the primary perpetrators of violence were away in the smoke many years ago.
Lord Tunnicliffe
The noble Earl seemed to say something fairly profound there about support for service personnel who may come under investigation in the Iraq cases et cetera, and about legal and historic pastoral support. Could he flesh that out, particularly the extent of legal support that he sees being provided? I recognise that might require a somewhat delicate answer so a written response could be more appropriate.
Earl Howe
I shall be happy to write to the noble Lord with further and better particulars on that issue. I add to the noble Lord, Lord Empey, that the aim of the Iraq Historic Allegations Team is to try to compete the majority of its investigations by the end of 2017. The team believes that that is within its grasp, although it may slip. I hope that is helpful as an indication of the timescale to which it is working.
Lord Tunnicliffe
Following the precedent of other Bills, when the Minister writes to me could he copy in any other noble Lord who has participated in the debate?
Lord Craig of Radley
My Lords, first, I thank all those who have spoken in this short debate. I made it very clear that my amendment was meant to be no more than a probing one, and I certainly did not expect the Minister to accept it as it was written or even close to what was written. But I am particularly grateful for the support that I have had for the thought behind what I was trying to get at, and I hope that the Ministry of Defence and the rest of the Government will continue to give this very close attention and not just park it as too difficult to deal with. It really does need to be dealt with. Meanwhile, I beg leave to withdraw my amendment.
Earl Attlee
“Operation of “pay as you dine” system
(1) Within 12 months of the coming into force of this Act, the Secretary of State shall lay a report before Parliament on the operation of the “pay as you dine” system of catering for members of the armed forces.(2) The report shall cover—(a) estimated numbers of service personnel who are in “single living accommodation” but are acquiring and preparing their food locally rather than using “pay as you dine” facilities;(b) any social impact, especially on military camaraderie, of service personnel either eating on their own or in small groups;(c) an assessment of the economics for service personnel; (d) comparisons between different services and different locations;(e) the effect of “pay as you dine” on a balanced diet; and(f) any other matter the Secretary of State thinks appropriate.”
Earl Attlee
My Lords, in the past, servicepeople living in barracks or the equivalent were charged for their food whether they ate in or whether they ate out. It could be the case that they were taking most of their food outside the barracks. This caused some resentment and a new system of pay as you dine was introduced several years ago. I shall not weary the Committee much further, as I do not oppose the policy, but I am concerned to ensure that it has not had undesirable or unintended effects. It may well be that there are differences between different locations and contractors; there could be the good and the not so good—and I am hoping that the noble Baroness, Lady Jolly, who has experienced pay as you dine more recently than me, may give us some of her experiences.
I am a little worried about balanced diets, about the pettiness in some locations of being charged for every extra portion of vegetables, and about any adverse effect on military cohesion. What I used to experience in what I would call the cookhouse, because I am so old-fashioned, was that you would sit down and have a meal with people with whom you might not normally sit down because they were in a different platoon or organisation. That is extremely beneficial and important to the unit, and I am a little worried about that. Furthermore, at one point, I found that the food in the cookhouse was better than the food in the officers’ mess, because in the cookhouse you got a wider variety.
I hope that when my noble friend replies he can give us an update on how the policy is working. It may well be that a review study has already been carried out. Perhaps the Minister could let the Committee have a copy. I beg to move.
Baroness Jolly (LD)
My Lords, I have had some experience recently in several officers’ messes of the Royal Navy, which all operate on a pay-as-you-dine basis. They are all outsourced, so they all operate on different principles. In one you might get all your vegetables including potato, while in others you might pay piecemeal—so there is no particular pattern. Were the department to do an analysis of the type suggested by the noble Earl, it might be worth looking at the issue of outsourcing. Is the same sort of thing happening across the other services? They say that an army marches on its stomach. This also highlights the issue of the quality of the food and the balance of the diet.
During recess, I was in the Arctic Circle; I am a member of the Armed Forces Parliamentary Scheme. I was taken to task by some marines who were talking to us about the quality of the ration packs that they take with them. I tried a chicken tikka masala, which had been dehydrated, and it was sort of identifiable. The serious point that they were making is that on an exercise such as that a marine should consume between 6,000 and 8,000 calories a day to be operational. There were several elements of the packs that were fairly good in terms of quality and being part of a balanced diet, giving them the nutrition that they needed, but they really resented that the calorie number was added to by putting in chocolate bars. They maintained that this was something on which they got a sugar high and then a sugar low straightaway, and that if we were really serious about them we should look again at the ration packs. Whether any dietitian has looked at them I know not, but the Minister might at some stage care to ask somebody who might know the answer to that question.
Another issue that has come up is with the Navy in particular. Clearly, ships need to carry chefs. With outsourcing, so that all bases at home are run by outside catering organisations, when a chef’s time for leave or a shore-based job comes up, there is nowhere for them to work because none of those opportunities is available. I know that the Navy is looking at that.
Those are short reflections for a very interesting topic, but perhaps not for legislation.
Earl Attlee
My Lords, before the Minister and the Opposition Front Bench reply, the noble Baroness made a very important point about the ration packs, which was slightly outside the scope of my amendment, but I have spoken slightly outside the scope of other noble Lords’ amendments. One of the challenges of manufacturing the ration packs is the exact point that the noble Baroness made about packing enough calories into them. It makes it very difficult to find suppliers that can pack that many calories into the packs.
Lord West of Spithead (Lab)
My Lords, I did not intend to speak on this, but I will say a couple of words—not that I try to eat my 6,000 to 8,000 calories a day. That is a real issue, but we are not on operations. I will speak on the concern that the noble Earl, Lord Attlee, expressed about cohesion. There is something in that. In the Navy we are all right. We are on ships and it is not pay as you dine—the food is there and we all eat together. When they are ashore and living in a barracks or a mess, compared with the old system where people went to the mess hall and all ate together, they now, instead of having barrack rooms, have individual cabins, which are much nicer, of course. There is a real danger of a lack of social cohesion. To be quite honest, I do not think there is anything that can be done about it. We have to move down this route, but it is right to be raised as an issue. Certainly, very junior ratings living independently in single cabins have to have particular care taken of them by their divisional officers, because they do not have that factor of living with other chaps and other people to help to support them. That needs very close looking at.
Lord Touhig (Lab)
My Lords, we all agree that having a healthy meal and good food inside us is important for increased productivity and performance. Not for nothing did Napoleon say that an army marches on its stomach. In the Armed Forces, being able to perform at your best is paramount to the role of those we ask to serve our country. Labour introduced the pay-as-you-dine scheme for the Armed Forces in 2006. I cannot remember whether I started it as a Minister, but I was certainly around as they were planning it. As noble Lords will know, I left the ministry soon after that, but that is nothing to do with this piece of legislation.
If required, service men and women who are single and live in service accommodation pay for their own meals when not on active duty, meaning that they would pay only for the meals they actually eat. Under the pay-as-you-dine system, they are responsible for their own meals and making healthy choices, which the Ministry of Defence encourages.
There have been many concerns about the scheme. Some report that it disadvantages the lowest paid in the Armed Forces, as they often run out of money to pay for their food at the end of the month. Others are concerned that individuals may not be following a healthy diet as a result of choosing and cooking their own food, and some, as is highlighted in the noble Earl’s amendment, are concerned that pay as you dine leads to a decline in camaraderie, as personnel of all ranks are not all eating together any more and are instead eating alone or in small groups. I do not want to say more about these concerns at this stage, although I recognise they are perfectly legitimate and should be addressed.
I suggest to the noble Earl that if he is not successful in persuading the Minister of the merits of his amendment, he should press for the information he is seeking to be included in the Armed Forces Covenant Annual Report. That comes out every year. We would then not need primary legislation. It would mean it would be reported every year, people would see it, it would raise the profile of the issue and some of the noble Earl’s concerns could then be better addressed. The Armed Forces covenant is our obligation to the military, and it is likely that this issue will get greater attention if we were to do it that way.
Earl Howe
My Lords, I welcome the initiative of my noble friend in reminding us that the health and well-being of our Armed Forces are especially important. Pay as you dine was adopted by the Armed Forces in 2005, as the noble Lord, Lord Touhig, mentioned. It replaced the deduction of food costs taken directly from pay at source, regardless of whether meals were taken or not.
At the moment, catering is provided for under the catering, retail and leisure contracts. Our industry partners are required to provide a core meal at each meal service of the day. Food is charged at cost, and contractors do not make a profit on the food they provide. Core meals served at breakfast, lunch and dinner provide a nutritious and balanced menu cycle. Throughout the day, when taken at each meal service, core meals provide 3,300 calories per day at a daily price of £4.79. A range of alternative meal choices is also available outside the core meal price.
We believe it is important to give service personnel the choice about how and where they spend their money with regard to food. We fully recognise that sometimes service personnel like to take their meals in a different environment, to visit their local shops to choose what they want to eat and even to cook their own meal. We have no reason to believe that this has a detrimental effect on unit cohesion, although I would not seek to belittle that as an important issue.
However, we recognise that some service personnel are not good at choosing a healthy diet, whether they are living in single living accommodation or not. This is, of course, not a problem that affects just the Armed Forces—it is a reflection of wider society and there is much concern about unhealthy lifestyles generally—but we aspire to bring about change and we acknowledge the need for members of the Armed Forces to be better informed.
We are therefore working in partnership with Public Health England to produce some lifestyle guidance for service personnel. In parallel, the services are developing a new programme to educate personnel in healthy lifestyle choices, including diet and nutrition, and encourage a change in their behaviours. Dieticians, general practitioners, physical development experts and public health consultants are among those who have contributed to this work. I will write to the noble Baroness, Lady Jolly, on ration packs.
I thank my noble friend for his interest in the pay as you dine system, but I do not believe his amendment is necessary. However, there is no sense of complacency here. Various assurance activities related to the system take place, including contract monitoring, site visits, reviews, customer engagement and assurance by single-service catering subject-matter experts to evaluate and improve the service provided. I hope that, with that measure of reassurance, my noble friend will feel able to withdraw his amendment, but naturally, if he feels that there is any more information I can provide him with, I shall be happy to do so.
Earl Attlee
My Lords, I am grateful to all noble Lords who have contributed to this short debate. The thing that slightly worries me is that the Minister did not offer to give us any information from any reviews. He said that reviews had taken place, and presumably those review reports could be obtained under FoI, so there does not seem to be any good reason why we should not see a copy of the relevant review, just to see how it is going. Maybe the Minister would like to reflect on that to see whether there is something.
Earl Attlee
I thank the Minister for that undertaking. The noble Lord, Lord Touhig, tempted me to table a suitable amendment relating to the Armed Forces covenant and the requirement to produce reports. My ration of unhelpful amendments is strictly limited, so I do not think I will be doing that. I beg leave to withdraw the amendment.
“Enlistment of minors
(1) The Armed Forces Act 2006 is amended as follows.(2) After section 343B (interpretation of Part) insert— “Part 16BREPORT ON THE ENLISTMENT OF MINORS343C Report on the enlistment of minors(1) The Secretary of State must in each calendar year—(a) prepare a report on military service by minors; and(b) lay a copy of the report before each House of Parliament.(2) The report must evaluate the effects on the individual, and on the armed forces, of the enlistment of persons under the age of 18.(3) In preparing the report the Secretary of State must have regard in particular to—(a) the principle that the best interests of minors must be paramount in all policy relating to them;(b) whether service people under the age of 18 are at a disadvantage in the immediate and long term future when compared to civilians of the same age, including disadvantage in education and training; and(c) any implications for the armed forces, including financial implications.””
Lord Judd (Lab)
My Lords, in moving this amendment, I should first say that the noble Baroness, Lady Jones, contacted me this morning to say how sorry she was that other commitments made it impossible to be here, and how strongly she supports the amendment.
I particularly thank the Minister for his very courteous response on several occasions to my concerns in this area, and I thank his many officials for the helpful letters they have sent us. I would like the Minister’s reassurance that this correspondence will be made readily available to a wider audience than just me, and I hope that it has been, or can be put in the Library.
I also want to put on record my very real appreciation to a number of concerned organisations, including, of course, Child Soldiers International, which has impressed me by the responsible and well-researched approach it brings to giving substance to its generalised concerns.
When I tabled a very similar amendment in 2011, the noble Lord, Lord De Mauley, on behalf of the Government, replied that it was unnecessary because the annual Armed Forces covenant report would take special account of the needs of those under 18 years of age. I may have misread it, but in the 114 pages of the 2015 covenant report, any mention of minors is conspicuous by its absence. Will the Minister now give a firm undertaking that in future editions of the covenant report, the three key points raised in my amendment will be fully covered? His response on this will obviously bear on how I decide to take the amendment forward.
Fewer than 20 countries still allow in law the direct recruitment of 16 year-olds by their Armed Forces. We in the United Kingdom are among them. We are the only major military power, the only country in Europe, and the only member of NATO to do this. Two-thirds of states worldwide now recruit only adults from the age of 18 into their Armed Forces, and this is becoming the global norm.
Among those to have challenged our existing system are that UN Committee on the Rights of the Child, the Commons Defence Committee, the Joint Committee on Human Rights, the Office of the Children’s Commissioner for the four jurisdictions of the UK and the Equality and Human Rights Commission. Major British children’s organisations and human rights groups have called on the Armed Forces to recruit adults only, as indeed have a significant number of MPs across the political spectrum, many faith groups and indeed, veterans. The public seem to agree with this. Answering an open question in a 2014 Ipsos MORI poll about what recruitment age should be, 77% of those who expressed a view said that it should be 18 or above; only 14% thought it should be 16.
The Earl of Dundee (Con)
My Lords, I support the amendment moved by the noble Lord, Lord Judd, and the noble Baroness, Lady Jones of Moulsecoomb, who cannot be here today. Indeed, they might possibly have advocated discontinuation straightaway. As the noble Lord pointed out, in advancing a strong argument, there is a good case for no longer enlisting 16 and 17-year-olds into the Armed Forces. Most other countries would agree. Indeed, as he has also reminded us, Britain is the only country in Europe, and the sole member of the United Nations Security Council, that enlists 16 and 17-year-olds, yet the amendment provides that we should decide what to do after building up our own proper evidence, such as would accumulate through systematic annual reports produced by the Secretary of State. This balanced approach is commendable, and consequently the amendment is all the more compelling.
However, along with what is proposed, and provided that the discontinuation of enlisting minors were to be supported by further evidence, as envisaged, I wonder if my noble friend the Minister, together with the noble Lord, Lord Judd, might connect a time structure within which the Secretary of State could decide about abolition. In due course, as a result, evidence-based abolition might then ensue, without unnecessary delay or procrastination.
Lord Tunnicliffe
My Lords, the amendment from my noble friend Lord Judd is clearly designed to cover the general issue of the recruitment of 16 and 17-year-olds into the Armed Forces. It is worth reflecting on the history in this country of young people in the Armed Forces. In the 19th century, two young men—aged 15, I think—received Victoria Crosses. I have no doubt that on 30 May, my noble friend Admiral Lord West will find some way of reminding us that it is the 100th anniversary of the Battle of Jutland, at which, famously, a young person, Jack Cornwell, Boy 1st Class, won the Victoria Cross at the age of just 16. So before discussing the present terms of recruitment, we must remember that in the past young recruits have played a brave part in the history of our Armed Forces.
Things have changed, however; nobody would suggest it is other than absolutely right that things have changed. In terms of how we represent ourselves to the world, these young people, the terms and conditions, and so on, we must take a thoroughly modern approach. I hope that the approach being taken by Her Majesty’s Armed Forces is satisfactory, but this is an appropriate occasion to test those conditions and receive, I hope, assurances from the Minister. He has helpfully sent us an email, which I will quote from, and I hope he will read those assurances into the record. In his email, he makes a number of points, but I will quote the key ones:
“No-one under the age of 18 can join the Armed Forces without formal parental consent, which is checked twice during the application process … Service personnel under the age of 18 are not deployed on any operation outside the UK except where the operation does not involve personnel becoming engaged in, or exposed to, hostilities”.
The third important point is:
“All recruits aged under 18 are enrolled onto apprenticeships”.
Obviously, it would be useful if that could be fleshed out a little more. The next point is:
“All Service personnel have a statutory right to claim discharge up to their 18th birthday, and the right of discharge is made clear to all Service personnel on joining the Armed Forces”.
Given those assurances, we continue generally to support the recruitment of young people into the Armed Forces. We think it has the potential to provide a good grounding for their future career and life in general.
Earl Howe
My Lords, I very much welcome the interest of the noble Lord, Lord Judd, in this issue, and his reminding us that the welfare of those who join the Armed Forces under the age of 18 is especially important. I begin by assuring noble Lords that we take our duty of care for entrants aged under 18 extremely seriously. Close attention has been given to this subject in recent years, especially after the tragic deaths at Deepcut. We have robust, effective and independently verified safeguards in place to ensure that under-18s are cared for properly.
I should perhaps make it clear at the outset that all service personnel have, since 2011, a statutory right to claim discharge up to their 18th birthday. The right of discharge is made clear to all service personnel on joining the Armed Forces. I will say something more about that shortly. Before I do, I need to say to the noble Lord, Lord Judd, that I do not share the negative slant that he sought to cast on the enlistment of minors. We are very clear in our belief that junior entry offers a range of benefits to the individual, to the Armed Forces and to society, providing a highly valuable, vocational training opportunity for those wishing to follow a career in the Armed Forces.
The noble Lord mentioned educational attainment. The provision of education and training for 16 year-old school leavers provides a route into the Armed Forces that complies with government education policy, while also providing a significant foundation for emotional, physical and educational development throughout an individual’s career.
There is no compulsory recruitment into the Armed Forces. Our recruiting policy is absolutely clear: no one under the age of 18 can join the Armed Forces without formal parental consent, which is checked twice during the application process. In addition, parents and guardians are positively encouraged to be engaged with the recruiting staff during the process. We also recognise that not all those recruited find that they are suited to life in the Armed Forces. In 2011, the Armed Forces terms of service regulations were amended to provide all service personnel under the age of 18 with the right to claim discharge up to their 18th birthday.
I wish to allay any concern that discharge as of right is ineffective. The noble Lord, Lord Tunnicliffe, asked about the ways in which discharge is facilitated. The Army recruits the majority of under-18s. I assure the Committee that every junior soldier arriving at the Army Foundation College in Harrogate is briefed by the permanent staff on their rights to discharge. Junior soldiers sign and retain the personal terms of service record of briefing and understanding, and the college retains a copy. The brief and document clearly set out the right to discharge and the process to be followed. During the reception day, the junior soldiers’ company commander briefs all parents and guardians in attendance on the processes involved in discharging junior soldiers, who have ample opportunity to seek advice on discharge outside their training team from the extensive welfare staff network and from fellow junior soldiers—particularly those in the senior intake.
Regardless of whether they are still in training, the regulations provide that for the first six months of service a person may claim discharge by giving not less than 14 days’ notice in writing to their commanding officer after an initial period of 28 days’ service. At any other time after six months’ service, those under the age of 18 who wish to leave must give notice in writing to their commanding officer who must then discharge the under-18 within the next three months. For those who give notice just prior to their 18th birthday, this means that the latest they will be discharged is at 18 years and three months of age. Those three months represent a cooling-off period, to avoid the unintended consequence of a decision made in the heat of the moment—say after just having failed a test or while feeling homesick.
A shorter period may well be agreed with the commanding officer, but three months provides the under-18 with a period of due reflection and the right to rescind their request for discharge. This process ensures that individuals under the age of 18 have an appropriate period of time to consider their decision to leave, and offers flexibility depending on individual circumstances. Voluntary discharge accounts for approximately 65% of those who do not complete the course at the Army Foundation College. I can also say that the college has routinely discharged those who are unhappy but may no longer claim discharge as of right, because clearly it is not in the Army’s interest to retain those who feel that way.
I also wish to say something about those who leave early. Indeed, I quote from one of Ofsted’s reports, which says:
“Early leavers receive very good additional support in developing job search skills, writing CVs and researching further education opportunities … families are kept well informed at all stages of the process, and appropriate help is sought to look after children”.
On those who choose to stay, all recruits aged under 18 receive key skills education in literacy and numeracy, should they need it, and all are enrolled onto apprenticeships. The Armed Forces remain the UK’s largest apprenticeship provider, equipping young people with valuable and transferable skills for life, based on structured training and achievement. Over 95% of all recruits, no matter what their age or prior qualifications, enrol in an apprenticeship each year.
The Armed Forces offer courses in a wide range of skills, such as engineering, information and communications technologies, construction, driving and animal care. Ofsted regularly inspects our care of newly-joined young recruits, and we are very proud of the standards we achieve. We welcome this specialist confirmation that we treat our young recruits well.
The noble Lord, Lord Tunnicliffe, mentioned the United Nations Convention on the Rights of the Child. The protection and welfare of our young people, as is required by Article 3, are important. The Armed Forces are careful to ensure that appropriate mechanisms are in place to comply with the law and to afford special consideration of the needs of under-18s. This extends to the service justice system, where appropriate.
What does that amount to in practice? Commanding officers are provided with guidance on the care of service personnel under the age of 18. Guidance covers supervisory arrangements, risk assessments, welfare and mentoring, and contact with parents and guardians. It also covers such things as prohibiting the sale of alcohol and tobacco, the requirement to provide an appropriate adult for those who are arrested and, of course, the right to discharge. I should also remind the Committee that service personnel under the age of 18 are not deployed on any operation outside of UK, except where the operation does not involve personnel becoming engaged in, or exposed to, hostilities.
During the Select Committee on the Armed Forces Bill, the Chief of the General Staff, General Sir Nick Carter, described the recruitment of young people as “incredibly positive”. I take pride in the fact that our Armed Forces provide challenging and constructive education, training and employment opportunities for young people while in service. I suggest that this is the right end of the telescope through which to look.
The Armed Forces Covenant Annual Report is about the effects of service on service people. Those under the age of 18 are well within the definition of service people, but this amendment would require the Secretary of State to give particular consideration, every year, to the effects of service on those under 18 years of age. It would also require him to have particular regard to those effects right through until the individuals become veterans. It obliges us to treat those who joined under the age of 18 as a separate category throughout their service and perhaps throughout their lives. I am not persuaded that this would be right or appropriate. It is perhaps relevant to mention that in July 2015, the High Court dismissed a judicial review brought by Child Soldiers International—CSI—alleging that the enlistment of Army recruits aged 16 to 18 was in conflict with the equal treatment directive.
I do not believe that this is an appropriate distinction to build into legislation, but I nevertheless hope that my remarks have been reassuring to the noble Lord, Lord Judd, in so far as he can be reassured on this topic. I am happy to circulate the letter that I sent him if it has not already been circulated. I am glad it was helpful to him. On that basis, I hope the noble Lord will agree to withdraw his amendment.
Lord Judd
My Lords, I am very grateful to the Minister for his characteristically full and sensitive reply. I shall just say that there are at least two letters, not just one, that should be available.
Let us be very clear about this: I made it plain in my introductory remarks that I am open-minded on this issue. I can see advantages and I can see social advantages. It is very easy for people in caring, comfortable, middle-class life to be worried about others and to raise issues that concern them, but when you look at the harsh realities of life for some of those who are recruited, it perhaps brings a different perspective to the situation because what are the alternatives? They are gangs, drugs and goodness knows what. We must be realistic about this.
My concern is that we have the highest standards and that these are all the time transparent. I cannot for the life of me see why it would not therefore be very sensible to have an arrangement in the Bill which enables this scrutiny to take place. We in Parliament have special responsibilities as custodians of these children. It therefore seems very important indeed that this issue should be openly discussed and evaluated.
Lord Thomas of Gresford
“Inquests
Every violent or unnatural death of every person subject to service law whether within or outside the United Kingdom shall be reported as soon as practicable to a coroner who shall determine by what means and in what circumstances the deceased came to his death.”
Lord Thomas of Gresford
My Lords, in 2006 I moved an amendment in these terms to the 2006 Bill with the support of my noble friend the late Lord Garden. At that time, inquests involving the services were very much a controversial area. There were long delays and lots of families were very concerned about the fact that these inquests took such a long time and seemed to be so unsatisfactory. At the same time, coroners were making some very trenchant criticisms. Lord Garden and I thought it would be right to have a statutory duty making it quite clear that the coroner should have jurisdiction in this area and that cases should be reported to him by commanding officers, in the terms of the amendment that I put forward.
That amendment was not accepted, but after that the Army itself became concerned and set up Project Ajax, and in 2008 the Defence Inquests Unit was formed. It is interesting to note that Mr Mike Venables, the head of that unit, said that,
“the MOD was struggling with how we handled inquests because there was no focus … The families were dissatisfied by the service they were getting and by the way that inquests were working. Many didn’t understand why we were having them or what they were for”.
The unit went to work. It seemed to have a number of aims. On the first aim, Mr Venables said:
“Our role is to support bereaved families”.
Its next role was to train coroners and explain the particular circumstances in which a death had taken place, to identify and locate military witnesses, to furnish reports and information to the coroners and to organise a familiarisation event—annually, as it turned out—so that coroners would know what vehicles and kit were used on operations and what mine clearance drills were, and could experience the weight of packs that troops carried, and so on.
Case officers under the unit read through the Royal Military Police reports, Special Investigations Branch reports and witness statements before handing them to the coroner. Colonel Newell, who was in charge, said:
“We read through everything first and redact them for security—which is something that they do worry about so we explain that … We point them”—
the coroners—
“to what we see as the salient information and suggest who we see as the key witnesses who should be called to the inquest. We provide them with a Rolls-Royce service”.
The next function was to provide support to witnesses. Mr Venables said:
“It can be a hugely difficult experience for some witnesses … we don’t…coach them. All we say is, ‘you’ve got nothing to fear from this, all you have to do is tell the truth’”.
So the unit seems to have various conflicting aims.
The purpose of my tabling this probing amendment today—in identical terms to the one we tabled in 2006—was to inquire into how the system is working and whether it is satisfactory. Case officers under the unit appear at inquests for the Ministry of Defence, so not only are they training and advising coroners, and redacting witnesses’ reports; they are actually appearing for the Ministry of Defence at inquests. That must cause concern to families who wonder whether their purpose is to protect the Ministry of Defence from the sort of trenchant criticisms that, as I indicated, were very much abroad in 2006 when we first approached this problem.
I will be interested to hear the Minister’s response. I may not have expressed quite clearly the full scope of my intention in tabling this amendment—I apologise for that—but I commend it to the Committee.
Earl Attlee
My Lords, I am grateful to the noble Lord, Lord Thomas of Gresford, for raising the issue of inquests. He has raised some important issues.
For many years, I have not been able to give my counsel on this matter because sadly we were taking many casualties on operation and, therefore, the timing was completely wrong. I must stress that I have no intention of pressing any of my own amendments relating to this issue at a later stage—I am merely giving my counsel—but I intend to compete with noble Lords who are lawyers in terms of the amount of detail that I will give. I accept that matters have improved with these inquests, but I am still not convinced that holding detailed inquests into fatalities incurred on operations overseas is likely to reduce casualties or be a good use of resources. I hope the Committee will allow me to explain why before calling for the silken rope.
All members of our Armed Forces should be highly motivated. Most of them will have a secret dream of being able to have strategic effect, even if it involves a significant risk to themselves. By “strategic”, I mean an action they take that significantly alters the outcome of the campaign. That is why many servicemen with particularly good qualities seek selection for Special Forces. Their incentive is that they are very likely to be able to have strategic effect at some point. One can also have strategic effect by denying the enemy’s strategic effect. That is what the off-duty serviceman did in France in that train attack, and it is an issue to which I will return at a later stage.
I understand that, prior to the mid-1980s, it was not necessary to have an inquest into an overseas operational fatality. The law changed, but it did not matter, because there were very few hot operations. If we had ever engaged in conflict with the Warsaw Pact, we would not have been worrying about inquests. I am very sorry, but I think that these inquests into operational fatalities have limited utility. If we think that we need inquests to learn from what went wrong, we are deluding ourselves. As I touched upon in the human rights amendment on the first day of Committee, quite often the deceased, or someone closely involved, made a misjudgment or a mistake. That is the nature of military operations. As I said then, this makes it extremely difficult for the MoD or the chain of command to explain these facts, because we would be shocked if those on the ground at the time were blamed. According to Wikipedia, in Sergeant Roberts’s case, very unfortunately, the soldier who fired the coaxial machine gun on the Challenger tank did not know, or he forgot, that there was a parallax effect in short range. Does anyone seriously think that that error would not have been immediately reported back to the Armour Centre in Bovington and compared with the existing training plans? Of course not.
One inquest that I read about centred on electronic countermeasures. The feedback cycle in this area is extremely fast: days, if not hours. It must be extremely demoralising for the experts—sometimes, I think the term “boffin” is rather more complimentary—at the Defence Science and Technology Laboratory, to read these unfair criticisms in the press. The reality is that we have a fabulous capability in this area and we should be very grateful. Think how demoralising it must be for the Taliban to take the very real risk of planting an IED, only for the initiation system to fail for some mysterious reason at the crucial moment.
Some argue that we need the coronial system to identify any defects in training and procurement. I touched on this during the first day of Committee and remind your Lordships of my inverse law: the attention and scrutiny applied to a fatality on operations is inversely proportional to the number of fatalities taken. That is why I believe that inquests into operational fatalities have limited utility. I also remind the Committee that they soak up considerable amounts of staff effort that could be better spent on prosecuting the campaign. I fear, however, that this is nothing compared to the negative effect.
In order for the enemy’s leaders to motivate their own side to make a very risky or even suicidal attack on coalition forces, it would be an enormous help to them if they could show that the attack would have strategic effect. We cannot avoid the MoD making the formal announcements of casualties or fatalities: we know perfectly well that it would be deeply damaging to mislead the nation regarding the level of casualties that we are taking on an operation.
What we actually do is have an exercise to publicly blame Ministers and then the chain of command for things that have or are alleged to have gone wrong when, for reasons I explained, they cannot effectively defend themselves without acting improperly and damaging morale. It should also be remembered that service personnel in theatre read newspaper reports and have access to the internet. It must be quite easy to damage confidence, especially that of more junior personnel. Reports of discord can also be shown by the enemy’s leaders to their subordinates to motivate them to make an attack which they can, frankly rightly, claim will have strategic effect.
Lord Brown of Eaton-under-Heywood
My Lords, I had not intended to speak to this amendment; I ought to be better prepared. Down the years, I have often been involved with coronial law. Indeed, I was Treasury Counsel in the early 1980s when for the first time it was decided, contrary to my argument, that there could be an inquest in this country in respect of a death abroad. It was the Helen Smith case. She was the nurse who fell from a balcony in Jeddah on to some railings and impaled herself. There was long, fraught litigation in the early 1980s. Since then, this area has developed hugely and has been complicated and clouded by the impact, reverting to where we were earlier in the week, of Article 2 of the European Convention on Human Rights and the need, in certain circumstances, for an Article 2-compliant investigation into a death.
I confess that when I first read the proposed new clause, I rather thought that that essentially is the present law. I shall listen, fascinated, when the Minister tells us exactly what the present position is in terms of inquests in respect of such deaths as are encompassed here. Certainly, I understand that the coroner will be informed in every case. There will always be an inquest, and he will always determine by what means the death occurred. The phrase “and in what circumstances” may be more contentious because this is a very technical area and I seem to recall that that phrase has been the subject of a good deal of specific litigation about exactly what it encompasses.
There is routinely an inquest in these cases. As I understand it—but this is very much anecdotal—the result of our now having and retaining a chief coroner is that these inquests are now heard by a comparatively limited number of coroners and essentially they deal with these matters in a way which is regarded as essentially satisfactory on all sides. That may be a misunderstanding of the position, and I know there was a problem some years ago when coroners were thought to be seeking to investigate way beyond the scope of what ordinarily would be permitted in terms of inquiring into military supply and matters of that sort, but I thought it was now under control. However, I shall say no more. I do not think this is a very useful contribution. I shall listen to what the Minister says.
Lord Hope of Craighead
My Lords, there is one aspect of this amendment to which I think I should draw attention. It arises because of its scope. The amendment applies to every violent or unnatural death of every person subject to service law within the United Kingdom. The coronial system does not apply in Scotland. I do not know whether it is the intention that we should extend the coronial system to Scotland in the case of every violent or unnatural death, but the system which applies in Scotland is very simply this: every death of that kind is reported to the procurator fiscal of the area in which the event occurred. There is then an exercise of discretion because it does not follow that every death is subject to an inquiry. It is a matter for the procurator fiscal, possibly with the advice of a law officer or his counsel, to decide whether it is in the public interest that there should be an inquiry. If there is such an inquiry, it goes not to a coroner but to a sheriff, who does indeed determine by what means and in what circumstances the death occurred. It is there that the public interest is served because if there is something to learn from the event, the opportunity is taken through the accident inquiry to determine the circumstances and in some way to improve practice or inform the public about how events of that kind could be avoided in future.
As I listened to the debate I wondered whether that system applied in the case of persons subject to service law. I think I am right in saying that when one reflects on the tragic events on the Mull of Kintyre, when a Chinook helicopter flying from Northern Ireland to Scotland with a number of very senior people on board crashed and everybody was killed, that event was dealt with under the Scottish procedure. I would have thought that that procedure is perfectly adequate to cope with all that one would expect from events of this kind and the need for the circumstances to be inquired into.
There are two features that need to be stressed. First, not every death of this kind is the subject of an inquiry because it is only if the public interest requires it. On the other hand, where the inquiry is resorted to, it is a full inquiry, with the results that I think the noble Lord, Lord Thomas of Gresford, is looking for; that is, the lessons to be learned from the evidence that is laid. I wonder whether he really does intend that every death—even a road accident, for example—occurring north of the border should be subject to this system; or, to take another example, whether training exercises in the Highlands, where unfortunately deaths do occur due to the very severe weather on mountains, should be subject to the coronial system. I think the Scottish prosecutors—the procurators fiscal, I should say—would rather that they retained control of these events and dealt with them under the Scottish procedure, which they would believe is perfectly adequate to provide the lessons that people need to avoid these events occurring again.
Lord Thomas of Gresford
My Lords, there were specific provisions in the Coroners Act 2009 relating to investigations in Scotland. Sections 12 and 13 provided that the Secretary of State would notify the Lord Advocate if,
“the Chief Coroner thinks that it may be appropriate for the circumstances of the death to be investigated”,
and there would be an inquiry under the Fatal Accidents and Sudden Deaths Inquiry (Scotland) Act 1976. I think that is the position.
Earl Attlee
My Lords, the noble and learned Lord, Lord Hope, talked about training fatalities. My view is that all training fatalities, wherever they arise, should be subject to an inquest. I think there is a far bigger problem with training accidents than with operational fatalities. Those occur where the enemy has a better position on you and sadly some servicemen are unlucky, but with a training accident, it is quite likely that something has gone wrong.
Lord West of Spithead
My Lords, I have a certain sympathy with what the noble Earl, Lord Attlee, has said. Indeed, I think that the coronial system, certainly when it was first being used for these sorts of events, was giving some very unfortunate results. There is no doubt whatever that one or two of the coroners were going way beyond what was required, and it put the whole thing into dubious territory and people began to think, “Why on earth should we do this at all?” because it was so damaging.
In terms of telling people what has happened, we talk of the next of kin’s need to know, which is absolutely right, but of course we have an established system whereby as a commanding officer you write a letter—I have written many of those letters—to the next of kin, explaining what happened and talking about their son, husband or father. Indeed, on the subject of fathers, I used to write another letter to all the children, to be opened when they were 18, explaining what had happened. I also let it to be known to all the families that they could come and talk to me about it if it happened. I am sure most COs do similar things. Indeed, a number of the next of kin took that up and I was able to sit down and talk it through with them.
I think the coronial system has got better but I still have concerns that there is the risk of this becoming a blame game. That is not what was intended at all and I was very nervous about that. I am not sure about this amendment but I think some of those wider issues that have been talked about are important and I am pleased we have had this opportunity to have this debate.
Earl Attlee
I am grateful for the partial support from the noble Lord. I have read the Army’s casualty procedure and looked at the advice to the commanding officer, and when I last looked at the document—I doubt it has changed that much—it said as little as possible. It certainly went nowhere near the detail that I propose. I am proposing that the next of kin would be able to talk about the circumstances with great knowledge, so that when someone suggested that something was wrong with the equipment, they would be able to say, “No, you have to understand that this was the difficulty”. Also, if perhaps the serviceman was the author of his own demise, they would understand why it was so easy to have an unfortunate outcome.
Lord West of Spithead
In the Navy, the rules are not quite so direct, but you are given guidance to be sure that you do not raise issues that would become extremely difficult. But I always felt that that gave you quite a lot of scope. As we know, rules are for the obedience of fools, and one was able to do quite a lot in those letters.
Lord Thomas of Gresford
I am grateful to the noble Lord, Lord Touhig, who drew my attention to a Scottish television report of September 2012, which says:
“Investigations into the deaths of Scottish military personnel killed abroad will be able to take place in Scotland for the first time from later this month. Up until now inquests into the deaths of servicemen and women have often had to be heard in England, forcing their bereaved families to travel long distances to take part in the hearings. But a change in the law means that from next Monday, September 24, the inquests will be able to be held north of the border”.
The mechanism is that the chief coroner, Peter Thornton, can,
“recommend to the Lord Advocate … that an investigation be transferred to Scotland”.
It arises out of 14 servicemen dying when their Nimrod crashed in Afghanistan; they were based in Moray, at RAF Kinloss, and the inquests were held in England.
Lord West of Spithead
We have gone down the route of the coronial system. As Plato said, only the dead see the end of war. Sadly, I am afraid that at some stage we will be in a war when we lose thousands of people, and I have no idea how the system will work at that stage or what the thought processes are about that.
Viscount Slim (CB)
Just to give noble Lords an example of an incident that might have involved an inquest and lessons learnt, in Korea, in an hour and a half, my battalion lost about—I am giving approximate figures as I do not remember them—probably nearly 30 dead and slightly more than 70 wounded. The reason was that during the battle, when we called for air support, we got some excellent American pilots, but they bombed us with napalm, instead of the enemy. We would call that “blue on blue” today, and you would have an investigation. Of course, it encouraged the enemy, who were the North Koreans at that time, to put in a counterattack, so we really had a very unpleasant time for a couple of hours. In those days, when we had a good number of soldiers, we had a reinforcement system, at the back of the Korean peninsula and in Japan, that sent you, within 24 hours, fully battle -trained soldiers to replace them—and we got about 100 or 110 good new soldiers.
Today, someone would want to have an inquest about why we were bombed. The chaps made a mistake, we had all those casualties—what use is an inquest? You have to get on with the battle. Lessons learnt—well yes, we can learn a lesson in 20 minutes about how to improve on what went wrong. In those early days of close air support, it was a lengthy process—not like today, when it is almost instantaneous. The military is the first to make amends for, and take decisions about, what went wrong and put that right. I do not see how a coroner with no military experience looking at that disaster would have helped at all. You must get on with the war.
The noble Earl was right to talk about what happens when a chap you have with you and who is your responsibility is killed. As the noble Lord, Lord West, said, you write to his mother, father, wife, daughter and whoever there is, and I am not sure that you write just a little—you write quite a lot. Those are the hardest letters to write of any kind. When everyone else is having a night’s sleep, you are up all night writing those letters—it is not just one. The commanding officer will write and so will his platoon or company commander. The wretched widow, mother or whoever gets two or three letters. On the whole, because you must explain how and why the son was killed, you write rather fully. You write in your own hand. When there are 30 of those letters to write, that is quite difficult. Do not tell me that the odd tear does not come down from the officer writing them.
Inquests play into the hands of the opposition nine times out of 10. On lessons learnt, nobody learns them quicker than the Army, Navy or Air Force.
Lord Touhig
My Lords, I will be brief. This debate is very important and shows that there has been a degree of overlap between inquests into the death of an individual and inquiries into perhaps wider problems that have arisen in conflict.
I spent 27 years working in newspapers and publishing before entering the House of Commons. I know only too well from my time as a young journalist covering inquests how important they were to a grieving family who had sometimes lost a loved one in the most tragic circumstances. With that experience of observing, I am not sure that inquests brought closure to a family coming to terms with a sudden and unexpected death but I have no doubt that they contributed to a sense of healing and understanding that the family was desperate for—an understanding of what happened and why some tragic death occurred to a son, daughter, husband or wife.
To no other group is that more important than to service families. A service family worries and frets as soon as its loved ones are sent on deployment somewhere in the world to defend Britain’s interests. We all agree that we have a duty of care to those who serve in our Armed Forces but we also have a duty of care to the families of those who serve. The noble Lord, Lord Thomas of Gresford, made clear that this is a probing amendment, really seeking to find out more about the present way in which these things operate. That is important and this is a step in the direction. It is fully supported on this side.
Earl Howe
My Lords, I found this an extremely interesting debate and I thank the noble Lord, Lord Thomas, for his proposal and his interest in ensuring that the death of a service person such as described in his amendment, where that tragically occurs, is reported to a coroner quickly for thorough investigation.
I listened with care to the views expressed by my noble friend Lord Attlee and the noble Viscount, Lord Slim, putting the opposite case. Our view is that reporting a death to a coroner is no more than the families of those killed in these circumstances deserve. The first thing I would like to do is reassure the noble Lord that the Ministry of Defence works hard to support coroners in all investigations connected to the Armed Forces. I am very happy to outline the current system, and I hope that I can reassure the noble Lord that that system is working well.
As I am sure the noble Lord will be aware, in the United Kingdom, where the death of anyone—whether subject to service law or not—is believed to have occurred by violent or unnatural means, there are already requirements in relevant legislations in England and Wales, Scotland and Northern Ireland for those deaths to be reported to the coroner or equivalent without delay. Naturally, the Ministry of Defence complies fully in the case of Armed Forces deaths, wherever and however these occur.
In England and Wales and in Northern Ireland, where the coroner believes a death to have occurred as a result of violent or unnatural means, the relevant legislation requires him or her to conduct an inquest. In Scotland, the procedure is called a fatal accident inquiry. I should just make clear that an inquest is an independent judicial inquiry conducted in England and Wales by a coroner into the facts surrounding a death that is sudden, unexpected or unnatural. Her Majesty’s coroners have a vital task giving certainty and reassurance to the bereaved and meeting the public interest by determining the facts of death where the circumstances were violent, unnatural or unknown. The Ministry of Defence will provide as much support as the coroner needs, and the Defence Inquest Unit has an important role in offering that support.
In recent years, a number of measures have been introduced to improve the inquest process for bereaved families of service personnel. These have included, in particular, measures to tackle delays in cases coming to inquest, including completion of inquests within six months wherever possible and flexibility to transfer investigations to another coroner. With regard to deaths of those serving overseas, there is a similar requirement, under existing legislation, for the authorities to notify the coroner. Once the deceased has been repatriated to England and Wales, the coronial process runs the same way as a death that occurred here.
The noble and learned Lord, Lord Hope, helpfully reminded us of the arrangements that applied in Scotland. The noble Lord, Lord Thomas, will, I am sure, be aware that until recently, not all service deaths in Scotland would have been subject to a fatal accident inquiry by the Crown Office and Procurator Fiscal Service. However, with effect from 14 January 2016, the introduction in Scotland of the Inquiries into Fatal Accidents and Sudden Deaths etc. (Scotland) Act 2016 ensures that all unnatural or violent deaths that occur as a result of a person’s duties will be subject to a fatal accident inquiry.
Concerning the scope of a coroner’s inquest, this is determined by the individual coroner on the basis of the evidence available to him or her. Where a coroner considers that the deceased’s right to life was not protected by the state, then the coroner is required to widen the scope of the inquest—or fatal accident inquiry in Scotland—to investigate the broader circumstances of the death. The Ministry of Defence will do everything possible to support the coroner, whatever the scope decided upon.
I hope that I have explained that the legal framework that the noble Lord’s amendment is aimed at achieving is already in place. I listened with care to my noble friend Lord Attlee’s concerns and those of the noble Viscount, Lord Slim, about the utility of inquests into the deaths of those subject to service law. I hope that they will allow me to reflect on what they said and to write to them with my considered observations. I will, of course, copy my letter to all noble Lords who have taken part in this debate. With those remarks, I hope the noble Lord, Lord Thomas, will agree to withdraw his amendment at this stage. Of course, if I can supply him with any further information on this subject, I would be glad to do so.
Earl Attlee
My Lords, I am grateful for the Minister’s response to my amendment. I have a wicked question to ask him, following the point made by the noble Lord, Lord West, about what happens if we start taking large numbers of casualties, especially if the circumstances of each casualty are different. Suppose in 100 days of an operation we take 10 fatalities per day. We are in for 1,000 inquests, and the circumstances of each one are different. Presumably at some point as a conflict escalated from peacekeeping to warfighting and, to put it bluntly, it was not going very well, we would have to suspend the system of inquests. It would be ridiculous—God forbid we could have 5,000 outstanding inquests! We would get to a point where we would have to stop the inquest system. That proves my perverse law that the scrutiny of each casualty is inversely proportionate to the number of casualties we take.
Earl Howe
My noble friend is right that that is a question from left field because I do not think I can answer him substantively today. Clearly, in the circumstances that he outlines the coronial system would be overwhelmed and one would have to consider the best way of arriving at the end point that we would all wish to see, which is that for all those deaths, no matter how many, an explanation is provided to families of how those people died and what lessons were to be learned from that. I do not think I can usefully speculate in these surroundings about what might happen in particular circumstances, but I will reflect on my noble friend’s question, and if I can give him a better reply in the letter that I have undertaken to send to him, I will be happy to do so.
Earl Attlee
I do not really expect the Minister to give me a precise figure, but I am very grateful to him for saying that he will reflect on what I have suggested. I do not expect him to get particularly far, but I am grateful for his attitude to my speech.
Lord Thomas of Gresford
My Lords, those of us who were around in 2009 will recall the great controversy in the Coroners and Justice Bill about whether we should have a chief coroner. Eventually the argument prevailed that we should have a chief coroner. We have a highly competent, able and experienced person in the shape of Peter Thornton. I am sure he will deal with many problems unless and until the system is overwhelmed, as the noble Earl suggested. I am very reassured, and I am grateful to the Minister for his careful response which brings me up to date on where we stand with the inquest system. I will reflect on what he said to see whether there is any necessity for me to take this issue further. I beg leave to withdraw the amendment.
Earl Attlee
“Guidance on definition of “on duty” for reservists
The Defence Council shall promulgate an instruction or notice giving clear guidance as to when a reservist is on duty and when he or she is not, and any such guidance must cover, but need not be limited to—(a) all hours of a day when it is intended that the reservist is to be paid,(b) the period after dismissal parade but when the reservist is still on Ministry of Defence premises.”
Earl Attlee
My Lords, I shall speak also to Amendments 19 and 20. This group of amendments explores when a reservist and, in some cases, a regular is or is not on duty, is subject to military law and can be expected to be supported by the MoD. When the Minister has replied, I hope the Committee will have a much clearer understanding of the position.
For most of my active years in the TA—now the Army Reserve—my understanding, and certainly my ethos, was that I was subject to service discipline for the full 24-hour period for which I was to be paid. This applied to both my commissioned and my non-commissioned service. On a Saturday morning, I might be in bed until 0600 hours; I might not be on parade until 0800 hours; work on military activities might finish at 1800 hours; and we might be engaged in social activities, on or off defence premises, at 2200 hours. I am absolutely certain that our ethos was that we were subject to service law all the time and that the chain of command was effective. This state of affairs did not seem to deter anyone from joining the TA, even if they were aware, nor did it encourage anyone to leave. Indeed, a reserve unit is a safe place precisely because there is an effective chain of command, with someone in charge all the time.
Nowadays there seems to be some doubt or uncertainty. Now it is being suggested that reservists are not subject to service law after dismissal parade, even though they are still on defence premises. It seems most odd that one would want to collapse the system of command, control, good order and military discipline at some artificial and very uncertain point in the day, which may also have to be moved back at a later point for some good reason.
There is also uncertainty for reservists when travelling to and from their place of duty. It now appears that they are not under service law at that point, but what happens if some reservists are acting in a way that would tend to bring their service into disrepute, but not so badly as to interest the civil police? If an officer, senior NCO or service policeman chanced upon the incident, they could not take any action because the reservist would not be under service law. In this case of any insubordination to a regular or reserve officer, nothing could be done. One of my amendments calls for a defence instruction and notice—a DIN—on the issue, but the Minister can start by explaining the situation to the Committee and telling us exactly when a reservist is or is not on duty. I am sure that is his intention.
My other amendments deal with the related issue about duty, which is about self-tasking in a range of emergencies. The first point for the Committee to understand is that ordinary service personnel never have the powers of a police constable or a firefighter. There is no need and that is not the role of the Armed Forces, but I and a very large proportion of the Armed Forces, both regular and reserve, are hard-wired to intervene in any form of emergency. The most obvious example is any form of transport accident. We would not fail to prevent an emergency situation deteriorating until the emergency services arrive, and we would do all we can to preserve life and limb, and to promote recovery. However, we are trained to assess risk and not become casualties ourselves. Officers and senior NCOs can exercise a fair amount of command and control just through leadership and personality. More junior personnel will find that they can often be far more effective and willing if they are in uniform.
None of this will be a surprise to the Committee, but what happens if there is not a happy outcome arising from the resolute actions of the serviceperson, whether he is a reservist off duty or a regular serviceperson off duty? I will not weary the Committee with a scenario, but perhaps there is some legal issue despite the serviceperson being compliant with the terms of my amendment. My understanding is that if the serviceperson is not on duty, they are on their own. Of course, various press offices in the MoD will lap up any easy and good news stories, so can my noble friend the Minister confirm to the Committee that, in a civil emergency, a self-tasking, off-duty serviceperson is on his own and there will be no “big firm” back-up from the MoD?
My next amendment is closely related to being on duty. The Committee will recall the failed terrorist attack on a train in France near Arras last summer. The attacker was heavily armed with automatic weapons, but there were no fatalities thanks to the very courageous actions of two off-duty US servicemen who disarmed him. It is important to understand that they could have been killed. They did what we expected them to; they certainly did not wait for any orders or rules of engagement. This type of attack is not a hostage situation, where the tactics would be to drag out the situation and try to make friends with the hostage-taker if at all possible. In this case, it is necessary to destroy or defeat the attacker in the shortest possible time to minimise the overall number of civilian casualties. Such an incident is likely to be particularly messy. The amendment is designed to ensure that a serviceperson who is self-tasked in such a situation is on duty, and in the aftermath will be supported by the MoD and HMG in the same way as if they were on a conventional operation.
It would also ensure that he or she knows that the law recognises in this particular situation that there may be collateral damage. I am not suggesting that the proportionality test of the law of armed conflict can be ignored; it certainly cannot.
The counter to my amendment is that it is not necessary because the law already allows for it. That may be the case but why should a serviceperson who has acted courageously and skilfully be put through all the worry? If the worst happens and they are killed, will the pension arrangements and death-in-service benefits be any different from if they were on duty in the normal way? In such a situation, would it not be better for the serviceperson, self-tasking in such a matter, to be considering military matters, such as estimating the number of rounds fired by the attacker rather than worrying about his or her legal position? I beg to move.
Lord Tunnicliffe
My Lords, on Amendment 18, which seeks clarity, we have nothing to add and look forward to the Minister’s response.
Amendments 19 and 20 seem to want to create an individual who is, in terms of rights and indemnities, somewhere between a citizen and a constable, or perhaps a firefighter. That would be a significant new piece of law. It would have to be accompanied by a significant portfolio of training in the management of risk to self and collateral damage. It seems to me that we would end up with the implication that the MoD had some sort of duty of care to make sure that the individual was equipped to behave in some way differently from a citizen, and we would end up in some area of certification whereby individuals would have to be seen to be competent not only in their straightforward military duties but in this self-tasking. There could be almost a proliferation of miniature armies among the citizenry.
I find it difficult to believe—I may be persuaded otherwise—that the complexities and costs of such a concept would justify the benefits. If the Government were to come forward with such a proposal, that would be a different matter. I would expect to see a body of research that looked into the various scenarios in which it might apply. I would expect that research to include an analysis of unintended consequences and how the appropriate ancillary rules would support those consequences, and I would expect extensive consultation. If such a concept were to come forward from the Government, accompanied by that level of analysis and consultation, of course we would have an open mind and treat it on its merits. Introducing such a powerful, new legal concept through an amendment to the Bill is not something we feel we can support.
Earl Howe
My Lords, I am grateful to my noble friend for setting out the rationale for his Amendment 18. However—without, I hope, disappointing him too much—I am not convinced it is necessary to set out in the Armed Forces Bill a statutory requirement for the Defence Council to issue guidance on when a member of the Reserve Forces is on or off duty.
We ask a great deal of our reservists, who, in many cases, attend training and fulfil military duties alongside their full-time civilian employment, as well as committing to deploy on operations when they are required to do so. It is self-evident that in return for this dedication, the MoD needs to make it clear how members of the Reserve Forces will be treated and supported when they are on mobilised service or training, or travelling to and from their reserve centre. Principally, we set this out because reserve service is not risk-free and we need to be able to give reassurance that we will support people properly if they suffer an injury or illness during service.
When is a service man or woman subject to service law? Section 367 of the Armed Forces Act 2006 sets this out:
“Every member of the regular forces is subject to service law at all times”.
The position for reservists is different. Reservists are subject to service law in the following circumstances only: when they are mobilised—called out; when they are in full-time reserve service; when they are undertaking any training or duty; and when they are serving on the permanent staff of a reserve force.
Single service regulations, which are made under the Reserve Forces Act 1996 for each of the reserve forces, already define the circumstances in which a reservist is to be regarded as on duty. As might be expected, this includes during Armed Forces training but it also includes time while they are on MoD premises for the purpose of training, or time spent travelling to and from training or duty for which they are entitled to claim payment. Travel to a mobilisation centre in answer to a call-out order is also regarded as duty. The regulations are principally intended to define the MoD’s liabilities in the event that a reservist sustains an injury at any of these times.
Of course, the actions of a reservist at a time when they are not on duty may none the less be relevant to their service; for example, reserves regulations stipulate that officers may at any time have their commission terminated, be called upon to retire, or be called upon to resign their commission because of misconduct, whether or not that misconduct took place during training or other duties. It is also fully understood by reservists who are present on service premises at times when they are not on duty—for example, those making use of unit gymnasium facilities in their own spare time—that they are to conduct themselves at such times in the same manner as they would were they on duty.
It is worth clarifying that the practice of payment of members of the Reserve Forces for training or other duties in increments of a day’s pay, half a day’s pay or a quarter of a day’s pay is not directly linked to the issue of when during that day the reservist is on duty. Thus a reservist who works an eight-hour day will receive a full day’s pay for it—the same payment as he or she would receive for working for all 24 of the hours in that day. However, that does not mean that the reservist who works an eight-hour day is on duty for all 24 of the hours in that day. It might be considered odd to suggest that they would be. It would be surprising to suggest that a reservist who left their reserve unit at 1600 on a Saturday after completing an eight-hour day and returned to their civilian life—and perhaps their civilian employment—would still be on duty until midnight.
For the reasons I have set out, and given that existing regulations already contain provision for when members of the Reserve Forces are on duty, I hope my noble friend will be reassured and will agree to withdraw his amendment.
I turn now to the amendments which would make provision with respect to members of the Armed Forces who encounter civil emergencies or terrorist attacks. Amendment 19 makes provision with respect to members of the Armed Forces who take it upon themselves as individuals to intervene to help in civil emergencies where they have received no orders to do so. I am sure this is intended to encourage them to intervene in such circumstances. In the case of members of the Reserve Forces, this would include interventions when they were not otherwise on duty. However, it would apply only to reservists who were in uniform and were either on duty, were intending to be on duty that day or had been on duty that day.
I read subsection (3) as intending to allow provision to be made to place service personnel under an obligation to intervene in certain circumstances. Subsection (4) would offer those who intervene indemnities from legal action. Amendment 20 makes similar provision with respect to intervention of members of the Armed Forces during terrorist attacks. This new clause would apply to reservists and members of the regular forces whether or not they were in uniform at the time.
The first point to make is that the criminal law provides protections for members of the public who use force for the purposes of self-defence, defence of another, defence of property, prevention of crime and lawful arrest, although the force used must be reasonable in the circumstances. Thus a member of the Armed Forces, whether in uniform or on duty or not, who intervenes during a civil emergency or a terrorist attack and uses reasonable force for any of the purposes to which I have just referred has a defence to charges under the criminal law.
However, Amendments 19 and 20 suggest that my noble friend is concerned that a person who intervenes in an emergency situation to prevent loss of life, serious injury or serious damage to property may be at risk of being sued in the civil courts. We think it highly unlikely that a person who did what they honestly believed was reasonable and necessary in the circumstances, during a civil emergency or a terrorist attack, to prevent loss of life, serious injury or serious damage to property could be successfully sued in respect of injury or damage caused by them in doing so.
It is not immediately apparent why an off-duty member of the Armed Forces who decides to intervene to help in a civil emergency or a terrorist attack should be in any different position in law from any member of the public who does so. No doubt contrary to my noble friend’s intention, the amendment might in fact make a claim in respect of the actions of a member of the Armed Forces more likely, because those actions would not simply be those of a member of the public in their private capacity but would instead be those of the Armed Forces.
Another concern that I have with these new clauses is whether, if a member of the Armed Forces intervened in a situation and was then deemed to be on duty and perhaps somehow under orders, there could be a risk that they could find themselves not supported but actually challenged by the chain of command as to the usefulness or otherwise of their intervention. While we would not want to deter off-duty members of the Armed Forces from intervening in a personal capacity in an emergency situation, we do not think that it would be appropriate for them to be duty-bound to intervene or to think that they were. Would we want an unarmed, off-duty member of the Armed Forces to think that they were duty-bound to tackle heavily armed terrorists and that they might face disciplinary action should they fail to do so?
We should also not rule out the possibility that their efforts, however well-intentioned, may not necessarily be welcomed by the police or other emergency services. It is long-established that it is only in very exceptional circumstances that members of the Armed Forces should deploy in an official capacity on the streets of the United Kingdom. The civilian emergency services rightly have primacy in such matters.
The notion that individual service personnel may deploy as members of the Armed Forces on official duty not under orders but instead, in effect, on their own say-so would also represent a very significant departure from very long-established practice, under which the use of service personnel is authorised and regulated under orders through a chain of command. I am afraid that it is a departure that the Government cannot support.
I also note that Amendment 20 would purport to allow members of the Armed Forces to use,
“all necessary steps to neutralise”,
an attack. The criminal law allows only the use of such force as is reasonable in the circumstances. This is the standard that applies not only to members of the public generally but also to the police and members of the Armed Forces who are under official orders to tackle armed terrorists. We do not see any basis for departing from this long-established standard.
In short, we do not consider that the proposed amendments are necessary to allow members of the Armed Forces to intervene in the circumstances discussed and we are not convinced that it would be appropriate to put in place the proposed legal rules regarding such intervention. I therefore ask my noble friend not to press his amendments.
Earl Attlee
My Lords, I am grateful to all noble Lords who contributed. The Minister gave me exactly the answer I would expect. The first part of his answer was particularly useful so I am grateful to him for that. I am a little surprised by the response of the noble Lord, Lord Tunnicliffe, because nowhere was I suggesting that there would be any special training. It was basically whether off-duty servicemen should have any top cover from the MoD. I do not see that there would be any extra costs in that. It certainly would not be a new task or mission for the MoD. I am still very grateful for the noble Lord’s response and beg leave to withdraw the amendment.
Earl Attlee
“Career employment group
(1) Subject to subsections (2) and (3), no female member of the armed forces shall be allocated a “career employment group” whose primary role is to close with and then engage or destroy the enemy in close combat.(2) In this section, “career employment group” means any alpha-numeric reference number to identify a trade and used for personnel management.(3) Subsection (1) does not apply to a female member of the Armed Forces who has been specially selected on the basis of being extraordinarily fit and having exceptional mental and other capacities.”
Earl Attlee
My Lords, this is a short probing amendment to explore where the Government are on the issue of allowing women to serve on the front line. I do not intend to return to it at a later stage.
There is a wide variety of important roles for women in our Armed Forces and they make a significant contribution. In many cases, they stand in harm’s way and take the same risks as their male counterparts. Furthermore, they can increase operational effectiveness. My only concern is that perhaps the range of roles was increased merely to plug a recruiting gap that should have been dealt with by improving pay, terms and conditions of service, and accommodation. There are many roles in which women can perform better than men, including traditional male roles. However, they are excluded from roles that are primarily to close with the enemy and kill him.
The intention of my amendment is broadly to allow women to serve in the Royal Armoured Corps but not infantry regiments, but I accept that it may not actually achieve that. Subsection (3) is merely an exemption, a get-out provision, to allow posting and recruitment for very special roles including but not limited to Special Forces. I do not see any need for the Committee to debate this provision as it is merely to avoid any undesirable effects of the amendment.
My concern is that the roles that I seek to exclude require a very high level of strength as a prerequisite. My first question for the Minister is: what proportion of females does he think can meet the current fitness and strength requirements for the infantry? I ask because very few women are as strong as the average male soldier. Secondly, do the Government have a target for the percentage of our Armed Forces that should be female? I would be very interested to hear the views of the Committee on this issue. I beg to move.
Baroness Jolly
My Lords, I am sure the noble Earl, Lord Howe, will correct me if I have this wrong when he sums up but I understand that a Statement on this issue is expected in the near future, and that both the PM and the Secretary of State expect to lift this ban within a year.
Perhaps the noble Earl, Lord Attlee, could help me. I want to make sure that I understand what his amendment is trying to do, taking the three subsections together and weaving them into an argument. I understand the noble Earl to be saying that a female member of the Armed Forces can engage or destroy the enemy in close combat only if they are specially selected for being extraordinarily fit and having exceptional mental and other capacities. Is that right?
Earl Attlee
My Lords, I did touch on subsection (3), the purpose of which is to ensure that we do not prohibit females from being posted to Special Forces units. Perhaps that would not be suitable for the SAS or SBS but perhaps other roles could be caught by my amendment as drafted. It is merely to make sure that the Minister does not criticise me for causing unnecessary problems. I suggest to the Committee that females can serve in the Royal Armoured Corps, operating an armoured fighting vehicle, but they should not be able to be in the infantry, sticking the bayonet into the enemy.
Baroness Jolly
I thank the noble Earl for that clarification. I rather suspected that that was what he was going to say. I was wondering about the words “extraordinarily fit” and,
“exceptional mental and other capacities”.
I wondered how these would be determined, defined and measured. The noble Earl has helped me out to a certain extent there.
We know that women already serve as medics, intelligence officers, fighter pilots and submariners. They have been awarded medals for their bravery in battlefield situations. Should these criteria not be applied to anybody, men or women? They sound gender-neutral. I see what the noble Earl is trying to achieve but I am not sure he has achieved it. It seems that it could apply to either men or women. Whatever happens, whoever we send into battle, we need the people engaging for us to do so based on their abilities, not their gender.
Earl Attlee
My Lords, my worry is that, if the Government decide that, yes, we can have females serve in the infantry, the fitness and strength standards for a combat infantryman would have to be lowered. That would mean that we lower the capability of the infantry—they would not be as fit and strong—in order to have a unisex standard.
Baroness Jolly
I understand what the noble Earl is trying to get at. Conversations I have had about this suggest that the number of women who are likely to fit the category will be very small indeed. I am sure that they will ensure that they have all the other characteristics that the noble Earl suggests they should have in order to engage.
Lord West of Spithead
My Lords, we know very well that women can be amazingly brave. We have always been willing in wars to let them die. Indeed, when I did my study into the employment of women at sea, it was quite clear that they could do all the jobs in ships at sea. Indeed, quite often they were better at some jobs than young men, particularly some of the computer work that was being done. However, there is a concern when it comes to hand-to-hand fighting and the like. With a volunteer force, we will have to allow women to become part of the infantry and the Royal Marines. What we must not do is lower the physical standards. There must be no lowering of them, so it will be a small number of women who can do that. Certainly, my judgment of women is that a lot of them are probably far better at killing people than men are, so I do not think that that is a problem, either.
However, I have a concern. One speaks in generalisations about training and other things. As I said, we must not lower that standard. When we talk in generalisations, women have 30% less upper body strength than men. That is across the whole population. Yes, in this volunteer service we will get away with this, but we must not let it affect operational capability or cause us too much of a problem administratively because too few women will be able to do it and therefore one makes special rules and it becomes administratively very difficult. Again, it comes to this business where, one day, we will have a war again, I fear—no one can predict it—and in the case of a general war, would we in this country conscript women as well as men into the infantry? That is an interesting question. That is all I have to say on this subject.
Lord Touhig
My Lords, more than 20 years ago, as a parliamentary candidate in Richmond in west London, I addressed a Labour Party women’s group, telling them that as a country we wasted a small fortune on educating girls and women at all. Before they could leap from their seats and warmly shake me by the throat, I went on to say that as a man, I had a family and a career but all too often women were denied this and had to make a choice of having one or the other. We spend a fortune on their education and then put barriers in their way to having a career and a family. For me, that is plain wrong.
Thankfully, as time has passed, more and more opportunities exist for women to enjoy the same lifestyles as men and to have a family and a career, but we are still far from achieving true equality. Where we can take steps to achieve this, we should do so. I therefore welcome the Government’s initial commitment to allowing women to serve in front-line roles in the Armed Forces. This amendment would prevent that and would deny a fit, well-trained, skilled and experienced woman combatant the same career progression as her male counterpart. This will always be a controversial and complex matter, as my noble friend Lord West pointed out, but if we are serious about the equality agenda we cannot deny women the same role that we offer men.
Throughout history womankind has played an exceptional and extraordinary role in our development, almost always against the odds and facing prejudice. Some would argue that in affording women this opportunity we are setting a precedent. Yes, we are—about time, too. I have no doubt that the first human who stood up straight and started walking on two legs was watched by those still on all fours, who tut-tutted and complained that this was setting a precedent. They were proved wrong, and I very much regret to say to the noble Earl, Lord Attlee, for whom I have the highest regard and respect, that I believe that his amendment is wrong, too. On Monday in the House we will debate a Motion to take note of the progress made in the United Kingdom in women’s representation and empowerment, 150 years after the 1866 petition to the House of Commons for women’s suffrage. It is about time we caught up—especially in the Armed Forces.
Earl Howe
My Lords, the amendment proposed by my noble friend would have the effect of excluding women from those roles in the Armed Forces, where the primary aim is to,
“close with and then engage or destroy the enemy in close combat”.
As I know my noble friend agrees, women play a vital role in the Armed Forces, with 70% of all posts being open to women. Women have made and continue to make a valuable contribution to current and recent operations, including Afghanistan. They are fundamental to the operational effectiveness of the UK’s Armed Forces, bringing talent and skills across the board.
My noble friend asked whether there was a target for the percentage of the Armed Forces who should be female. The answer is: yes, the Ministry of Defence has a target for recruitment of women into the Armed Forces of 15%. As at 1 October 2015, 10.1% of the Regular Forces were female, and that has remained stable since 1 October 2014. So we have a way to go in this area.
Women already serve in a variety of support roles with front-line units, including as medics, fire support team commanders, military intelligence operators, counter-improvised explosive device operators and dog handlers. Under the Equality Act 2010, the Armed Forces are permitted to exclude women and transsexuals from employment in some areas where it is necessary and appropriate to ensure that the combat effectiveness of the Armed Forces is maintained. However, under the equal treatment directive, the UK Government are obliged to review this exclusion every eight years. To that end, studies were conducted in 2002 and 2010. Women are currently excluded from 30% of posts in the Army, 21% in the Royal Navy and 6% in the Royal Air Force. The units of the Armed Forces that are affected by this are the Royal Marines general service of the Royal Navy, the infantry and the Royal Armoured Corps of the Army, and the Royal Air Force Regiment.
In May 2014, the then Secretary of State for Defence announced a review of the exclusion of women from ground close combat roles. The review was led by the Army and it was completed that year. The review achieved a considerably better understanding of the physiological considerations than existed previously, due to significant improvements in the accuracy of data available and the fact that the military female cohort is both larger and more representative than that available to previous studies.
While defence welcomes the prospect of opening further military roles to women, the findings of the 2014 review identified that further physiological research is required into the high physical demands inherent in ground close combat roles and the associated potential impact on women’s health. To lift the exclusion without doing this research could place women at risk of personal injury. The physiological research programme is now examining the challenges and risks of including women in ground close combat roles in order to inform a final decision.
I need to make it clear to my noble friend that the women in ground close combat roles review follows the principle that all roles should be open to women unless it can be demonstrated that the exclusion was necessary to maintain combat effectiveness. Therefore, in the event that the exclusion is lifted, any woman serving in a combat role will have passed the physical tests and training to be there in her own right. I can reassure my noble friend on one important point. The requirement to maintain combat effectiveness remains the paramount consideration. Training standards will not be lowered in order to accommodate women and this, in turn, will ensure that the combat effectiveness of ground close combat units is maintained.
The Prime Minister and the Defence Secretary are united in wanting to see all roles in the Armed Forces opened up to women. In answer to the noble Baroness, Lady Jolly, I cannot be precise on dates, but the decision on whether or not women should be allowed to serve in ground close combat roles is expected by the middle of this year. I hope that this explains our position and, in view of what I have said, I hope that my noble friend will agree to withdraw this amendment.
Earl Attlee
My Lords, I am grateful to all noble Lords who have contributed to the debate. I am not surprised that the noble Lord, Lord Touhig, had a go at me. I went part of the way: I said that we could have women in the Royal Armoured Corps because there is no logic for why a woman should not be able to operate a tank or an armoured fighting vehicle. In fact, there is a possibility that women may be better in certain roles.
The noble Lord, Lord West, was very cruel to me because he took away one of my killer questions to the Minister, which is: if we were in general war and had to conscript people, would we be happy to conscript women into the infantry? I do not think the Minister needs to answer that because it is far too tough a question.
I would like an assurance from the Minister that he will not authorise the fitness and strength standards in the infantry to be lowered. Can we have an assurance that that will not happen? If there are one or two superhuman women who can do it, fine. But as soon as we lower those training and fitness standards, we will have reduced the combat effectiveness of the infantry.
Earl Attlee
My Lords, my position is that the solution outlined in my amendment is the right one. In other words, yes to women in the Royal Armoured Corps but no to the infantry and the Royal Marines. We will have to see what happens. In the mean time, I beg leave to withdraw my amendment.
Lord West of Spithead
“Compensation for veterans with mesothelioma
(1) The Secretary of State must, within two months of the passing of this Act, put in place an armed and reserve forces compensation scheme, through which a person who has served in the armed or reserved forces can claim a lump sum of at least £140,000 in respect of a diffuse mesothelioma diagnosis.(2) The scheme must provide that all persons who have worked in the armed forces and have been diagnosed with diffuse mesothelioma as a result of that employment are eligible to claim the lump sum specified in subsection (1) irrespective of —(a) the date on which they were diagnosed; and(b) whether they are in receipt of a war pension under a separate scheme.(3) In this section, “armed and reserve forces compensation scheme” has the same meaning as in section 1 of the Armed Forces (Pensions and Compensation) Act 2004 (pension and compensation schemes: armed and reserve forces).”
Lord West of Spithead
My Lords, mesothelioma is a most dreadful disease, as we all know—and very difficult to pronounce, if I may say. It is bad enough for a veteran to have it, let alone having to suffer the unfairness of limited compensation compared to his civilian counterpart. What of the armed services covenant?
A campaign has been run by many, not least by my fellow Labour colleagues and the noble Lord, Lord Alton, who I see is sitting in his place. It seems now to have borne fruit: parity of payment for all veteran sufferers now seems to have been agreed. Perhaps the Minister could confirm that this is the case, as no Statement has been made to this effect in the House. The proposals set out in the amendment in the name of the noble Lord, Lord Empey, make sense unless these things are being done by some other means, and I am not sure whether they are.
My last few words relate to the need for much more research into this killer disease and much more emphasis on that. More needs to be done, but, crucially, there needs to be a co-ordination of the results of research, particularly between the four big teaching hospitals that are working in this arena. I am led to understand that some sort of central analysis unit, funded by LIBOR money, is being set up to do this work. Will the noble Earl let me know if this is the case?
Earl Howe
My Lords, without wishing to preclude further debate on this amendment, it may be for the benefit of the Committee if I confirm the announcement made by my ministerial colleague in another place on 29 February. This was that the option of receiving a lump sum of £140,000 will be extended to veterans in receipt of a war pension for diffuse mesothelioma who were diagnosed before 16 December 2015 and also to those who have yet to have a claim accepted. We listened to the views of parliamentarians and ex-service organisations, particularly the Royal British Legion, which commented that the Government had “done the right thing” in announcing these changes to the compensation pay-out.
Lord Alton of Liverpool (CB)
My Lords, I support the amendment moved by the noble Lord today in Committee. I apologise to the Committee, as, although I attended some of the Second Reading debate, duties elsewhere in the House prevented me from being able to be present for the Minister’s reply. I therefore did not speak at that stage and I crave the indulgence of the Committee in speaking today.
Noble Lords might know that I currently have before the House a Private Member’s Bill which has received a Second Reading. It enjoyed all-party support and would provide funding for research—to which the noble and gallant Lord just referred—into the causes of mesothelioma, a disease which the Government themselves predict will take a further 60,000 British lives. We have the highest incidence of mesothelioma anywhere in the world. No effective treatment exists; there is no cure and once diagnosed, the average patient dies within a few months.
On introducing that Bill, and in relation to our Armed Forces, I said that,
“the failure of the 2014 Act to include provision for compensation for our servicemen who die of mesothelioma is a glaring anomaly. The British Legion, the Royal Navy & Royal Marines Charity, the Royal Navy Royal Marines Widows’ Association, the Royal Naval Association and others all support calls for change”.—[Official Report, 20/11/15; col. 385.]
I contrasted at the time the position of a 63 year-old civilian, who might expect to receive around £180,000 in compensation, compared with a veteran’s entitlement to a year’s worth of war pension which, paid at the maximum rate for a non-married naval veteran, amounts to just £31,000. I argued then that veterans should be offered compensation at least equal to that which the courts and the Government have decided that civilians deserve. The unequal treatment of our servicemen and servicewomen amounts to a serious breach of the Armed Forces covenant, which is supposed to ensure that veterans are not disadvantaged because of their service.
I am particularly grateful, therefore, that the department has recognised that this is an anomaly that needs to be rectified, and I strongly welcome what the noble Earl, Lord Howe, said to the Committee a few moments ago. Of course, this echoes what his honourable friend in another place, the Parliamentary Undersecretary, recently told the House of Commons. He will also know that there was not just that anomaly: there was an anomaly within the anomaly in that a very small group of people—some 60—had been excluded from the scheme because of the way in which the timeline in the announcement fell. It is particularly good that the noble Earl has been able to say today that that will be removed—that the effect of the amendment that the noble Lord, Lord West, has put before the Committee will be realised.
The noble Earl will also know, especially given his previous duties at the Department of Health, that this is a disease that does not have a cure and needs much more basic research. He will also know that until the mid-1960s, blue asbestos—crocidolite—was widely used in the insulation of Royal Navy vessels. In consequence, many Royal Navy personnel have died of mesothelioma, particularly those working in boiler rooms and in engineering trades but also those on board ships during refits.
Professor Julian Peto, in an analysis for the Royal British Legion, estimates that a further 2,500 Royal Navy personnel will die of mesothelioma between now and 2047. On 8 December 2015 I asked the noble Earl in a Parliamentary Question how the Government intend,
“to assist members of the armed forces who are diagnosed with mesothelioma in the future; and what assessment they have made of whether those individuals should receive financial support at least equivalent to that of civilians diagnosed with the disease”.
The noble Earl replied that this was “a complex matter” and that:
“The Department commissioned advice from the Independent Medical Expert Group to look at mesothelioma and the awards paid through the WPS”.
The noble Earl promised an announcement and we have now received that.
However, if I may say so, there were also written into this and other Questions tabled at the time questions about the levels of research and indeed the data collection by the Government. I refer particularly to the comments of Commodore Rhod Palmer, who is a third-generation Royal Navy sailor diagnosed with mesothelioma in April 2015. Incidentally, he is one of those who would have been excluded from the new compensation scheme—the anomaly within the anomaly. He said:
“No amount of money will ever compensate sufferers and their families for a preventable death. However, it is a real breakthrough that the Government will treat all current and future sufferers of mesothelioma exposed to asbestos during their Service under comparable terms as civilians. This payment allows patients with mesothelioma to make arrangements to maximise their quality of life during this terminal illness and to support the family that they leave behind”.
He went on to say:
“Looking to the future, I strongly encourage further funding of research into advancing the treatment of this devastating condition”.
The noble Earl will recall that when he was at the Department of Health I moved an amendment to the Mesothelioma Act to provide financial support from the levy on the insurance industry, which was defeated by a handful of votes. At the time four insurance companies were voluntarily supporting research and the noble Earl believed that many of the other 120 insurance companies covered by the levy would voluntarily join the other four in supporting research into this killer disease. Sadly, I have to inform the noble Earl and the Committee that the opposite has happened, with only two companies now voluntarily supporting research. In supporting this amendment and welcoming this week’s announcement, I ask the noble Earl to study the correspondence that I have sent him today, which includes a letter sent on 18 February to Mr George Osborne, the Chancellor, by Professor Sir Anthony Newman Taylor CBE of Imperial College, urging him to release LIBOR funds—referred to by the noble Lord, Lord West—to help fund a national mesothelioma research centre, which Imperial wishes to create with the National Heart and Lung Institute, the Royal Brompton Hospital, the Institute of Cancer Research and the Royal Marsden Hospital. Incidentally, in that letter Sir Anthony says that the current rate of death is around 3,000 a year. He says:
“There is an urgent need to find curative treatment for this awful disease”.
He says that modern genetics hold great promise but that,
“sadly, to date, mesothelioma has not been the focus to achieve this at any research centre in the UK, or, as far as I am aware, at any centre worldwide”.
The Committee will recall the decision of the Chancellor to transfer some £35 million from the fines levied on the banks for attempting to manipulate the LIBOR interest rate. That money was transferred to the MoD for use in supporting the Armed Forces community. The proposal from Imperial College would be an imaginative use of some of those funds to help to find cures for a disease which has claimed too many lives among members of our Armed Forces. Following our debate today, therefore, I would be grateful if the noble Earl would write to me with a considered response to Sir Anthony’s initiative.
I shall conclude with a word about data collection within the Armed Forces. In February 2014, I asked the Government,
“how many of the annual fatalities caused by mesothelioma involve former members of the armed forces; what data are kept on the cause of death of former servicemen; and what research they plan to commission into the incidence of mesothelioma amongst former servicemen”.
The then Parliamentary Under-Secretary, the noble Lord, Lord Astor of Hever, replied:
“Data on the number of annual fatalities caused by mesothelioma does not identify those who were former members of the Armed Forces … The MOD has no plans to commission research into the incidence of mesothelioma amongst former Service Personnel”.—[Official Report, 11/2/14; col. WA 125-6.]
It is the duty of the department to do that, and it should have such plans. I encourage the noble Earl to revisit this issue. This should not be a case of don’t ask, don’t say. This is about people’s lives and our duty of care towards them. Anecdotes and speculative figures are no substitute for hard-edged data and empirical research, and today I again ask that data collection be instigated.
The noble Lord pursued this argument in June last year when he asked Her Majesty’s Government:
“What data is collected about the incidence of mesothelioma among members of the armed forces; what studies of this issue have been conducted; what estimates they have made of the future incidence of mesothelioma among service men and women and of connected fatalities”.
Those questions still have to be answered, and I hope today’s debate will help us to attend to that. In reply the Minister said:
“The MOD has not conducted studies or research about mesothelioma”.
Surely it is high time it did.
The London School of Hygiene & Tropical Medicine produced an estimate in 2009 that about 2,500 Royal Navy veterans will die from mesothelioma between 2013 and 2047. Surely, we should be commissioning research across the services to establish what the likely incidence will be and, more importantly, what we can do to avert this suffering and these deaths. Surely we should be supporting the work of our scientific community and offering hope to those who have been diagnosed with this horrible disease.
Lord Empey
My Lords, I support the amendments and welcome the statement from the Minister. It was sobering when the noble Lord, Lord West, said at an earlier stage that he and others played snowballs with this material in vessels. Sadly, anybody who comes from an industrial city such as mine with shipyards and other related businesses knows that that was common practice. Dust and fibres were brought into homes on clothing, and that transferred the disease to families, which is why in 2001, when I was Enterprise Minister, I set aside £180 million to cover what we considered to be the compensation required for people who had previously worked for shipyards, which were a nationalised business at the time, to cover deaths to 2050. The noble Lord, Lord Alton, who has done enormous work on this issue over recent years, says the same thing—that that is the sort of timescale.
What is not mentioned is that while some people think this disease is literally dying out, it may be in this country, but it is not dying out in the world. I am sure we have all seen the horrifying photographs of women in the Indian subcontinent surrounded by mountains of this material which is coming off ships that are being scrapped on beaches in Bangladesh, India and Pakistan. They are being dismantled, and these women are sorting this stuff out. It is horrifying to think of the downstream consequences that will produce. Therefore, anybody who thinks this matter is going to be settled in a few years is wrong.
In the amendments in my name in this group I want to draw attention and attempt to raise awareness through publicity among former members of the armed services who may be at risk or who may be susceptible to this disease. It is important that ex-service personnel and their families are made aware of the changes that are now taking place. I was also hoping for a monitoring process to ensure that the comprehensive and prompt detection of cases is also part of it. If people have been exposed, while it may not be currently curable the management of the disease can be handled. I had two neighbours who got this disease; it was a terrible death that they suffered. One of those individuals spent just one year of his entire career in the shipyard, where he, from time to time, went through an area where the electrical materials were being covered in asbestos. One exposure to one fibre, if you are susceptible, can be enough. That was 40 years earlier. It does not discriminate between a person’s normal health, class or physical condition. It is just one of those things: some people are susceptible and others are not. It does not matter whether you are exposed to it for one day or for 20 years. If you are susceptible, you are susceptible.
Lord Brown of Eaton-under-Heywood
My Lords, I, too, welcome the Government’s announcement proposing compensation for service personnel who have contracted mesothelioma. It perhaps does not matter, but I am rather concerned about the wording of Amendment 21, particularly proposed new subsection (2). In the second line of that proposed new subsection, the requirement on the scheme is to compensate those who,
“have been diagnosed with diffuse mesothelioma as a result of”,
working for the Armed Forces. The words “result of” create all sorts of problems because, as has already been explained—it is well known to all of us who have had to deal with this ghastly disease down the years—it is very difficult to know how one came by what may have been just a single brief exposure and thus how one came to suffer the disease.
I ask for some clarification: what is to be the scope of this proposed new scheme for compensation? Plainly, it will not be necessary to establish ordinary liability in the way of negligence or breach of some statutory duty. Will it be necessary to prove even that one has been exposed to asbestos in the course of one’s service? I did national service more than 60 years ago. If, say, after the 40-year period in which this can develop—it can actually probably be even longer than that, so say after 40, 50 or 60 years—suddenly one receives this terrible diagnosis, does the mere fact of having done national service or whatever 40 years or more earlier entitle one at that point, without more, to compensation? Will it be necessary to prove even exposure to asbestos?
I point out that in the non-military context the courts have been grappling with this problem for years. There was a case called Fairchild, then one called Barker, and then in 2011 I was in the Supreme Court for the last case on it: Sienkiewicz v Greif. We have pretty much arrived at the situation now where anybody can get compensation where they have this diagnosis and can show that they were exposed to asbestos during any earlier period—wherever it may have been, in schooling or employment—and assuming that there is money there, the employers were insured and all the rest of it. True, the claimant must establish liability, but that is not generally much of a problem. If they were exposed to asbestos the likelihood is that they will be able to show negligence or breach of some protective duty under some statute.
All I ask is that there be clarification: is this intended to apply—one hopes that it is—to literally anybody who served in the Armed Forces and later contracted mesothelioma, or will it be necessary to prove at any rate some exposure to asbestos? That may create difficulties if service was 30 or 40 years ago.
Baroness Jolly
My Lords, I add my congratulation to those of other noble Lords to everyone who campaigned for this so hard and for so long. It seems that these last few sufferers were almost proving elusive. I am delighted that the Government announced that they will bring them into the scheme. The British Legion has also been hugely active in this regard and deserves congratulation, too.
The noble Lord, Lord Alton of Liverpool, showed remarkable tenacity in all this, particularly today, and in his quest for research funding. As noble Lords said, research is critical. On that point, it is worth mentioning for the Committee—and the noble Lord, Lord Alton—that the NHS does not record employment. A veteran goes to sign up the day after he or she leaves the services and the NHS takes their name, address, number and whatever. That is something else he might need to think about. It is not just in this area that the NHS recording employment would be really useful. It would help with research, treatment and, in some cases, diagnosis. There is work still to be done there.
Although I welcome this amendment, the devil is of course in the detail. Tough decisions always have to be made about the lump sum balanced against the annual income from war pensions and anything supplementary, multiplied by the life expectancy of a partner. I would like to quiz the Minister slightly on how this will be managed. Will people be given advice and support? If that comes from within the Veterans Welfare Service, which is part of MoD, how can that advice and support be seen to be independent?
Lord Touhig
My Lords, I do not intend to repeat the very important questions put by other noble Lords. I just add one brief reflection. I spent a great many years when I served in the other place helping to deal with compensation claims from former miners for illnesses they suffered as a result of working underground. For several years, I chaired a committee set up by my noble friend Lord Murphy of Torfaen when he was Welsh Secretary and I was his deputy. We sought ways to speed up the system of payments. I had more than 500 cases in my own constituency of Islwyn and more than £50 million was paid out in compensation. We had to overcome all sorts of difficulties, but we worked at it and did it. However, that job was unfinished. Try as we did, we could not persuade the Government to compensate workers on the surface who were often exposed to more dust than those working underground.
I was moved at Second Reading when my noble friend Lord West of Spithead spoke for the small number of mesothelioma sufferers who did not meet the qualifying date to be included in the compensation scheme. It would now appear that that has been corrected, and I pay tribute to him and the noble Lord, Lord Alton, for the work they have done on this. The Government have listened. That is not a bad thing. I am the first in line to congratulate them on listening and acting.
Earl Attlee
My Lords, I am grateful for the progress that has been made by the Government in expanding the scheme. When I supported my noble friend Lord Freud with the Mesothelioma Act, I could not understand why it was not extended to MoD personnel. My question to the Minister is about research. Many noble Lords raised the issue of research, which could have very great benefits. What lines of research are available? When I was with my noble friend Lord Freud, I understood that there were not that many good avenues for research. I have not found any areas of research that might provide some benefits.
Lord Alton of Liverpool
Perhaps I can help the noble Earl because his noble friend Lord Prior of Brampton has been extraordinarily helpful on this subject and, as recently as two weeks ago, convened a meeting at the Department of Health which I attended. Many of the people involved in current research into mesothelioma were present. The big issue they all raised was sustained funding. The noble Earl, Lord Howe, knows far more about this than me so I am sure he will deal with it in his reply. The noble Earl, Lord Attlee, can be reassured that there is a lot of interest within the research community but it comes down to funding.
Earl Howe
My Lords, I thank the noble Lord, Lord West of Spithead, for raising this critical issue. Mesothelioma—as the noble Lord, Lord Alton, outlined—is a devastating disease that changes the lives of not only the people diagnosed with it but also those who care about them: their families and loved ones. The fact that life expectancy after diagnosis can be so tragically short is why it is so important to ensure that we get the support right for those affected by the disease.
The arrangements we announced will give veterans and their families greater control over their finances and choices to suit their individual needs. So, subject to finalising the necessary legislative changes, lump sums of £140,000 will be able to be paid from 11 April 2016. The lump sum will be provided through the well-established war pensions scheme, administered by Defence Business Services Veterans UK. Veterans UK currently prioritises claims for mesothelioma and will continue to do so. Claimants will be given a choice of either the new lump sum or the existing war pension payments. The noble Lord, Lord Empey, spoke about the need to raise awareness and I fully understand that concern. Defence Business Services Veterans UK will write to existing and new war pensions scheme claimants diagnosed with diffuse mesothelioma to explain that they have the option of the current payment arrangements or the new lump sum. The Veterans Welfare Service will be on hand to help claimants understand the lump sum option.
Defence Business Services cannot offer independent financial advice, so claimants will be advised to seek independent financial advice and to discuss their decision with their families. In addition to the announcements we made and to raise awareness of the lump sum option, details were given on the same day to ex-service organisations for them to publicise to their members.
On detection and treatment of mesothelioma, when individuals leave the Armed Forces their healthcare needs become the responsibility of the National Health Service. Most people with mesothelioma will therefore see their GP first if they are worried about symptoms. Regrettably, there is no reliable screening test for mesothelioma. The aim of screening is to pick up cancers at an early stage of the disease before symptoms develop. At the moment it can be difficult to diagnose mesothelioma since the usual tests for lung diseases often appear to be negative. Additional monitoring—as proposed in Amendment 22—outside of encouraging those worried about symptoms to contact their GP as early as possible would therefore not help detect cases any earlier.
We are, however, engaging with NHS bodies on disseminating information to GPs, respiratory clinics and other healthcare professionals so that when they treat a veteran with mesothelioma caused by military service they can also direct them to the GOV.UK website and the Veterans UK helpline. They have details of how to make a claim under the war pensions scheme and the new lump sum option. I hope that the Committee will agree that this shows that we are absolutely committed to supporting veterans with mesothelioma, and the wider Armed Forces community.
Lord Tunnicliffe
The Minister mentioned necessary legislative changes. Is it the Government’s intention to use the Bill as a vehicle?
Lord West of Spithead
My Lords, I thank all those who have spoken. It shows the concern that we all have about this dreadful disease. There has been a lack of understanding about it. The efforts of so many are beginning to make people more aware. I would very much like to be included in the letter of response about the central analysis of research, which the Minister was going to send to the noble Lord, Lord Alton. I am sure he will send it to all Members here, because it would be interesting to know whether that LIBOR funding is available and whether it is going ahead. That would be very useful.
In among all this, this is a most happy outcome for the 60 people who have fallen through the cracks. This is good news and it is so lovely to have unadulterated good news. That so seldom happens. It was urgent, because between four and five of these men die every month. I am glad that this change is happening quickly. It will therefore have an impact and make a real difference. It is in the spirit of the Armed Forces covenant as well. I know that the Minister personally really understands that issue and how important it is. I thank him for that. It is the right result and I congratulate the Government on recognising the justice of the claim and for taking this action. I know that there is still a lot more to be done in other ways, but that is all very good news and I beg leave to withdraw my amendment.
“Reporting obligation on overseas deployments (civilian casualties)
(1) The Royal Air Force Commander responsible for review of reports on civilian non-combatant casualties submitted to the Ministry of Defence in connection with UK deployments overseas shall report to the Minister for the Armed Forces, at least once every quarter or at any more frequent intervals as the Secretary of State may specify, on—(a) the number of reports on civilian non-combatant casualties submitted by independent bodies during the period since his or her last report;(b) the number of reports on civilian non-combatant casualties submitted by the civilian casualties tracking unit in that period;(c) the number of reviews on civilian non-combatant casualties carried out in that period;(d) the outcome of such reviews; and(e) the sum and allocation of funding for any awards made as a result of the civilian casualty review procedure in that period.(2) A report under subsection (1) shall include—(a) a copy of the relevant civilian casualty review procedure;(b) working definitions of the terms “civilian” and “combatant”; and(c) the standard operating procedures in place to enable the review of reports of civilian non-combatant casualties.(3) In this section “UK deployment” includes any airstrikes carried out by UK personnel operating manned or unmanned aircraft remotely from the United Kingdom or United States.(4) On receipt of any report under subsection (1), the Minister for the Armed Forces shall—(a) lay a copy of the report before Parliament, and(b) lay a copy of the Government’s response to the report before Parliament, making particular reference to the operation of the civilian casualty review procedure, and any relative increase in reports, reviews or awards.”
Lord Hodgson of Astley Abbotts (Con)
My Lords, I sense that the horse is heading for the stable, and at an increasing rate, so I will be as brief as I can. I apologise to the Committee for not having taken part in proceedings before, but I have a particular interest in this area. The Committee should be aware of my involvement with the All-Party Group on Extraordinary Rendition and the All-Party Group on Drones.
In that connection, I ask my noble friend to thank his colleagues in the Ministry of Defence for arranging for us to go to RAF Waddington to see the operation of the drones there. It was exceptionally impressive. I took away three important things. One was the care being taken, with the forces on the ground calling in the strikes being balanced by people in the cooler atmosphere of RAF Waddington, who were able to provide the right balance.
Another was the stress on personnel, in the sense that personnel left their homes on the base, where the children were not doing their homework and the dog had to go to the vet, and went to the place they operated the drone from. They might, over the course of the next six or eight hours, have had to do some exceptionally unpleasant things that might result in the death of a fellow human being, then drive home again and, 10 minutes later, be back with the dog still needing to go to the vet and the kids’ homework still not being done. It is a very stressful situation, and the care that the ministry was taking to make sure that everyone’s mental health and well-being were being properly looked after was impressive. Last of all was the international nature of the operation in the sense that the operations at RAF Waddington are then passed to the Creech Air Force Base in Nevada. As the RAF officer explained to us, if you are being asked to get up at 2.30 am to sit in a hut and make these sorts of decisions, it is quite destructive for your mental health: it is much better if it can be passed to somebody in another part of the world. It means that there is this rotating situation which has its own issues, stresses and strains.
With that background, I turn to my amendment and the reasons for it. It is, of course, a probing amendment. Casualties are an inevitable and ghastly by-product of war. Every casualty is a tragedy, but civilian, non-combatant casualties are probably doubly so. I say that for two reasons. First, the long-term damage to the fabric of society if women and children are traumatised takes generations to recover from. Therefore, we need to be particularly careful of the damage that we might be doing to those groups. Secondly, and no less importantly, mistakes—casualties among civilians—are one of the best, possibly the best, recruiting sergeants for the extremists. People who have seen their village wrecked, their families or communities blown apart, are unlikely to be sympathetic to the cause that has resulted in this unfortunate episode.
We have now reached the three-month anniversary of the commencement of Parliament’s authorisation of military activity in Syria. We were promised a quarterly progress report to update both Houses, as a way of providing some form of parliamentary oversight of the mission against Daesh. I am not sure that that has yet been provided, but no doubt my noble friend could tell me when he comes to wind up.
Accountability and transparency are important aspects of this country’s military activities in the Middle East. They play a critical role in ensuring continuing public support at home for a policy that is bound to have its controversial aspects, particularly in the maintenance of popular support in our minority communities. However, accountability and transparency are also important for the maintenance of this country’s reputation abroad. We should be giving an example by setting standards that our allies will emulate, that will shame our enemies and that will give third parties caught up in the crossfire some confidence that these terrible events—which have, in many cases, shattered their lives—have not been undertaken capriciously or without due thought.
This amendment seeks to build on the commitment made by Penny Mordaunt in the other place on when she said that Airwars, the NGO that provides surveillance or information about civilian casualties,
“has been proactive in submitting written reports of civilian casualties and we are grateful for its efforts and for the value that they add. Each case has been individually reviewed and it has been demonstrated that the civilian casualties were not caused by UK activity. Our targeting processes are extremely robust in this respect and in others, but I would welcome any further ideas about how value may be added. I have committed to review any reports of civilian casualties and I have oversight of the whole process, including compensation”.—[Official Report, Commons, 29/2/15; col. 672.]
She gave further reassurance in reply to a Written Question on 2 February this year when she said:
“Any credible concerns or evidence relating to the possibility of civilian casualties caused by air strikes may be submitted to the Ministry of Defence Ministerial Correspondence Unit”,
and gave an address and email address.
This need to clarify and commit to a UK standard is particularly important as it appears that yet another remote engagement—in Libya—is getting under way. Further, there are also indications of new collaborative working with partners, in particular the United States, which have emerged in recent weeks. Most recently, as has been reported in the press, the Secretary of State has authorised the use of RAF Lakenheath for US air strikes in Libya on the—I have to say uncertain—legal basis that “it makes us all safer”.
The UK can and should lead here in forging a model civilian casualty review procedure and a model procedure for dealing with compensation claims as well as in standards of transparency to show how this is working in practice. This might act as a model for Russia or, more likely, for other EU states and the United States in and outside the traditional battlefield.
The UK has carried out 600 air strikes in Syria and Iraq and flown more than 2,100 combat missions against Daesh. The Defence Secretary has stated that the UK is probably the second most important part of coalition air activity in strikes as well as in surveillance and intelligence activity. According to the NGO Airwars, there are credible reports that up to 952 civilian casualties have been caused by coalition air strikes, excluding Russia. The NGO puts that figure at between 3,200 and 3,800. Eleven out of 12 coalition members, including the United Kingdom, deny any civilian casualties. This is unprecedented in a major military engagement and naturally invites questions about how civilians are being classified, what the onus of proof is, how battle damage assessments are being undertaken in the absence of ground troops, what sort of procedures are in place to make sure that credible allegations of civilian casualties are reviewed rigorously with sufficient independence, what discussions and agreements there have been about these matters with coalition partners, whether there is a realistic chance of a co-ordinated or collective response, what are the implications of joint operations and whether the UK has a non-combatant casualty cut-off value like the US.
As far as the UK is concerned, we have a good record on civilian casualties and the disclosure of relevant information. The UK has second place in Airwars’ transparency table, which is a matter on which the MoD deserves congratulation. However, I am not sure that it is enough to announce that there have been no civilian casualties caused by 600 air strikes for which we have been directly responsible—and there will be many more which we have supported—without additional information and disclosure of relevant policies and procedures.
Subsection (1) of the proposed new clause would impose a new quarterly reporting obligation on the responsible commander to report to the Minister in order that she can report to Parliament. The report need not be long—it can be quite short—but it must include the basic statistics outlined in the amendment.
Proposed new subsection (2) goes a little further. So that we can make sense of the report in proposed new subsection (1) and to promote the principles of transparency and accountability to which, no doubt, the MoD is committed, the report must include three key sets of documents: a copy of the relevant civilian casualty review procedure; working definitions of the terms “casualty” and “combatant” and the standard operating procedures in place to enable the review of reports of civilian casualties. Most of these terms are drawn from the ISAF model used in Afghanistan and do not come from the MoD commitment in relation to the mission against Daesh.
Several parliamentary Questions have been tabled in the House of Commons which suggest that a policy or procedure is under way, or at least is at an advanced stage of development. For example, the Minister for the Armed Forces has said that the Ministry will “analyse the risks” in any potential air strike in advance and,
“every strike is subject to careful post-mission scrutiny”.
However, it seems likely that the information I am seeking already exists, although possibly under a different or updated name. I would welcome my noble friend’s clarification on this point.
Baroness Smith of Newnham
My Lords, I welcome the probing amendment from the noble Lord, Lord Hodgson. He is absolutely right to raise one of the issues that upsets huge numbers of the British population in any military intervention—the danger of civilian casualties. The idea that that should be added to the report that is brought quarterly is clearly welcome. I very much hope that the Minister will be willing to look into that. One advantage of the United Kingdom entering into the war in Iraq and over Syria was precisely that we have precision weapons. The suggestion that we have not caused any civilian casualties in the past three months is clearly welcome.
I realise that this is only a probing amendment, but I am slightly concerned that the noble Lord suggested that for the quarterly report there should be working definitions of the terms “civilian” and “combatant”. How do the UK Government define those terms? I would hope that it would be something in the glossary, not something that would be redefined every three months. There is a suggestion that perhaps the United States has a rather more generous definition of combatant that we would in the United Kingdom, and that males over the age of 15 are seen as combatants if they are in certain areas. I would very much hope that that is not a definition we would ever consider.
This is a welcome probing amendment, and we would very much like the definitions. My noble friend Lady Jolly has also asked whether the Minister could tell us what work has been done to assemble figures so far.
Lord Thomas of Gresford
The Minister will recall that I asked a Question on this topic two or three weeks ago. I support the amendment proposed by the noble Lord, Lord Hodgson. There is a danger, when we are concerned with a definition of UK deployment that includes,
“any airstrikes carried out by UK personnel operating manned or unmanned aircraft”,
that we may forget that we are part of a coalition under joint command. It is a joint operation and, in such a situation, we cannot say that we are responsible only for these bombs but not for other bombs dropped by other countries under the same command as ourselves. This country is bound legally and morally by the activities of all those operating in the coalition. We carry that responsibility for the deaths and maiming of civilians, whoever’s bomb it is. Civilians do not care whose bomb it is if they are maimed. If it is under joint command, we have a responsibility.
Lord Touhig
My Lords, living as we do in a time when news reporting is constant, continuous and around the clock, the public rightly expect Governments to be the same, especially when reporting on conflicts in which our Armed Forces are engaged. Parliament and the British people have the right to be kept informed about not only what happens to our forces but also the impact our actions might have on civilians in the conflict zone. The Government currently report on civilian casualties in a number of different conflicts that we are involved in, including Iraq, Syria, west Africa—the Ebola response—and Afghanistan. That is the right thing to do. It demonstrates openness, transparency and proper regard for the loss of life that inevitably occurs in conflict, whether military or civilian deaths.
None of us who supported the Government’s decision to use air strikes against ISIL in Syria did so lightly. I have not spoken to a single person who did not have concerns that there would be casualties among the civilian population. To date, the Government have stated that there have been no reports of civilian casualties as a result of our air strikes. Having said that, I look forward to hearing from the Minister what guidelines the Government set themselves for collecting data and reporting on casualties, whether military or civilian, in any conflict in which we are currently engaged.
On this side, we certainly welcome the aspirations that motivated this amendment but we have doubts that it is the best way to deal with the issue of reporting on civilian casualties—I am grateful for the excellent briefing on this that I was given earlier today. For example, the amendment addresses the matter of reporting civilian casualties caused by air strikes but says nothing about reporting civilian casualties caused by ground forces. Often, ground operations are in play as well as air strikes. More than that, if we are to enshrine in primary legislation the reporting of civilian casualties in conflict, this is not the right vehicle to do so. Some might argue that reporting on civilian casualties is not simply an Armed Forces issue alone but has wider foreign affairs and international development implications. If that argument were accepted, we would need a cross-government input and approach to legislation to achieve the objectives that would be set out.
We certainly welcome the opportunity that this amendment gives us for debate and we have had some important and useful contributions. I look forward to the Minister’s reply and hope that we will have regular reports to Parliament on the conflicts, especially details of the number of casualties—even where there are none. That is very important. We welcome the opportunity for debate that the amendment affords but in its present form we would not support it.
Earl Howe
My Lords, I am grateful to my noble friend Lord Hodgson for introducing his amendment, which would, as he explained, create a legislative obligation on the department to report civilian casualties following RAF operations, including sharing the details of investigations with Parliament. I recognise that this is a probing amendment but I hope to show my noble friend that his concerns are recognised and being properly addressed.
I make it clear at the outset that the MoD takes very seriously—and always will—any allegations of civilian casualties. The Defence Secretary committed to review all claims of this nature. We have robust processes in place to review reports of civilian casualties and to launch investigations where appropriate, and we will continue to consider all available credible evidence to support such assessments.
It is important for me to emphasise that the Ministry of Defence takes all feasible precautions to avoid civilian casualties when conducting any form of military operation. All missions are meticulously planned to ensure that every care is taken to avoid or minimise civilian casualties, and our use of extremely accurate precision-guided munitions supports this.
We have a robust process in place to authorise air strikes that is tried and tested. All military targeting is governed by strict rules of engagement in accordance with both UK and international humanitarian law. Of course, the men and women of our Armed Forces are highly trained, including in the law of armed conflict. I should also make it clear that we will not use force unless we are satisfied that the use of force is both necessary and lawful. When we carry out a strike, we carry out a full assessment to determine the damage that has been caused, specifically checking very carefully whether there are likely to have been civilian casualties.
I can assure the Committee, lest there is any doubt, that the Ministry of Defence is committed to transparency as far as possible. We have been very open and transparent about the strikes conducted in Iraq and Syria. They are reported regularly online two or three times a week. These reports explain where the action has taken place and what effect has been achieved in the fight against Daesh. However, I hope that the Committee will agree that it is also paramount that we maintain personnel and operational security. This can include not revealing details about our targeting process, which may endanger personnel and our ability to operate.
Furthermore, while a requirement in primary legislation to publish data on a regular basis may be seen as a means of holding the current Government to account—and, for that matter, future Governments—it may also on occasions be a very inflexible tool which is soon out of date and redundant. As I have made clear, the MoD has clear processes and procedures to limit civilian casualties, and the principle of openness and transparency on this issue is something which the MoD and I strongly support. Where information is not disclosed, it is for very good operational reasons.
The noble Lord, Lord Touhig, asked about regular reports on Operation Shader, which, as he knows, is the counter-Daesh operation in Iraq and Syria. The Government’s first quarterly report on Syria was provided to the House of Commons by the Secretary of State for Foreign and Commonwealth Affairs on 16 December last year. The Secretary of State of DfID, my right honourable friend Justine Greening, provided a second quarterly report on 8 February this year. I cannot be specific about the date of the next report but it will be issued in due course.
I will write to the noble Baroness, Lady Smith, on the particular question she raised and to my noble friend in respect of those of his questions that I have not covered. In the light of what I have said on this matter, I hope my noble friend will agree to withdraw his amendment at this stage.
Lord Hodgson of Astley Abbotts
My Lords, I am grateful to all who have participated in this short debate—the noble Baroness and the noble Lord, Lord Thomas of Gresford. Apropos of his comment, I of course understand that this is a coalition, but I am thinking, “Physician, heal thyself”. We start by trying to make sure that the unpleasant things that our personnel are doing on our behalf are properly corrected first, and then, by setting standards, maybe our allies will follow.
I thank my noble friend very much for his full reply and his promise to follow up on the points that he has been unable to answer now. I hope that I made it clear that from our visit to RAF Waddington we were well aware of the very considerable care that has been taken to make sure that those on the ground are balanced by the cooler heads further away from the point of action. I understand the question of inflexibility. This is a probing amendment, but it was helpful for us to have a debate this afternoon, and I look forward to hearing the follow up in due course. In the mean time, I beg leave to withdraw the amendment.
House of Lords
Student Loans: Muslim Students
(8 years, 9 months ago)
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Lord Sharkey
To ask Her Majesty’s Government what help they provide to Muslim students whose religious beliefs prevent them from taking interest-charging student loans.
Baroness Evans of Bowes Park (Con)
My Lords, the Government are aware that some students whose religious beliefs may prevent them from taking out a loan that bears interest may feel unable to take advantage of student loans. In April 2014, the Government conducted a consultation on a sharia-compliant alternative finance product for students. Upon review of consultation responses the Government supported the introduction of a takaful alternative finance product available to everyone. Work on this product is ongoing and, subject to Parliament, the Government hope to introduce the new system through legislation.
Lord Sharkey (LD)
I asked the Minister the Question because the head teacher of the Preston Muslim Girls High School asked me the question and I could not answer it. I am not sure that the head teacher and his students will find much present comfort in the Minister’s reply. Every year that passes without a solution, thousands of Muslim students are disadvantaged. As she said, the Government identified the solution two years ago but still cannot say when it will be delivered. Will she agree to meet me so that we can discuss how to have a sharia-compliant system in place without further delay?
Baroness Evans of Bowes Park
As I said, the Government did a consultation in 2014 and are continuing to work closely with experts in Islamic finance to develop the product but, at the moment, the Secretary of State does not have the power to just introduce it. We need primary legislation, which is why we are hoping and looking for a suitable opportunity to bring it forward.
Baroness Hayter of Kentish Town (Lab)
My Lords, given that the student maintenance grants are now to be ended, this will be far more urgent because it means that a whole swathe of students will not have grants available to them. It really is not any good saying that the Government have been doing this for two and half years now; it has to be in place by the time the grants are withdrawn. Can we have that commitment from the Government?
Baroness Evans of Bowes Park
As I said, we will be looking for a suitable vehicle with which to attempt to introduce the system. There is strong interest in it: of the consultation responses, 94% believed that there would be demand for such a system and 81% thought that the proposed scheme being developed was acceptable. We of course want to ensure access for all students to higher education, which is why we would be the first Government to introduce such a scheme, but we need primary legislation to do so.
Lord Pearson of Rannoch (UKIP)
My Lords, talking of the growing influence of sharia law in this country, is there any truth to the press reports that the Government have mortgaged Richmond House and other buildings with sharia bonds, which ban alcohol on those premises? If true, how would that affect the habits of Members of the House of Commons if they move into those premises during refurbishment of this Palace?
Baroness Evans of Bowes Park
This proposed scheme has nothing to do with sharia law. It is about ensuring that all young people have access to university. We are very keen to try to ensure that we can provide a product that will help them to do so.
Lord Forsyth of Drumlean (Con)
My Lords, can my noble friend explain exactly how this product will work?
Baroness Evans of Bowes Park
I am happy to. The takaful model will operate as a type of mutual fund. Students will apply for finance from the fund the same way that they would apply for an equivalent student loan and will enter a contract promising to repay a contribution. When they are earning above the repayment threshold, as with an equivalent student loan, they will make their contributions, which will be used to fund the education of future students. It is a type of mutual fund, which is why BIS cannot introduce it without primary legislation, as the Secretary of State does not have those powers.
Lord Elton (Con)
My Lords, the Secretary of State does have the power to initiate legislation. I ask my noble friend to urge him to take the opportunity as soon as Parliament reassembles after State Opening to introduce a Bill—a small Bill—for the simple purpose of introducing this change, rather than waiting for some great wagon train to assemble for the next 18 months.
Baroness Evans of Bowes Park
As I have said to noble Lords, the Government hope to introduce the system and will be looking at the appropriate legislative way to do so. As my noble friend says, the up-and-coming Session will be detailed in the Queen’s Speech in due course.
Lord Pearson of Rannoch
My Lords, can the Minister explain the difference between takaful and paying interest?
Baroness Evans of Bowes Park
As I said, this model operates as a mutual fund so the contributions that a student pays go into that fund to be refunded. The idea of borrowing and paying back interest is absent from this model.
The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
My Lords, on this occasion I think it is the turn of the Lib Dems.
Lord Newby
My Lords, could I follow up the comments of the noble Lord, Lord Elton, about the passivity of the Government on this issue? The Minister has said on several occasions that they were looking for a suitable vehicle, as if they were waiting for a bus to come round the corner. Can I underline the views that I think the whole House has on this issue? It would be a minor legislative tool but, in terms of the life chances of very many Muslim students, this change could make all the difference to whether they get a proper education or not.
Baroness Evans of Bowes Park
I thank the noble Lord for his comments. The strength of the feeling in the House is quite clear, which I am sure will be noted by the Secretary of State.
Lord Tebbit
My Lords, will this product be available to persons of all religions or none?
Lord West of Spithead (Lab)
My Lords, 45 years ago today the first British nuclear submarine reached the North Pole. It did that only courtesy of the engineers and their skills. In the interests of helping out on this, any Muslims who wish to join the Navy as engineers will get their courses paid for.
Baroness Evans of Bowes Park
I thank the noble Lord for his comments and add my congratulations on this important occasion. As I said, we want to ensure that all young people who wish, and have the ability, to go to university have the access to do so. That is why we are looking forward on this and we would be the first Government to introduce such a product.
Lord Cormack (Con)
But, my Lords, those who do not want to go into the Navy could benefit from a simple one or two-clause Bill. I cannot for the life of me see why we are delaying on that.
Baroness Evans of Bowes Park
I am sure that I shall see shrugs and groans, but I repeat that the Government understand the strength of feeling. We had an extremely high level of responses to the consultation and continue to work on developing this product. We are looking for a suitable vehicle by which to introduce it through primary legislation.
Baroness Farrington of Ribbleton (Lab)
My Lords, would the Minister care to advise prospective students as to whether she envisages this provision being in place this autumn? Noble Lords have made reference to it coming after the Queen’s Speech. As we have not been given that date yet officially, it would be helpful for students to know how long they will have to wait.
Baroness Evans of Bowes Park
As I said, we are looking for an appropriate time at which to do this and the forthcoming legislative programme will be detailed in due course in the Queen’s Speech.
Water Billing
Lord Redesdale
To ask Her Majesty’s Government what assessment they have made of how many non-domestic water bills are estimated, rather than calculated through automatic meter readings.
Lord Gardiner of Kimble (Con)
My Lords, the choice of meter type and frequency of meter readings is a matter for water companies and their customers. There is a trend towards smart meters. This varies by company and by customer, reflecting factors such as water scarcity and customer preference. Not all will benefit from sophisticated data and fitting new meters will affect the bills of all customers. Water companies therefore need to consider all the costs and benefits when taking any decision.
Lord Redesdale (LD)
My Lords, I declare an interest as CEO of the Energy Managers Association. Our members are the ones who will be buying our water in the non-domestic marketplace. However, about 80% of all meters are not AMR or smart meters, so they cannot get the data on whether they are actually saving water or finance. As the purpose of deregulation of this marketplace was to introduce competition, will the Government ensure that this is kept under constant review? Also, following on from the Minister’s Answer, who is the customer? In the non-domestic sector the customer is the water retailer. There is no direct link between the company and the customer on the ground.
Lord Gardiner of Kimble
My Lords, the meter data, of course, belong to the customer. Therefore, any company wanting access will have to agree with the customer. Indeed, the new retail system that is coming in, which is designed to be of enormous benefit to the consumer, will provide an opportunity for greater competition. We believe that it will be of benefit, in this case, to the non-household customer as a beginning, but clearly we will consider how best we can bring better competition for the whole water market, because we think that competition in this sector is going to have benefits.
Lord Watts (Lab)
My Lords, I have resisted installing a meter in my property on the basis that I think it will lead to poorer families paying more while richer families might pay less. Can the Minister assure me that that will not be the result of this policy?
Lord Gardiner of Kimble
My Lords, that is certainly not the intention. As I have said, there is a trend towards smart meters. With the arrival of a smart meter, the tendency is to reduce consumption by about 10%. The water companies are very mindful of those customers in vulnerable circumstances. Schemes already exist to help 760,000 households, and the companies forecast that by 2020 they will help 1.8 million households. There are also social tariffs to assist them, which all companies will have by end of this year.
Baroness McIntosh of Pickering (Con)
I declare my interest in the register. Does my noble friend agree that the voluntary use of meters has made a massive contribution to allowing people to manage their budgets? Will the Government go further and introduce legislative measures to tackle bad debt, which is adding £22 to the average bill for water services?
Lord Gardiner of Kimble
My Lords, I do not believe that it is the intention at this stage to introduce legislation. The water companies do not want to have bad debt; clearly it is not in their interest. But because there are such difficulties, particularly with customers in vulnerable circumstances, there are social tariffs. At the moment they help 30,000 households; by 2020, the companies forecast that it will be about 380,000 households. But, clearly we want to ensure that bad debt is reduced.
Lord Gardiner of Kimble
My Lords, I am afraid that I am not technical at all and will need to take advice on that. Because of the technicalities of all these matters, the best thing I can do is to write to the noble Lord with some of the very technical details. But it is a very pertinent point.
Lord Whitty (Lab)
My Lords, genuine social tariffs would be enabled by universal smart-metering of water, but, unlike energy, we have no mandatory rollout of smart meters for water. Indeed, the smart meters for energy have some problems. Will the Minister consider having genuine smart meters—smarter than the current ones for energy—which incorporate water-metering, so that the next phase of mandatory installation would cover water as well as energy?
Lord Gardiner of Kimble
What the noble Lord says is probably the direction of travel. I know that at the moment the meters for water are, in many cases, not as sophisticated as those in the energy sector, but I am sure that this is going to be very important. I am particularly mindful of the non-household sector, particularly large consumers of water, where smart meters are definitely assisting in factories and commercial production a better understanding of where water is used. Of course, we all want to reduce water consumption, so it is very important.
Baroness Jones of Whitchurch (Lab)
My Lords, the noble Lord referred to social tariffs. Is it not the case that 14 of the 18 water companies have social tariffs but are failing to achieve their own targets for registering customers? Many people do not even know that that opportunity exists. At the same time, more than 1 million people are struggling to pay their bills. The noble Lord talked about the roll-out of social tariffs, but is there not a case for putting more pressure on the water companies to speed the process? After all, it is not such a difficult process. He talked about a deadline of 2020, but I am sure that it could be done before them.
Lord Gardiner of Kimble
My Lords, I assure the noble Baroness and your Lordships that the Government will continue to work with Ofwat and the water companies to ensure that they continue to provide a fair deal for all customers. Indeed, average water bills will fall by about 5% before inflation by 2020, while at the same time there will be a very considerable amount of investment.
Lord Holmes of Richmond (Con)
My Lords, can my noble friend confirm that if we vote to leave the European Union in June, smart meters will have to be renamed smart yards?
Lord Gardiner of Kimble
Whatever the result in the country, I think that metrification will continue.
Prisons: Violence
(8 years, 9 months ago)
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Lord Marks of Henley-on-Thames
To ask Her Majesty’s Government what steps they are taking to tackle the incidence of deaths, serious assaults and incidents of self-harm in prison.
The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, the Government recognise the seriousness of this problem and are taking action to respond. We are trialling the use of body-worn video cameras, the Psychoactive Substances Act will introduce new offences to control supply and possession and we have reviewed the process for supporting prisoners at risk of suicide or self-harm. We recognise that our prison system needs reform, and there is much more to do to ensure that prisons are places of decency, hope and rehabilitation.
Lord Marks of Henley-on-Thames (LD)
My Lords, 2015 saw a record number of deaths in custody, a 20% increase in assaults and a 25% increase in self-harm incidents. Those increases were over record figures the previous year. The Justice Secretary appears committed, rightly, to prison reform, but has he been promised the resources to address the causes of these dreadful figures—squalid conditions, overcrowding, understaffing and prisoners locked for far too long in their cells?
Lord Faulks
The causes of violence are multifactorial. They include of course the increased use of psychoactive substances, to which the Government are responding positively. It is a ceaseless challenge to try to prevent them coming into prison, but we have a new offence, and we are taking steps to make it very difficult for these substances to be thrown over walls or secreted in parts of the body. It is generally a significant challenge. We are also looking at a two-year violence reduction project, to help us better understand the causes and characteristics of violence and to strengthen our handling of it. There is also the use of body-worn cameras. Ultimately, the best way to reduce violence may be to give, as the Prime Minister and the Secretary of State have suggested, much more power to prison governors to give them the tools necessary to reform the way their prisons are run and to help rehabilitate offenders.
Lord Cashman (Lab)
My Lords, we are all deeply concerned about the number of deaths in prison, but I wish in particular to raise the issue of the increasing number of trans people who are taking their own lives in prison. Are there special provisions for dealing with the LGBT community, in particular the trans community? If so, will the Minister publish them so we can ensure that they are fit for purpose?
Lord Faulks
There is a prison service instruction in relation to the care and management of transsexual offenders, which is being reviewed. People with particular experience of these issues are involved in the review, including Peter Dawson of the Prison Reform Trust and Jay Stewart of Gendered Intelligence respectively. We are concerned of course to tackle this very delicate issue, so that those who are on the journey, very often to change gender, are properly looked after and their considerations taken into account, so that prison can be adapted in a way that most suits their requirements.
The Lord Bishop of St Albans
My Lords, in the light of the welcome announcement last autumn that a number of the old, unsuitable prisons were going to be replaced with purpose-built ones, will the Minister assure the House that the specifications for those new-builds will take very careful account of mental health issues, consulting with the charities that are dealing with this particular area and producing excellent educational, medical and spiritual facilities, so that we can minimise the level of mental health problems and maximise rehabilitation?
Lord Faulks
The right reverend Prelate makes an important point. He will have been reassured by what the Prime Minister said in his speech on 8 February—namely, that the design of these new prisons should be particularly directed towards helping mental health treatment. If necessary, that should allow individual governors to have appropriate control, with co-commissioning with NHS England to ensure that the significant numbers of inmates in prisons with mental health problems are adequately treated.
Lord Hamilton of Epsom (Con)
My Lords, following the right reverend Prelate’s question, can my noble friend tell us what percentage of prisoners have been diagnosed with mental illness problems, and is prison the best place to treat them?
Lord Faulks
The NICE estimate is that 90% of prisoners have at least one psychiatric disorder. Of course, the precise nature of a psychiatric disorder will vary. With many of them, prison may not be the correct place to treat them—although there may be other factors that make it appropriate for them to be there. NHS England has developed national specifications for health and justice services in English prisons and all prisons have clear commissioning models that focus on outcomes specific to custodial settings. All judges who sentence offenders will, or should, have adequate information to allow them to sentence appropriately. It then becomes a matter for the prison estate as to how best they are housed.
Baroness Corston (Lab)
My Lords, the Minister may be aware that there are about 82,000 men in our prisons and over 3,000 women. Those women are responsible for about 50% of the self-harm in prison. Furthermore, since my report published nine years ago this week, the number of women who took their own lives in English prisons last year was a record. Two have taken their lives this year already, in the first two months. What factors does he think underline the deterioration in the safety of women in our prisons?
Lord Faulks
On the positive side, the female prison population is now under 4,000—the lowest it has ever been. In the speech I referred to earlier, the Prime Minister made a particular point of the importance of finding alternative ways of dealing with women offenders, preferably avoiding sending them to prison altogether, which has been very much the trend with sentencing. Of course, there will be an irreducible number who have to be sent to prison. Although the noble Baroness is quite right that any suicide in prison is a matter of complete regret, and self-harm is equally concerning, we are in the process of modernising the prison estate to ensure that there are the best regimes and that women are held in environments that better meet their gender-specific needs.
Lord Dholakia (LD)
My Lords, the Minister must have read the report in 2015 by HM Chief Inspector of Prisons—a devastating report that talks about violence and poor conditions in our prisons. The most disturbing aspect of the report and the allegation made by the then Chief Inspector, Nick Hardwick was that the Secretary of State tried to influence his report. Will the Minister make sure that that sort of thing does not happen in future? Public confidence will be eroded if independent reports by prison inspectors are interfered with by Ministers.
Lord Faulks
The noble Lord is right to suggest that the report by Mr Hardwick was unfavourable in a number of respects. The Government will learn lessons from what he said. It is important that we should take on board an objective analysis of that. It is perhaps an indication of the Secretary of State’s willingness to embrace criticism that he has appointed Mr Hardwick to have continued involvement in the criminal justice system, by his appointment as chair of the Parole Board. I hope that the noble Lord will accept that that is a real sign of somebody getting to grips with a critical friend of the system.
Immigration: Harmondsworth
(8 years, 9 months ago)
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Lord Roberts of Llandudno
To ask Her Majesty’s Government, in the light of the publication on 1 March of the Chief Inspector of Prisons’ Report on an unannounced inspection of Heathrow Immigration Removal Centre: Harmondsworth site, what action they are taking to rectify the situation.
The Minister of State, Home Office (Lord Bates) (Con)
My Lords, the Government take the welfare of detainees extremely seriously. We have independent inspections and publish service improvement plans. We will closely monitor progress towards implementing the recommendations, and have recently announced a strategic response to Stephen Shaw’s report to provide greater protection for vulnerable refugees.
Lord Roberts of Llandudno (LD)
The unannounced inspection of Harmondsworth must cause us all tremendous disquiet, as it did the inspectors. What steps are the Government taking to rectify the dirty, overcrowded and poorly ventilated residential units, unsanitary toilets and showers, and disregard of mental health issues? Will the criticism that many of the 661 detainees in what is Europe’s largest immigration detention centre were held for an unreasonably long time—one for five years, 18 others for over one year—prompt the Government to end the indefinite detention of immigration detainees?
Lord Bates
The report by the inspectorate was very serious and disappointing. Stephen Shaw made 58 recommendations, 50 of which were accepted immediately. James Brokenshire set out in a Written Ministerial Statement on 14 January the Government’s plans to deal with that, and already we have posted a service improvement plan—what we are going to do to address the very points mentioned in the report of Her Majesty’s Chief Inspector of Prisons. We will continue to monitor that progress.
Lord Trimble (Con)
My Lords, have any of those being removed committed offences here or abroad? If so, how many of them?
Lord Bates
Currently in the immigration detention estate there are about 2,700 people. Of those, 40% are foreign national offenders. If one then takes into account those who have committed immigration offences, they are the overwhelming majority of all those who are held in detention. They are held in detention as a last resort in exceptional circumstances, just prior to departure.
Lord Rosser (Lab)
My Lords, the Chief Inspector of Prisons states in his introduction that the report,
“highlights substantial concerns in most of our tests of a healthy custodial establishment”.
He also states that many of the concerns that were identified in 2013, when Harmondsworth IRC was run by the GEO Group, have not been rectified, and in some respects matters have deteriorated since then, even though since September 2014 the Harmondsworth site has been run for the Home Office by the care and custody division of the Mitie Group. What penalties under the terms of their contracts have been, and will now be, incurred by the two contractors concerned, since presumably the Minister can confirm, in the light of the adverse reports from the chief inspector in 2013 and again in his latest report, that neither contractor has run or is now running the Harmondsworth site in accordance with the terms of their contract?
Lord Bates
That is something that is under active review at this point in the light of Stephen Shaw’s report. He identified that there had been some improvement in a number of areas since 2013, particularly in the physical infrastructure of the site, but nowhere near enough. There are very strict criteria set out for performance in the contract, and they are being reviewed by the Home Office. We will of course make public what actions will be taken when a decision has been reached.
Lord Greaves (LD)
No, we have just had a Labour question.
Yesterday I visited some houses in a Home Office scheme in a street in West Drayton, run by an adjoining hotel, Heathrow Lodge, which provides a few days’ initial short-term accommodation for asylum-seeker arrivals before they are dispersed. There are very basic bedrooms, with communal bathrooms and no kitchens. Will the Minister look personally into the numerous problems that I found there? I will send him a briefing, but they included people who seemed to have been effectively abandoned there for up to three months instead of three days; the quality of food provided; a lack of necessary Home Office communication and documents; ridiculous rules; a lack of facilities for a one year-old child who had been there for some time, and much more.
Lord Bates
I am very happy to look at those issues, just as we looked at the issues raised by cases in Cardiff and Middlesbrough recently. If the noble Lord supplies me with information, I am very happy to look at it more closely.
Lord Lea of Crondall
My Lords, can the Minister throw a little more light on the remarkable statistic referred to by the noble Lord, Lord Roberts of Llandudno, that someone has been in there for five years? How can that be?
Lord Bates
It is certainly the case that 92% have been there for less than four months, and the time is reducing. Of course, those who have been there for longer than four months—in fact, for longer than 28 days—are often people who are working very hard to avoid their removal. They are perfectly entitled to do so, but they are trying to frustrate the system. We have concerns about public safety. That is the reason why they are there and have not been granted bail.
The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
Order. Why does not the noble Lord, Lord Foulkes, ask a question?
Lord Foulkes of Cumnock
My Lords, we have gone through four Questions this morning. Has the Minister, like me, been thinking, “How long will it be before we can forgive the Liberal Democrats for not dealing with these problems when they were part of the coalition”?
Business of the House
(8 years, 9 months ago)
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Baroness Stowell of Beeston
That Standing Order 46 (No two stages of a Bill to be taken on one day) be dispensed with on Tuesday 8 March to allow the Supply and Appropriation (Anticipation and Adjustments) Bill to be taken through its remaining stages that day.
Housing and Planning Bill
Lord Shipley
Lord Shipley (LD)
My Lords, I shall also speak to Amendment 41B. Amendment 37B would require a mortgage to be taken out when buying a starter home—in other words, cash sales would not be permitted. Amendment 41B would require a first-time buyer to occupy the dwelling as his or her principal residence.
I can almost hear the Minister’s reply—
Baroness Hollis of Heigham (Lab)
Order. May I ask the noble Lord to give us a second while noble Lords leave the Chamber? We cannot hear anything he is saying and we do not wish to miss a word of it.
Lord Shipley
My Lords, I shall start again in a moment.
I can almost hear the Minister’s reply, which may be to tell us that all this will be made clearer in regulations, but as the Minister well knows, we have no regulations. There are no draft regulations and it is essential that, before Report, we have regulations which explain clearly what the Government’s intentions are on matters such as buy to let, subletting for short periods and leaving and letting a starter home within five years. In the case of this probing amendment, we need to know whether payment for a starter home can be in cash. I hope that the Government will rule this out today.
The basic principle is that cash buyers do not need a starter home. The simplest way to address this is via a requirement that the purchaser takes out a mortgage. Indeed, a key part of the National Planning Policy Framework definition of affordable housing is an eligibility test, with its provision for those whose needs are not met by the market. However, that is not a cash buyer, whose needs can self-evidently be met by the market. Therefore confirming in the Bill that anyone buying a starter home must do so via a mortgage would restrict market abuse.
Amendment 41B would require a first-time buyer to occupy their starter home as a principal residence. Thus, starter homes must not become second homes, and buy to let should be prohibited. However, there may need to be some consideration prior to regulations being published about how a property could be let out for short periods, where, for example, a purchaser of a starter home has a six-month temporary work transfer to another place. Therefore I am very keen to know what the Government’s thinking is on this matter. In the face of the fact that the Bill lacks so very much detail—even the technical briefings lack detail to enable us to respond properly to exactly what is planned—I hope very much that the Minister will be able to clarify these matters.
Lord Kennedy of Southwark (Lab)
My Lords, this group of amendments contains some important provisions that would be welcome in the Bill and should not be left hanging in the air to be covered by regulations at some point in the future. Amendment 37B, in the name of the noble Lord, Lord Shipley, would add the words “via a mortgage”. It is extremely important that we are clear about this, because if the property was purchased in any other way, such as by a cash buyer, that would signal that the person or persons had no need to take advantage of a product with a generous discount that could be realised in a relatively short space of time.
Equally, Amendment 41B, which is also in the name of the noble Lord, Lord Shipley, makes clear that the person who buys the property should buy it to be their home. Again, I am fully supportive of that.
On government Amendment 42A, I will be interested to hear the noble Baroness, Lady Williams of Trafford, explain the reasoning behind the proposed change to the words in Clause 2(3)(c).
Amendment 43, in my name and that of my noble friend Lord Beecham, would add the criteria of “lives or works locally” to the Bill. That is aimed specifically at helping local people to take priority in getting a home in their local area rather than being forced to go somewhere else, and would help in building stable communities. I will be interested to hear the Government’s reasoning for their Amendments 44A and 44B in turn, which seem to turn on its head the requirement that individuals should be under 40. Is this because the Government have realised that in the present climate it will be very difficult for people under 40 to get a deposit together? Does the Minister envisage that this will apply to all areas of England or maybe just London in particular, where there is a problem with the affordability of housing?
Amendment 45, in my name and in the name of my noble friend Lord Beecham, would place a duty on the Secretary of State to consult the relevant local authorities and/or the Mayor of London when seeking to vary the price cap for starter homes. The requirement to consult relevant bodies when considering making this price cap change is good practice and will aid the Secretary of State in understanding the specific local circumstances that he or she should probably take into account when making such a change.
Lord Young of Cookham (Con)
My Lords, perhaps I may make a brief intervention following specifically Amendment 43, which the noble Lord just mentioned. I note with some alarm that, as we approach the third day of this stage of the Bill, we have now reached line 11 of page 1 of a 100-page Bill.
Baroness Hollis of Heigham
Will the noble Lord not agree that that is because we have taken the clauses out of order?
Lord Young of Cookham
If indeed we have made slightly swifter progress than that arithmetical calculation would—
Baroness Hollis of Heigham
Will he not therefore agree that his point is not a valid one?
Lord Young of Cookham
Returning to the theme, Amendment 43 seeks to add a qualification for those who are eligible for starter homes. I think that this is going to be a very popular product and that it will be oversubscribed. That raises the question of how one prioritises those who bid for the starter homes. Amendment 43 suggests one such restriction or qualification—namely, that people should live or work locally.
There may be other ways of managing demand. On Tuesday, I suggested that the product should be targeted at existing social tenants in order to free up a re-let, or at those on the waiting list in order to enable those behind them to move forward. There may be other ways of managing demand. Historically, we have had schemes for key workers—for example, teachers or nurses—who may need to live in a particular area.
When my noble friend replies, can she indicate how demand for the product will be managed, given that it will be oversubscribed? Will it be first come, first served, or will there be some eligibility qualifications such as those mentioned in Amendment 43 or those that I mentioned on Tuesday to ensure that the maximum benefit to the community as a whole is achieved from this exciting government initiative?
Lord Campbell-Savours (Lab)
My Lords, the thrust of these amendments, as I read them, is to try to deal with potential abuse of the system. I had thought of giving notice of my opposition to the clause as a way of dealing with these matters, but I think that I should deal with a number of issues on the back of these amendments because all my comments basically deal with the potential for abuse.
Perhaps I may go through some of the figures, because it seems that there are substantial profits to be made out of this scheme. Let us take as an example the starter price of £450,000 for a house or flat in London, which will probably be at the lower end of the market. I know that the Government say that there will be cheaper properties than that available in London but I certainly do not believe it from what I have seen recently of the property market in London. The market price of that property will actually be £560,000 but it will be sold for £450,000. Working out the figures on the basis of a 4% increase per annum, over five years there would be a 25% increase. I say that because the latest survey from the Royal Institution of Chartered Surveyors predicts a 25% increase in prices over the next five years. An increase of 4% per annum compounded gives £582,000 in the first year, £605,000 in the second year, £631,000 in the third year, £656,000 in the fourth year and £682,000 in the fifth year. In other words, you buy a house for £450,000 and, at the end of five years, you make a profit of £232,000 on the back of the people, because essentially this is funded by the people.
Let us take a starter price of £250,000 outside London. The actual market price of such a property is £310,000. It is worth £322,000 after the first year, £335,000 after the second year, and it goes up to £377,000 in year 5. So if you buy a £250,000 house, you will sell it with a profit of £127,000 on the basis of the RICS valuation. I think that these valuations are very low. It is quite possible that in London the prices will go up substantially more than that and we will see far greater capital gains. The same obviously applies to the £150,000 purchase that we talked about the other day. The market price of that property would be £187,000 and you would end up with a £78,000 profit on the basis of a 4% increase per year. I was doing these calculations in bed last night at one o’clock in the morning and I think they are fairly accurate.
Substantial profits are available under this scheme, and we all know what happens when a lot of profit is available, particularly in schemes where the Government are involved. People very often will organise their private affairs to maximise the profit that they can make. Therefore, in the regulatory arrangements that are introduced we have to be absolutely sure that we have covered all the potential arrangements that might be introduced, and I will just give one or two of them.
A qualifying person is set out in Section 57AA(2) of the Finance Act 2003 as a person who has not acquired freehold or leasehold residential property in the United Kingdom or elsewhere in the world. In other words, it is their first home. What happens when the beneficiary to a will inherits a £40,000 house in, let us say, the area where the noble Lord, Lord Greaves, is a councillor? That is the price of a house in Colne or other parts of Lancashire. Does it mean that the person who inherits that house—effectively, they have acquired it, which is what it says in the 2003 Act—loses the right to buy a starter home? They would already have acquired a house through their inheritance, and the Act does not say “purchased”, it says “acquired”. What would happen in that particular case? Would they still retain the right to buy a starter home, having already inherited that £40,000 terraced house in Lancashire?
What about the cash purchaser who the noble Lord, Lord Shipley, referred to? The noble Lord argued that cash purchases should not be allowed in these circumstances. He said that we should be sure that these houses are purchased under mortgage arrangements. However, someone could buy a house under a mortgage arrangement but it is the scale of the mortgage that matters. In other words, if we are to preclude cash purchasers, the regulations have to define how much of the purchase price of the house can be cash if there is a requirement to have a mortgage on the house. Will the Minister answer that? Again, that should be set out in the regulations.
What about a sham mortgage followed by a cash payment? Someone could take out a mortgage but then, three months later, pay cash; they always intended to pay cash but knew that the only way round the scheme was to take out a mortgage. Again, that has to be set out in the regulations.
What about the circumstances where a parent or relative, or even a friend, purchases in the name of the legitimate purchaser and then takes a charge on the property to take out a proportion of the profit at the end of the five years? In other words, the purchaser in fact was not the person whose name is on the deed and, by way of some charge, the actual purchaser is able to take the profit out of the deal at the end of the five-year period. Some might say that I am going a bit over the top by suggesting that these things might happen. However, there is a lot of profit in this and a lot of people will see great advantage in getting involved in these deals to take out the profit at the end of the five-year period. So again, we must ensure that the regulations cover the circumstances in which something like that might happen.
What happens if people acquire by purchase another property during the five-year period; in other words, they now have two homes? They have the home which has been subsidised with its vast profit potential and then they buy another home during that period. Whereas at the moment it is the second home which is subject to capital gains tax, in those special circumstances it might be that the first home should be subject to it. If someone can afford to buy a second home, having bought the first home under a subsidised arrangement, surely the starter home should be treated as the second home and be subject to some sort of tax gain to the Exchequer.
I move on to the question of the developer. How do we know that the developer will not inflate the price? The developer is supposed to offer the property at 25% less than market value—
Lord Campbell-Savours
I am sorry, 20%. Having done that, the developer might simply inflate the starter price. Who will determine what the real market price is of that property? Again we are going to need some pretty subtle guidance here because, when I talked this morning to some local authority people in Bristol, it was made clear to me that one of the great flaws in this legislation is over the valuation of starter home properties. Although I do not have the quote with me, I understand that Jones Lang LaSalle, a firm that will be well known to Members of this House with an interest in this area, has expressed grave concern about the question of inflated prices by developers.
Further, how can we prevent developers charging excessive ground rents on the leasehold properties they sell? We have noticed over recent years that, when there is a boom in the market, the length of leases on flats in London invariably seems to shrink down to 99 or 125 years, but when the market is bad very often the same blocks, at new-build stage, are sold on 999-year leases. Developers may sell properties on shorter leases with high ground rents and then even with truncated review periods, whereby instead of the review being made every 21 years it might be every 10 years. The reason they do that is simple. When it comes to the enfranchisement of the lease, developers will secure a higher price when the leaseholder buys the freehold, because of course the sale of the lease is dependent on the annual ground rent for the property. In my view the law should provide that such properties cannot be sold with less than 999-year leases and regulations should define the review period for ground rents. I do not know how it would be done, but it might be sensible to set up an arrangement whereby even ground rent maximums can be defined. Some might say that the only properties that could be sold should be freehold or share of freehold to avoid the problems I am talking about.
We keep hearing references to repayable discounts. In my discussions this morning, no one understands them to be repayable at all. I keep being told that what is happening is that annually the property is simply sold at a discounted rate further down the line up to five years. I am finding it hard to work out how that will happen. We need at this stage an explanation of how the discount system is actually going to work on resales within the first five years, because as yet no one has given me a satisfactory explanation. Moreover, what happens in a declining market? The market dropped in 1973, 1981 and 1992, with a minor drop in 2008. I know, because I have lived long enough to have experienced those falls on all four occasions. The discount on a £150,000 property is £37,000, on a £250,000 property it is £60,000, and on one worth £450,000 it is £110,000. What happens to those discounts in a declining market? Since I do not understand how the system works in terms of preserving the discounts during the first five-year period, I cannot work out what would happen in relation to those discounts. Is there some calculation which proportionately affects the amount of discount which has to be allowed on the subsequent sale of the property?
I think that I have dealt with most of what came to mind overnight when I was thinking about these things. What I am basically saying is that this system will be abused by people who want to make a lot of profit very fast—they will regard it as very fast—over a five-year period. Under this scheme, if people can build it into an investment, they can make a 50% return over five years. That will be very attractive to a lot of people. It invites abuse. Therefore, the regulatory arrangements that govern the scheme have to be sophisticated enough to ensure that that abuse does not take place and that taxpayers’ interests are protected.
Lord Kennedy of Southwark
Does my noble friend agree that one reason for raising these points today is the wholly unsatisfactory way that the Bill has been put in front of us? We have no regulations and we will get none before the Bill is passed into law. It is a ridiculous situation and why we have raised these points.
Baroness Royall of Blaisdon (Lab)
My Lords, building on some of the things that my noble friend has said about Amendment 41B, what can be done to ensure that starter homes sold with a discount cannot immediately be sold on to second home owners or to people renting them out as holiday homes? As we know, in many areas of the country, especially rural and coastal areas, while properties are sold and people have homes, these homes are not lived in all the time. Therefore, notwithstanding that the homes have owners, the essence of these communities is hollowed out because people are not there all the time; they become real communities only at certain times of the year, and the schools, the pubs and the shops all close. Can anything be done, if we persist with this 20% discount, to ensure that communities still thrive and that people are not able to sell these properties on as second homes?
The Government, in seeking to enable people to buy these starter homes, intend that if a person is under the age of 40, as I understand it, they still qualify to buy one. I do not think that the government amendments go far enough. Is the Bill, even as amended, compliant with the Equality Act? There is discrimination, I would say, against people over the age of 40.
Lord Beecham (Lab)
My Lords, I suspect that the Minister will be grateful that my noble friend Lord Campbell-Savours eventually managed to get some sleep, having burned the midnight oil on what has been an absolutely forensic analysis of these proposals in the Bill and the amendments in the name of the noble Lord, Lord Shipley.
I had intended to ask the noble Lord, Lord Shipley, how much of a mortgage would disqualify and for how long would it have to be held under the terms of his amendments. How would the maintenance of a mortgage be monitored? If a mortgage were paid off after a year or two, or three or whatever, would that change the situation in relation to the discount? How would residence be monitored, for that matter? Is somebody supposed to call every so often to check who is occupying the property? On a lesser topic, would very short lets of the Airbnb kind interfere with the concept that the Government have advanced? I understand the intentions of the noble Lord, Lord Shipley, but there are significant problems in realising the objective, with which the Opposition agree, of ensuring that only genuine first-time buyers are covered.
There is also a question about the meaning of locality. Amendment 44 states:
“The meaning of ‘locally’ … shall be defined by the relevant local authority or the Greater London Authority”.
If the Government are disposed to accept this amendment—which would be sensible because someone has to ensure that this is a locally based scheme—I wonder whether, in addition to the terms of the amendment as it stands, “local authority” could be defined as including combined authorities where they exist. Combined authorities will usually have a strategic role in the housing market and development—certainly some agreements have now been signed—and it would incongruous if, in an area designated as one for which it has some housing responsibility, the combined authority was not included in the process of determining the locality for obtaining a grant of this kind. If the Government are disposed to accept the principle of Amendment 44, perhaps that further refinement could be taken on board.
I agree with the suggestions made by the noble Lord, Lord Young. It would be right to look at the range of issues that he has covered and I hope that the Minister will indicate a sympathetic stance—he has already made the point, so she has had a couple of days to think about it—and apply his suggestions to the scheme as it develops. It is to be hoped that, on Report, the Government will reflect at least that much in their own amendments.
Baroness Hollis of Heigham
My Lords, I have a simple question—this is not a speech—to ask the Minister. As far as I can see, the only effective constraint—apart from the price or value of the property—is the age of the applicant for a starter home, who has to be under 40. We all share a common wish to ensure that home ownership is available to people on modest incomes where it makes sense for their lives, but what about the displacement issue? In quite a number of cities where there are universities, colleges and so on, people do not expect to enter the home ownership market until they are around 30 or so—they are doing PhDs and so on—at which point they enjoy relatively generous salaries and could well afford first-time homes on the open market without taking any advantage of the discount. However, because the discount is there with no income-cap qualification to its retirement, we will see people who have quite generous incomes—and whose income increases will also be quite generous—able to pocket this public subsidy paid for by taxpayers, often with incomes much lower, and then trade up as soon as they get their first promotion. Why is the Minister not considering an income cap as well as an age cap to ensure that people who can buy without discount should?
Baroness Gardner of Parkes (Con)
My Lords, all sorts of scenarios have been put forward, many of which I agree with, including the point made by the noble Lord, Lord Campbell-Savours, that there will be people who will find ways around the regulations and buy these houses unscrupulously.
I remember when I was a local councillor it was decided that local councils should not be owners of property and we sold off houses near to here on the basis that they were offered to sitting tenants at an incredibly low price. It is hard to believe that you could buy a house near Smith Square for £50,000, but that is what they were. After we sold all of these properties to the sitting tenant, one was left vacant and sold for £150,000. There was a huge difference between the property values; in fact, I think the sitting value was out of touch with values at the time. It annoyed me to discover that one of the people who had bought as a supposed sitting tenant was nothing but a front man for someone who could well have paid anything. So, a lot of the abuses suggested by the noble Lord, Lord Campbell-Savours, will happen—I hope not too many, but someone is always working out a way around things to get a personal advantage.
The noble Lord, Lord Shipley, commented on the issue of whether a person has bought a property as a genuine place to live in and whether, to ensure this, there might be letting restrictions and various conditions applied. This leads me back to the point which has been made again and again, that until we have regulations we honestly do not know how we are going to care about and deal with this. That is the greatest worry of all.
Lord Greaves (LD)
My Lords, I want to speak to government Amendment 45B. I was wondering if I should wait until the Minister had spoken to it but I think it is probably better that I speak now and that she hears what I have to say. If the Committee is happy for me to do that, I will.
The amendment proposes quite an extraordinarily far-reaching Henry VIII power. It simply says:
“Regulations under this section may amend this Chapter”.
That is as far-reaching as is possible. It suggests that the Government are not quite sure—perhaps it is stronger than that—whether they have got it right in this chapter on starter homes, and therefore that they want a provision to be able to change it in any way and at any time, subject to parliamentary approval. Of course, we keep being told that the House of Lords is not allowed to oppose these things, anyway.
In what ways can this chapter be amended, either as we go through this procedure in Committee now or in the future by regulations, to deal with the fundamental problem, which I keep banging on about, that housing markets are different in different places? There are parts of the country—not just in north-east Lancashire but in lots of other areas too—where the housing market is not buoyant but flat and fragile. In these places, the introduction of starter homes into the system could have serious unintended consequences which harm the market rather than boost it.
I want to give noble Lords the prices of three or four houses for sale at the moment. In so doing, I refer to the asking prices in the property supplement of the wonderful newspapers, the Nelson Leader and the Colne Times, published on Friday—so they are up to date. I have to say that in our area houses often go for less than the asking price; the idea of forcing prices up is not known to us.
I was taken by one of the featured properties at the beginning of this supplement because it is in the ward I represent, which is normally not featured. It is one of their top properties and a two-fronted terrace house. It is described as:
“Immaculately presented and substantial in size … dwelling has two reception rooms … three bedrooms”,
et cetera. It is obviously highly modernised. It continues:
“The garden has an area of hardstanding … and views toward Pendle Hill”.
What more does anybody want? An offer—and this is incredibly high for a terraced house in this part of Colne—of £110,000 is being sought by the owners.
Lord Kennedy of Southwark
My Lords, my noble friend Lady Hollis was absolutely right when she suggested that the only restriction is age. But government Amendments 44A and 44B in this group of course seek powers to disapply even that.
Baroness Hollis of Heigham
It would be really helpful if the Minister could assure the House—we really do need this—that proposed draft regulations will be before this House before we get to Report. If not, we will have major problems in this and other areas. It is not too much to ask. The Bill started in the other place last autumn, so there has been abundant time for the Government to determine what their policy intent is behind these “anything goes” powers for the Secretary of State. We must know, otherwise some of us will seek the House’s authority to defer consideration until we have those regulations. We cannot do our job of scrutiny when so much of the information that we need is absent.
Lord Campbell-Savours
May I ask one question? We were told on Monday, I think, that there were so many hundred thousand people listed as wanting starter homes. Is there any information available on where these people are located—which counties and local authorities—and could we have that information quite early, perhaps even today? It might help us in our debates.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, we have started today with another interesting debate on starter homes. I am conscious that this is the third day in Committee and we still have some substantial issues before us.
Baroness Hollis of Heigham
Is the Minister aware that, in the other place, they took 17 Committee days to discuss this Bill?
Baroness Williams of Trafford
I am not disputing that at all. I was going to give a bit of a recap of Tuesday if that is okay by your Lordships. Anyone who read Hansard for Tuesday will not be in any doubt that your Lordships’ House is passionate about social housing and the need to make sure that the most vulnerable in our society have safe and secure housing. The Government’s position is not as far removed from that as some noble Lords may believe. We, too, believe that social housing should continue to house those who need it most.
Some noble Lords suggested that the provisions in Chapter 1 mean that we no longer believe in anything other than home ownership, which is not the case. As I have said before, there is a gap in the market. An additional product is required to fill that gap and that is why we are legislating for starter homes. We are helping people to access homes that they can afford in a number of different ways and this Bill should not be seen in isolation. The Government have committed £4.1 billion in spending reviews to deliver 135,000 shared ownership homes and £1.6 billion to deliver 100,000 affordable homes for rent.
With help to buy, shared ownership, the affordable rental sector and social renting, market-priced housing and private rented sector housing, as well as the retirement housing that is coming forward, there is a whole range of tenures available and starter homes will rightly be a part of that mix. Just because this wider range of affordable housing is not mentioned in this part of the Bill, it does not mean that local authorities will not provide it. Local planning authorities know their market. We would also expect them to seek other forms of affordable housing, such as social rent, where it would be viable. Councils have the option to release more land for housing to ensure that they are delivering as much housing of all tenures as is needed.
Baroness Hollis of Heigham
My Lords, in that case will local authorities be able to claim Section 106 land which has now been earmarked for starter homes and which in the past has funded more than 50% of social housing in this country? The Minister says that they can do it but she is denying them the powers, the authority and the revenue base by which to do it.
Lord Beecham
Before the Minister replies to that, how does this aspiration match the Government’s imposition of cuts in rents for local authority social housing, which will restrict their capacity to invest?
Baroness Williams of Trafford
My Lords, to go back to the first question from the noble Baroness, Lady Hollis, the councils will provide through various mechanisms different types of tenure, as they always have done. We fully expect that this will be the case in the future and I have outlined some of the funding mechanisms.
Baroness Hollis of Heigham
I am sorry, my Lords, but that is not good enough. In the past, local authorities and housing associations have relied on Section 106 but that is largely going to disappear unless some of the amendments that we will discuss later are taken into account. It is no use the Minister saying that she has no reason to think that this will not continue when it will not—unless she can tell us how local authorities will make good their loss in rents, their loss in capital grant support and their loss in Section 106 land.
Baroness Williams of Trafford
My Lords, Section 106 can still be used for infrastructure but cannot be used where it would damage the viability of providing those houses on the site. Local authorities will continue to use Section 106 and a variety of other mechanisms to provide mixed tenures on their sites.
Baroness Hollis of Heigham
My Lords, I have been chair of a modestly sized housing association across Norfolk, and virtually all our new building was under Section 106. Take 106 away and the building will stop—full stop.
Baroness Williams of Trafford
My Lords, if it is viable developments can use Section 106, for example to provide infrastructure on those housing developments. The £1.6 billion that we have provided for affordable rented properties is purely grant-funded.
Baroness Hollis of Heigham
But, my Lords, the infrastructure in rural villages is already largely in place. We are talking about modest pockets of 10 or a dozen houses here and there. Infrastructure is not the point; that land has come through Section 106 from other private development which is already happening. How are local authorities going to add to the social housing stock when they face huge pressures with no land and no resources?
Baroness Williams of Trafford
My Lords, as I have said this will happen through a variety of mechanisms. I appreciate that we are in disagreement at this point but if noble Lords will indulge me, I would like to make some progress.
Lord Beecham
I am grateful to the Minister for giving way but broadly speaking, it is right to say that in terms of Section 106, authorities have been accustomed to accepting some 15% of houses in development under that scheme. Can the Minister give any indication of what she thinks the future likely percentage will be under the regime which the Bill introduces? In percentage terms will it be around the same, less or more, and on what basis does she advance her opinion? I accept that she may not have an answer immediately across the Dispatch Box and if she does not, can she write to us about that?
Baroness Williams of Trafford
I cannot say at the Dispatch Box what the percentage will be, because it will be out for consideration, but I can give my opinion. In my experience, it will not be too dissimilar from the affordable homes expectation that was previously in place. The noble Lord, Lord Beecham, asked me another question in following the noble Baroness, Lady Hollis, on the previous point and I have completely forgotten what he said. Perhaps he could repeat it—it is going to be a long day.
Baroness Hollis of Heigham
My Lords, we need to know whether these are affordable homes for rent. Otherwise, what the Minister is doing is using starter homes to embrace the whole concept of affordable homes. That entirely ignores the need for affordable homes to rent. Following my noble friend’s question, can she say specifically whether the percentage of social housing for rent will continue?
Baroness Williams of Trafford
My Lords, all I can say is that local authorities know their market, and they can use Section 106 for other types of housing on sites, whether for sale or for rent, in addition to starter homes where viability allows, as well as for infrastructure. I cannot answer more clearly than that at this time.
Lord Kennedy of Southwark
The Minister is right to say that local authorities know their market. The core problem with this Bill and its provisions, which has not been taken account of, is that of the powers being taken to the centre of the Government.
Baroness Williams of Trafford
Those powers are a specific type of power for the Secretary of State, but that does not take away from any of the other powers that local authorities might wish to use, viability allowing, when agreeing Section 106 for development in terms of other affordable homes for sale or for rent.
If I may, I wish to make a bit more progress. Our analysis has shown that in regions outside London, we expect that, on average, up to 60% of eligible households currently renting privately would be able to secure a mortgage on a starter home. Within London, we expect that up to 47% of eligible households currently renting privately would be able to secure a mortgage on a starter home. For example, 59% of eligible households currently renting privately across London would be able to secure a mortgage on a starter home in Hammersmith and Fulham.
Lord Campbell-Savours
Does the Minister know what the remortgage payments are on a mortgage of £450,000?
Baroness Williams of Trafford
My Lords, I do, because I have a rather large mortgage myself. I think the noble Lord may be referring to the cap on a starter home, which is £450,000.
Lord Campbell-Savours
Yes, but £450,000 is the price at which most developers are going to build houses in London.
Baroness Williams of Trafford
My Lords, the first-time buyer price of a house in London is currently £356,000. I appreciate that that is not the average house price in London, but that is the average first-time buyer price in London.
Baroness Williams of Trafford
It includes all sorts of properties, and that is for first-time buyers. But the price cap is a cap; it is not an average. We can and we will argue statistics today, but the cap is not the average, and the average first-time buyer price of a home in London is £356,000.
Lord Beecham
I thank the Minister. I referred to this when we discussed similar matters the other day. The suggestion—I was quoting Savills as my authority—is that new-build homes are going to be more expensive than houses on the market, so the £350,000 figure is likely to be an underestimate—if I recall rightly, by around 10%. We will be looking at nearer £400,000 for a new-build property, which makes it a different story.
Baroness Williams of Trafford
I apologise to the noble Lord and to the noble Lord, Lord Campbell-Savours, because the figure that I gave was the implied first-time buyer price of a new-build in London. I think we will all get a bit confused with prices and statistics today, so I hope the noble Lords will accept my apology.
I turn now to the amendments. I thank the noble Lords, Lord Kennedy and Lord Beecham, for Amendments 43 and 44, which suggest limiting starter homes to local people, and for Amendment 40, which would prevent starter homes being sold to buy-to-let investors.
I thank the noble Lord, Lord Shipley, for his amendments, which seek to restrict starter homes to those purchasing via a mortgage, and to require first-time buyers to occupy starter homes as their principal residence. Finally, the amendments in my name introduce some modest flexibility to the age 40 cap.
Lord Campbell-Savours
I have just looked this up. The cost of a £450,000 mortgage on a new house in London, at 4%, is £28,000 per annum—out of after-tax income. How is it possible for her to say, as I think she did, that 40% of private owners in London can afford a mortgage like that? These figures cannot be right. With £28,000 after tax, we are talking about income of something like £45,000 a year before tax just to pay your mortgage. This is not affordable.
Baroness Williams of Trafford
My Lords, first, if someone is paying 4% on a mortgage, they might not be getting the best deal on the market. Secondly, I just repeat my point that £450,000 is the cap on a starter home and £356,000 is the implied price of a new-build first-time buyer property. I do not think we are necessarily talking about the same thing.
Lord Kennedy of Southwark
But the point is that the figures she referred to are for the whole of London. The price of a property in the Elephant and Castle, around where I grew up, is £450,000 or more. This may apply on the edge of London, but not anywhere near here.
Baroness Williams of Trafford
My Lords, I recognise there are vast variations in house prices in London. We talked about Lewisham the day before yesterday, and we could talk about every borough in London today, but I am simply giving an average implied price. I accept that Westminster and Kensington and Chelsea are more expensive—I could not afford to live there—but there are places in London that are more affordable than others. This is simply an average price.
Amendment 37B would restrict who could buy a starter home to those purchasing with a mortgage only. We are allowing starter homes to be purchased only by qualifying first-time buyers under the age of 40, with limited exceptions. The noble Baroness, Lady Royall, asked whether this fits in with the Equality Act. I confirm that an equality impact assessment has been prepared for the starter homes provisions in the Bill, and this will be kept under constant review in line with the duties under the Equality Act. In addition, a further assessment is being prepared to accompany the Government’s consultation proposals for starter home regulations.
We need to prioritise our assistance to the generation of people in their 20s and 30s who have been disproportionately affected by the increasing affordability pressures over the last 30 years. My noble friend Lord Young of Cookham made the very good point that this is a very popular product and significant interest is already being generated on these homes. He was correct that this is done on a first come, first served basis. He also made the point about it being a good way of increasing mobility in the social rented sector and for those currently on waiting lists. I totally agree with that point—it is. We will be ensuring that resale letting restrictions are included in our regulations. The aim is to provide a place to live in. We are consulting on these requirements for the regulations shortly, to seek wider views and to ensure that they operate fairly and effectively.
Baroness Hollis of Heigham
Does that mean that the proposed draft regulations will be available to noble Lords before Report, so that we can see how the Minister ensures to target starter homes on those who most of us would accept need them most, given income and occupations that some may have which our society needs?
Baroness Williams of Trafford
My Lords, I do not think that I can undertake to provide the regulations by Report, given that the consultation will be happening shortly. As I have done with regulations on many occasions, I will elect to give noble Lords as much detail as I can possibly can, but I cannot give an undertaking that they will be ready by Report.
Baroness Hollis of Heigham
I am sorry; it may be a matter of when Report happens. The Minister should recognise that noble Lords all around the Chamber are floundering, because we do not know enough. We are not challenging the Minister’s good intent; I am sure that she is telling us everything she knows at the moment and that she does not wish to mislead the Committee, nor to pre-empt decisions that her department may go on to make. Some of us have been there and know the situation that she is in. However, the response to that should be to delay Report until we have those regulations, because otherwise most of this debate will continue on Report with questions such as, “What does this mean?” or “What does that mean?” and the Minister will say, “We have to await the regulations”. Then we will have an argument about whether those regulations will be affirmative or negative, and whether we can go back and amend legislation, given that we will then see the intent of the Government’s proposals, which the Minister was not able to share with us when we were discussing the Bill itself. She recognises this dilemma, as does the whole House—it is not unique to this Bill. Easter Recess is coming up. Either she must delay Report stage or she must get those regulations to us. For the sake of good scrutiny, we cannot afford to have the same sort of debate as we had on the previous day in Committee on Tuesday—and, so far, today.
Baroness Blackstone (Lab)
My Lords, let me pick up the point my noble friend has just made. Given that there is a consultation, I completely understand what the Minister is saying. However, it is obviously sensible to delay Report so that this House can have a proper opportunity to peruse the regulations in detail.
Lord Campbell-Savours
My Lords, let me add that the danger is that the Bill will be treated as a skeleton Bill under the Cunningham report. I always oppose voting on fatals, but we may find ourselves having to vote on fatal Motions because it is the only way we will be able to deal with amendments that we should have been able to deal with in primary legislation.
During my modest contribution, I mentioned a number of abuses. Will the Minister assure us that each of those that I quoted will be considered and dealt with by officials, and that if they believe my comments were accurate, they will be dealt with in the regulatory arrangements?
Baroness Williams of Trafford
I hope to answer the noble Lord’s points as fully as I can. I know that if I do not, he will intervene again.
Lord Greaves
My Lords, perhaps it is my fault that I have not noticed yet, but while we are on the question of the 40-year age limit, will the Minister tell me whether the cut-off will apply to a person trying to buy a house at the time they make an offer or the time they complete?
Baroness Williams of Trafford
My Lords, it will be at the time they complete. That is when they become the owner of the house.
Lord Greaves
That is an interesting answer and I am grateful for it. May I suggest that we find a way of discussing this and thinking about it further, because if we think about the practicalities of buying houses, the answer that has just been given has all kinds of implications?
Baroness Williams of Trafford
I appreciate that. I keep coming back to the point that this is to address a specific demographic in the market that has been disenfranchised from home ownership.
To return to the point made by the noble Baroness, Lady Hollis, I understand the frustration of the Committee. I understand particularly that when the House is frustrated by not receiving regulations, that then takes time that we should be taking to discuss the Bill. However, I also see the need for the consultation to be meaningful. I would not want to delay Report but I am happy to meet noble Lords once the consultation has been published, which they might find helpful.
Baroness Blackstone
When is that date going to be? Of course consultations should be meaningful; they are often not, but I hope that this one is. Still, it would be useful to know the timetable that the Government have in mind.
Baroness Williams of Trafford
I expect that it will be in the next few weeks. I will keep noble Lords posted. As I say, I am happy to meet Lords once the consultation has been published.
Baroness Hollis of Heigham
My Lords, does that mean that the consultation period will be through by the end of March, the end of April or what?
Baroness Williams of Trafford
I hope the noble Baroness will forgive me if I cannot give her an exact date. What I have elected to do, once the consultation has been published, is to meet noble Lords to discuss it.
Baroness Hollis of Heigham
My Lords, if that means we will not get the results of the Government’s response to the consultation until after Report, I suggest that through the usual channels they consider delaying Third Reading, or at least the use of Third Reading to take Report-style questions that we would not have been able to ask on Report because of the Government’s handling of their own timetable.
Baroness Williams of Trafford
I can only reiterate my commitment to sharing the consultation once it has been published and to ensuring that as soon as regulations can be brought forward, they will be.
Lord Kennedy of Southwark
Can the Minister not go a bit further than that? Can she not just agree here today to go through the usual channels to explore the point that my noble friend has made about the possibility of having further process at Third Reading?
Baroness Williams of Trafford
My Lords, matters may have been resolved by Third Reading, but I will speak to officials to see what can be done to expedite the detail of the regulations as soon as possible. I can do no more than that today.
Lord Beecham
My Lords, I would like to revert from this dreadful series of process issues and assert that the Committee has every sympathy with the Minister; it is no fault of hers that we are in this dreadful situation. To go back to the last substantive thing that she said, which was about making sure that the houses are not let after being bought, what mechanism will there be for monitoring the situation? Unless it is effectively monitored it becomes a meaningless provision, and I am not sure how it might be monitored.
Baroness Williams of Trafford
My Lords, there will be a power to stop letting because this is a very important aspect. For the intention of what is being provided through starter homes to be flouted in that way would undermine the policy altogether.
Lord Beecham
That is obviously right. The question is how it is going to be done. Will someone be going around and checking letting boards or with estate agents to see whether properties bought under right to buy are to be let? Or is it going to be an obligation, although how it would be enforced is another matter, for an owner of a right-to-buy property to notify someone about letting? Again, how could that be enforced? There are real practical difficulties here to which I find it hard to come up with an answer. I am not expecting the Minister to come up with an answer just like that, but I hope that someone in the department is giving some thought to how they can make a reality of the aspiration, which the Government and the Minister no doubt have, that the principle of not letting these properties is actually enforceable.
Baroness Williams of Trafford
The noble Lord gets to the heart of some of the issues on which we shall be consulting and which we shall try to ensure do not happen—for example, abuse of the facility. The regulations will be subject to the affirmative procedure, so there will be time to debate them, although I am not losing sight of noble Lords’ frustration.
I have completely lost my place. The English housing survey, which was published in February, found that 83% of first-time buyers funded their first property with savings; 27% had help from family or friends, while 10% used inheritance. Many first-time buyers used a combination of sources and 96% required a mortgage to buy. I am not convinced that a mortgage requirement will prevent the gaming that noble Lords suggest, although I can see exactly where they are coming from. People can play all sorts of games with mortgages. They can get a mortgage and, six months later, pay it back. I am keen to prevent local gaming, but I do not know that this would actually prevent it. We will keep implementation under review and issue further regulations if necessary.
The noble Lord, Lord Campbell-Savours, talked about resale in the first five years. This is a very important point. For example, what would happen to any money from the 20% discount? If a property were resold in the first five years, it would be sold at a 20% discount during that period, so it would remain a starter-home type of product.
Lord Campbell-Savours
In a free market, how do you calculate the 20% discount within the first five years? Take year three. Who would decide the market price, and the subsidised—discounted—price? Would it be the estate agent; would there be some sort of independent valuer; or would it be the department? Who is going to do it? At that point, we would be interfering and trying to prejudge market values. I do not think that it will be possible.
Baroness Williams of Trafford
The noble Lord is right. Market values can go down and they can go up. I would expect that an independent valuation of the property would be made and the 20% discount applied to the next person buying that starter home. It is true that the market might go down, in which case the price to any subsequent starter home purchaser would also go down.
Lord Campbell-Savours
I cannot see how you can calculate it. I am the purchaser. There is a house—a discounted property. How do I work out what I should pay? I might be competing with a queue of six people all of whom want to buy the house. Who is going to be the winner? In these conditions, there will be competition and one would have thought that the competition will take it above the discounted price. Unless there is some sort of preferential system built in, I cannot see how it can possibly work. We need a lot of information on this before we get to Report.
Baroness Williams of Trafford
If the noble Lord is happy, we can discuss this further. There are all sorts of complexities in it and I am very happy to meet with him. I think that the noble Lord, Lord Campbell-Savours, and I are likely to be meeting a lot over the next few weeks to discuss various things. But that would be the mechanism: money would not go anywhere but the property would come back on to the market as a starter home.
The noble Lord, Lord Campbell-Savours, also talked about a charge on a starter home, which is another good point. We will consider this issue further and will engage with lenders, developers and local authorities on the detailed implementation of starter homes, which will include such issues. The noble Lord also talked about the length of leases allowable on starter homes, which, again, is another good point. The Bill specifies that a starter home may be held as a freehold or a leasehold interest. The regulations will not specify the length of any lease but in practice they will be of a market-standard length so that it would be possible to obtain mortgage finance—that is, it would be very difficult to obtain mortgage finance on, for example, a leasehold property of 10 years—even if the purchaser does not intend to obtain a mortgage.
Lord Campbell-Savours
Why not simply say, “No 99-year or 125-year leases?”. Why not just say that they should all be 999-year leases?
Lord Campbell-Savours
A 999-year lease is a virtual freehold, is it not? Why not have those extra-long leases? Why have short leases, which force up the enfranchisement costs when people buy their leases if the ground rents are high as well?
Baroness Williams of Trafford
I get the noble Lord’s point entirely. We expect that if these properties were leasehold, the leases would be of market-standard length.
Lord Campbell-Savours
But market-standard length at the moment can be anything from 99 to 999 years. I am just saying, why not go for the longer lease?
Baroness Williams of Trafford
I entirely take the noble Lord’s point. As I say, that is our expectation, but we will continually monitor this. It is a new product and we will monitor it as time goes on.
I think I have answered the questions—or some of them—before I have introduced the amendments. Amendment 41B would not allow buy-to-let investors to buy a starter home but would require first-time buyers to occupy a starter home as their principal residence. I assure noble Lords that it is not our intention to allow those people who buy a starter home to become buy-to-let landlords, and nor do we want the properties to be second homes.
The noble Lord, Lord Campbell-Savours, brought up the point about what happens if someone inherits a house. If that happens and they sell it on, clearly they do not own that house, but once they occupy that house they own it and therefore they would not be a starter-home purchaser. I do not know what would happen if someone purchased a starter home and then one year into that purchase inherited a house. I can get back to the noble Lord on that.
Lord Campbell-Savours
What worries me is where someone inherits a house in the area where the noble Lord, Lord Greaves, lives, at £40,000, and then is disadvantaged because under the provisions in the Finance Act 2003, if they have acquired it—not purchased it but acquired it; in other words, inherited it—that would then deny them the right to have a starter home. That should be sorted out.
Baroness Williams of Trafford
It would, but it would give them a very good deposit on a home if they were to then sell that property, and in the north-west, the implied first-time buyer price of a new build is £144,000. I am just giving an example which relates to the one the noble Lord gave, but in that case the properties would be well within the affordability range for a new-build first home.
Lord Campbell-Savours
It is defined in the 2003 Act. If you have acquired a house by way of inheritance, under this legislation that is your first home and therefore you cannot buy a starter home. That is what I was driving at.
Baroness Williams of Trafford
My Lords, if you have acquired a home and then you live in it, you are the owner of that home. You own it.
Lord Greaves
I am not qualified to take part in these legal technicalities but this is clearly something that needs sorting out. If the Government are going to stop people buying a starter home and letting it during the five-year period, will they also be prevented from keeping it empty? For example, if I bought a starter home worth £250,000, having received a discount of £50,000, and with two years to go I unavoidably had to move somewhere else and could not live in that house, it would be altogether financially more beneficial to me to simply leave it empty for two years and pay the council tax on it rather than to sell it and lose the £50,000. What will the position be in that situation?
Baroness Williams of Trafford
Theoretically a person could, within the five-year period, have to move somewhere else and therefore the house could be left empty for two years. The question is whether they sell that property within the five years. The person that the noble Lord is talking about would not sell the property; he would simply go elsewhere for work or for whatever purpose.
Lord Greaves
My Lords, there are all sorts of theoretical circumstances that we can put ourselves in but people may well move permanently—they may move to another part of the world or to another part of England where there are some jobs, unlike in parts of the north of England. Under those circumstances, they would not come back to the house and it would clearly be in their interests to leave it empty for two years. Therefore, the number of empty properties in that area would increase for purely bureaucratic reasons. All you have to do is leave the house empty for a couple of years, then sell it and make a profit of perhaps £45,000. That does not seem sensible. If the Government have not thought out the problem, they ought to do so and come back and tell us whether there is a solution to it.
Baroness Williams of Trafford
My Lords, the matter here is resale. I will certainly write to the noble Lord to clarify the issue if that is okay.
Baroness Hollis of Heigham
On that last point, we want to help people to buy a starter home if they have a good chance of affording it. On the one hand, we want to stop abuse but, on the other hand, we do not want to stop appropriate geographical mobility. The core of the problem is that after five years the 20% discount ends. I hope that the Minister will understand the overlap between a lot of these discussions and the subsequent amendments relating to trying to keep that 20% discount in perpetuity, because at that point the possibility of abuse reduces very sharply.
Baroness Williams of Trafford
My Lords, I am sure that we will go on to talk about “in perpetuity” today. The Government are quite clear that not making these homes discounted in perpetuity allows mobility up the housing ladder and frees up property for other people to live in. Also, it does not restrict the person who has bought the starter home in making progress up the property ladder.
Lord Beecham
I want to revert for a moment to the conundrum posed by my noble friend Lord Campbell-Savours, to which the noble Baroness has endeavoured to reply—with some difficulty, which I quite understand. His question is predicated upon a single person inheriting a house. However, if two or three siblings inherited a share in that house, on the face of it that would also invoke the problem he raised. Again, I do not ask for an answer now but this is yet another area that needs to be explored by those advising the Minister. On the face of it, one out of the three, four or however many siblings might have a share in this notional property would be disqualified.
Baroness Williams of Trafford
I think that the noble Lord is right. If the noble Lord, Lord Campbell-Savours, will indulge me, I will write to him on this further. It starts to raise questions, particularly when there are two or three—
Lord Campbell-Savours
All I am saying is that where the Bill states:
“’First-time buyer’ has the meaning given by section 57AA(2) of the Finance Act 2003”,
that should be amended because it is an insufficient definition.
Baroness Williams of Trafford
Perhaps I may take that point away because, like other noble Lords, I am no legal expert. The noble Lord, Lord Greaves, asked about the Help to Buy scheme being used to purchase a starter home. We are certainly exploring whether it can be used but as yet no decisions have been made.
Lord Greaves
Just to wrap up this point if we can, when might decisions be made? The point is that if there is a 20% discount on a starter home and a potential 20% discount in certain circumstances through the Help to Buy scheme, somebody could get a 40% discount out of public funds on the house they buy. That seems rather a lot, and I would like an answer to that question before we finish with this Bill.
Baroness Williams of Trafford
My Lords, Help to Buy is a government loan guarantee scheme as opposed to a discount, but I shall be happy to discuss that further and, as I said, to bring forward in due course government thinking on Help to Buy being used for a starter home.
Putting the sales and letting restrictions in regulations will give us flexibility to amend the restrictions, should this be required in the future. It will also give the opportunity to consult with key stakeholders to ensure the regulations operate fairly and effectively, which is what we all want. Restrictions in any legislation will not prevent gaming at the local level, much as we would want it to, but I reassure noble Lords that we will be working with builders, lenders and local government to secure the best possible mechanism to ensure that starter homes are for owner-occupiers only. We are working to secure a practical mechanism that can be agreed with all parties to ensure that starter homes are real homes for those who will enjoy living in them.
The noble Baroness, Lady Royall, asked a question about second-home owners. I cannot remember what it was but I have something written down in my notes. Would she mind repeating the question?
Baroness Royall of Blaisdon
It was how to ensure that, once the starter homes are sold on, having been occupied for two or however many years, it is not possible to sell them on to second-home owners or to people who are going to rent them out to other people. It was about second homes and holiday homes.
Baroness Williams of Trafford
My Lords, unfortunately you cannot really stop that, much as we would like to see a perfect housing system in which there is no abuse. Noble Lords have given many examples of when, once the five or however many years are up, in subsequent years some of these houses could be used as second homes. I wish it were not the case but, unfortunately, it is. The point is that they will go back into the market as a supply of houses for people to live in in the future.
Lord Greaves
My Lords, I apologise, but these are new houses and therefore subject to new planning permission. Could it not be attached to the planning permission that they should not be used as second homes?
Baroness Williams of Trafford
My Lords, I think the idea is that we want to make the system as simple as possible, but I completely accept the fact that we do not want to leave it open to abuse. There are examples of that under right to buy, where properties might have been used as second homes. Of course, we hope that the second-home stamp duty should deter some people—noble Lords included—due to the quite substantial price now involved in buying a second home.
Baroness Young of Old Scone (Lab)
Could I just challenge something that the Minister said? The nub of this is a point that we are going to come on to debate later: the in-perpetuity issue. A lot of these potential misuses, both at point of purchase and at point of sale subsequently, could be resolved very simply if the Government were to relent and see these starter homes as being starter homes in perpetuity with a permanent discount. I was very unconvinced by the Minister’s argument that, otherwise, people in these starter homes would be unable to get on to the next rung of the ladder in the housing market. Do we really want to be persuading people to go up the housing market ladder in an inflated way? That is partly the problem with the housing stock at the moment: prices are inflated, and the steps between a small property and the next rung up the ladder are huge, particularly in areas of high housing cost such as London. What is the harm of them staying in the smaller property, if they have to, until such time as they can either achieve their aim with additional savings to buy into the next higher grade or get to the point at which they have a sufficient income level to be able do it? It seems to me that the system will struggle in the future with the sorts of abuses that the Minister is struggling with, because of the inability to control what happens after the first sale.
Baroness Williams of Trafford
I take the noble Baroness’s point, but the Government’s wish is that people who want to move—and there are many reasons why people would want to move in the future—will be able to do so without being restricted by the same problems that they faced when buying before the starter home discount came in. Also, that mobility introduces a supply into the market. Noble Lords from all round the House have talked about the lack of supply and the lack of supply at a certain level. So it has a dual purpose, in allowing other people to come on to the market but also introducing supply when those people choose to move on.
I now move to non-government Amendments 43 and 44. Over the last 20 years, we have heard that the proportion of those under the age of 40 who are homeowners in England has declined by over a third, from 61% to 38%. There has been a 26 percentage point increase in the proportion of that age group who rent homes in the private sector, from 18% to 44%. Therefore, as one has declined, so the other has gone up. This is a problem faced by an entire generation. It would be wrong to say that some people cannot benefit from starter homes and buy a home in the location that works for them simply because they are currently living or working elsewhere. They could, for example, currently be priced out of the neighbourhood of their choice, or they could be relocating for work or other personal reasons. The effect of a local connections test on starter homes would be to restrict access for some people for no good reason. A starter home purchaser must commit to living in the property for five years and there will not be the opportunity to rent out the property, as we have already discussed. This must be a better test of commitment to an area.
It is also important that there is consistency, in order that our reforms and the commitment to deliver 200,000 starter homes are widely understood. This is particularly important for lenders and developers, and their support and engagement are critical to achieve delivery. Putting differential requirements in place as a matter of course, such as a local connection test, would introduce complexity that we do not want in getting housing delivery on the ground. However, my noble friend Lord Young brought up the point that a local connection may be warranted, and I recognise that. It has long been a common feature of rural exceptions sites, where opportunities for new housing supply are very limited. As part of our consultation on national planning policy, we sought views on whether local planning authorities should have the flexibility to introduce a local connection test for starter homes on rural exception sites. This would reflect the particular needs of some rural areas, where local connections are important and access to the housing market for working people can be extremely difficult. It would also be consistent with existing policy on rural exception sites. We are currently considering consultation responses on this point.
Lord Beecham
My Lords, I wonder whether it might not be sensible also to look at possible urban exception sites. Take the case of inner London—there may be other places as well—where there are very high levels of demand and very high prices, and even these homes will not exactly be cheap. Would it not be sensible to allow the local planning authorities in those areas to have the discretion to require a local connection, having regard to the pressures they are already experiencing with their existing population? I certainly support the rural exception point, and presumably it may be possible to have a similar mechanism for urban areas. Perhaps in conjunction with discussions with the LGA or combined authorities, the Government could reach an agreement about which areas should have that. Some element of discretion ought surely to be provided for in urban areas. The Minister represented part of Greater Manchester where, I suspect, there will be areas with precisely the same problem.
Baroness Hollis of Heigham
I support my noble friend in what he says. This morning, I was sent briefing data from the city of Cambridge. The average house price in Cambridge city, based on February 2016 data, is £483,625—in other words, £484,000. The lowest quartile price is £315,000, and there has been a 17% increase in the last 12 months. South of Cambridgeshire—so people would have to travel in, but none the less—the average price is £385,700. In the east of England, it is £303,000. These figures confirm the point that my noble friend was making: we are going to need exemptions for urban sites of high demand just as we will in rural areas. Cambridge city and university cities across the country face this sort of price explosion.
Baroness Williams of Trafford
My Lords, as I said, we are keen not to introduce complexity generally. The reason I homed in on the rural exception sites was for those very reasons: lack of supply generally and people who want to work locally to whom that test could be applied.
I move on to government Amendments 42A, 44A, 44B and 45B. These amendments would allow for some modest flexibility on the under-40 age cap. Amendments 44A and 44B allow the Secretary of State by affirmative regulations to exempt the under- 40 age cap for specified categories of people. It would allow the Secretary of State to specify circumstances where a property may still be classified as a starter home if it is purchased by joint purchasers, not all of whom are under 40. Both exemptions would allow limited flexibility in the age threshold, for example, where joint first-time buyers wished to buy a starter home and one was over the age of 40. We consider that a reasonable amendment.
Amendment 45A would require the Secretary of State to consult local authorities, the Mayor of London and any other person the Secretary of State thinks appropriate, such as professional bodies, before amending the price cap for starter homes. A requirement to consult before amending the price caps was one of the amendments tabled by the Opposition in the other place.
I have made it clear that price caps are not an expectation of the going price for starter homes, and I am sure that I will reiterate that point again. The price cap framework has been set nationally to ensure that there is a clear and consistent product that first-time buyers, lenders and developers all understand. However, I expect that there will be regional differences, as we have discussed. We want the policy to work effectively across the country. That is why we have taken powers to amend the price cap through affirmative regulations, which will ensure that the provisions remain up to date. The Secretary of State can adjust the limit to reflect movements in the property market generally. Following further consideration, we have decided to amend the Bill so that it is a requirement for the Secretary of State to consult local authorities, the Mayor of London and any other person that the Secretary of State thinks appropriate, such as professional bodies, if we decide to change the price caps in future.
I hope that that provides reassurances that local authorities will be able to make representations before any change to price caps is made through regulations, and we will consider any responses carefully. Although I thank noble Lords for tabling Amendment 45, the government amendment makes it unnecessary.
Amendment 45B is linked to Amendment 45A and allows regulations under the clause to amend the starter homes chapter of the Bill. For example, if the Secretary of State were to use that power to create a list of different categories of people to whom the age requirement does not apply—for example, a specific professional group—the list could be inserted into Chapter 1 as a new section. This will add further flexibility, should it be required.
Amendment 42A is technical, amending the Secretary of State’s power in Clause 2(3)(c) to make regulations which specify the characteristics that an individual must possess to be considered a qualifying first-time buyer for the purposes of Clause 2. We consider that the term “criteria” more accurately reflects the imposition of things such as a minimum age requirement that an individual must meet to be a qualifying first-time buyer.
Baroness Hollis of Heigham
My Lords, I understand why the Minister has been unable to pick up all the questions that have been thrown at her, but one question I asked was: have the Government considered an income cap as well as an age cap? If they have rejected that idea, why?
Baroness Williams of Trafford
My Lords, we have not considered an income cap; we have considered the age demographic that has been priced out of the housing market. Therefore, we wanted the whole age group to be able to access starter homes.
Baroness Hollis of Heigham
If there is the demand that the noble Baroness thinks that there will be, how will she reconcile that with the fact that many people on a higher income who could afford to go into the open market—those in jobs with a professional qualification, such as accountancy, law, medicine, teaching and so on—will not start earning their salaries until their late 20s, at which point they will be thinking to buy? They could go into the open market but now—sensibly—will choose to go into a starter home because there will be no limitation on them. Two such people may well have an income of £70,000 or £80,000 outside London and could well afford to go into the open market but, if they acquire a starter home, will be displacing someone else who is possibly in greater need. Why have the Government not explored that? There may well be good arguments on the other side, but it is odd to have an age restriction but not an income restriction; frankly, it is not age that stops people going into the open market, it is income.
Baroness Williams of Trafford
My Lords, if you look at the demographic, you see that it is this age group that is restricted. I take the noble Baroness’s point about accountants and doctors, but it takes quite a long time to earn a decent salary in either of those professions—I am married to someone in one of them. It is the age group that has been so badly restricted, and that is why the age group was selected.
Baroness Blackstone
My Lords, I am very sorry to interrupt the Minister yet again, but on various occasions during this debate she has talked about abuse. The biggest abuse of all, which will be a consequence of the Bill, is very highly paid young people in their 30s benefiting from a very large discount—in London, it could be £80,000 or £90,000. Surely the Government should be concerned about that. It will bring the legislation for starter homes into disrepute, and rightly so. I reiterate the concern around the House about this issue and ask the Minister to reconsider whether there should not be a government amendment on this issue.
Baroness Grender (LD)
My Lords, the Minister has ruled out a mortgage but, in this context, perhaps the Government could right here, right now, today rule out cash buyers. That gives us something more specific to hold on to here. Or can the Minister envisage a cash buyer in this scenario who would not have an unnecessary advantage?
Baroness Williams of Trafford
My Lords, I hope that I have demonstrated—I do not think anyone is disputing it—that if this market was so open to people of this age, they would be buying. The fact is that, over the past 20 years, they have not been buying; purchasing has hugely declined. Yes, we may be talking about a few people in London on a high salary, but the statistics show us that that is not the case. We should not be restricting it geographically or by income, because it is a problem facing an entire generation. That is why we do not want to restrict them from being able to buy, should they wish to.
Baroness Hollis of Heigham
The Minister is happy later in the Bill to have an income restriction for council tenants but not, apparently, on the donation of a very large subsidy to people in the purchase market.
Baroness Williams of Trafford
My Lords, I do not think it is correct to say that we want an income restriction for council tenants. I do not think that that is a statement of fact.
Baroness Hollis of Heigham
Yes it is, my Lords, because under “pay to stay”, two tenants—a couple—each earning £15,000 a year, possibly with three or four children, will not even be eligible for housing benefit, but will have to pay market rents to stay.
Baroness Williams of Trafford
The noble Baroness made the point that they would not be able to access these properties; they will.
Lord Greaves
My Lords, I am sorry to keep saying this, but I shall keep saying it until the Government start to engage in the discussion. There are parts of the country where the housing market is stagnant, where there are real housing problems, but they are not the inability of a particular demographic—in this case, people under 40—to access the market. As I demonstrated earlier, where a lot of good-quality properties are already available for the same price as new two and three-bedroom semis would sell for, if they were starter homes and attracted the 20% discount, the introduction of starter homes is likely to have a severely disruptive effect on the whole housing market. There may be answers to this, but for the Minister to suggest that the demographic of under-40s is excluded in the same way in all parts of the country is simply not true. Moreover, the solution being put forward is, as I say, likely to have a severely disruptive effect on the whole housing market and potentially do more harm than good.
This is not particularly my view; it is one that has been put to me strongly by our local council officials who are involved in all this. They are the ones dealing with empty properties and trying to get new build going right across the field: housing officers, planning officers and senior council officers. They say that this proposal as it stands will do more harm than good, possibly far more harm than good, and actually will not seriously improve the prospects of the under-40s to get their own homes.
Lord Campbell-Savours
Perhaps I may ask the Minister an Andrew Neil-type question, one that is very simple: why should a cash buyer benefit from a Section 106 subsidy?
Baroness Williams of Trafford
My Lords, I shall take the point made by the noble Lord, Lord Greaves, first. He has talked today, as he did the other day, about empty homes in Pendle—I am assuming he means Pendle or Colne or Brierfield—
Lord Greaves
I am sorry; I do refer to the place I know best, but this is not about a single place in England. We have the same sort of housing market across a range of areas, many of which are in the north of England, but there are some in the Midlands, the south-west and others in amazing places where I did not really know that this problem existed. It is generally those places where the housing market is stagnant, and there are quite a lot of them about.
Baroness Williams of Trafford
My Lords, I shall reiterate the point I made the other day. The noble Lord is absolutely right to say that the housing market is stagnant in some parts of the north-west of England and employment is not like it is in the rest of the country. I think that the interventions that the Government have made in, for example, transport and infrastructure will put some of those areas back on their feet again, playing their economic part in the country.
Coming back to the point made by the noble Lord, Lord Campbell-Savours, about cash buyers, I do not know a single person aged under 40 who is a cash buyer, although of course there will be some. But our overriding principle here is that we do not want to disenfranchise people who work hard from the housing market.
Baroness Grender
My noble friend Lord Shipley has tabled this amendment on mortgages for precisely that kind of reason. No, of course there are not many people aged under 40 who are cash buyers, but if someone subsidises them to become cash buyers in order to acquire a property, that is the loophole we are concerned about here.
Baroness Williams of Trafford
I think I have explained that having a mortgage will not stop gaming. There are always going to be abuses of the system, but we are trying to address an age group which has been disenfranchised from the purchasing market. I hope that what I have said gives to some extent reassurance to the noble Lord and that he will feel content to withdraw his amendment.
Lord Kennedy of Southwark
Can I push the noble Baroness a little further on this? I do not think it is good enough to say that there are always going to be abuses; we need a little more than that. There will be scams and shams, so we have to make sure that we will be able to identify them and sort them out.
Baroness Hollis of Heigham
Perhaps I may add to the point made by my noble friend. Many of the abuses will indeed be made if not by the mortgage principle then by continuing the discount in perpetuity. Can the Minister tell us why she thinks, if the discount in perpetuity were to apply, that would disadvantage first-time buyers in the future: those who bought the first time round, the second time round or the third time round? The only people it would disadvantage are those who seek to pocket a profit.
Baroness Williams of Trafford
My Lords, I was trying to articulate my point about housing mobility. People buying starter homes who want to move on to the next rung of the ladder would be disenfranchised at a further point down their aspirational route.
Lord Beecham
My Lords, if you have served your five-year term, as it were, and you make your £100,000 or so profit, you will have more money to spend on the second house. Surely the effect of that will be to push up house prices.
Baroness Williams of Trafford
My Lords, the effect of introducing 1 million more new homes into the housing market by 2021 will be to increase supply, which should, first, deal with some of the problems of demand and, secondly, start to moderate house prices in a way that has not been the case over the past few decades.
Lord Greaves
My Lords, I realise that I am ploughing a different furrow from other noble Lords in these interventions, but I have to say with all due deference to the Minister that my concerns about our local housing market and that of many other areas are not answered by her saying that the Government are going to introduce better infrastructure and invest at that sort of level. If that happens it will be extremely welcome. There is not much sign of it in east Lancashire at the moment, but even if there were, investing in infrastructure takes time. There is no doubt that it takes 10 to 15 years and has a long-term payback. As I understand it, we are talking about the housing market over the next few years. Building new roads, reinstating railways and doing all the other things that people are talking about under the heading of the northern powerhouse will not have any significant effect on our housing market and that of many other parts of the north of England in the next five years. Meanwhile, we have to deal with the problems that result from a stagnant, fragile, flat housing market next year, the year after and so on.
I am not trying to be awkward about this. If starter homes are a wonderful thing, I am all for them. But what I am saying is that in these parts of the country the introduction of starter homes risks having a disruptive effect on the existing housing market. While starter homes might be built if anyone can be found to build them, which is a question in itself, the result may well be that the rest of the housing market in the area becomes even more depressed than it is at the moment. That will mean more empty properties and a general reluctance on the part of developers to build, whether for social rent, private rent or owner-occupation. If the return from building houses either through selling them or from rents is less than all the costs put together of building them, they are not going to be built. Because of this bonus—this subsidy—we might get some starter homes, but that will put a severe damper on the rest of the housing market.
All I am asking is for the Government to discuss this with people on the ground in areas like those I have mentioned. We should set up a mechanism for doing this and see how it works, and then perhaps bring forward different rules, exceptions or whatever it might be—or just reach an understanding between us—to see how things can be improved. There is no point in having a starter homes policy or anything else in areas where it is actually going to make things worse.
Lord Skelmersdale (Con)
My Lords, before my noble friend answers, this has gone beyond a joke. My noble friend has given as many answers as she possibly can and, as a result, has been battered by yet further questions exemplifying the miscellaneous points which have been made. My noble friend has offered meetings with any and all noble Lords who want to pursue their points quietly so that they can pursue them again, if necessary, on Report. Surely, this is enough.
Baroness Hollis of Heigham
No, my Lords; the problem with the noble Lord’s comment—I do not know whether he was here when we were discussing this earlier—is that we are dealing with what is essentially a skeleton Bill. We do not know how this scheme is going to work in any sort of detail. We have spent some time today and some time on Tuesday trying to tease out the detail. We do not blame the Minister; we entirely sympathise with her in the situation she is in, but she is trying to answer questions to which she cannot know the answer because, deeply foolishly, the Government have started a consultation exercise on all these questions so late that the results of the Government’s thinking, as affected by that consultation exercise, cannot be fed into today’s discussions in Committee.
The fault is with the Government’s timetabling. It is not the Minister’s fault—she is doing her best and we have every sympathy with her; none the less, the Government have put her in this position, trying to answer questions she cannot answer, because they have not banked their consultation exercise in appropriate time, but they expect this House to go ahead with scrutiny of major policy developments without the detail that should inform it.
Viscount Younger of Leckie (Con)
Following on from my noble friend Lord Young’s remarks, the Minister has been on her feet for nearly an hour and a half and I think that the Committee might allow the noble Lord, Lord Shipley, to respond.
Lord Shipley
My Lords, I had not anticipated, when I moved my probing Amendment 37B, that we would be discussing this group some two hours later. However, I think the debate has been very valuable because it has revealed the gaping void in the Government’s thinking. I hope that the Minister will understand that a huge number of questions have been posed. Like, I suspect, many other noble Lords, I have been astonished that the answers are not being provided. After all, this Bill was passed in the other place. It has arrived here; we have had Second Reading, at which the need to publish at least draft regulations was made clear; we are now on day three of seven in Committee and progress is very slow. I think Ministers ought to explain to your Lordships’ House why we are in a position where consultation is taking place so very late that the answers to that consultation are not in our possession as we debate the later stages of the Bill.
I was very disappointed by the response of the Minister as to when regulations are going to be published. I said previously that we would happily receive draft regulations, as opposed to the finished version, but, of course, we now understand why Amendment 45B has appeared on the Marshalled List. I remind noble Lords that it simply says:
“Regulations under this section may amend this Chapter.”
In other words, the Bill is going to be amended by secondary legislation. This is simply an unacceptable position for your Lordships’ House to be put into. Many questions have been raised and I do not think that the Minister has actually answered many at all. I am grateful for offers of meetings and letters, which, I guess, will be copied, but there has been a very large number of questions to which there have not been answers. It is now incumbent upon the Minister and the department to provide a question-and-answer sheet with a set of clear answers to every question posed by noble Lords on this group.
For example, we have a problem with numbers. The Minister cited that 65% of people outside London who are currently renting privately and 40% of people in London who are currently renting privately will be able to take on a starter home. As we know from other agencies, such as Shelter, those figures are disputed. On Tuesday, I think, the Minister agreed that we would have a detailed response to that so we can actually understand the facts with which we are trying to deal.
I was really concerned by the Minister’s remark, and I think I quote her rightly, that there is always going to be abuse of the system. That really is an unacceptable thing for noble Lords to confront. There should not be abuse of the system. There are ways in the planning system—and in the next group, which deals with “in perpetuity”—for this problem to be solved. So I hope that the Minister, in our proceedings after the lunch break, will work with the feeling across all sides of the Committee that we have to do something to make this a much better Bill; for, as it stands, it surely cannot proceed as it has been written. So, while I beg leave to withdraw Amendment 37B, I hope that the Minister has understood the mood of the Committee in demanding clear answers to questions which have also been very clear.
Circular Economy
Baroness Jones of Whitchurch
To ask Her Majesty’s Government what steps they are taking to promote the principles of the circular economy, based on the re-use, repair, refurbishment and recycling of existing materials and products, to protect the environment, give new growth opportunities and avoid waste.
Baroness Jones of Whitchurch (Lab)
My Lords, I am very grateful to noble Lords who have put their names down in such numbers to join in this debate today. It reinforces an increasing view that this is a concept whose time has come. I am also very grateful to organisations such as the Ellen MacArthur Foundation, WRAP and the Green Alliance, who have taken the seed of an idea and fertilised it into a fully-grown, evidence-based new business model.
It starts from a simple principle. Current consumption is linear. Companies use raw materials to make products which are sold to consumers who then discard them when they are no longer valued or useful. The circular economy replaces that model with a virtuous circle, replacing the concept of waste with the concept of disassembly and reuse, so that materials are used again and again. It is a simple principle, but one which could transform industrial and service processes for the future.
Why is this transformation so necessary? At a global level, the challenge of providing food, clothing and shelter for a growing population is becoming ever more pressing. The global population is set to increase from 7 billion to 9 billion by 2050, many of whom will be joining the new middle classes, with new levels of consumption. In the next 20 years we will need 40% more energy and water, and three times more material resources. In 2010 some 65 billion tonnes of raw materials entered the economic system globally. This is expected to rise to about 82 billion tonnes by 2020.
Meanwhile, scarce supply and increased demand are driving up prices. As the Green Alliance has said:
“Over the past decade world food prices have doubled, metal prices have trebled and energy prices have quadrupled”.
Yet at the same time as that is happening the UN estimates that, for example, electronic waste, globally, is increasing by 2 million tonnes a year, with less than 16% of it diverted from landfill. This results, globally, in landfill mountains of potentially recyclable materials worth some £34 billion. This includes huge quantities of precious metals and rare earths which are really needed for future production.
Clearly, this is not sustainable because we are running out of resources and because the extraction and use of those scarce resources is having a major detrimental effect on climate change. This is a global problem to which businesses, environmentalists and politicians are finally waking up. It is a global problem which the circular economy can help to resolve.
It also has unique and specific applications in the UK. We currently recycle less than 50% of our waste and are in danger of missing our EU recycling targets for 2020. This is exacerbated by complex and inefficient collection systems, with more than 300 different systems across the UK, which even the Minister, Rory Stewart, has described as absurd.
At the same time, we have failed to develop robust markets for recyclable materials, so they do not achieve their true market value. For example, a couple of years ago, I was excited to visit a new factory in Redcar which was taking recycled plastic bottles and creating new plastic materials from them. However, that factory subsequently folded because it could not guarantee a regular-quality waste stream of plastic bottles and it could not compete on price with virgin materials. That clearly does not make sense. Recycled glass and paper businesses suffer the same challenges of maintaining quality and markets.
Yet, at the same time as that is happening, manufacturers are being rocked by the fluctuating price volatility of raw materials, making profitability and growth projections difficult. This is why there is a growing realisation of the opportunities that the circular economy can deliver. It flows from necessity but also heralds innovation, creativity and the potential for competitive advantage.
What does that mean in practice? The businesses in the forefront of this revolution realise that they have to design products differently. There is much talk about designing out waste completely. New products will be designed for a longer life, with easily available spare parts and repair. For example, I recently heard a Samsung executive setting out its plans to strengthen its product repair offer to consumers, training a new generation of service engineers and delivering a local and responsive service to them. New products might be leased rather than sold, with the advantage that the raw materials go straight back to the original manufacturer for stripping out and reuse rather than via any third parties. New products might consist of innovative new materials that are less environmentally damaging. For example, Jaguar Land Rover recently reported that it is experimenting with sustainable flax and cashew nuts as a replacement for plastics in some of their fittings. New products might be designed with reuse in mind. For example, IKEA now claims that 98% of its home furnishings can be recycled and it has established a take back service for used mattresses. New business models are often product sharing rather than purchasing. I say this as a contented member of the City Car Club, a car-sharing scheme in Brighton which is now expanding nationwide.
I give these examples not to suggest that the problem has been solved or that a sea change has taken place but as an indication of some of the radical new thinking which is now occurring. However, these developments and opportunities need to be nurtured and championed, and I look forward to hearing from the Minister as to how the UK Government intend to do this.
It is not only business opportunities we need to recognise but the enormous consumer benefits which can accrue from more sustainable business practices. For example, a recent report estimated that this has the potential to create somewhere between 200,000 and half a million new jobs depending on the rate of expansion. In addition, business would need to develop longer relationships with their customers and provide a higher quality of service. The practice of building in premature obsolescence would end, bringing down costs. Trends in consumer behaviour through leasing or sharing products rather than purchasing them would provide more customer choice. Of course, the ultimate consumer prize is that we would all live on a healthier and more sustainable planet.
However, consumers also need help to think about consumption in different ways, to value goods because of their function rather than because of any fashion or brand support and to reject a throwaway economy. Governments can play a role in this and I look forward to hearing from the noble Lord how he thinks his department might help.
What else can the UK Government do to facilitate these changes? First, at UK level, we recently mentioned in a previous debate the excellent work that WRAP has done on food waste, but it is also creating ground-breaking voluntary agreements with manufacturers and retailers in electronics and textiles through the electricals sustainable action plan and the Sustainable Clothing Action Plan. I commend the Government for continuing to fund these initiatives, although, as the Minister will know, their funding has been considerably reduced, which means that the sectors in which they can work are limited.
Secondly, as the Minister will be aware, the EU has produced its revised circular economy package which, when adopted, can provide crucial leadership and leverage for ongoing work. I am sure we could entertain ourselves at the expense of the EU leave campaigners by pointing out how reliant on the EU we are to drive forward the UK waste and resource efficiency agenda, but I am taking it as read that, certainly among noble Lords joining in this debate, we can all agree on that matter.
The EU circular economy package is a great step forward. It provides vision, an action plan and proposals on eco-design which will build in repairs, durability and recyclability. It also calls for economic incentives for greener products and signposts additional funding from the Horizon 2020 and structural funds. It specifically builds in EU targets for recycling 65% of municipal waste and 75% of packaging waste, and sets a maximum of 10% of goods going to landfill by 2030.
Perhaps I may ask the Minister for an update on the UK Government’s response to the EU draft. How will the Government’s emphasis on less regulation and greater subsidiarity affect our implementation of that package? Do we welcome the specific targets in the package? Are we confident that the UK Government would meet them?
I am pleased that the noble Lord, Lord Gardiner, is replying to this debate because I know that he shares many of our ideals. However, to be successful, the principles have to be embraced across government, particularly in BIS and the Treasury. I hope that he can reassure us that the Government are embracing these issues across government and are serious about adopting them. I look forward to his response.
Baroness Jenkin of Kennington (Con)
My Lords, I am grateful to the noble Baroness, Lady Jones, for introducing the debate and for setting out so clearly the background, the challenges and the opportunities. The noble Baroness was my predecessor on the board of WRAP and I look forward to the day when I know as much about this subject as she does. She described accessibly the way in which we look at the circular economy. However, for many people the term is confusing and most of them will prefer to look at it as a make-do-and-mend principle, particularly in their own homes.
In the short time allotted to us today I am not going to talk about the European Commission’s circular economy package; about the waste industry, which is examining its business in the light of the new models; or about big business, which is studying opportunities and challenges.
I hope that, as in the previous debate on food waste, we might hear from the noble Lord, Lord Young, with some tips about how he and Lady Young promote the circular economy in their own home. Ways of doing things which may come naturally to us need to be shared with a new generation, which finds it easier to chuck than to reuse. When I was a girl growing up, before tights were invented, we were taught to darn our own stockings—that is the circular economy. I now use laddered tights—clean ones—to filter through the pith and pips when making marmalade and recycle the residue into my compost bin. Again, it is my own personal, household circular economy. I had a beautiful pink hat which I bought in a charity shop. I wore and wore it until eventually I thought, “I cannot wear that pink hat anymore because they will all think that I’ve got only the one hat”; so, at a reception at a constituency event, when a lady came to me and said, “I so admire your pink hat”, there was no one happier than me to give it to her knowing that it would be loved and reused. That is the personal circular economy.
The circular economy is about valuing our products differently and creating a more robust economy in the process. By assessing how we design, make, sell, reuse and recycle products we can work out how to get the maximum value from them, both when they are in use and at the end of their life. So, what does this mean in practical terms? As a company, how do you move to more circular models? Where are the new business opportunities? Like the noble Baroness, I strongly recommend a good look at the WRAP website for tips and advice about helping to access the business benefits of a circular economy. As a resource for understanding the closed-loop economy it cannot be bettered.
A cursory google shows how many innovative social enterprises and businesses are being launched. The Restart Project, for example, is a social enterprise which encourages people to repair their broken electronics to extend their lifespan and prevent electronic waste. It hosts restart parties in London where you can bring your gadgets and find out how to fix them, together with their repair coaches. So far, these events have prevented over 43 tonnes of carbon dioxide in London alone. I wish there were time for more examples.
This is an agenda with great appeal to young entrepreneurs, especially in the social enterprise space. Knowledge of what is available, both to consumers and to those who wish to innovate in this space, needs to be shared more widely. I urge my noble friend the Minister and others to do what they can to vigorously embrace, communicate and promote this agenda.
Lord Whitty (Lab)
My Lords, when economists first started talking about the circular economy some people ridiculed it as a bit of utopianism, as if we were going back to pre-commercial agriculture, when plants seeded themselves and everything was reused. After all, that was a biological circular economy. Once agriculture came to be traded, however, there were always opportunities to dump side costs and waste onto other parts of the economy and onto the environment. The linear economy which has developed since those days has all of those opportunities.
A couple of years ago I was involved in one of your Lordships’ sub-committee’s studies of food waste. We discovered that, 20 years ago, studies indicated that food waste arose in three roughly equal parts: on the production, distribution and consumer sides. We then discovered a considerable improvement in the efficiency at the distribution end. Much of that was for real: there were genuine processing and logistical improvements by supermarkets. However, much of it was simply shifting the cost of waste—and waste itself in some cases—down to the consumer or up to the farmer and small producer. The supermarkets were able to do that as a result of their dominant power. That is what the linear economy ends up doing.
There are standards for dealing with food waste but we have not yet got a situation where the food industry itself has changed the way it operates. The food chain needs to be circular, not linear. That applies to many other sectors as well. There are huge numbers of potential applications of the concept of the circular economy, not just in small and innovative businesses but in many large and complicated ones as well.
In metal-based sectors, we have already seen some large companies designing components so that they can be repaired, reused, refurbished and remanufactured and not, as has been the case for most of the last century, with built-in obsolescence. In the textile and clothing sectors there is a rather older pattern, where discarded clothes are not only reused through the second-hand market—or the “already loved” market, as it is now called—but also as fibre in upholstery, and for near-permanent use in insulation. The latter saves substantially on extraction in the mineral sector.
It can also apply in the energy sector, where decentralised CHP-based networks use genuine biomass waste—waste from local forestry, food and agricultural produce, not waste imported across two oceans—by circulating surplus heat through commercial and domestic district networks. They save twice over through the use of sustainable feedstock and by reducing the need for the extraction and carbon-creating use of fossil fuels.
The waste-management system itself needs to become more circular and rational. The 300 different systems that my noble friend referred to are very evident—my local tip is on the border of two district health systems with different separation and collection systems.
The circular economy is not some hippy utopian dream of a lost Arcadia but a better way of organising our economy with less waste, less costs, less depredation from extraction and fewer greenhouse gas emissions. In adopting it we can save the planet as well.
Baroness Miller of Chilthorne Domer (LD)
My Lords, I congratulate the noble Baroness, Lady Jones of Whitchurch, on her excellent introduction, which gave a very good flavour of the opportunities offered by the circular economy. It promises a future with great environmental gains but not having waste will also enrich the entire economy. I can think of no better example of this than anaerobic digestion.
At its best, anaerobic digestion takes local farm waste and turns it into soil conditioner and fertiliser, as well as biogas which can be used as energy to run a farm’s tractors or heating to heat local houses. The problem is that the Government are not measuring the benefits correctly. On anaerobic digestion, for example, they are looking only at energy without appreciating that it is also a very low-carbon process; nor are they considering what can be done for soil by using not artificial fertiliser but waste to recondition it. They need to measure everything within that circle in a ranking system, rather than having silos for measuring energy, the level of carbon emission and waste reduction. It all needs to be measured as a whole.
If that happened, the Government’s attitude to, for example, the renewable heat index would change. This is because the measurements have encouraged the use of bigger plants at the cost of smaller, more local ones. That is inefficient because it requires more transport and for maize to be grown specifically for use in the plants instead of utilising waste. As the noble Baroness, Lady Jones, mentioned, food waste is collected in an inefficient way or not at all at the moment. If the Government’s attitude changed, that problem would disappear.
The start made by the anaerobic digestion community is really good. They have moved from about 40 plants six years ago to 170 now. But that is despite a lot of government obstacles. The Government should be encouraging this industry. It has the ability to provide for up to 30% of domestic electricity or gas consumption and deserves to have their full weight behind it.
Baroness Young of Hornsey (CB)
My Lords, I, too, am grateful to the noble Baroness, Lady Jones of Whitchurch, for securing this debate on such a critically important subject and also for her support for the All-Party Parliamentary Group on Ethics and Sustainability in Fashion. I would also like to thank colleagues from Julie’s Bicycle, Hubbub and the Centre for Sustainable Fashion, especially Anna Fitzpatrick and Professor Dilys Williams, for their support and excellent briefings.
After COP 21, we cannot fail to be aware of how much intellectual and practical energy and commitment we need to bring to bear on the huge environmental challenges we face. I want to make three brief points. First, the clothing and textile industries and we, their consumers, have a big problem. Secondly, there are a range of strategies developing to mitigate the environmental impact of the sector, including circular economy solutions. We should note that, on the upside, fashion can make a really positive, creative intervention in debates about action on the environment.
Thirdly, and perhaps most importantly, circular or closed-loop initiatives are just one part of the picture. We need a fundamental rethink of current business models. Two compelling fashion facts from WRAP: approximately £140 million worth of clothing goes into landfill every year in the UK alone; and we send 700,000 tonnes of clothes to be reused or recycled every year. This is not just an issue for high street fast-fashion outlets. More expensive clothes are regularly discarded after little wear and workplace uniforms are another area of great concern.
Four fundamental design models in the circular economy apply to fashion and many other goods. One is designing for longevity, where clothing is designed and made to last and valued for that quality. The second is designing for leasing, where digital platforms enable consumers to lease or rent clothes. The third is designing for reuse in manufacturing, where clothes are returned to the maker for a range of purposes. The fourth is the type of design that recaptures materials, transforming them into newly recycled, raw material. The emphasis is in designing in circularity from the start rather than trying to bolt it on top of existing design paradigms. Initiatives such as the Sustainable Clothing Action Plan and the Sustainable Apparel Coalition have proved useful mechanisms for bringing together some of the significant players in fashion to address these key issues.
On the role of government, whenever we have held APPG meetings on the subject, we hear two main pleas of relevance here. The first is for clarification of existing regulatory frameworks, regarding, for example, landfill taxes and their use, penalties for pollution and so on. The other is a request for government-backed incentives, particularly for fashion SMEs that will invest in and encourage the research and development of more sustainable practices in the clothing sector. We should not be too gloomy, I guess, as there is evidence that progress is being made, some of which has already been mentioned—for example, repair, recycling, leasing and so on.
I finish by reiterating an earlier point on how these issues represent for me just one major aspect of a much broader set of issues that encompass poverty, inequality, social injustice as well as environmental degradation. We cannot expect to be able to buy our way out of the problems we face.
The Lord Bishop of St Albans
My Lords, my thanks also go to the noble Baroness, Lady Jones of Whitchurch, for this important debate on the circular economy.
I want to spend just a few moments highlighting the economic and environmental impact of planned obsolescence—this has already been referred to —particularly in technological goods, which we know is used by companies to drive growth and ensure a steady supply of return customers. It is a business model that relies on technological products needing to be upgraded and/or replaced at regular intervals, whether because they go out of fashion, have a limited lifespan, or are difficult or expensive to repair.
The model of consumption of regular upgrading and replacing is so deeply ingrained within our national consciousness that nowadays we hardly even question it. We toss out the old and bring in the new at an alarming rate, and, of course, at great cost to the individual customer and, indeed to the environment. Not only that but it is incredibly wasteful. It is estimated that there are probably 125 million old mobile phones languishing in the top drawers of British households, many of which contain metals that are becoming increasingly scarce in the natural world. From every angle, whether economic or environmental, this approach to consumption is simply not sustainable in the long term, not least when we look at population projections and the way in which other communities and nations are expected to modernise and therefore need modern technology.
What we ultimately need is a fundamental shift in manufacturing and design, so that products are once again designed for longevity, and where upgrades and repairs can be done without needing to buy replacement goods. This, of course, will come about only with pressure from consumers. Therefore, it is encouraging to see a number of green shoots emerging in this regard. I have previously highlighted in this Chamber the work of the Dutch social enterprise, Fairphone. However, there are surely ways in which government can incentivise manufacturers to move in this direction. I know there are movements in this regard at both domestic and European level. I was particularly interested to read of French laws that require manufacturers in France to inform consumers how long products will last and guarantee them for two years. Can the Minister inform the house whether this is something that Her Majesty’s Government have looked at and whether we might learn from that, and build upon it, as we seek to address this crucial area?
Lord Suri (Con)
I thank the noble Baroness for securing this debate. This is an issue of great salience today, when the growth opportunities of tomorrow lie in the circular economy, and in a society that produces less waste and pollution than the current one. It is clear that bold thinking will be required from many spheres of civil society, not just public spheres. The Government have made some good strides towards making sure that renewable technology can achieve the necessary levels of efficiency for it properly to replace fossil fuels in the future.
One such example is the recently privatised Green Investment Bank. I believe that the progression of this concept provides a useful road map to the future of the circular economy. The bank started off as an idea in the Commons Climate Change Committee, and became an eponymous banking identity in the last Parliament. While being more of a fund than a bank, it has shown itself capable of making significant investments, such as an £11 million biomass plant in Port Talbot, among others. Crucially, it is profitable, as of the last financial year. This is important because encouraging the circular economy must be done in a way that does not put extremely high burdens on taxpayers, and it must be liable to market forces in order to fulfil that. The Business Secretary has put forward plans to part-privatise the bank in the future, and I look forward to this, as it will be able to access more capital and international investment, and continue its good work on a much larger scale.
We can see from this example that it is very possible for a commercially viable project—rather than the Government—to lead the future. Of course, the third sector and government will play a role, but I expect that businesses will drive the change. As in this case, government should play a nurturing and supportive role. This can be done in a variety of ways, possibly with a wider range of subsidies or grants to incentivise research and development in renewables.
As a businessman myself, I know that the private sector will want to have the biggest possible role in the growth markets of tomorrow, and so I encourage the Government to look at more ways of supporting businesses in their endeavours to create more sustainable technologies.
Lord Giddens (Lab)
My Lords, I had a pink hat once but I struggle to relate it to the circular economy.
The idea of the circular economy was first mooted by the economist Kenneth Boulding in the 1960s. Nature, Boulding pointed out, is an endless recycling machine, in which nothing is ever wasted. Why not develop an economic model on this basis? So far the notion has made little impact on industrial civilisation as it spreads voraciously across the face of the earth. That civilisation is based largely on a sort of mindless consumerism and profound environmental pollution. A step change of global proportions is needed. The circular economy could play a fundamental part in such a step change if it could be rapidly generalised. The idea has recently been endorsed by no lesser authorities than Meryl Streep and Susan Sarandon and—almost as important—the EU and the Chinese Government, as well as by the mainstream of economic orthodoxy in the shape of the World Economic Forum.
The only major economy to have made significant advances so far is Japan, where it has been driven mainly by immediate self-interest rather than by environmental considerations, since the country is so short of indigenous mineral resources. Japan recycles fully twice as many of the materials used in its industrial production as Britain does. Many of these, significantly, are used in making the same product that they were derived from, hence meeting the technical definition of the circular economy. The fact that positive environmental outcomes can be achieved through self-interest, however, is precisely one of the reasons why the circular economy could have wide appeal. It has direct implications for business at a time when widespread economic stagnation is prompting a rethink of existing business models. I have spent much of the past two years studying the digital revolution, which could help create huge advances in circular economic production that need not be confined to the richer countries. The digital revolution, unlike any previous fundamental advances, has gone straight to the poorer countries of the world. Their processes of industrialisation could in principle be far more sustainable than those of the industrial revolution.
I have two questions for the Minister: first, does the idea of the circular economy have any traction in economic thinking in this country and is anyone in the Treasury interested, because that is where it counts? Secondly, what is the Government’s response to the work of the Ellen MacArthur Foundation, which has been far and away the global pioneer on this issue?
Lord Rees of Ludlow (CB)
My Lords, I add my thanks to the noble Baroness, Lady Jones, for introducing this debate and I also acclaim the inspiration of Ellen MacArthur in pushing this subject up the agenda. The goal is of course to conserve resources, to reduce the scale of mining and similar activities, to save energy and, as a by-product, to reduce CO2 emissions.
Dealing with food and organic waste is in principle straightforward. Most can be recycled or burnt for fuel but, better still of course, we should create less of it. Far less tractable, however, is the recycling of plastics. Here, cutting consumption must be the priority. Promoting the reuse of plastic bags is in itself merely a token gesture. Overall plastic debris is a growing problem; if this cannot be addressed as global growth continues, we will end up with as many plastic bottles in the ocean as there are fish. There need to be incentives to ensure not only the greener operation of buildings and consumer products, but greener design as well. Cambridge’s department of engineering has published some interesting ideas on this. To take one example, it points out that, when a building is demolished, some of its elements—steel girders and plastic piping—will hardly have degraded at all and could be routinely reused. Moreover, girders could be more cleverly designed so as to offer the same strength with less weight, thereby saving on steel production.
Advances in technology allow continuing improvements in appliances and vehicles, but these objects should be designed in a more modular way so that they can be readily upgraded by replacing parts, rather than thrown away. To echo the right reverend Prelate the Bishop of St Albans, we need to value long-lasting things and to put pressure on producers and retailers to highlight durability. We need to repair and upgrade rather than replace. Regulations, especially in the EU, are helping but they will not gain full traction unless the public mindset changes. Attitudes to, for instance, smoking and drink-driving have transformed in recent decades. We need a similar change in attitude so that the manifestly wasteful consumption of materials and energy—Chelsea tractors, brightly illuminated houses, slavish following of fast-changing fashions, and the like—become regarded as naff rather than stylish.
Finally, let us remember that the issues in this debate have long-term global resonance. By 2050, the world’s population will have risen to 9 billion. We surely hope that by then there will be a narrower gap between the lifestyle that we in privileged societies enjoy and that available to the rest of the world. This cannot happen if developing countries track our route to industrialisation. They have to leapfrog to a more efficient and less wasteful mode of life. The world’s people will only achieve a sustainable future via a lifestyle that is, for all of us, far less profligate of energy and resources than ours is today. This goal is not anti-technology; its achievement will demand more technology, but differently directed technology and a great deal of innovation. We and the rest of Europe can surely lead in this enterprise, to the benefit not only of ourselves but of the rest of the world.
Lord Young of Norwood Green (Lab)
My Lords, I, too, thank my noble friend for introducing the debate. I will try to rise to the challenge. The noble Baroness, Lady Jenkin, mentioned tights, which we cut up and use as plant ties. Cotton, if it is good quality, gets absorbed into Lady Young’s quilts, one-sided printed paper is always cut up and recycled, and the carcass of the chicken goes into the stock pot for making soup. So there are a few things that we in the Young household do.
Most of the good points about the importance and value of the circular economy have already been made. I would like to put only a couple of other points to the Minister. First, has any thought been given to ensuring that we have a circular economy and industrial strategy operating at a LEP or local authority level, or to introducing the subject into schools and colleges? Lots of ideas come from young people.
I listened carefully to the right reverend Prelate the Bishop of St Albans about technology. I have a bit of a problem; I am replacing good-quality lightbulbs. Why? Because I can buy LED bulbs that have come down in price and that dramatically reduce power consumption. I hate wondering what I am going to do with them—I will not do anything with them because I cannot think of an alternative use. It is a balancing act. I think that the same could be said of a significant number of household appliances; when you think of the power consumption of old-fashioned televisions, washing machines, refrigerators and so on, there is something of a problem there. Though that is not to argue against longevity; the idea of being able to repair items is fundamentally important.
On the recommendations that came from the Environmental Audit Select Committee in the Commons, can the Minister inform us whether the Government intend to adopt those recommendations, which seem to be valid, including the idea of providing incentives to companies to become more efficient and to ensure that the products that they produce have greater longevity? These are obvious things that we have been talking about for years. There is so much variation on mobile phone chargers—or chargers for any bit of equipment—but we still do not seem to have cracked that problem and persuaded manufacturers of the benefit of standardisation, so that every time another phone is introduced, there is not another variation of phone charger. So there are lots of opportunities for us to create a genuinely circular economy. It is a no-brainer in terms of job creation and environmental benefits and I look forward to the Minister’s response.
Lord Teverson (LD)
My Lords, I, too, thank the noble Baroness, Lady Jones, for this debate. She mentioned Jaguar Land Rover and I think that we were both at an event where JLR talked about its new innovations. But what it did not do was to shout about the fact that 70%—this is a well-known statistic—of Land Rovers ever produced are still operating on the roads, not just here but across what was the British Commonwealth and the rest of the world as well. But as the noble Lord, Lord Young, said so well, no doubt many of them from the early days are now extremely energy-inefficient by current standards.
There are two big challenges: population growth, and rising income and consumption expectations within the world. They can be solved in only two fundamental ways. One is the decarbonisation of energy and greater energy efficiency. The other is the circular economy and ensuring that our consumption does not outpace the ability of our planet to replenish those resources. That is why the circular economy is absolutely essential. Within a more international framework, it surprised me how few people have heard of the circular economy, so one of the great imperatives is to get that concept far better understood. It may have been invented in the 1960s but the understanding of it is still very small.
I was absolutely delighted that the European Commission, having junked or disposed of the original circular economy package has come back with another—I hope improved—version of it. Surely if there is something important that Europe can do, and do well, in a single market of half a billion people it is to take this area forward in terms of culture, in the way that industry works and in the competitiveness of the European economy. So with the Government being enthusiastic about Europe and the European Union for the first time in a long while, I challenge the Government and the Minister to take this area forward.
I will make four very quick points to the Minister. First, I believe that in the past Defra has not been that engaged in this area, so will it become far more engaged? Secondly, the noble Baroness, Lady Jones, mentioned eco design. Surely this is an area where British industry could really thrive. Will the Government help it to lead in that area? Thirdly, in negotiating the transatlantic trade treaty—the TTIP—do we need to bring the circular economy into such negotiations, if only to defend our package against other sides? I will very much welcome that agreement if it is made, but do we need to take it into consideration there? Finally, I echo the mention by the noble Lord, Lord Rees, of the marine environment, where pollution by plastics is a major challenge that needs to be resolved.
Lord Gardiner of Kimble (Con)
My Lords, I am most grateful to the noble Baroness, Lady Jones of Whitchurch, for securing this debate and introducing it so comprehensively. It is a great privilege to respond to this debate because we all share a common cause; we want Britain to have the best natural environment anywhere and encouraging a more sustainable, circular and efficient approach to resource use must surely help deliver this ambition. The Government consider it essential that we move towards a more circular economy and we are working together with business, industry, civil society and the public to achieve this aim.
The Government have a leadership role in facilitating that transition through better regulation, fiscal incentives such as the landfill tax and supporting innovative approaches—for example, circular business models where customers purchase a service rather than the product itself. The noble Lord, Lord Young of Norwood Green, mentioned schools and colleges. I think that we will increasingly see a lot more young entrepreneurs coming through as designers, with schools and colleges encouraging what will be such a core part of the future UK economy.
In 2013, the Government introduced the waste prevention programme for England, setting out roles and actions to move away from a “make, use and dispose” approach towards a more circular economy where materials are kept in circulation for longer. The noble Lord, Lord Teverson, mentioned the Land Rover and the noble Lord, Lord Rees of Ludlow, rightly emphasised its durability. We can surely say that, over generations, that vehicle has been extremely durable.
Reuse, repair, refurbishment and recycling are all vital elements. Regarding waste prevention and reuse, in the charity sector alone in 2012, organisations generated an estimated £430 million from reuse—so its value to society and the circular economy is considerable. To leverage the value from this, government can provide the leadership, incentives and knowledge to move towards a more circular approach. But everyone has a role to play in making the best use of our materials and resources by preventing waste, recycling efficiently, and dealing with waste properly.
Businesses surely will be the key driver to this. I have mentioned young entrepreneurs but my noble friend Lord Suri mentioned business more generally, which will be engaged in driving this. The Government must provide support but I note the strictures of the noble Baroness, Lady Jones of Whitchurch, and the noble Lord, Lord Giddens, about cross-government engagement. I can assure your Lordships that officials from across government, including from the Treasury and BIS, meet regularly to consider and co-ordinate government action in this area. Defra has obviously had a very considerable amount to deal with but this can be done only if we work across government.
To this end, Defra has started a number of voluntary agreements in conjunction with WRAP to incorporate circular-economy thinking, such as the Courtauld 2025 agreement that WRAP is on the brink of agreeing with industry. The noble Lord, Lord Whitty, comes to this with considerable experience, as was shown in our earlier deliberations about food waste. I am really pleased that we have seen the successor to the Courtauld commitment, which was the beginning of something that is now seen as a no-brainer. It was obvious, so why were we not doing it before? So there have been considerable advances there—but, as in all these cases, we need to do more.
The noble Baroness, Lady Jones of Whitchurch, mentioned the Electrical and Electronic Equipment Sustainability Action Plan and the Sustainable Clothing Action Plan, which bring together manufacturers, retailers and charities from across the electronics and clothing sectors to achieve resource efficiency savings. The noble Baroness, Lady Young of Hornsey, made powerful points about how the fashion world can make such contributions to the circular economy, and she was absolutely right to be positive and suggest the real progress that is being made. There is always more to do but we need to encourage business. We need to ensure that people in the fashion world understand that what they do is tremendously important, not only for their sector but for us all.
We are working, for instance, with the PaintCare initiative to address regulatory barriers to the manufacture of paint. This is going to be an important example. Through such initiatives, we can all aim to reduce the use of virgin materials and instead treat waste as a valuable resource in a more circular approach. My noble friend Lady Jenkin of Kennington leads by her own example, and we all very much look forward to the contribution that she will make to the very important work of WRAP.
We can see the successes of the circular economy already. The resource and waste management sector has grown faster than the wider economy over the past two decades. In the UK, the core waste sector and wider repair, re-use and leasing activity contributed £41 billion gross value added and supported 672,000 jobs in 2013. I noted what the noble Baroness, Lady Miller of Chilthorne Domer, said about anaerobic digestion. I was at a presentation in the other place on AD, as she may have been, and very interesting it was, too. I have had a wonderful visit to the AD plant at the Adnams brewery in Suffolk, which reuses all the residue from the brewery. That is a great example. The Government have provided support for anaerobic digestion and published a strategy for growth in the sector in 2012. More recently, WRAP has published reports on the use of digestate from the process, helping farmers applying this to their land. So, again, there are all sorts of encouraging advances.
The noble Baroness, Lady Jones of Whitchurch, also highlighted the importance of developing new business models. This is something that your Lordships have more generally considered as we move forward. Indeed, the Government are funding a project exploring the sustainability benefits of pushchair rental. Pushchairs can be reconfigured or upgraded as the baby grows, and the used models can be refurbished for further use by a new customer. The Argos national gadget trade-in service, developed with WRAP’s support, incentivised the return of unwanted mobile phones and tablets for reuse in exchange for vouchers. The returned items are refurbished and resold. All these initiatives not only provide businesses with new opportunities and innovation but transform the relationship with consumers. Consumers can therefore benefit from more choice, convenience and better-performing products.
Action is being taken not just domestically. Internationally, we have been working to promote resource efficiency in fora such as the G7, where the UK is recognised for encouraging a circular-economy approach. I was interested particularly in what the noble Lord, Lord Giddens, said in his references to Japan, and I would be interested to hear more.
The noble Lord, Lord Teverson, and the noble Baroness, Lady Jones of Whitchurch, referred to the EU draft circular. We are indeed assessing the commission’s proposals and will be finalising the UK position in discussion with other departments, devolved Administrations and other stakeholders. We want to make sure that we end up with measures that are right for the UK, ensuring that the whole circle is considered and not just the individual parts. I was particularly interested in what the right reverend Prelate said about French regulation. We will certainly be looking at that example, and if I have anything further to report I will get back to him as speedily as I can.
We still generate roughly 200 million tonnes of waste annually across the UK. We must reduce this and do more to ensure that waste that cannot be prevented is reused. The noble Baroness, Lady Jones of Whitchurch, highlighted the challenges in increasing levels of recycling. Currently, we recycle 44.9% of waste from households, and we are committed to meeting the EU target of 50% by 2020. But, of course, we need to go further. The Government continue to work with local authorities, WRAP and businesses to promote best practice. This includes the Recycle Now campaign and industry initiatives such as Pledge4Plastics, promoting plastic recycling by householders. I was very much struck by what the noble Lord, Lord Rees of Ludlow, said about plastics, and I am particularly mindful of what the noble Lord, Lord Teverson, said about marine pollution, which is appalling.
We believe that local authorities are best placed to develop recycling arrangements in their areas. With our support, WRAP works with them to recycle more and to make recycling easier for householders. Clearly, there are opportunities to improve recycling and to reduce confusion for householders through greater consistency and partnership working between authorities. Indeed, my ministerial colleague Rory Stewart has highlighted the benefits that we can obtain from reducing the variety of collection systems so that we have a smaller number of models based on best practice. Surely, the key to success is in making things work for local authorities and also making them easier for the public.
Developing and securing sustainable end markets for recycled materials is key to ensuring that the UK meets its statutory recycling targets. I believe that the UK has come a long way over the past few decades in how we view and handle waste. We must continue to embed a more circular approach in all parts of our economy. As I said at the beginning, I am most grateful to the noble Baroness, Lady Jones of Whitchurch, who has brought to this debate so much of her experience, particularly serving on WRAP, which is key. So many innovative ideas and initiatives have come through WRAP’s work that I would like to take this opportunity to acknowledge and congratulate not only the noble Baroness but all those who worked with her and continue to work now with my noble friend Lady Jenkin of Kennington, because this is going to be tremendously important. It has also given me an opportunity to listen to the many good examples and the experience that your Lordships have brought to the debate in so many ways. I hope also that your Lordships will understand that there are so many exciting economic and environmental solutions on which the Government are leading and on which we need and want to do more.
The circular economy undoubtedly has enormous advantages, opportunities and economic benefits. Indeed, earlier at Question Time—last week, I believe—so many of your Lordships acknowledged the work of the Ellen MacArthur Foundation. I very much welcome the important work of that foundation, which works on rethinking, redesigning and building a positive future for the economy. I am very grateful for the foundation’s valuable input into Defra’s sustainable resource management forum, providing valuable insight into the implementation of the circular economy in our country.
The noble Lord, Lord Teverson, asked about TTIP. Given the enthusiasm we have for the circular economy, we must use any opportunity we have on design. Clearly, what we are doing and need to do on design is essential. There is so much possibility. I was fascinated by what Jaguar Land Rover is doing with cashew nuts: that is the first I had heard of it. So many things will start to come through, and we need to be the catalyst to encourage that to come through.
I can assure your Lordships that the ministerial team at Defra is passionate about this. Much progress has been made and, by working together, we must achieve more in the years to come, because this is for the benefit not only of the people of this country but of our environment and the world environment.
Housing and Planning Bill
Lord Beecham
Lord Beecham (Lab)
My Lords, I shall also speak to Amendments 39, 39A and 40 in this group.
“There is no specific shortage of social housing, or private rented accommodation, or homes for first-time buyers, but an overall shortage of inexpensive housing across all tenures. Government solutions … are all a step in the wrong direction … Boosting homeownership should not be a policy aim in its own right. The government’s aim should be to improve affordability in general”.
These are not my words. They are contained in a briefing which I have just downloaded from my computer from that unregenerate Marxist body, the Institute of Economic Affairs—which tells us something about the peculiarity of the Government’s position.
Amendment 38 addresses the critical issue of affordability. In an earlier debate, I declared that affordability is an elastic concept, and we debated at some length the implications of that condition on Tuesday. Rather than beginning with a figure reflecting current house price averages—unaffordable to a large proportion of the population and varying widely not just between London and the rest of the country but within London and, as we have heard already in some areas, within other parts of the country—the approach comes to the issue from the other end. The criterion for affordability should be the income levels of the potential beneficiaries of the scheme. I am afraid I will cite figures again from my own authority: in Newcastle, the average two-bed property is marketed for £135,000 and the average three-bed for £160,000—those are existing stock. The discounted prices under the starter homes scheme would therefore be £108,000 and £128,000. As we have heard in relation to other figures which have been quoted, new-build properties would presumably cost more than current average prices. In any event, either would be out of reach for the majority of applicants on the city’s housing register and for a sizeable proportion of other people seeking to purchase a property. In the existing areas of what we call lower-quartile properties—flats or terraced houses—the average asking price is around £78,000, or £92,500 for slightly bigger homes.
The scheme we are debating today has little to offer in places such as Newcastle. By contrast, in areas of higher value in the city and elsewhere, its potential would be limited to those with higher incomes, who will in addition benefit of course from the ability to cash in eventually not only on the 20% discount but, as my noble friend Lord Campbell-Savours pointed out in some detail this morning, on any rise in house prices. At the top end, there is clearly the potential for very large windfall gains to arise from the scheme, amounting to well in excess, in some areas, of £100,000—ironically, enough to allow the lucky first-time buyer in London to invest in a buy-to-let property in Newcastle of the kind I have described.
It cannot be fair to facilitate, after only five years, such significant untaxed gains for buyers whose incomes are likely to be substantially higher than those of people buying cheaper properties.
Lord Campbell-Savours (Lab)
Once again I express the need for us to see, at a very early stage today, this document that sets out the Government’s estimate of regional demand, based on the number of people who have applied. We need to see those figures and where they are coming from. If they are available in the Chamber now, why can they not be circulated during this debate?
Lord Beecham
I cannot answer that question, of course. I am not sure the Minister will be able to either, but she will have a little more time—probably quite a lot of time—to perhaps get some information from the Box.
My Amendment 38 indicates that the starter home should be sold at a price not higher than that which would be affordable to a household on the local median income rather than creating an artificial discount irrespective of the means of the buyers. That seems a more sensible approach. Amendment 39 looks at the position in a slightly different way, and deals with the length of time in which the 20% discount applies. The Bill provides for a five-year period, after which the property can be sold and any gain accrues to the original purchaser. Amendment 39 would retain the 20% discounted price in perpetuity, so that the property would always be sold at 20% less than what by that time would be the market price. The benefit of the 20% discount would therefore go to successive purchasers of the property, which would remain at a discounted price, rather than it effectively disappearing into the pockets of the first lucky first-time buyer.
Amendment 39A would extend the categories of properties which might be purchased, by including properties bought under a rent-to-buy agreement as well as those purchased directly. This seeks to cater to buyers who might find it difficult to obtain or service a mortgage by allowing them to participate in the rent-to-buy scheme; it could be extended to shared-equity purchases. The Minister might look into these possibilities before we return to these issues on Report. The thrust of the amendment is that prime consideration needs to be given, in terms of affordability, to the means of the buyer and not simply to the price of the house. That is cardinal to achieving greater access to genuinely affordable houses on the private housing market. Accordingly, I beg to move.
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
I have to inform your Lordships that if this amendment is agreed to, I cannot call Amendment 39 owing to pre-emption.
Lord Best (CB)
My Lords, it is time for the Cross Benches to join in. Amendment 41A is in the names of the noble Lords, Lord Kerslake, Lord Cameron of Dillington and Lord Beecham, as well as my name. It also relates to this key component of the Bill—the Government’s flagship policy of starter homes—and is all about reducing demand for this new product so that starter homes are not such a cuckoo in the nest. Just to reiterate, these are homes for first-time buyers under 40 sold at a 20% discount, with the costs borne by housebuilders, who in return are now excused the normal requirements to provide a percentage of affordable rented or shared-ownership homes and to pay a community infrastructure levy.
I preface my remarks with an overarching comment on where we have got to in relation to the starter homes initiative. If only starter homes were all additional to the affordable rented homes that would otherwise be provided, I am sure there would be far less concern. However, they would then of course need to be funded separately, instead of replacing accommodation for those on lower incomes. What would that cost? If the average discount was something around £40,000, the total cost over five years for 200,000 of these homes would be £8 billion. The Government have already pledged something over £2 billion to assist with the programme, leaving under £6 billion—rather more than £1 billion a year—to be found if only the scheme was intended to add starter homes while serving the same number of people. However, this is not where we are.
On Tuesday we talked a lot in Committee about the losers from this policy: the people who would have obtained those rented or shared-ownership homes that will not now be built. Today we are talking more about the winners from the starter homes policy and whether this scheme is rather more generous than it needs to be. Who are these winners, and does the nation get value for money from rewarding them in this way? A big group of beneficiaries will be those of my generation. This is not because I am under 40, but because the starter homes initiative will benefit parents of buyers, since the bank of mum and dad will not need to be drawn upon so heavily. Over a quarter of first-time buyers have been dependent on this source of funds, so a lot of parents can now draw a sigh of relief that government will pay instead.
Secondly, of course, the main gainers from the policy will be those lucky buyers who can receive up to £112,000 towards their purchase in London and up to £62,500 elsewhere. These discounts take the form of grants after five years; the purchaser can then keep all the money alongside keeping 100% of the increase in the property’s value, of course. That is great for these buyers.
Owner-occupation does indeed provide a level of security, a source of pride, an encouragement to maintain and improve the home, and a degree of freedom that renting does not. But because these discounts represent a hefty subsidy to the buyer at the expense of a relatively worse-off household, who will not now get the affordable rented home which starter homes have replaced, we need to ask whether this trade-off represents good value for money for the nation.
Lord Campbell-Savours
That is an area that confuses me. When we talk about repayment, who is actually being repaid? I cannot work it out.
Lord Best
The Bill and my amendment leave open whether repayment would be to the local authority where the home has been built—which I would support—or to the Homes and Communities Agency, to be used for housing elsewhere.
By making the offer a little less generous—by making the cream a little less rich—the excessive stimulus and distortion of this market is reduced, I hope, and the cost to the nation in losing out on affordable rented homes is made a little easier to bear.
Lord Kerslake (CB)
My Lords, I support Amendment 41A, spoken to so ably by the noble Lord, Lord Best. I declare my interest as chair of Peabody, president of the Local Government Association and chair of the London Housing Commission.
The focus in our debate on Tuesday was on the impact of proposals on social rented housing. As the noble Lord, Lord Best, has said, there is a price to be paid in the current model for that sort of housing. We also spent considerable time debating the one-size-fits-all approach to planning that is envisaged to support starter homes. Today we have focused on starter homes as a product in itself; indeed, we might say that we have spent most of this morning on what might be described as product design, and the Committee might agree that this has been a rather unsatisfactory process. The reason why this is the case is quite clear: with starter homes we are going from a prototype to full production by missing out the stages in between, so it is hardly surprising that we are struggling to make sense of something that, in truth, has not been fully designed.
If we ourselves are confused, struggling with this, frustrated or indeed concerned, it may be some consolation to the Committee that such confusion, concern and frustration are shared equally by the house builders and lenders. Before we come to the amendment, it is important to explain the context for why this issue is so difficult for them and for us. There have been products to help first-time buyers to access home ownership for 30 years now. It is not a new concept; it has been around under both Governments as something that they aspired to achieve. The aims have been twofold. The first has been to help people with the deposit. People often have the income to enable them to pay the mortgage but not essentially the wherewithal to pay the deposit on the property. That was one key element of helping people into home ownership. The second reason why we went down the road of promoting home ownership products was to sustain demand, particularly following the financial crash in 2007. So there were two reasons why, as I say, Labour Governments as much as Conservative ones have gone down this route.
Up to 2013, the cost of these products came essentially from departmental budgets—in this case CLG and, before that, the ODPM. Because budgets were tight, accessibility to these products was constrained and in fact linked to income, as was talked about earlier. That was our basic model prior to 2013. In 2013, though, it was established by the Treasury, and there was some very clever thinking on this, that in fact these forms of support, in the shape of equity loans, could be regarded essentially as financial instruments and held against a third-party asset. As a financial instrument, they scored as debt but not as deficit. The Chancellor therefore thought that he could expand them in a pretty unconstrained way, so income requirements came off and the size and value of the property that you could buy went up substantially.
That was a crucial shift to making these schemes much more widely available. In fact, in 2013 a large sum was assigned—it was expanded to £10 billion later on—to take this through to 2020. In addition to that, there was £12 billion to support an additional product, Mortgage Guarantee, which underpinned mortgages. So there were two products that effectively helped people to get over the deposit problem, Help to Buy and Mortgage Guarantee. Since 2013 there have been something like 126,000 purchases using one or other of those products, and £3.8 billion of government money has been put alongside that. I cannot say how many of those people who bought are under 40 because I do not think those data are held, but I am willing to bet that a large number were in that age category.
Lord Young of Cookham (Con)
My Lords, before I speak briefly on Amendment 39A, I want to touch on the point that both the noble Lord, Lord Kerslake, and the noble Lord, Lord Best, raised about the issue of dead weight. This is something that has dogged housing policy for a very long time. There is dead weight in the right to buy in that many local authority tenants might have purchased without the discount. There is dead weight in transferable, portable discounts. In both these cases, Administrations of all colours have taken the view that the overall benefits of the policy of promoting home ownership and diversity of tenure have justified a bit of dead weight. In the earlier debate a number of suggestions were put forward to minimise the risk of dead weight in that, in so far as this product is oversubscribed, there is a way of prioritising. In his speech, the noble Lord, Lord Best, mentioned a number of ways of doing this. The noble Baroness, Lady Hollis, mentioned one. There was one in an amendment and I mentioned others. If there is an excess of demand, one can tackle the issue of dead weight by prioritising it to those for whom the dead weight issue is not there because they would not be able to afford it without it. Or they are moving out of social housing and therefore freeing up a tenancy. I take the point about dead weight but there may be ways through. It is something that has been there for a long time.
I turn to Amendment 39A, in the name of my noble friend Lord Lansley, who is in Brussels today. During the debate on Chapter 1 on Tuesday, a number of noble Lords suggested that we should have had this debate on definition first before we had the debate on Clause 1. I note with some satisfaction that we have now moved from line 11 on page 1 to line 12—so progress is being made. My noble friend Lord Lansley was seeking to stretch the definition of starter homes to include Rent to Buy. In her winding-up speech, my noble friend the Minister referred to the definition of the starter home. She said that Clause 2 talks about the criterion for a starter home and then went on to define it. When pressed for a slightly tighter definition, she said:
“That is fine. I just thought I would set that out now. I know we will be talking about it later”—[Official Report, 1/3/16; col. 766]—
in response to what my noble friend Lord Lansley said about Clause 2.
At the moment we have a product—Rent to Buy—which is a hybrid, in that it sits between affordable renting and affordable home ownership. It is a product aimed at those who are renting but who cannot afford a deposit. In return for paying a lower rent, they are allowed to purchase their home after a set number of years. Under the current definition of a starter home, the insertion of the word “purchase” means that they would be excluded in that they have not—
Baroness Hollis of Heigham (Lab)
The noble Lord, Lord Young, said that in return for paying a slightly lower rent, they would effectively acquire an equity stake. Does he not mean a slightly higher rent as part of the Rent to Buy process?
Lord Young of Cookham
I am reading from the briefing from Rentplus:
“The affordable rent to buy tenure addresses this, enabling tenants to save more through paying lower rents and allowing them to purchase their home after a set number of years”.
In other words, the money is put on one side to enable them to buy the product at a later date. That is from Rentplus, and I am very happy to let the noble Baroness have the briefing. It was debated in another place and, in response to a question, the Minister replied:
“Higher income tenants in a Rent to Buy scheme will not face increased rent under proposals for pay to stay. This is because the rent they pay is an intermediate rent”—
this may answer the noble Baroness’s question—
“which is excluded from social rent policy”.
The purpose of the amendment is to see whether this product—and there may be other products, such as shared ownership—will qualify as starter homes under the definition. Or, if it does not qualify under the current definition, whether the definition could be looked at so that products that promote home ownership will be included in the starter homes definition. We had a bit of this debate on Clause 1. I hope it will not be so narrowly drawn that a number of worthwhile products, such a Rent to Buy, will be able to score as starter homes. Again, just looking at the brief from Rentplus:
“Affordable rent to buy is a new ‘hybrid’ housing tenure, sitting between affordable rent and intermediate housing. The tenure enables working households to save for a deposit whilst renting at an affordable rate (80% of market rent …) allowing tenants to purchase their home after a set number of years”.
I hope that explains to the noble Baroness what the product is. I am surprised that, given her interest in housing, she may not have come across this particular product.
I very much hope that, in her response, my noble friend can give some comfort to those aspiring home owners who cannot access a deposit which is necessary for starter homes but who are seeking to enter home ownership through a different route.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I will speak to Amendment 46. I support all the amendments in this group and the comments that were made by the noble Lords, Lord Kerslake and Lord Best. I support the Government’s aim to provide more homes for those who cannot currently afford them, but fear that the time-limited discount of 20% will be seen as unfair by those not able to access it, and will be unlikely to increase the housing supply in the future.
I do not support the discount remaining in place for the limited period of five years. This is a very sizeable discount, as other noble Lords have explained, and it should be enjoyed by others looking to gain access to the housing market in the future. This is a discount which should be available in perpetuity so that the same home can be within the reach of others, despite the inevitable rise that inflation will cause to the price of the property over its lifetime. Have the Government thought about what will happen if a purchaser fails? Who will get the discount if that initial purchaser defaults? Perhaps there is a bit of a perverse incentive for a lender to repossess after year 4.
Why should the first purchaser receive the discount, live in the dwelling for five years and then sell it, keep the discount and the uplift in the value of the house due to inflation and not pass that discount on to the next person? This discount is to be funded from local taxpayers, via the sale of high-value council homes. I feel certain that those taxpayers would wish their hard-earned money to be used wisely and to be recycled wherever possible.
Lord Horam (Con)
My Lords, I will comment very briefly on the remarks made by the noble Lord, Lord Kerslake, who made a significant point about the existing instruments we have to help people in this situation—the Help to Buy method and so forth. He made the point that this is a financial instrument and therefore the debt/deficit equation, which is so important to the Government, is resolved by using these sorts of methods. As he pointed out, no fewer than 126,000 people, with total costs of £3.8 billion, have been helped by these methods.
The simple point is that it has not been enough. As the noble Lord also pointed out, you have to have an income of no less than £83,000 to be able to afford a house in London, and 90% of people cannot do that. So the plain fact is that we need to do more—which is what the Government are trying to address with starter homes. We dealt two days ago with the question of whether we are helping the right people when we addressed the question of whether you can help people who are in a different category but who are even more disadvantaged than people who might benefit from starter homes. We dealt with that issue—or at least we tried to. Now we are dealing with whether this is the right kind of instrument in the circumstances to deal with the fact that we have a crisis, particularly in London, and the present instruments do not help enough. That is the fundamental point.
Lord Kerslake
I am grateful for the opportunity to come back on this point. The noble Lord is entirely right to say that we need to do more—there is no question about that. I strongly hold the view that we need to put a lot more into the building of new housing. If there is an issue about the existing products, as there was in London with Help to Buy, we should look to revise and amend the products themselves rather than introduce a new product which essentially competes in the same market and, instead of giving people a loan to help them with their deposit, gives them a very substantial gift. I am most concerned about that issue. I said that we had to make choices about priorities and doing more. As my noble friend Lord Best said, we have this cash, so I would put it into affordable rented accommodation. Nothing you will do in relation to these products will make housing accessible for people on middle or low incomes. We have to build an awful lot of houses for an awfully long time before they will benefit.
Lord Horam
I entirely agree with that. My way would be to recognise that the sort of lift in the cap on borrowing for local authorities, for example, is perfectly acceptable in the context of the Government’s overall economic strategy. If you look at what is now being said worldwide by the International Monetary Fund and the OECD, at the moment they are calling for more capital investment of this kind, and there is no better capital investment than housing. It is interesting that insurance companies, for example, are now going into the build-to-rent market in a fairly big way in London, because the sort of regular, sensible rents you get from that sort of market precisely match the sort of income streams they need to service insurance bonds. That is a very interesting development, which I am sure the Government will welcome and which shows how the market, if left to itself, can itself resolve some of these questions.
To digress for a moment, the reason that insurance companies are going into this area is not only that it is a very interesting way of solving their problems but that the price is high enough for them to be able to produce buildings at a cost which enables them to rent them out to young people at a price they cannot afford. So the very high price is producing a supply consequence which is very favourable. None the less, the noble Lord is right that what is proposed here is a new product, and there is always a danger with a new product that it will lead to distortions of the market. If you try to interfere in a market situation with a product that has not been thoroughly thought-through, you risk unintended consequences—and that is what we are worrying about in this situation.
If that is the case, Amendments 38 and 39, put forward by the noble Lords, Lord Kennedy and Lord Beecham, are frankly impractical. They are not the way to deal with this problem. They are putting into the system the local authority having to decide what the level of affordability is in a particular area, when the market already decides what affordability is in a particular area. Frankly, therefore, I do not trust local authorities to second-guess the market as to what the right level of affordability is.
Secondly, on the idea of having a discount in perpetuity, as the noble Lord, Lord Campbell-Savours, rightly pointed out, how on earth do you value it in the future? Indeed, how on earth do you value it now? There is no way you can value something which has been separated from the rest of the market, which is determined by market forces, and which has a value discount attached to it. You cannot do that—there is no way an accountant could work that out over a period of time and make any kind of sense of it. Inevitably, if you try to put in something in perpetuity, it will disappear into the general market in due course, probably in some way you do not expect.
So the right answer is the amendment put down by the noble Lords, Lord Best, Lord Kerslake and Lord Beecham—two minuses and one plus, from his point of view—whereby you pull back some of the discount over a period of time from the people who benefited from this government largesse. You are achieving what you want to do, which is to get them into a new house and to start a home and so forth, but you are pulling back some of the advantages you gave to them to achieve that.
However, I point out that even that has its impracticalities, because you will be asking them to pay back rather a large amount of money at some stage unknown—they do not know when and you do not know when—in the future. That could be a very considerable amount of money. I do not know how you would do this over a period of time and whether you would do this in one lump sum or whatever it may be, and you and they do not know what their circumstances will be. So there are impracticalities even with this. None the less, we have to have some measure by which you can pull back some of the advantages you are giving to people under this new model, and the Government have to think very carefully about how they handle this.
Lord Shipley (LD)
My Lords, I am a signatory to Amendment 46. I want to refer to the report from Generation Rent, which was published earlier this week and found that public subsidies proposed by the Government will help comparatively few people. That is because very few people in the private rented sector will be able to benefit from the scheme, and the 200,000 people who stand to benefit could receive a huge dividend if they sell up after the five-year discount period expires, with the potential for six-figure profits individually. We have heard a great deal about this but these are very large sums of money.
The consequence is that the scheme will increase inequalities between those who own property and those who do not, and there will be a lack of any sense of fairness between those who can afford a subsidised starter home and those who cannot, driving social inequalities wider and deeper. I wonder whether that is really what the Government want to achieve.
I should like to ask the Minister whether the Government are committed to the statement in the Conservative election manifesto that starter homes will be exclusively for first-time buyers. The point is that when the homes are sold on after five years or later, there is no guarantee from the Government that they will be bought by first-time buyers. So these are starter homes for first-time buyers but theoretically only for five years; after that, the benefit that had accrued from defining them as homes for first-time buyers will be lost.
I am still puzzled by the Minister’s statement before the lunch break to the effect that it may well be possible that starter homes will be sold as second homes. I keep thinking about those parts of the country that are short of housing and where starter homes may be important in providing additional opportunities for people. The prospect that they may be sold and lost to the next generation who could take up starter homes I find particularly disturbing.
We need clarity from the Minister. If housing affordability fails to improve, future first-time buyers will find it very difficult to get on to the housing ladder, so having a discount which carried on in perpetuity would help the Government to keep their promise.
Lord Campbell-Savours
I am sorry to intervene but I cannot understand how this would work. I am not trying to be critical in any way; I only want to know how it would work. Can the noble Lord give us an example of a property purchased at a discount under this scheme? What would happen at its first sale? How would the price be determined? What would be the position of the estate agent selling the property? Would a valuer be involved? I am trying to understand the mechanism here. If it worked then it would be reasonable to consider it but, like the noble Lord, Lord Horam, I cannot see any mechanism that would make it work. Can he please explain?
Lord Shipley
I agree with the noble Lord. I am as concerned as he is about these matters. Of course, I had assumed that there would be a role for the valuation system. There may be a role for local authorities, or there may be a role for both. That system exists in relation to council tax valuation, for example, but it seems to me that to prevent market abuse—the noble Lord, absolutely rightly, discussed that before the lunch break—we have to be clear about this, otherwise there could be a problem with how properties are valued. For that reason, in my view there has to be an independent valuer.
This would operate in exactly the same way if there were a taper, going down 1% a year over 20 years, or if the 20% discount applied in perpetuity, but there are ways in which that can be done by using local government and the valuation system. I do not wish to say much more. In this group—
Lord Beecham
In terms of the perpetual restriction, does the noble Lord think that it would be possible to discount the sale price by the 20% on every sale for perhaps 20 years or in perpetuity so that no money changed hands? The sale price would be paid, and as far as the buyer was concerned the property would be priced in competition with other kinds of property. I would have thought that that would be a mechanism to secure the preservation of the 20% discount.
Lord Shipley
My Lords, that is a very helpful intervention and it could well be one way in which we could proceed. However, we are in Committee on the Bill and I would have thought that the Government would be able to explain this to your Lordships’ House, as opposed to individual Members of the House having to come up with proposals for the Government to consider when the Bill has now been in front of Parliament for many months.
There are two approaches in terms of Amendment 46: our approach is the “in perpetuity” one and another one involves tapers. Some further thought has to be given to that. The noble Lord, Lord Kerslake, rightly identified that the Government have not presented any options for consideration. There has been no cost-benefit appraisal and I am very surprised about that. If there has not been, there should have been.
The issue of avoiding dead weight also seems to be very important. I concede entirely that occasionally dead weight will apply, because the overall gain is greater than the loss on dead weight. However, if there is too much dead weight, it means that some are being subsidised at the cost of others.
I agree entirely with those noble Lords who have said that the priority should be affordable rented housing, as so very many people cannot participate in buying starter homes because they either do not have the deposit or do not have the ability to repay the mortgage. I hope the Minister will respond to what the noble Lord, Lord Kerslake, called a gift, and the noble Lord, Lord Horam, referred to using the words “government largesse”. We have to be very clear who is getting the financial advantage here. At the moment, I believe that we are driving a deeper wedge in terms of social exclusion.
Lord Cameron of Dillington (CB)
My Lords, I put my name to Amendment 41. I was going to list the range of various abuses that I felt the starter homes regime would be open to, but that has been done with much greater expertise and experience by my colleagues, my noble friends Lord Best and Lord Kerslake, and, indeed, with greater eloquence.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford)
My Lords, I thank the noble Lord for giving way. I just do not want to happen today what happened on Tuesday. Amendment 41 is in the following group, but I am very happen to listen to him and to respond.
Lord Cameron of Dillington
I do apologise; I meant Amendment 41A.
The point that everyone has made, including the noble Lord, Lord Campbell-Savours, who I did not mention just now, is that the moment you falsify a market, there will always be someone looking to make a turn. If the Government are experimenting with a new product, I am certain that financiers and traders will be very quick to find new ways of taking advantage.
To my way of thinking, starter homes do little, in the countryside at any rate, to solve the urgent housing problems of those many families in real need. The other big shortfall of starter homes, when compared with, say, shared equity, is their transiency. Unless we continue to build, let us say, 50,000 starter homes every year in their currently proposed incarnation, not only until 2020 as promised by the Government but ad infinitum, then their very small benefit to society will in each case be lost after only five years.
The lack of affordable housing in this, our very crowded island, is not a short-term problem. I cannot see it diminishing, so we need something more permanently fixed in the affordable sector than starter homes as currently planned. By way of a compromise, to assist starter homes to give a little longer-lasting benefit and to avoid, as has already been said, some of the possible abuses, I believe that Amendment 41A is worth serious consideration by the Government.
Baroness Hollis of Heigham
My Lords, might I ask the Minister a question following the powerful speeches from the Cross Benches today? Can she explain why the financial instruments we currently have would not address the problems that she has identified? I think we all agree that we need to increase the supply of housing and that we want more people to have the choice of which tenure they occupy given basic affordability rules. We would also wish to avoid huge discounts being a one-off gain for a select few who then pocket them, with the gain being permanently lost to subsequent generations coming behind them. As the Minister has outlined it, those three objectives are incompatible with each other.
My question is to some extent triggered by the comments made by the noble Lord, Lord Kerslake: why is the equity loan system not an appropriate way forward to be expanded? Why should government not assist people with an interest-free equity loan for the 20%, the equivalent of the discount? At the time of sale, that 20% would be repaid, and could then be made available to be attached to a new home or any existing home so that there is a continuing pool of money coming back from the 20% equity loan to finance the next generation? It may well be attached to a starter home, or it may be that, in some places, there are no starter homes but, none the less, there are modest Victorian terrace houses which would attract the same potential buyer. Certainly that would be the case in Oxford and Cambridge and so on.
Can the Minister explain what is wrong with the existing instruments? Why would that not help encourage demand in a way that strengthens the supply side, extends purchase to people who are currently struggling, and recycles that money into—as the noble Lord, Lord Cameron, said—continuous generations of would-be purchasers? What is wrong with that? Why should we not do that? Why is that not the simplest way forward to build on what we have? I have been studying this darned impact analysis: not a single figure about cost, number of people or the ultimate effectiveness of the discounts is anywhere to be found. Can the Minister explain why we need this way of meeting objectives that most of us share?
Lord Campbell-Savours
I shall very briefly intervene on this occasion just to say that I only wish that Amendment 89L in my name, a very controversial amendment that comes much later in our proceedings, could have been taken at this stage. It would have provided a very different approach to dealing with this matter. But of course we will not come to my amendment for another three weeks, I understand; it is at the very end, by which time everyone will have made their mind up.
I think that if we are to go down this route, Amendment 41A in the names of the noble Lords, Lord Best, Lord Kerslake, Lord Cameron and Lord Beecham, is the perfect solution. In my view, it deals with the problem of excess profit-taking; it provides for the discount system and, if you are acting honourably, you are not penalised in any way. That is the compromise that Ministers should seriously consider. I know that promises were made in the manifesto, but that amendment does not compromise the commitments that were given. It still provides for the 20% discount system which the British people were promised was on offer. I hope that the amendment is very seriously considered.
The Earl of Lytton (CB)
My Lords, I have sat on my hands for a considerable while since we started in Committee this morning. I speak to an intriguing amendment, Amendment 41A. Before doing that, I will try to peel back some of the skins of the increasingly complex onion that we appear to be dealing with.
The first thing to realise is that the housing market is potentially a very volatile animal, and has an enormous number of different subset markets—as we have heard, different parts of the country operate in very different situations. I know that your Lordships’ Select Committee on National Policy for the Built Environment heard evidence that, in certain parts of the country—not the north-east or the north-west— the market simply has not returned to anywhere near pre-peak levels of value. However, I leave that to one side.
Earlier, the Minister cited a gap in the market. I question which market we are referring to. Apart from believing that the gap is vanishingly small—we have heard some reasons why other products would effectively fill it anyway; and apart from the means being adopted to plug it in the Bill being vanishingly transient; and, furthermore that the limited category of people whom this type of starter home would actually benefit is, to my way of thinking, irrelevantly small in the overall scale of things, I have to wonder where we are trying to get to.
We need to be clear about whether society will provide lasting sectoral benefit to that proportion of the population that any social society is bound to try to assist. In that, I include people who may have been property owners at some stage, have fallen on hard times and, for whatever reason, have to depend on the state. When you are dealing with free markets, that sort of thing happens. There will always be a proportion of people—I do not pass judgment on how significant or insignificant—who cannot afford to buy and almost certainly cannot afford to pay a market rent. Are we going to assist those people, or to provide an increasing focus on a windfall gain for the few, without reference to the needs or actual means of the few who will benefit? I question what we are doing here.
In introducing Amendment 41A, the noble Lord, Lord Best, identified that the discount and loan assistance taken together is a huge transfer of asset. It is much bigger than the headline 20% figure that we are led to believe applies under starter homes. As the noble Lord, Lord Young, observed on Tuesday, developers are keen on this. Yes, indeed— they would be. Who would not be as an alternative to the affordable housing regime under Section 106, with the uncertain outcomes and unpredictability that that involves? I am not in the least surprised about that. Purchasers of starter homes would also be keen. Who would not be, offered a windfall gain for the asking? I wonder whether we should be devoting quite so much time and effort to this ephemeral social benefit.
When dealing with the question of housing and the impecunious, I am reminded of a gentleman who once said to me, in connection with council house sales, “If I had that sort of cash, I would put it to a better use than buying this place”. I hope that we do not build the sort of place that he was referring to, but I wonder whether, in circumstances of strapped resources in the public domain, we should be funding the ephemeral and assisting those who have access to a deposit that enables them to gain this discount in the first place. There is certainly no gain to the social budget on the sale of a starter home. The mortgage gets paid off, presumably, and the balance of it goes off down the road with someone to their next home. Or, if they have succeeded in being parted from their money, it goes to someone else—some financier who may have come in on the back of this scheme. It was mentioned earlier today that there is absolutely no end to the ingenuity of financiers of all sorts, regular and irregular, who would jump on this bandwagon and might usefully talk people round into doing business with them on the basis that they would share in some of the largesse being provided by society at large.
I believe that doing more here includes retaining a significant element of social benefit of some sort, and it is a matter for debate how much that should be, for society at large—unless of course you believe that the market will do everything, which of course it will not and cannot. History shows us that it does not.
Lord True (Con)
My Lords, I apologise: council duties earlier this week led me to miss the extremely interesting discussions about the relationship between starter homes and affordability. I hope that I will be able to make a contribution to that at Report, because clearly there are issues there. I also missed the early stages this morning, but I have listened with tremendous interest all day, as always, to your Lordships on these questions. Clearly, there are issues that need further discussion. What I heard from the earlier extremely extensive intervention from my noble friend on the Front Bench was that she was open to reflect on all the things that noble Lords have been saying.
The noble Lord, Lord Kerslake, with all his authority on the Cross Benches, made the fundamental point, which we have to bear in mind, that this is a manifesto commitment. That was almost the first thing that the noble Lord, Lord Kerslake, came in with. So this House has a duty, in my submission, starting from that point, to look at practicalities and ways forward here, some of which have been put before us in these interesting amendments.
Baroness Hollis of Heigham
My Lords, I accept the point about the manifesto commitment—we came in in 1997 in the same way. But what we then did was, where possible, to go for a White Paper to flesh out the details of how it would be done and used the responses to that White Paper to shape the regulations behind the drafting of the Bills. Would the noble Lord agree that that is the most appropriate way forward in this case?
Lord True
My Lords, I respect the noble Baroness. We have heard from her many times today and if she would allow me to pursue my remarks I will try to pick up on that point among others. I have been patient. As a general principle—I have said this many times in your Lordships’ House—policy-making should be progressive. We should have Green Papers, White Papers and so on. But that practice was eliminated in the years when Mr Tony Blair was Prime Minister of this country; it disappeared. So I will not take strictures on that point. Perhaps we could form an alliance and move back, but we are dealing with the situation that we have now.
We do have an artificial market at the moment. I would not choose this particular instrument if I was selecting the first XI to bat for England in solving the housing problem. But we have an artificial market at the moment, parts of which are caused by matters we do not address—for example, the growth in population. The biggest distorter is the London market, because there has been an exceptional rise in London’s population. Currently there is no planned instrument to address or control the problem, and that will lead to continuing high pressures on housing.
Another distortion in the market, generally supported across the parties, is the artificial depression of interest rates. If you depress the cost of acquiring or holding a good, the capital value of that good will increase. At the moment we have an artificial situation in which low interest rates relate to capital costs. The problem then for young people who are trying to save for a deposit or acquire a house at a time when capital values are high is that they have had to live during a period in which, for a time, there have been, effectively, negative interest rates for savers. Now there are minimal interest rates for savers. It is extremely difficult in the exceptional and artificial market that we have now for young people to save. I do not want to follow the interesting and reasonable points that have been made about people with high capital assets, but it is not easy to save for a deposit when prices are moving away.
So it is perfectly logical and understandable that the Government wish to look at an instrument of this kind that would help people seeking to be first-time buyers. It may not be perfect. In exceptional local authority areas where capital values are high I would like to see further discussions about exceptions and so on, but it is not unreasonable that an instrument of this kind should be considered. The fact that it may be a skin graft when perhaps the market needs heart surgery is not necessarily material because skin grafts are important and useful and do help certain people.
Your Lordships have reservations of different kinds and I am interested in the arguments that have been put forward. I do not agree with those who say that we do not need this instrument. There is nothing in it which threatens the existence of other instruments that have been commended, some of which also cause distortions in the market. So we should go on in a constructive way, look at this proposal—which was put before the British people and voted for—and, for all its imperfections, see if we can make it better. Maybe some of the suggestions made today will contribute to that, maybe they will not—but that is what your Lordships’ House is here to do.
Lord McKenzie of Luton (Lab)
My Lords, while listening to this debate I have been trying to get my mind around the mechanics of how some of this might work. Perhaps the Minister might comment. It seems to me that on day 1 the discount is met by the developer, not by the Government or the purchaser. Other things being equal, you would expect that discount to be represented as a charge against the property. If nothing else changed, should that property be sold it would be sold at market value and the vendor would have an obligation to account for the discount—presumably, in this case, to the Government. If Amendment 41A were accepted, the detriment of that charge would gradually reduce over a number of years, and if there were a disposal there would be a smaller amount to be repaid.
The issue arises as to who the amount gets repaid to—who the charge is discharged in favour of. The Government presumably get some sort of windfall along the way. If they do not, how does it work? Should there be a residual recovery of the charge, who would get the benefit of it? If the charge is written off on the basis of Amendment 41A over a period, in a sense there is nothing to recover. It seems that that is a mechanism to address the issue the noble Lord, Lord Horam, and my noble friend Lord Campbell-Savours were pursuing about how the market will work. It would be relatively straightforward if that were the mechanism.
But where are the Government in this in terms of scoring against public expenditure? They do not take a hit on day 1, but do they anywhere along the line? Presumably not if the discount is on some basis fully written off. But if it is not and it is recovered by the Government, that has got to be reflected somewhere. Perhaps the Minister can help us with that.
Baroness Gardner of Parkes (Con)
My Lords, I really like Amendment 41A but I believe the money should go to the local authority in which the property is based, to be used for further housing benefit or whatever else is needed. Local authorities are very hard pressed for funds and all the local communities benefit from anything that goes to them.
It is not at all unreasonable to ask for a certain amount to be repaid. It would be just,
“1% for each year of occupation”—
or is it 1/20th? That is where I am slightly lost. If you occupy a property for 20 years and pay 1% for each year does that mean—my maths are not good enough to work this out—that you have reduced the whole lot at the end of 20 years? If you have not stayed the whole 20 years do you pass it on to the next person, so say after five years that person has a 15% discount, which they can then keep for 15 years? And will they lose that when they pass on the property? I believe that is what is intended. It seems to be the fairest amendment which has been put forward on this.
Lord McKenzie of Luton
I accept entirely that the recovery could be by the local authority rather than the Government.
Baroness Williams of Trafford
My Lords, I thank the noble Lords, Lord Kennedy and Lord Beecham, for Amendments 38 and 39, and the noble Baroness, Lady Bakewell, and the noble Lord, Lord Shipley, for Amendment 46. I will address them together.
I am very clear that starter homes are a new product. They are a manifesto commitment designed to serve a pressing new need. Clause 2 sets out the key parameters: a starter home is available to first-time buyers, under 40—the very gap that the noble Earl, Lord Lytton, referred to—at a minimum discount of 20% of market value and are subject to a price cap.
The proposed amendments would replace the minimum 20% discount on the open-market value with affordability criteria based on average local household income. Any discount would remain in perpetuity. This amendment would remove the 20% discount on local market values. I cannot support that as 20% is a minimum discount and, if they wish, councils would be free to negotiate with developers for a higher discount if that was best for the area. There is evidence that they do that at the moment for affordable housing.
Much was said at Second Reading and on Tuesday about the affordability of starter homes. Research on affordability by Shelter and Savills for the Local Government Association was based on median house prices in each region. I question whether first-time buyers access the market at average house prices, as I pointed out the other day. Starter homes will be valued to align with local house prices for first-time buyers aged under 40. We are working with the sector and professional bodies to ensure that a transparent process is agreed for valuation.
The noble Lord, Lord Kerslake, talked about the Shelter report, which is not out yet—he must be a very important person, as I have not seen it yet. I will be interested to see it when it is published but I must point out that we all agree that London is expensive. I do not think that anybody denies that. In response, I would point out that we estimate that starter homes will be accessible to those with a gross household income of £45,500 in the south-east, as I added up badly yesterday, and of £39,500 in the east of the country.
Lord Campbell-Savours
The noble Lord, Lord Kerslake, challenged the Government’s figures on this question of affordability. I think that he quoted a figure of 68% in one case, which is different from the figures that the Government are giving. The Minister said that she was going to have a look at the report. Will she come back at the next stage, when she has seen that report, and give us an explanation of why there is a difference in the stats?
Baroness Williams of Trafford
I can, my Lords. We can all argue about statistics and, given that I have not seen the report, it is very difficult to make a comparison of the different figures. However, I will do so.
Lord Kennedy of Southwark (Lab)
In her earlier remarks, the Minister said that authorities could negotiate a higher discount on the property with developers. If they can do that, why can they not negotiate a lower discount as well?
Baroness Williams of Trafford
Because the whole point of the starter home is that it will be available at a discounted level to those under the age of 40. I will give the noble Lord the workings out of why that was arrived at. I am guessing that it was derived for a similar reason to that for the affordable homes discount, which has now been going for many years.
Lord Kennedy of Southwark
That is very helpful, thank you. We used to hear from the Benches opposite about how local authorities knew best but it has all gone very quiet now. I am thinking of the Localism Act, which was never mentioned again from the Benches opposite.
Baroness Williams of Trafford
I do not think that anything changes there. Nobody would promote any louder than I the view that local areas know best but local areas also know that government has certain expectations of them, and it has ever been thus.
The noble Lord, Lord Campbell-Savours, asked me for a breakdown of demand. I elected earlier on to provide that in due course and I will write to him. I do not have it at my fingertips at this point.
Baroness Williams of Trafford
I will try for next week and see what is in the art of the possible.
We have examined the affordability of homes to those who are currently in the private rented sector. If they were to buy a new-build property in the lower quartile of the first-time buyer market outside London, up to 60% of households which are currently renting privately would be able to secure a mortgage on a starter home, compared with 45% who could buy a similar property—
Baroness Williams of Trafford
That is the figure being challenged and we will return to it later but in the absence of seeing the report and its figures, I cannot comment on that report at this time.
Lord Beecham
Can I remind the Minister of my request to see a comparison of newly built first-time purchases and any other housing that might be bought by a first-time buyer? I suspect that there is a difference.
Baroness Hollis of Heigham
I take it that the letters will be circulated to all Members taking part in the debate?
Baroness Williams of Trafford
Absolutely, and they will be placed in the Library. I have the implied first-time price of new build—not the demand figures—by region, which might temporarily satisfy noble Lords. In the north-east, it is £138,000; in the north-west, it is £144,000; in Yorkshire and Humberside, it is £144,000; in the east Midlands, it is £152,000; in the West Midlands, it is £148,000; in the east of England, it is £220,000; in London it is £356,000—no surprises there; in the south-east, it is £352,000; in the south-west, it is £179,000; and in the whole of England it is £216,000. I hope that is all right as a starter for ten, but I will endeavour to get those demand figures for next week.
Within London, up to 47% of households that are currently renting privately would be able to secure a mortgage on a new-build starter home—in the lower quartile of the first-time buyer market—compared to 37% who could buy a similar property now, priced at full market value. This demonstrates that starter homes, at a 20% discount, will provide a genuine opportunity for home ownership for many more households and help them to get a lasting foothold on the property ladder. The noble Lord, Lord Best, talked about the equity loan scheme as being a discount; the very nature of its name implies that it is a loan—it has been extended to 40% in London. But the whole of the debate so far has talked about the inaccessibility of the housing market, particularly for first-time buyers, and London is a really hot case in point. Either we want Londoners to access the London market or we do not—I think that all noble Lords do want Londoners, particularly the young ones, to access the London housing market.
The noble Lord, Lord Best, also said that Help to Buy distorts prices and drives down supply. A government research report that came out last week stated that, actually, Help to Buy does not distort prices but drives up supply. Government research found that 43% of additional new homes built were as a result of Help to Buy. It has, understandably, been an extremely popular product.
Lord Best
I am not saying that the current 20% Help to Buy support has not been helpful in the marketplace. What I am saying is that the increase from 20% to 40% Help to Buy assistance in London, coupled with a 20% discount—that is where the discount comes in, a cash discount—adds together to 60% of the value of the property. The Minister is right to say that I commented that others have criticised the 20% Help to Buy support—I think we have yet to see it, but we can guess that 60% help to people buying in the form of 40% Help to Buy plus 20% discount really is an extraordinary level of assistance to people, much as we sympathise with their need to move out of rented homes if they can.
Baroness Williams of Trafford
I thought that the noble Lord had said discounts, so I apologise if I misheard him. I think I need to reiterate that point: the 40% Help to Buy loan equity plus the 20% discount do not add up to a 60% subsidy. Effectively, 40% of that 60% is in fact a loan and has to be paid back.
Baroness Hollis of Heigham
In that case, why does the Minister think she needs a 20% discount on top of a 40% equity loan—which is, frankly, an interest-free bridge, if you like—which then gets repaid and recycled on to the next, so that, as the noble Earl, Lord Lytton, said, it is not just a one-off windfall for the lucky first-time accessors to that particular property?
Baroness Williams of Trafford
My Lords, I think I have been over the arguments many times. As I say, this is a new product introduced by the Government, a manifesto commitment to help that demographic which has been so disenfranchised by the buyers’ market, and it will help those people to get on the housing ladder. I know that we disagree, but everyone in this Chamber has talked about the particular difficulties of London, and that is why the equity loan guarantee scheme is being extended to 40% in London.
The restrictions imposed by permanent discount can make it more difficult to sell and to move on—I have gone through that earlier today. If a property can only ever be sold at a discount, can the owner easily move upwards to a larger home or to a new area? We want to ensure that the opportunity of home ownership comes with future choices and mobility, and not with more constraints. This is central to our vision for first-time buyers: a genuine discount that provides a genuine opportunity for the long-term future. As I have said, this is particularly important for young people, and we intend that starter homes will continue to be provided until 2020 and well beyond—obviously, we cannot commit a future Government to the priorities of the current Government, but that is our intention. A new supply of starter homes will become available for future first-time buyers, who will benefit from the same opportunities as the earlier buyers.
I will now turn to Amendment 41A, which introduces an alternative to the Government’s five-year restriction on sales, and the in-perpetuity model put forward under Amendment 46. This proposes that a 20-year taper is attached to starter homes where a buyer secures an uplift in value of 1% for every year of ownership. However, under this amendment, a couple in their mid-30s buying a starter home as their first house would need to stay there until their mid-50s to realise the full uplift in the value of their property. This seems like a significant restriction on their future mobility and does not support our ambitions for starter homes. Such long-term restrictions would make it more difficult to sell and move on. If the property is sold at a discount, can the owner easily move upwards to a larger home or to a new area? If people find it more difficult to move on, I question whether long-term restrictions will benefit future occupiers.
Lord Campbell-Savours
Would not such people still get the benefit of house price inflation, irrespective of the discount?
Baroness Williams of Trafford
My Lords, they would. But the principle behind the Government’s initiative is that within a few years people can start to move up the property ladder, but we want to help them to move on rather more quickly than the noble Lord suggests.
Baroness Blackstone (Lab)
My Lords, I am puzzled by what the Minister is saying. There are hundreds of thousands of young people who have had to buy a small flat early in their lives, at the point when they need to have housing. Very often they have got married and they may have a baby. They then have a second child. They make some savings and move to something larger. They do not have big discounts. So why is the Minister saying that this very small group of people should have such a very large sum of money thrown at them? It really is very difficult to understand.
The Minister has said throughout this debate that she is concerned that other forms of housing and tenure should all be provided with support as well, yet everything she says in response to this debate suggests that starter homes have become of such enormous significance to the Government’s policy that very large sums of money are being promoted to be provided for a relatively small group of people who will, very often, not be the really poor or even middle-income young people but relatively well-off young people. I cannot understand why the Minister thinks that, when it comes to wanting to move to a larger house, this group is not capable of doing what everybody that has been in this group before without a starter home benefit has been able to do. It just does not add up. It is also incredibly inequitable. In fact, the whole scheme is incredibly inequitable. I would have thought that the Government would want to look at the distributional consequences of a scheme of this sort: not just the costs and benefits, as was suggested earlier by the noble Lord, Lord Shipley, but who benefits and who does not benefit. The Committee deserves to know something about this, and we have not been told.
At face value, it looks to me as if a large number of people, including young people who want to buy homes, are going to get nothing out of this while a very small number are going to get a great deal and will continue to get a great deal. The Government and the Minister refuse to see that a perpetuity provision such as that proposed in this group of amendments would help to counter some of the criticisms that Members of the Committee have given in the debate this afternoon.
Baroness Williams of Trafford
My Lords, the noble Baroness asks who will benefit. Young people will benefit, and history shows us that it is young people for whom home ownership has been out of reach.
Lord Kerslake
There is a critical point here, which has perhaps been missed. When a couple or an individual seek to buy, they will make choices about what they can afford and, accordingly, where they can buy. In some situations, they will choose somewhere, as was said earlier, of lower value, because that is what they can access by way of mortgage; in other places they will go for somewhere of higher value but with a discount offered. They will make a choice about their purchase at that point. What they are essentially doing, when you put a second charge on a property, is making a trade-off between the discount—and the length of the discount—and the price they have to pay. That is what they are doing.
If you make it five years, anybody will go for that, whether or not they need it, as that will be the only way they can access the property. If you make it 20 years, it is much more likely to be the people who genuinely cannot access full market value who go for the property. This is a crucial point. If you really want to avoid deadweight squeezing out the people who might be able to purchase only with the discount, you have to have a longer taper than five years.
Baroness Williams of Trafford
My Lords, I think we are going to have to disagree on this. The noble Lord, Lord Campbell-Savours, made the point that owners would get the uplift from house price inflation. However, that could be the other way round, as after five years, a house could be worth less. The housing market is cyclical—prices go down as well as up—so there will not necessarily be an increase in the house price after five years.
Lord Campbell-Savours
So people in this particular group who might be subject to deflation are again picked out to be treated specially: they will have their deflation subsidised by others.
Baroness Williams of Trafford
My Lords, this is all relative. When house prices come down, the next house up on the ladder will also be cheaper. Under the proposal of the noble Lord, Lord Best, after five years the couple in question would benefit from a quarter of the discount. I accept that after 20 years they would benefit from the whole discount. I know there is not agreement in the Committee about this, but we want people who work hard and want to move up the housing ladder to be able to do so.
Lord Kennedy of Southwark
We all want people who work hard to move up the housing ladder, but the problem here is that this is such a small group of people.
Baroness Hollis of Heigham
Can the Minister explain something? I think most of us would sympathise with trying to find the best way to help people into owner-occupation, particularly given the pressure of house prices. We could argue whether it should be equity loans, starter home discounts of 20% or anything else, but why this sudden fixation with mobility for people who are no longer first-time buyers but second-time buyers and maybe, subsequently, third-time buyers to be free of any discount so that they can enter the market without having had to save, as my noble friend said, in the way that everybody else has? Why do the Government consider it to be part of their responsibility to help people become second-time buyers?
Baroness Williams of Trafford
My Lords, housing is an issue for government and there is a huge demand on housing in this country. This scheme is not to the exclusion of other products—I must stress that it is not as though we have switched off the tap to all other products. Sitting on these Benches, one might think that there were no other products on the market, but there are. This is one way of helping that demographic for whom home ownership has been so out of reach.
Lord Kennedy of Southwark
I asked a Question this week about people on the living wage for whom homes are out of reach—people who are trapped in the private rented sector. This is not helping those people.
Baroness Williams of Trafford
I did not disagree with the noble Lord. I pointed out the various things that were available, such as shared ownership and affordable rented properties.
Baroness Williams of Trafford
There is Section 106, if it is viable for the scheme. There is £20 billion going into the housing market, of which £8 billion is for starter homes. It is one of a number of parts of the jigsaw, but the Government are very keen to promote it. We do not shy away from that: we want people to get on and move up in a reasonable time.
Baroness Williams of Trafford
For all the reasons I have outlined, because of the gap in the market. However, if people find it more difficult to move on, I would question whether long-term restrictions would benefit future occupiers. Allowing first-time buyers to benefit from a genuine discount will increase the vibrancy of the housing market, while the next generation of first-time buyers will benefit from new starter homes coming through the planning system in years to come.
Those homes will provide first-time buyers with the opportunity to move up as their family grows—as the noble Baroness said—or their circumstances change. We are consulting on the five-year restriction for affirmative regulations shortly, and will consider all responses carefully.
Our proposals would prevent starter homes being sold on the open market at full market value for a period of five years after they were first purchased by a first-time buyer. We believe this is important to ensure that starter homes are sold to those who are genuinely committed to living in an area and not to those who would simply wish to sell to secure financial uplift. We want to be clear that a starter home could be sold during the first five years of occupation—that point relates to the question of the noble Lord, Lord McKenzie—but it could be sold on only at 80% of market value to a qualifying first-time buyer. Therefore no money moves anywhere during this period. After that time, the property may be sold at full market value. This proposal will be set out in affirmative regulations following consultation.
Lord Shipley
My Lords, could the Minister please explain who would be responsible for assessing market value?
Baroness Williams of Trafford
My Lords, as I said this morning, we would expect an independent valuation to take place. That would be the fairest way to do things. A number of noble Lords have mentioned that this afternoon.
Our consultation will provide the best opportunity to test our proposals with the sector, including developers and lenders. We need to wait for the outcome to ensure that post-sale restrictions can work well in practice. Introducing tapered discounts over such a long period is complicated and including them in the Bill would limit the flexibility to make adjustments to the way they work in practice if necessary.
On Amendment 40, I assure noble Lords that it is not our intention to allow those people who buy a starter home to become buy-to-let landlords. We will ensure that letting restrictions are included in our regulations. The aim is to provide a place to live in, not a place for absentee landlords to profit from.
Unfortunately, restrictions to any legislation will not prevent gaming at the local level, but I assure noble Lords that we are working with builders, lenders and local government on the best possible mechanism. We will consult on the details for the regulations in a technical consultation to be published shortly.
Lord Campbell-Savours
I ask the Minister to imagine a sale where a house is being sold on the second occasion. After the valuer has said, “This is the value of the property and that is the discount, so you have to sell it at this price”, a person buying finds that he is one of eight people who all want that property. Is there not a danger that one of them will come along and say, “I’ll give you an extra £3,000 but don’t tell anyone about it”? Are those not the conditions that are going to exist in reality? Estate agents will be party to it, too. They will say, “Yes, that’s the price, but I understand that Joe Bloggs is prepared to pay you a few extra bob round the back to make sure that he gets the deal as against the other seven in the queue”.
Baroness Williams of Trafford
The noble Lord makes an extremely valid point and I will ask about what the mechanism would be there. People will be queueing up for these homes anyway because they are going to be appealing for first-time buyers, but I will ask about the precise mechanism by which that would work—whether, effectively, there is competition in the market. That is a valid question.
Lord Kennedy of Southwark
My noble friend indeed makes a valid point. If people went on to do that, it would be fraudulent activity, so I presume that there would be appropriate penalties. People need to know that, if they behaved like that, they would get caught and pay a heavy price.
Baroness Williams of Trafford
I do not disagree. We would not want to introduce a system that was fraught with potential fraud.
Baroness Hollis of Heigham
But the easy way around that is that you pay £20,000 or £25,000 for the white goods and the carpets. There is no problem in doing that; it is easy.
Baroness Williams of Trafford
My Lords, I turn to Amendment 39A, which would enable Rent to Buy products to be considered as starter homes. We know that there is an appetite among housing providers and developers to deliver more home ownership in new and innovative ways. We know that we need a wider range of products to assist young first-time buyers to access home ownership when a generation is increasingly being priced out. The Government are supporting people who cannot afford a discounted purchase outright through the separate schemes that I have mentioned, such as Rent to Buy, Help to Buy and shared ownership.
Our commitments through this spending review will provide households that cannot yet afford a home on the market but aspire to home ownership in the medium term the opportunity to save for a deposit. It is a good product and, like other valuable products that support access to home ownership, affordable Rent to Buy can be considered by councils as part of their wider affordable housing requirements for their area. The clause will not prevent those developments from coming forward.
This is a new product. Our manifesto was clear that we would build 200,000 starter homes and this is central to our housing ambitions. The electorate will expect us to deliver on our commitment. The starter homes policy is a product for outright purchase that gives people the benefit of home ownership and, importantly, helps them to achieve a step up the ladder. I have tried to answer all noble Lords’ questions.
Lord Kerslake
Before the Minister sits down, I understand that Shelter will publish its data very shortly. I was keen to have the latest data for this debate. It would be helpful if the Government could also publish not just their data but the underlying assumptions behind them so that we could have a true like-for-like comparison.
Baroness Williams of Trafford
I can say to the noble Lord that we will certainly request that—he has been teasing us all afternoon. I am looking forward to seeing that report and I am sure that we will debate it in full, comparing those data and the Government’s data. I ask noble Lords not to press their amendments.
Lord Beecham
My Lords, I express the thanks of the House to the noble Baroness. She has had a long, difficult and, if I may say so, lonely day in terms of support. Over the lunch break, I suggested to her that she should have a word with the Whips’ Office to ensure that somebody else could take some of the load of replying to the debate. Perhaps the noble Lord was sent in for that purpose, but I do not know how well he would have been prepared for it. For the rest of our discussions on the Bill, I hope that the noble Baroness receives more visible and audible support. It is unfair for her to have to deal with all these complicated matters on her own. I compliment her for her patience and good nature, if not for the policies that she is supporting.
In speaking to his amendment, the noble Lord, Lord Best, came out with a rather delightful phrase:
“If the cream is too rich, the cat dies”.
It is not quite appropriate in this case because, effectively, the cat is the public purse. The public purse suffers because money is being pumped into this scheme—and it is not just the public purse, but other potential uses for that funding in the housing sector. So it is a rather strange cat that we are looking at.
The noble Lord also referred to the concern of the building industry in that regard. The noble Baroness did not refer to that but seemed to imply that this was a great thing for the industry. However, that is not, apparently, the view of the industry. It would be interesting to see, as we go through the Bill, whether more information comes from that sector.
The noble Lord, Lord Kerslake, referred to Help to Buy and the Minister made some reference to it, too. It is not clear whether and to what extent the relationship between the two concepts has been thought through and whether the impact of the one on the other has been assessed as to eventual outcomes. As usual, there is little in the impact assessment to help us. This clearly needs to be addressed. Help to Buy might decline in the light of this arrangement. Of course, Help to Buy is not confined to this particular age group, but it is not at all clear what the impact of the change would be. The noble Baroness gave some figures for the amount that the scheme costs. It may or may not be cost-effective. On balance, it looks to be a sensible proposition.
Amendment 39A, tabled by the noble Lord, Lord Lansley, who is not in his place, has a good deal to commend it. I hope that the noble Baroness will look at it slightly more sympathetically than she appeared to be doing, although I am not sure if I have read her intentions correctly. The amendment seems a sensible proposition.
The noble Lord, Lord True, referred to distortions in the market. Of course there are distortions in the market, particularly in the capital, with a vast amount of investment flowing into very expensive properties and buildings, many of them apparently for the benefit of overseas citizens who want to park their money somewhere safe. That must have a distorting effect on the whole housing market in the capital. Nothing in the Bill, or anywhere else, appears to address that issue, but the issue surely needs to be addressed—not necessarily in the Bill—as it is a factor in the huge price rises in the capital. It also uses the resources of the industry, which could be building more affordable homes elsewhere but, for obvious reasons, is investing heavily in these hugely expensive and unwanted developments. As the noble Lord rightly says, or implies, this distorts the market.
The amendments to which my noble friend and I have subscribed our names have two potential ways of dealing with the discount. We have signed up to both of them because they are both potential runners and we need to discuss them in further detail, perhaps before we get to Report. One is that the discount should be regarded as being there in perpetuity, which would hold the price down in perpetuity, while the other would taper the discount. They would not necessarily lead to money being paid by a seller as opposed to the price having to be retained at the discounted level—while of course allowing for the house inflation to which my noble friend Lord Campbell-Savours has referred more than once.
This is a hugely complicated area. We all need time to reflect and I hope that that period of reflection will be materially aided by as many answers as the noble Baroness and her team can provide and by advice from those in the industry and those concerned with the problem nationally, bearing in mind that there will be different approaches in different parts of the country, which we very much need to take into account. Having said that, I beg leave to withdraw the amendment in my name.
Lord Kennedy of Southwark
“( ) is built on under-used or unviable brownfield sites not currently identified for housing on public and private land, as determined by the local authority,”
Lord Kennedy of Southwark
My Lords, when I first spoke today I should have drawn the House’s attention to my declared interest as a local councillor in the London Borough of Lewisham. I apologise for not doing that sooner. I also echo the comments of my noble friend Lord Beecham and add my genuine thanks to the Minister. This is obviously very difficult and we very much appreciate the way in which she is handling the debate, so we thank her very much for that.
Amendment 41 in my name and in the name of my noble friend Lord Beecham seeks to put in the Bill a requirement for starter homes to be built on underused or unviable brownfield sites that are not currently identified for housing, on land determined by the local authority. The amendment simply seeks to put in the Bill what we believe was the original concept of starter homes. The Government have widened the scope of these starter-home proposals to include every reasonable size of housing site, to be defined in regulations—which, of course, we have not seen as yet. I contend that this goes too far and our amendment leads to a more realistic option, leaving local authorities with greater flexibility for this policy to be delivered alongside what they think is needed to meet the local housing needs.
Again, this seems to be the sort of thing we were being told from the government Dispatch Box not so long ago: “Let local people and local authorities decide”. But here again we have more regulations—which, again, we have not had sight of—and the views of local people and local authorities are not taken account of, local flexibility in determining local housing needs is not given priority, while the views of the Secretary of State and Whitehall are. It all seems at odds with the Government’s stated policy of localism that was trumpeted from the government Dispatch Box not that long ago. It would be useful if the Minister could address the conflict I see between the policy we are debating today and the Government’s policy on localism when she responds at the end of this debate.
Amendment 42, in the names of the noble Baroness, Lady Doocey, and the noble Lord, Lord Kerslake, will be spoken to shortly, but I can say that I am supportive of its intention to keep starter homes separate from dwellings which are part of a housing regeneration scheme. I will make further comments on that during the course of the debate. I beg to move.
Baroness Doocey (LD)
My Lords, I shall speak to Amendment 42 in my name, which would exempt councils that wish to regenerate estates from the duty to provide starter homes. If councils are forced to put starter homes ahead of replacing council homes when they regenerate estates, resources will be sucked away from replacing council units and existing tenants will be priced out. This would put at risk the Prime Minister’s own stated ambition, which is to see 100 of the most run-down estates transformed, with tenants protected.
The reality is that balancing the protection of tenants and unlocking land is extremely difficult. Sometimes a local authority can convince tenants that everything from crime to damp is endemic in the estate’s design, and indeed sometimes that is correct. But even if a council manages to persuade people that regeneration is both necessary and desirable, it must then meet two further challenges.
The first is persuading tenants that there will be enough units for everybody who wants to move back to the estate once it has been rebuilt. This right of return is crucial if tenants are to be persuaded to back the regeneration proposals. The second is agreeing a scheme which releases land to build properties for private sale in order to fund the regeneration. This inevitably means an increase in density and raises real concerns that the newly built estate will give pride of place to private dwellings, relegating social housing to less desirable locations.
Councils also have to joust with developers over what is and is not viable in their battle to have social rented units reprovided. Residents are rightly suspicious, because the viability studies which underpin the assumptions about what will and will not stack up are often commercially confidential and hotly contested. Then there is the question of ensuring that leaseholders get a good deal. They should get the market value for their property and they, too, should be able to return to the estate if they wish after the regeneration is complete.
Taken together, those are immense financial, logistical and political headaches, and there is clear evidence that some councils are already having great difficulty. In Southwark, for example, the Heygate estate, which has more than 1,000 council properties, is being redeveloped at the moment. Of the 2,500-plus homes being built, only 79—less than 3%—will be social rented property. These situations can only get worse if the Bill gets on to the statute book unamended.
A recent report of the London Assembly Housing Committee showed that on regenerated estates across London, the number of social rented units has reduced from 30,000 to 22,000. By contrast, the number of private market housing units has increased from 3,000 to 36,000. These figures show the difficulties that local authorities face in the negotiations for these regeneration schemes.
Any local authority with a serious commitment to social housing will be asking the developer for what may well turn out to be a quite impossible mix: to rebuild the estate, to build enough private housing to fund the scheme, to reprovide all the social rented, shared-ownership and leasehold units, and also to provide starter homes. As we have seen from Shelter’s research, starter homes are not going to make the situation any better. In practice, the Bill will make the vital principle of a right to return almost impossible to achieve. This means that estates either will not get regenerated or, if they do, it will be done in a way that means not just decamping existing tenants but permanently evicting them from the estates concerned—and some tenants have lived on these estates for generations.
So I ask the Minister to consider how the Government’s twin priorities of the provision of starter homes and the regeneration of 100 of Britain’s most difficult estates, with existing tenants protected—that is the promise that the Prime Minister made—will sit together. My amendment aims to help the Government to ensure that both objectives are met, and I hope that the Minister will be able to give a constructive response.
Lord Kerslake
My Lords, I add my support to what I think is an excellent amendment from the noble Baroness, Lady Doocey. It absolutely goes to the heart of the practical challenge of estate-based regeneration. Typically, in those situations, you are dealing with stock that is either time-expired or very badly designed, and the only solution there is to redevelop and re-provide on the site. Anybody who has been involved in such schemes will know that the viability of doing this is extremely hard. It is compounded, as the noble Baroness said, by the proper requirement—I emphasise the word “proper”—to ensure that those who live on the estate at the time of the redevelopment can stay on the estate when the development is completed. It typically involves a phased process of redevelopment, decant and then development of the properties that have been freed up.
Yesterday, I was at the unveiling of public art for a scheme in St John’s Hill, where the leader of the council, Councillor Govindia, was in attendance as well. That is the first phase of a scheme there. What we have secured on that site is an increase in supply from 351 homes to 528. Of those homes, 249 are for sale and 279 are affordable. The point I make is that that scheme took over five years to get to a point of viability. We had to provide for those who were already living on the estate and we had to cross-subsidise the whole initiative through the market-sale properties on the site. We have there a scheme that we at Peabody can feel genuinely proud of. However, I can tell the Minister that if another requirement was superimposed on that scheme that itself involved the loss of value in the form of starter homes, I do not think that we could have delivered both a viable scheme and met the needs of the tenants. These issues will be replicated up and down the country. We have had a long debate about the pros and cons of this, but it is crucial that in the introduction of starter homes we do not inadvertently create a problem for the practical regeneration of estates that so desperately need it.
Lord Horam
My Lords, I add my voice to the support for Amendment 42 in the name of the noble Baroness, Lady Doocey, and the noble Lord, Lord Kerslake. I am aware, as they have said, that there are many chief executives, of big London boroughs in particular, who are very anxious to regenerate their existing—very often large and troublesome, I must say—estates in an interesting and innovative way. But the first thing they have to do is get the support of the people on the estates. They have votes, and it is no good not giving them the sort of right of return that this amendment involves—you simply would not get the support that you need to go ahead with the kind of development that is necessary.
Although it encapsulates a very important idea, this particular amendment is not right, and perhaps I can anticipate the Minister’s response in this respect. I do not think that you can exclude any starter home-type development. It would be wrong to do that, as the amendment appears to, because some sort of mix is needed. None the less, I think that the right of return for existing tenants should be guaranteed. Indeed, that is essential if you are going to get these schemes off the ground.
Lord True
My Lords, I also agree with the underlying force of the amendments. They do not apply only to large developments. In some developments there is pocket regeneration and smaller examples of where a decant and a return is needed. It is a question of where in my first 11 for solving the problem, as it were, starter homes come. Some of these schemes are extremely delicate at the edges, not only as my noble friend said in terms of selling and carrying the support of existing tenants and leaseholders but also on finance.
I was interested to hear my great friend, Councillor Ravi Govindia, the leader of Wandsworth, yesterday. I could testify from my local authority’s concern that we need to think about this very carefully. Whether it is rightly addressed by this sort of prescriptive amendment, or by a more concessionary approach to exceptions, which we might discuss between now and Report, I do not know, but I hope that my noble friend will think carefully, because it would be a great pity to lose delicate developments of social housing and estate improvement on the margins. I speak from personal experience when I say that some developments are balancing on the margins at the moment.
Lord Deben (Con)
My Lords, I remind the House of my interest of chairing a company which tries to help people to develop sustainably. I come back to the amendment tabled by the noble Lord, Lord Kennedy, about the areas on which such housing could be built. I do not want to restrict it to this kind of housing, starter homes, but I would not like the Committee to miss the fact that this is a housing Bill which does not make some of the fundamental statements which we ought to be making.
Every time anyone tries to deal with a housing problem, those clever people who dislike planning of any kind suggest that we should build on greenfield sites or move into the green belt. We have had another such statement recently. I have been Minister for Housing, and many of us recognise that if you allow people to build on easy sites, they will never build on difficult ones. That is part of the nature of things.
I am disappointed that we bring forward yet another housing Bill in which we do not reiterate the fact that there is plenty of land which has been used on which such housing can be built. Yet again, we give opportunities for largely right-wing think tanks to suggest that we should build on the land which we have no more of, the land which we were given and which needs to be protected. I say that because another interest of mine is sustainability for climate change. We will need this land, and we will need it to be productive, because we will not have enough, unless we are very tough.
Sometimes, a Bill is characterised by what it leaves out rather than what it puts in. This is my only opportunity to raise this matter, so I hope that the noble Lord, Lord Kennedy, will not mind that I do not want to restrict my remarks to what is in the amendment.
I say to my noble friend that we have to start getting real about the limits of a very small island, or series of islands. The only way that we can do that is to say that when land has been used, it must be reused. We are wrong at this time to allow government institutions, quasi-government institutions and former government-owned institutions to retain the land until they can get a better price for it. I have often thought that we should release the whole lot at once to lower the price and say that the public will carry that cost in order to lower the basic price of land—you must have all sorts of protections to do that.
I am deeply disappointed that there should be a Bill about housing which does not at any point approach the crucial issue, which is that we are wrong to despoil any more of our land, whether it be, as one organisation suggested, our parks, our green spots in towns or our green belt and greenfield sites. We have to make sure that once-used land must be developed, and if you allow people easier options, they will not do that. It is time that we faced that fact. Anyone who has been a Minister for Housing knows perfectly well that that is what happens: if you say that 50% of a site will be greenfield, then the bit that gets built is on that while the 50% that is not built is the more difficult area which has to be redeveloped.
I say this to my noble friend: please can we take more seriously this fundamental part of the kind of mix that we are trying to put together?
Baroness Williams of Trafford
My Lords, I thank the noble Lords, Lord Kennedy, Lord Beecham and Lord Kerslake, and the noble Baroness, Lady Doocey, for their amendments. They give me an opportunity to explain our key parameters for the delivery of starter homes, particularly in relation to unviable and underused brownfield land and housing regeneration schemes.
Perhaps I may start by addressing Amendment 41, which seeks to restrict starter homes to underused and unviable brownfield land in line with our original starter homes exception site policy, as the noble Lord, Lord Kennedy, has said. Let me be clear that we still expect exception sites to make a significant contribution to starter home delivery, and the first planning applications have been submitted under the exception site policy which has been in place since March 2015. We expect these to deliver a substantial number of starter homes, boosting the overall housing supply, and we have consulted on planning policy changes to extend and strengthen this policy, as well as bringing forward more land for starter homes, building on the exception site policy. We want to ensure that sufficient appropriate land is brought forward to meet housing need.
This planning reform will be further strengthened by the £1.2 billion starter home land fund which was announced by the Prime Minister in January. The fund forms a significant part of the £2.3 billion allocated to deliver more starter homes in the spending review and will support further brownfield site preparation, delivering at least 30,000 starter homes. It builds upon £36 million made available this year to secure and prepare more land for a first wave of starter homes, and it includes £8 million offered to councils to support starter homes on 27 underused or vacant brownfield sites across England. The HCA is using the remaining funding to acquire further suitable brownfield sites to drive up housing delivery.
But we also need to deliver starter homes on more conventional housing sites so that first-time buyers across the country can benefit from discounted home ownership. Limiting this would limit the opportunity for home ownership. It will also bring the benefit of a new mix of housing types on site: discounted properties for first-time buyers alongside wider market housing and any shared ownership or rented housing secured on the site. It is our view that the opportunities for first-time buyers have too often been neglected. Starter homes provide for a new model which should be delivered alongside other housing types. My department will be consulting on proposals for starter homes requirement on conventional sites in a technical consultation to be launched in the near future, and we want to look carefully at the proportion of starter homes required.
Lord Kerslake
I apologise for intervening again, but there is a critical point to be made here. When you consider the viability of a regeneration scheme, you can juggle the mix between market, sale, affordable rent and shared ownership, but in the case of the proposals for starter homes, we will have a number dictated by central government that in effect will be required to be delivered. That will have an impact, whether we like it or not, on the viability of a scheme. The issue is the ability to deliver a scheme and the flexibility required to make it viable. That will be significantly impacted by an absolute requirement to deliver starter homes regardless of the other requirements.
Baroness Williams of Trafford
I take the noble Lord’s point that the requirement to deliver starter homes might affect the viability of a site. That would be absolutely counterproductive, but it will often be the case that not only will the starter homes requirement be able to be met, but the council, in consultation with the developer, may well be able to provide other types of housing. I particular refer to houses for affordable rent, because they are quite often the grant-funded houses that effectively act as a pump-prime for the construction of homes.
Turning to my noble friend Lord Deben’s point on the green belt, we are very committed to protecting the green belt, despite what noble Lords might read in the newspapers, and we are maintaining the strong safeguards that are set out in national planning policy, which allow for development only where special circumstances exist. I agree with my noble friend that once it is gone it can never be got back.
Lord Deben
I just hope that my noble friend will remember that it is not just the green belt that I wish to defend: it is green fields and it is the need to build on land that is already built on, or has been built on, in order to get the homes we need. This is very important part of it; I do not want to restrict our building.
Baroness Williams of Trafford
Yes, I understand my noble friend’s point. Under our proposals in the NPPF national planning policy consultation, small-scale development in the green belt for starter homes could take place, but only where it is endorsed by the local community. I take my noble friend’s point, certainly in light of recent flooding, about the need to have this very finely balanced and for green belt not to be used as a sloppy method for builders to be able to build willy-nilly.
Lord Kennedy of Southwark
On that point, the idea for this policy was originally to build on brownfield sites and get them back into use, but the policy has now been widened. As the noble Lord, Lord Deben, said, people will opt for the easier options. I am worried that we will end up with a situation where we will still have the old brownfield sites, because no one wants to build on them, and other options, in our towns and elsewhere, will become more attractive for people to build on.
Baroness Williams of Trafford
I am in total agreement with the noble Lord and with my noble friend. One thing we are testing is whether there should be more flexibility on developing brownfield that is in the green belt—that exists, of course, but it is 0.1% of all green belt. It has been suggested that there should be a bit more flexibility on that, but not on the green belt itself. The noble Lord and my noble friend are absolutely right that these will become go-to sites for developers unless we are very careful.
Amendment 42 seeks to prevent housing regeneration schemes from incorporating starter homes. In January the Prime Minister announced an ambitious new programme to regenerate public sector estates, to tackle deprivation and build more homes. As I announced at this Dispatch Box a couple of weeks ago, £140 million of loan support funding has been made available to support regeneration and encourage investment from the private sector. My noble friend Lord Heseltine has appointed his estates regeneration advisory panel and its first meeting was held in February. Clause 2 is very clear on the definition of a starter home, which we need to ensure our reforms are widely understood. Clause 4 sets out the requirement for the provision of starter homes for residential development. My department will be bringing forward a technical consultation on the requirement so that we get it right.
The consultation will recognise that there are some developments where the inclusion of starter homes could help to secure a diversity of tenures and support mixed communities, but that compulsory inclusion could alter the viability, as my noble friend Lord True pointed out. But as my noble friend Lord Horam said, we should not exclude it at the outset—I think that that is absolutely right. I reassure noble Lords that our consultation will invite views on whether these schemes should be subject to the minimum starter homes requirement. As my noble friend Lord Horam absolutely rightly pointed out, engagement with tenants is crucial.
My noble friend Lord Heseltine was very keen to make sure that this is a truly genuine engagement with tenants, as well as other people involved in the scheme. So we need to wait for the outcome of the consultation to enable us to take into account the views and expertise of the sector. We need to work with those who will make this work on the ground to ensure that we get it right. Setting the requirement through regulations will help us to keep this operation under review and give more flexibility in the future.
Given my comments, I hope that the noble Lord will feel content to withdraw his amendment.
Lord Kennedy of Southwark
My Lords, I thank all noble Lords who have spoken in this short debate—the noble Baroness, Lady Doocey, the noble Lords, Lord Kerslake, Lord Horam and Lord Deben, and, of course, the Minister.
I agree with virtually all the comments that were made, including those of the noble Lord, Lord Deben. The amendment seeks to put the homes policy back to its original intention. In a debate earlier this week, I think it was the noble Lord, Lord Kerslake, who said that we had gone from a concept, to a policy, to an expanded policy and that we have now added more—and we have not yet put a brick down. It is disconcerting to find ourselves in a situation where we do not know what is going to happen. I have voiced my concern in previous debates about how we get these policies, how they are developed and how they find their way into Bills. I do not know whether it is through a right-wing think tank or anything else, but there is an issue about what ends up here for us to discuss. I am supportive of the proposal for the regeneration of estates. Having said that, I am happy at this stage to withdraw my amendment.
(a) ”
“(b) disapply the age requirement in subsection (3)(b) in relation to specified categories of people;(c) specify circumstances in which a dwelling may still be a starter home even if it is available for purchase by joint purchasers not all of whom meet the age requirement.”
“( ) Before making regulations under subsection (8) the Secretary of State must consult—(a) each local planning authority in England,(b) the Mayor of London, and(c) any other person the Secretary of State thinks appropriate.”
“( ) Regulations under this section may amend this Chapter.”
“( ) Through regulations the Secretary of State shall require that local planning authorities only allow starter homes on rural exception sites where these are subject to locally agreed “in perpetuity” arrangements and will contribute to delivering a significant increase in the supply of affordable homes to meet local needs, including those for rent.( ) Rural exception sites—( ) are small sites in or adjoining rural settlements of less than 3,000 people;( ) are used for affordable housing in perpetuity where sites would not normally be used for housing;( ) are sites which seek to accommodate households who are either current residents or have an existing family or employment connection with the community where the development is occurring.( ) Affordable rent is defined as a rent at or below 80% of open market rents in the locality of the development.”
Lord Cameron of Dillington
My Lords, the two amendments in the group concern exception sites and, for the purposes of clarity, they contain definitions of such sites. If you agree with the definitions of affordable housing in perpetuity to accommodate local households and so on, then the amendment needs little explanation. However, this is the House of Lords and so I shall proceed to give one anyway.
The key point is that these,
“sites would not normally be used for housing”.
They are outside the village envelope and are usually ordinary farmland or open countryside. In terms of planning, our countryside has two major conflicting pressures. First, there is the desire to keep England both green and pleasant—for the fifth most densely-populated country in the world, we do very well at that. Secondly, we need to resolve the biggest worry of many rural families, namely where on earth their children are going to live.
Lord Young of Cookham
My Lords, it will come as no surprise to my noble friend when I indicate that I have some support for these two amendments. What we are basically seeing is two worthwhile government initiatives coming into contact. On the one hand, there is the rural exception sites policy and on the other hand the starter homes initiative. I quite understand why the Government take the view that they do not want to deprive rural communities of the benefits of starter homes. However, the interface between the two policies is quite difficult. If I did not conceive the rural exceptions policy, I was certainly one of its midwives when it was brought forward in the 1980s. To use an analogy used earlier by the noble Lord, Lord Best, the real risk about this is that the cream will disappear in the form of the sites becoming available.
I know from my own experience of representing a rural constituency in the other place that there were villages where a benign local landowner made land available under the rural exception site policy, in the confidence that the homes provided would be available in perpetuity, as the noble Lord, Lord Cameron, has just said, and at affordable rents. If the landowner feared that those homes would disappear into the market, I am not sure that those sites would ever have been made available.
The features of the rural exception site policy were that, first, you have to do a survey to establish a local need for affordable homes for rent. Secondly, those homes have to be available in perpetuity—normally, for rent through a housing association. In some cases, they are for sale but with a lock such that the discount has to remain there in perpetuity. The starter homes initiative is different in that 80% of market value will still be beyond the reach of many local people, who would have been able to afford an affordable rent under the rural exceptions policy. Also, under the starter homes initiative, after the first time the second purchaser need have no local connections at all.
I understand that the Government are aware of the sensitivities on this. The briefing that we got says that their proposals included,
“using rural exception sites to deliver starter homes in rural areas”,
and allowing,
“the flexibility to require a local connection test on these sites”.
That is an important concession and, as we heard in earlier debates, it is not a requirement for the starter homes initiative anywhere else. None the less, some extra flexibility is required by either giving discretion to the local authority, as in Amendment 50C, or exempting sites below a certain level from the requirement to have starter homes.
When my noble friend replies to these amendments, I hope she can indicate that the Government are aware of the risk of losing the additional supply which the rural exception sites can provide and of the sensitivities in local areas to the change in the occupancy of these sites via the starter homes initiative, which were well represented by the noble Lord, Lord Cameron. I hope that there can be some flexibility in response to these two amendments.
Lord Deben
My Lords, as another of those involved in getting this policy in the first place, I remember the battle to try to get townspeople to understand the particularity of the problem in the countryside. Just in case—although I look at your Lordships and realise that all will have understood it—I want to repeat the fact that many of our villages, and some would say most of them, are in danger of becoming middle-class, middle-aged and middle-income groups, with hardly an opportunity for anyone else at all. This is a serious social problem. It also creates a community unable to sustain itself. Communities are about all sorts of different people doing different kinds of things and contributing in different ways.
In my former, very rural, constituency, one of the biggest difficulties is that, because there is a large number of older people and a need for a large number of carers, the social mix having been altered because people buy up houses in the countryside, it is more difficult to get carers in those circumstances than it often is in the towns. This never used to be true, but it is true now and it is to do with the social mix that has now been reduced for so much of rural England.
There is a bigger issue here, which hangs round this individual concern for the protection of exception sites. When we had the argument originally—this really is history—we managed to convince people that, because of the planning system itself, we had created a particular kind of shortage in the countryside. Every little house that used to be the house of a farmworker is, once it comes to market, an ideal, bijou residence for the part-time—very often for someone who will retire there. I am not suggesting that second homes are necessarily a bad thing, merely that such houses are so attractive that the price means that they are well out of reach of people living on agricultural wages or the lower wages in the countryside. I do not think that this is something that is bad just for that section of the community—it is bad for the whole community. It creates an artificial community of the kind that many of us deplore in the towns, and it is becoming more and more true of large areas of the countryside. I therefore think that this is a social problem for all of us.
The one way that we managed to get people to be able to gift and to sell at an agricultural land price, or something of that kind, was, as my noble friend Lord Young and the noble Lord, Lord Cameron, said, because they were convinced that we meant it when we said that it was in perpetuity, for local people, and that it would not be changed. It was not only a concept but something that we felt we had committed ourselves to. I am concerned, as are others, that once you undermine people’s trust—and I think that the present circumstances without the amendments does undermine that trust—there will be no more land provided in that way. I put it to my noble friend that, if the land does not come forward because we were hoping to have some extra starter homes, what we will have done is to reduce the number of homes all over, not just starter homes but other opportunities.
Lord Campbell-Savours
I want to intervene very briefly. In the old days—certainly when the noble Lord, Lord Deben, was a Minister in the Department of the Environment, if I remember rightly—in the Lake District we had what were called Section 52 agreements, whereby the planning authority placed a requirement on planning permission that people had to live within either a parish or some other defined area. In so far as Amendment 50A deals with,
“affordable homes to meet local needs, including those for rent”,
surely locals-only agreements could apply in the case of starter homes in small rural communities. Rather than planning authorities simply saying, “We will not have them. We will exclude them in particular areas”, could they not exist within those areas but subject to locals-only agreements?
Lord Deben
They certainly could; the noble Lord is absolutely right. But they would have to exist in a way which meant that they were not lost when the next tenant comes forward. You would have to have them in perpetuity as well. As long as that is the case, I do not mind two hoots.
Lord Campbell-Savours
If I remember rightly, under Section 52 agreements, that was precisely the case: the permission attached to the property was carried forward to subsequent buyers. In this mix of debate whereby it is being suggested that we should be more careful about their inclusion in these rural communities, if you have that kind of restriction in place, I cannot see that there is such a great problem.
Lord Stoneham of Droxford (LD)
My Lords, I remind the Committee of my interests as chair of Housing & Care 21. The noble Lord, Lord Cameron, has moved this amendment very fully. I will just mention a local example that illustrates the issue to which the Minister has to respond.
It is a village near where I live in Hampshire on the edge of the South Downs National Park called Wickham—the birthplace of William of Wykeham, the famous Lord Chancellor in the reign of Edward III. It is a nice rural village. A friend of mine who is a local landowner and farmer decided, in the interests of the village, to donate some land as an exception site for approximately 11 properties and a doctors’ surgery on the edge of the village. That was done, and the houses were divided between a housing association and a community land trust. When he heard about the right to buy, he was incandescent, because he had given this land in good faith. Despite remaining a substantial landowner in the area, he vowed that it would be the last piece of land he would give up for an exception site.
This is the issue that needs addressing, and that is why I support the amendment. We will come on to other aspects of this particular site when we get to the amendments on community land trusts, but I raise this as an example of why the issue needs to be addressed. That is what the Minister needs to respond to and why it is so important.
The Duke of Somerset (CB)
My Lords, I support both these amendments and declare my interest as a rural landowner. Although the idea of encouraging home ownership through starter homes is a very laudable aim, I do not believe that these clauses will be successful in the wider context of rural home provision without the promotion of other tenure models, such as those we heard about in the earlier groups, which remain in perpetuity. This is the point with the discount.
One of the aims of the Bill should be to keep a balanced mix of tenures, particularly in rural areas, with both rented and owned—partially or entirely—properties. I think the Government have confirmed this is their intention. Despite what the Minister said in an earlier group, the Bill does threaten the future success of rural exception sites, which have delivered many lower-cost homes in communities where local families, often already employed nearby, and supported by the wishes of the community, can find a more affordable house. Such sites make the group with these two amendments different from the earlier ones, but many of the same principles apply.
As we have heard, these sites are provided through the altruism of the landowners selling them. Various figures have been suggested, but this is normally at 10% of the development value. Very few landowners will want to continue to offer this, if after five years the house can be sold on in the open market, perhaps to an incoming second-home owner. If I understood the Minister correctly, we have had slightly contrary answers to this question. In one reply I think she said that the Government were going to take measures to stop purchases by second-home owners, although perhaps I have got that wrong.
The Duke of Somerset
I was under the impression that we had had two contrary replies. On one occasion the Minister said that the Government accepted that second-home owners would be able to purchase such houses eventually, while on another occasion she said that the Government were going to take measures to stop that from happening.
Baroness Williams of Trafford
My Lords, I think the noble Duke is referring to when I talked about second-home owners purchasing starter homes.
The Duke of Somerset
I thank the Minister. Surely it must be sensible to protect the 20% discount in perpetuity, as the amendment suggests, or to use a tapering mechanism; or else to exclude starter homes from rural exception sites. They should also be kept for first-time buyers after the five years.
We have heard various statistics, particularly from Shelter. One published piece of research shows that in order to buy in the countryside, an applicant would need a salary of at least £50,000, with a deposit of £40,000. Those figures are after tax, which is a point that has not been made very much; so they are very high and would probably have to apply to two people in the household. Self-evidently, that is not widely affordable.
The old Section 106 affordable home requirement would be made largely redundant. Perhaps that would mean higher profits for developers, because they would not need to provide a percentage of affordable housing. In the past, that has often been 30% to 50% of the total. This is also going to mean less rental accommodation. Will the council tax banding be based on the open market value, or on the discounted value?
It is important to point out that prospective owners must consider the extra cost of the maintenance of their new houses. That is often included in the rent, and can amount to a large sum. I also want to take the opportunity to suggest that in the past so many new houses have been built to an abysmal standard of appearance and greening. Perhaps this Bill allows a chance for planners to have more say over that. Low-cost and efficiency are not mutually exclusive.
Rural villages need organic, holistic and good-quality growth. Vital assets of infrastructure—transport and medical—pubs and shops all need to be planned together, as I proposed in my Second Reading speech. I may be anticipating a slightly later grouping, but that issue is important.
Let me return to where I started. The main problem is the contention that government funding, especially in rural areas, should be spread equitably between shared ownership, starter homes and renting—that is, mixed tenures. That is why in perpetuity is such an important concept. I support both these amendments.
Lord Best
My Lords, my name is on Amendments 50A and 50C and I rise to support my noble friend Lord Cameron to whom I pay tribute not just for his eloquence today but for setting a perfect example of a landowner who has made available land on very favourable terms to ensure that local people get decent housing. There are other Members of your Lordships’ House who have done the same; all of them deserve absolute credit.
I was delighted that the noble Lords, Lord Young and Lord Deben, have also joined in. If tribute has to be paid to the actual founder of the feast, Nicholas Ridley, as Secretary of State at the time, must get the laurels for inventing this particular piece of policy. It is the hope in these amendments that local authorities would not be required always to insist upon starter homes on rural exception sites, knowing that these will be lost to the locality five years later if the purchasers sell up, perhaps to second-home owners for holiday lets or to better-off commuters.
Last year I chaired the Rural Housing Policy Review, which was conducted with the noble Lords, Lords Cameron of Dillington and Lord Taylor of Goss Moor. This review was promoted by Hastoe Housing Association, which is a leading player in the housing association world in this regard. It joined forces with the Campaign to Protect Rural England and the Country Landowners Association to take forward these issues. Our report set out the special position of rural areas, which others have outlined today. From the report I would only add the following additional points.
First, promoting home ownership in rural areas, where people often put down roots and stay for a lifetime, is particularly important. However, a 20% discount will not, on its own, do the trick for affordable starter homes. Shared ownership can be of particular value in those circumstances, with young households buying for half or less than the market value and paying affordable rent on the remainder. The problem, as in so many other cases, would come from the Government requiring local authorities to push out other contenders to make way for starter homes.
Lord Kennedy of Southwark
My Lords, I am fully in support of both these amendments. I agree with virtually all the contributions that have been made by noble Lords. The noble Lord, Lord Deben, very eloquently—certainly more eloquently than I could—set out why the Government should accept these amendments, or at least reflect on them carefully and possibly bring back their own amendments on Report. We on these Benches are very supportive of the point that he made about localism. Obviously the exception sites policy is very important, and to lose this opportunity would be very regrettable for the rural areas. That is why in perpetuity is so important.
We have all heard about keeping rural communities alive and thriving, with people of different ages and occupations, or none, all coming together to build a community. What we do not want to see, as the noble Lord, Lord Deben, explained, is a group of 60-plus people living there, with no other services. That is the route to that community dying and not being sustainable at all.
Baroness Hollis of Heigham
My Lords, I also support these amendments. As a child and as a teenager, I was brought up in a village in south Devon of what we used to call “150 souls”. For some time in the 1970s and 1980s I was a parliamentary candidate in a constituency with a large number of rural villages. As we went round from village to village, there were half a dozen council houses here and half a dozen there—hopefully and usually, but not always, having Labour stickers in their windows. Every one of them has gone. What is left are housing association villages. Obviously housing associations are on a voluntary basis but, as the noble Baroness will know, we are going to have a somewhat similar debate over the problems of rural exception sites with right to buy. There will then be the question of whether there is a portable discount, as opposed to the sale of those particular houses, because government recognises that stripping out affordable rented housing from villages or ensuring that new housing is not of that sort will kill those villages.
It is worth reminding ourselves of how poor, how low and how modest some incomes are in such areas. In much of the parts of rural Norfolk that are not occupied by retirees from Essex, by second home owners from Islington or by reasonably new purchasers on the outskirts of Norwich, incomes are exceedingly low. As the noble Lord, Lord Deben, said, many of the people connected to the agricultural and food processing industries, some manual public sector and building and construction workers—and they are mostly men here—will be lucky if they are taking home £20,000 a year before tax. What about their wives and partners? I was checking when we were doing amendments on previous Bills and found that women in those situations, because they did not have a car, were dependent on their locality and were lucky to piece together an income of £5,000 a year. From what? They cleaned caravans, boats and houses. They picked mushrooms and, occasionally, in summer, they might pick fruit. They amplified that with bar work in the local pub on a weekend. If they could take home £5,000 or £6,000 in total in the course of the year, they regarded themselves as fortunate.
Such people will never buy. What they would like to do is to enjoy an attractive home in which they can keep their roots; where the children can go to the local schools and all of the community virtues, values and emphases that the noble Lord, Lord Cameron and the noble Lord, Deben, have expressed so well are continued. The Government seem to have a conflict of issues here. I am sure that they respect and support the need for communities—particularly viable communities—in more rural areas. The Government also support the philanthropy of landowners, as we all do. At the same time, the Government are also calling for social mobility—for people who actually want to stay, put down roots and make their community thrive. This is inconsistent with the philosophy of starter homes, where you keep your discounts, sell on and make those houses unaffordable to the local community, but you are none the less allowed to buy your next home up the ladder.
I think the Government have to accept that small rural communities are different from the cities, where you have a choice of housing, a choice of occupation and can, to some extent, construct your income. If the Minister does not understand—which I am sure she does—the physical and social immobility and, to some extent, the mental immobility by virtue of family connection, then those villages will die. Certainly, in Norfolk, they are already dying. If all new developments are increasingly monopolised by starter homes and we find, as a result, landowners drying up their donations, particularly to housing associations, then this Government will have the honour of seeing the death of so many of our villages.
Lord Campbell-Savours
My Lords, I wonder if I might intervene again. In some ways I find myself at odds with much of this debate. I do not think that people understand what happens with Section 52 agreements. The noble Lord, Lord Deben, understands them, but I think he was in the department when they were brought in. The effect of a Section 52 agreement is that the smaller the locality that applies to a particular planning permission, the lower the demand for the property, which affects the price. Therefore you can have a house in a village which is free of any restriction that is identical to a house which is covered by a Section 52 agreement, where the locals-only agreement is so containing that it might cover only a few hundred yards, depending on the parish, and one house might be half the price of the other.
I thought that the objective of the people behind this amendment was to ensure that local people were provided for long term in property within their community. I would be a little concerned if we concentrated on development in villages which was simply about rental. I have no problem at all with people buying in villages as long as they do not come in as outsiders and inflate the market, driving up the price. However, if you can create an arrangement whereby, because of Section 52-type agreements, the price is contained within very restricted localities, you can then contain the price and stop huge price inflation bringing in the very people to which some Members of the Committee have taken exception during this debate.
Baroness Williams of Trafford
My Lords, I thank the noble Lords, Lord Best, Lord Cameron, Lord Kennedy, and Lord Stoneham, and thank all noble Lords who have spoken in this debate. They give me the opportunity to set out how we think starter homes can contribute to the important rural housing agenda.
Noble Lords have articulated very well how rural areas have a series of challenges, including being dominated by perhaps a certain age group or second-home owners, and seasonally dominated—I can think of one place in Cornwall, Mousehole, which I am sure the noble Lord, Lord Cameron, knows well, which is almost deserted in the winter and packed so full in the summer that you can hardly move. Further challenges are how the few people that live there sustain themselves during other times of the year and how key workers can be brought in to fulfil certain essential jobs, and so on.
Amendments 50A and 50C are both concerned with rural exception sites. Young first-time buyers face significant affordability pressures in many rural areas, so we want the development of starter homes to make a significant contribution to housebuilding in these areas. The use of rural exception sites is an established means for supporting sensitive housing growth where it is locally supported and meeting local needs. It is very important to underline that. We do not want to undermine the operation of rural exception sites.
Our rural productivity plan, which was published last August, set out priorities for growing the rural economy and the need to increase the availability of housing in rural towns and villages to help them thrive. In our consultation on changes to the NPPF we have consulted on amending the policy on rural exception sites to allow starter homes to be included. The current policy allows for some market housing on rural exception sites to enable some cross-subsidy of affordable housing, and we have tested at consultation whether this mix should include starter homes.
We also consulted on allowing local planning authorities to have the flexibility to require a local connection test on rural exception sites. This reflects the particular needs of rural areas, where local connections can be important and access to the housing market for working people can be difficult, as a number of noble Lords have pointed out. It would also reflect the current local connection tests on rural exception sites.
My noble friends Lord Deben and Lord Young talked about philanthropic landowners; the question of whether they will continue to bring forward their land for the best-intentioned purposes needs to be addressed. We have absolutely no wish to switch off the operation of these sites. They can provide a really good mix of tenures, including private housing for cross-subsidy, and starter homes might be another tenure type.
I would like to make several points here. First, many of the sites that come forward in rural areas are small. When we start to deliberate about the site size for starter homes, it may well be that many sites will not be relevant.
Baroness Hollis of Heigham
Does the Minister have any idea yet whether she is talking about sites accommodating 12 or 20 homes?
Baroness Williams of Trafford
I do not know but, as I said either earlier today or on Tuesday—the days are rolling together—I expect that the size of the sites will be roughly what we see now in terms of affordable housing. However, that is my guess rather than something that I have been informed about.
Lord Kennedy of Southwark
I thank the noble Baroness for giving way—she has been very kind in that respect. Part of the problem is that you may agree a certain size for a site but then a rumour goes round that that is not the case. Although it may not be the intention, people will fear that these sites will be lost, in which case they will not bring the land forward for use.
Baroness Williams of Trafford
Perhaps I may make another point about covenants, which many philanthropic landlords attach to their sites. We appreciate their benefits. Sometimes sites are donated to the local community and, if the donor wants to put a covenant on the land prohibiting its use for starter homes, that is within their gift. Although, again, we stress the benefits of starter homes in communities that are looking to create homes, we also appreciate the other factors that are in play.
We want to see policies working together. My noble friend Lord Young of Cookham highlighted how well-intentioned policies working together can in fact conflict with each other. We know that we need growth in rural areas to allow young people to stay in the communities in which they grew up. However, we also want neighbourhood planning to play a role in identifying the sites on which starter homes should be built so that there is collaboration between the landowners, the developers and the communities that they serve. That is an important point. One of the benefits of neighbourhood planning has been its collaborative nature, and that must be a factor in the doubling of acceptability of housebuilding that we have seen. Local people feel far more in control in terms of what is put in their community than perhaps they did 10 or 20 years ago. That is not a political point; it is something that we have all learned over the years.
However, we do not agree that starter homes on rural exception sites should be in perpetuity rather than having the five-year restriction that we are proposing. We believe that there should be a consistent model for first-time buyers. Why should rural workers not have the same opportunities as workers in towns and cities? They, too, need to move and grow.
We are currently considering all representations and will issue our formal response to the planning consultation in due course. Any changes to national planning policy will be a material consideration which a local planning authority must take into account when making planning decisions and developing planning policy. If changes are made, starter homes will be an additional, not a replacement, type of affordable housing which can be delivered on these sites following consultation with the local community.
Amendment 50C would allow local councils to ensure that the requirement for starter homes did not have to be met on rural exception sites. We will consult separately on the starter homes requirement for suitable, reasonably-sized sites for the regulations. We will also test in the consultation any exemptions from the requirement. Again, it is right that we discuss this with the housing industry and ensure that we achieve the best outcome.
I want to be clear that the consultation will include a minimum site size for the starter homes requirement. Any sites, urban or rural, below the size threshold will not, as I have said, be subject to the starter homes requirement. Starter homes can be delivered on sites below the threshold but this will not be a compulsory requirement; it will be a matter for local determination.
Baroness Hollis of Heigham
Forgive me for interrupting, but can the Minister tell us when we will know what the minimum size is? Will it be measured in hectares or by planning density? Can the Minister give us a feel for this? Are we talking about an acre?
Baroness Williams of Trafford
My Lords, I would strongly imagine that we are talking about numbers of units.
Baroness Hollis of Heigham
Does the Minister have any idea what sort of numbers she is talking about?
Baroness Williams of Trafford
I do not. What I have said is that I strongly expect—although I do not know—that it would be very much in line with what was expected through the affordable housing duty. However, that is just a guess from me at this point.
Lord Kennedy of Southwark
The Minister said that people living in rural communities should have the right to benefit from the starter homes policy. I am absolutely fine with that, but the whole issue is about how much people earn and whether they would be able to afford these starter homes. My noble friend Lady Hollis has mentioned a number of times that these homes may be unaffordable. During the debate a couple of days ago my noble friend talked about an area in Norfolk where building two or three bungalows in the village would free up some of the family homes in order to get people to go there. It is regrettable that that is going to be the case here. If we stick with this policy, we are not looking at the wider implication that, actually, it is unaffordable for most people in rural areas.
Baroness Williams of Trafford
I do not agree with much of what the noble Lord said. Obviously, the mix of tenures is essential, whether it is starter home level, shared ownership, affordable rents or social rents, and a number of funding streams are available for the different types of tenure. I think that the noble Lord and I may be saying the same thing but in a different way. I hope that the noble Lord will feel happy to withdraw the amendment.
Lord Greaves
Before the noble Lord does that, and I have no doubt that he will, the Minister made some interesting remarks about the importance of neighbourhood planning in relation to starter homes. At some stage in Committee, she said that there are now 1,600 neighbourhood plans at some stage of gestation. A few of these have been adopted but none of them will be busying themselves at the moment with starter homes, because starter homes are still being discussed in this Committee. What will be the process of neighbourhood planning in relation to starter homes? Will starter homes be put into the mix of that large number of neighbourhood plans that are still being worked out and will go to inspection and referendum, et cetera? Or will it require a process of amendment and change in adopted neighbourhood plans to cater for starter homes, which is, of course, a time-consuming and bureaucratic process? Will there be a presumption that in areas with neighbourhood plans, which are strongly biased towards rural areas and places with parish councils, there will be no starter homes until the neighbourhood planning process has dealt with how many there should be and where they should be?
Baroness Williams of Trafford
My Lords, I think it will be done through amended neighbourhood plans. It also may be done through the NPPF. I will need to come back to the noble Lord on that, because the mechanism is important. I probably would have known the answer about six hours ago but, at this time of the day, I do not know.
Lord Campbell-Savours
Under the starter home arrangements, I envisage in a village half a dozen or a dozen terraced houses sold under this principle, subject to strict locals-only Section 52-type arrangements, whereby there is no great market when you sell at the end of five years and where people have the right of ownership. That enables young families to stay in villages in properties that they own, rather than having to rent.
Baroness Williams of Trafford
My Lords, six terraced houses would be quite a small site size. It is important for noble Lords to know in due course what the site sizes will mean, and I will let the noble Lord know. I am guessing at this point, but six sounds like a very small site size, and therefore probably exempt.
Lord Kennedy of Southwark
Just one final point. I was pleased to hear that we may be agreeing after all; I am not sure that we are, but that would be great. The point about rural areas is not just what happens in 10 years—the important issue is the people who are living there.
Baroness Williams of Trafford
I think I addressed quite a lot of my remarks to the local test.
Lord Cameron of Dillington
My Lords, I thank all noble Lords for their participation in the debate and for their nearly universal support—especially the noble Lords, Lord Young and Lord Deben, who are both old hands in this area—even if they only assisted in the birth of the site, not being the rightful daddy, as the noble Lord, Lord Best, said.
I was reminded when the noble Lord, Lord Deben, was speaking of a phrase that I believe he did conceive when he was Secretary of State at the DoE, “executive ghettos”, which is what we are all trying to avoid. I have heard another phrase recently in planning philosophy, which is “place making”. What we are trying to do here is place saving, because I hope that, mostly, we already have reasonably good places in the countryside.
The noble Lord, Lord Campbell-Savours, talked about Section 52 agreements. I am not too concerned how we organise the exception sites or homes for locals; the real point about the exception sites is that they are outside the planning system: the land would not normally get planning permission of any sort. It is the cheapness of the land and the way that the house can be built by the housing association which enables houses to be very good value for locals, not only the control of the marketplace, as the noble Lord rightly says, which the Section 52 agreement dictates. They start off being of very low value. I would be very keen on trying to maintain the houses being owned by a housing association; in that way, no one owns them outright so that they can sell them, whether at a low value or not.
I repeat that 45% of all rural affordable houses built in the past year are on exception sites. Without the amendments, the supply of exception sites will dry up; neither landowners nor parishes will accept them. The noble Baroness, Lady Hollis, said that, without them, we could easily kill the village. It depends what your definition of village is, but it would definitely kill the community, which is perhaps the major point, as they very possibly revert to the said executive ghettos.
I am glad that the Minister supported the sentiment behind the amendments, even if she did not totally accept them, but I was very dismayed when she said that starter homes could be allowed on exception sites, and would also still fall out after five years and be sold as homes. That very statement will kill exception sites stone dead. I cannot see parishes or landowners agreeing to continue on that basis. It is all very well saying that the landowner can place a condition of sale, but conditions of sale are very difficult and expensive to enforce, particularly after the first sale.
I hope that we can continue to discuss the arrangements between now and Report so that these executive sites will be able to continue to come forward, but at the moment I do not think they will.
Lord Best
Perhaps I may intervene and say that before we go home in a really gloomy state of mind, I did catch the point made by the Minister that below a certain number of homes on the site, there is likely to be an exclusion from this whole system. If that number is high enough, an awful lot of rural exception sites will still be possible. Before the noble Lord concludes his remarks, I should say that I cling to that hope.
Lord Cameron of Dillington
As I say, I have no doubt that we will be able to discuss this between now and Report. In the mean time, I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
“Infrastructure requirement: provision of starter homes
(1) Prior to the first occasion on which planning permission is granted for a site involving starter homes, the Secretary of State must produce an infrastructure plan to be implemented as part of the starter homes programme.(2) The plan must outline—(a) which services (such as hospitals, doctors’ surgeries and schools) will be built alongside new housing developments involving starter homes, and(b) where funding for the new infrastructure will come from.(3) The infrastructure plan must be laid before both Houses of Parliament.”
Lord Kennedy of Southwark
My Lords, I am conscious of the time. The amendment, tabled in my name and that of my noble friend Lord Beecham, seeks to place a duty on the Secretary of State to produce an infrastructure plan to be implemented as part of the starter homes programme. This is only a probing amendment but it is particularly relevant to the larger brownfield sites where new housing developments are taking place. We cannot just build a group of houses and have no plans to address the services that are required to make the scheme viable. Those services include access to health services, doctors’ surgeries, dentists, schools, shops and transport including bus services—I am not even going to mention rail services. They are all important and need to be taken into account on these brownfield sites.
Amendment 51 in this group seeks to improve the quality of the information that is to be provided under Clause 5. I beg to move.
Baroness Hollis of Heigham
My Lords, I support my noble friend in his Amendment 50F. If we do not do what my noble friend says and ensure that infrastructure and community support are built alongside housing, we will not be building communities, we will be building estates—and many of us know what that problem has meant. Back in the 1950s, Plymouth City Council built estates. It did not build the infrastructure to go along with the housing: community centres, doctors’ surgeries, pharmacies, shops and the like. As a result of things like the Essex Design Guide, steered in part I suspect by the noble Lord, Lord Deben, in the 1980s, local authorities were encouraged when building developments—in the case of Norwich it was the Bowthorpe estate with something like 15,000 people on it—to build the infrastructure in with the first homes. This included not only shops, community halls, chapels and churches, and of course bus routes and so on, but also small units for industrial use to try to develop to some extent a self-sustaining community.
Within those developments half of the properties went to social housing and half went for sale. In Norwich we could not get builders to build or building societies to lend, so I went to Companies House and got a company from the books in order to make sure that we had a balanced community. To my delight, once when I was in one of the leading stores in Norwich, I heard someone say to someone else, “I see you’ve bought one of those new houses up at Bowthorpe. What’s it like?”. She said, “Oh, it’s very nice with lots of support and amenities. There’s only one thing wrong with it. You can’t tell the difference between my home and a council house”. That was exactly the compliment I wanted to hear.
What we learned from that development and from the Essex Design Guide, which stressed respect for the local environment, was that if you do not put in the infrastructure along with the housing, what you get are soulless estates that are empty during the day and problematic at night. It is deeply important that any developer or local authority which is seeking to develop extensive sites for starter homes should take this into account. I am sure that the Minister knows very well indeed, given her local authority background, that if you do not, you will be building a problem estate from the day you begin.
Baroness Grender
My Lords, Amendment 53, in my name and that of my noble friend Lord Shipley, calls for an annual report by the Secretary of State containing information on the construction and sale of starter homes in the area, and a report on the composition and incomes of people who have purchased starter homes in each area during the relevant period. The amendment has two purposes. The first is to assess progress and the second is to understand who is benefiting from it. I also take this opportunity to say that we support the other amendments in the group. In particular, 50 years on from Shelter being started, the fact that children are still in temporary accommodation reflects a failure for all of us.
Shelter calculates that the starter homes scheme is a significant public subsidy of £8.4 billion, working on the assumption that starter homes sell at 20% less than the average price paid by first-time buyers in England, and that the subsidy per home will be worth about £42,200. Other noble Lords have raised concerns about starter homes being in place of social housing. The noble Lord, Lord Kerslake, set out in some detail how inaccessible this product may be, particularly to families on low wages currently in the private rented sector. But it is worth reminding ourselves that Shelter calculates that the average starter home will be unaffordable even to families on average earnings in some 58% of the country.
Given that starter homes will be sold at a discount from the market price and that this discount will be paid for through a reduction in the usual obligations, and with such a large amount of public subsidy going to the buyers of starter homes, it is vital that the Government and regulators such as the National Audit Office have good evidence as to who is benefiting from such subsidy. This will help them and others to assess whether public money is being well spent in the context of the wider housing crisis.
We have already explored possible abuses of the scheme in some detail. It is critical that the Government take steps to know who is living in them—that is the second part of the amendment—what their incomes are and whether we are reaching the all-important gap in the market that the Minister described today. Given that we already know that 40% of right-to-buy sales are now buy-to-lets, we do not want the same thing to happen with starter homes. I welcome the Minister’s reassurance earlier this afternoon that there will be some kind of mechanism to ensure that that does not happen: I am glad that we have learned that lesson.
I shall talk very briefly—I know it is getting late—about the market confidence among developers in this area. I promise I shall be brief. We have already heard Jones Lang LaSalle referenced a few times as part of the development sector. It says that the UK housebuilding sector will need to see a near 50% increase in capacity if it is to meet the ambitions of the Government’s 200,000-plus homes per annum. The jury is very much still out for the Council of Mortgage Lenders: while it is working with the Government to try to make this happen, it worries terribly about this being such a distortion of the market.
There was a very interesting report by Pocket, which is exactly the kind of innovative, private-sector thing that we should be encouraging in London and which produces the kind of homes that starter homes actually look and feel like. It is a highly innovative company, but it says that there is a real danger that this could put off developers such as itself. Its report states:
“For lenders, it is virtually impossible to value a product that only has a five-year shelf life. Lenders will, as a result, limit their exposure to developments with Starter Homes, which, without sufficient credit, will fail to grow in number”.
I am sure we will explore issues of market distortion and how developers are feeling—whether they have full confidence in starter homes—over the next few days, but I felt it important to raise it now because it is one reason we believe in this amendment: there should be some mechanism for annually looking at how this is progressing.
The Earl of Lytton
My Lords, I generally support both amendments, up to a point. On Amendment 50F, so ably moved by the noble Lord, Lord Kennedy, the question of infrastructure clearly goes beyond starter homes alone. For example, in certain coastal towns along the south coast it has become evident from my travels to and fro that the amount of development in what I call the suburban areas has now produced difficult traffic conditions—not because of the development process but because of the subsequent use which is causing an overload on feeder roads. This, I fear, will become an increasing problem because alternative forms of transport for journeys to work have not had the necessary investment and it does not look like they are going to get it any time soon. For instance, the high-quality rapid-transit type of bus such as you have in large parts of central London—where you can see when the next bus is coming and where it is going to—is not there. It is a considerable problem.
We know that doctors’ surgeries, schools and other infrastructure are not keeping pace with the state of development. The noble Lord, Lord Kennedy, is right that we have to look at the broader picture of the setting—otherwise we will be creating the latter-day slums of tomorrow while we are trying to create high-quality homes. I say high-quality homes because I had the privilege of serving on the Select Committee on National Policy for the Built Environment, which looked particularly at the need for decent quality and not just building anything at any price with all that that means.
On the amendment in the name of the noble Baroness, Lady Grender, I understood her to be referring to what I know as post-occupancy evaluation. I hope I have not used the wrong term. Some years ago, an All-Party Parliamentary Group on the Built Environment—which is not the same thing as a Select Committee, I hasten to add—on which I also had the privilege to serve, produced a report on procurement. It identified various shortcomings in the procurement process. First, the people who were doing the procuring—they might have been a particular subsector of local government, school governors or parish councillors—did not have the tools or the ability to deal with the procurement themselves and were not bringing in the necessary skills required to do that properly. What they were procuring ended up not serving its proper purpose, not having any reuse value, being over budget and not being properly controlled. That failure, in particular, identified a complete absence of post-occupancy evaluation—in this respect, it pointed the finger rather pertinently at many government departments. You did not have any feedback as to where you were going wrong and so you made the same mistakes all over again the next time round. We have got to do better with this.
The noble Lord, Lord Deben, referred to the scarcity of the precious space that is available for development without impinging on the green spaces outside. I say hooray to that. However, the process is getting much more demanding than it used to be. If you do not want to create cramming, if you want to create greater density and the best use of urban, previously developed land, then we have got to be smarter about how we do it. The two amendments seem to address aspects of being smarter about it and I support the principle that lies behind them. I hope the Minister will consider them in that tone.
Lord Greaves
My Lords, I support a great deal of what the noble Earl, Lord Lytton, has said about the importance of infrastructure in relation to housing. I am greatly worried that there is now such a housing crisis in this country that we are doing exactly what the noble Earl suggested and failing to learn the lessons of the past. At times in the past in the post-war years, large numbers of houses were built but infrastructure and services were not put in and local authorities spent a long time playing catch-up. In some cases they did not succeed because of the problems which existed on those estates. So what has been said is absolutely right. There is a huge danger that under the pressures to find ways of building more and more houses the proper overall planning of houses as part of future communities is being forgotten in too many areas.
Baroness Young of Old Scone (Lab)
My Lords, regardless of whether the Labour Front Bench brings this amendment back on Report, it still encapsulates an important principle. Perhaps I can draw the Minister on the issue of infrastructure provisions.
It is true that the dash for the development of starter homes at all costs runs the risk of producing poor-quality homes that are inadequately served by infrastructure. Although we are not yet at the point in the Bill where we talk about permission in principle and, in particular, brownfield registers, it is important that we hear from the Minister, before we reach that point, how those provisions will take account of the need for planned infrastructure alongside fast-track provisions to get starter homes and new housing developments on to small-scale brownfield sites quickly. We need to hear how they will do so without transgressing the very important requirements for good infrastructure and principles of design.
I have asked the Minister in several ways and on several occasions—I keep promising her a letter which I have not yet written—for a flow chart on the “permission in principle” issue that shows when various factors will be taken into account and when various consultations will take place on the provision of infrastructure such as schools, doctors’ surgeries, roads, sewerage and plumbing, as well as an assessment of the downside of development on these sites, taking into account biodiversity conservation, flood risk management and an assessment of whether there is enough water available to flush away sewage.
I remember volubly—although I should not at this stage, on this day and at this time, give an anecdote—how in Basingstoke at one stage of its housing development there was enough water to allow people either to clean their teeth or to flush away their sewage but not enough for both. We have got to get these infrastructure issues right well before the fast-track development processes are put in place. Perhaps I may also press the Minister to give me my flow chart before we come to discuss the “permission in principle” part of the Bill. I will be extremely grateful if she does.
Lord Deben
I support the noble Baroness opposite. This is not a sensible amendment and I am sure that my noble friend will not accept it. It is not sensible for the reasons that the noble Lord, Lord Greaves, put forward. It also reminds us that we are going to come on to the whole question of infrastructure. Again, this is a Bill that does not say what I hoped it would about greenfield sites. It has also not faced a number of infrastructure issues. It is, therefore, going to have this kind of amendment—whether good or bad—because these issues have to be faced. For example, I do not see how we can go forward with the starter homes concept—which I agree with; I am very supportive of my noble friend on it—if we go on having a situation where, whenever anybody gets a planning permission, not only does the local water authority not have the right to be consulted but it has to connect any new property to the sewage system even if that causes a flooding risk. We have not faced that issue and yet we have a Bill which is about all of that.
It seems that there is quite a lot of work to do between now and the point where we get to that issue. I feel that I ought to warn my noble friend that we will have to discuss those issues in detail if we are to give her the support which many of us would like to give, because they are not yet in the Bill and we need to have them there.
Baroness Williams of Trafford
My Lords, this has been an interesting debate and I thank all of your Lordships who have taken part. Perhaps I may start by addressing Amendments 51 and 52. Clause 5(4) already makes provision that an authority must make these reports “available to the public”. The clause also provides that the Secretary of State may make regulations “about their timing” and whether they should be combined with the local authority’s authority monitoring report. The authority monitoring report is an existing requirement, which must be published on at least an annual basis. We do not want to introduce unnecessary burdens and it would be sensible to combine starter-home reporting with this existing requirement. We will be consulting on the monitoring requirements associated with starter homes shortly. We want to understand wider views on what the reports should contain and their arrangements for publication.
Furthermore, local planning authorities are already required to report on affordable housing delivery. They must report on the extent to which their planning policies are being achieved through their authority monitoring reports. This is a statutory requirement in Regulation 34 of the Town and Country Planning (Local Planning) (England) Regulations 2012. Measures under this amendment are already covered by the legal framework.
Amendment 52 would require all local planning authorities to demonstrate that these sites were not otherwise needed for employment, retail, leisure, industrial or distribution use. Our planning policies look to encourage the productive use of brownfield land. Our starter homes exception site policy has a crucial role in delivering starter homes by providing new and cheaper land to be used for housing—and, because the land tends to have a lower value, this helps to improve the viability of starter home developments. This is why we have consulted on extending and strengthening this policy as part of our national planning policy consultation. Let me be clear: this is not about building houses at the expense of all other types of use but about releasing land where there is no reasonable prospect of it being used for its original purpose.
As part of the consultation, we invited comments on evidence to be used to justify the retention of land for commercial or similar uses and on whether there should be a fixed time limit on land retained for commercial uses. We expect local authorities to be proactive in identifying and publicising these exception sites and, where applications for starter homes come forward, in being prepared to give planning permission. The intention behind the new duty to promote starter homes in Clause 3 is to encourage local authorities to do this. Before they grant that permission, of course, local authorities will need to assure themselves that this brownfield land is an exception site and, in particular, that it is underused and unviable in its current land use. I believe that local authorities are capable of taking this decision using our guidance without the Government monitoring them. For this reason, Amendment 52, which would require all local planning authorities to report in detail about the appropriateness of sites, is unnecessary and bureaucratic.
Amendment 53 would require the Secretary of State to prepare a report on an annual basis containing information on the construction and sale of starter homes in the area of each local authority. As part of this, the report should contain information about the household composition and incomes of persons who have purchased a starter home in each area. As the noble Lord, Lord Greaves, put it rather articulately, this would not be a particularly proportionate approach to reporting on the operation of the policy. Any monitoring requirements should not be overly onerous or waste precious resources. I believe that reports should be published at local level, to ensure that first-time buyers can access them easily and that local councils can be accountable.
Baroness Grender
My noble friend Lord Greaves was actually talking about the main Labour amendment and not Amendment 53, just to be clear.
Baroness Williams of Trafford
I do apologise—I was trying to give him credit because I disagree with him on quite a lot of things. But he knows what I mean.
Lord Greaves
I think that the Minister was trying to stir up trouble on these Benches—I would not dare to contradict my noble friend Lady Grender.
Baroness Williams of Trafford
I was not trying to stir up trouble—honestly, my Lords, it is getting a bit late for that. Amendment 50F is, I think, the appropriate one, which the noble Lord articulated very well. It would seem to be quite strange for the Secretary of State to produce an infrastructure plan as part of the starter-homes programme.
We particularly want to see local authorities and infrastructure providers planning positively for the broad infrastructure needs of their areas as part of local plan-making, and our starter homes reforms will not change this. In particular, local planning authorities will still be able to secure Section 106 contributions—which we spoke about earlier—for site-specific infrastructure improvements required for development, including new roads or financial contributions to local schools. Finally, we have announced a £1.2 billion fund to ensure that sites are prepared and have suitable infrastructure on site. This will support delivery of starter homes on brownfield land.
A couple of noble Lords talked about design, and I wholeheartedly agree about innovative and energy-efficient design. The Government have a design panel looking specifically at avoiding, I suppose, some of the mistakes of the past and providing far more innovative designs for the huge number of houses that we are expecting to deliver.
I thank the noble Lords, Lord Kennedy, Lord Beecham, Lord Kerslake, and Lord Best—in fact, the noble Lord, Lord Beecham, has gone so I will not thank him—for explaining why they have concerns about Clause 6. This direction would state that the incompatible policy must not be taken into account when certain planning decisions are taken. The remaining local development documents would not be affected and the local planning authority may still have regard to these in its decision-making in the usual way. The compliance direction would not apply to policies forming part of neighbourhood plans and the local plan. Communities would continue to shape development in the area. This is a reasonable and balanced approach.
The compliance direction must set out the Secretary of State’s reasoning for making the direction and must be published. A copy must be given to the local planning authority and the compliance direction would remain in force until revoked by a further direction given by the Secretary of State. We will set out very clear guidance on the operation of the duties so that all local planning authorities are fully aware of what they need to do to comply with them. I will reassure noble Lords at this point that the compliance direction is a backstop provision. It will only be used in limited circumstances where the local planning authority is in breach of its starter-home duties and we envisage that it would be rarely used
The Secretary of State will decide whether to issue the compliance direction based on information within the monitoring reports that local planning authorities are required to produce under Clause 5. There will be the opportunity for councils to submit further evidence to the Secretary of State and any exceptional circumstances could be considered at this point. It will only be revoked by a further direction if the Secretary of State is satisfied that the local planning authority has taken adequate steps to meet its duty.
Turning now to the amendment to Clause 7, Amendment 53D seeks to place a duty on the Secretary of State to publish a strategy that includes targets for reducing the number of children living in temporary accommodation with their families. Under the Homelessness Act 2002, all local housing authorities must have in place a homelessness strategy and must consult public or local authorities, voluntary organisations or other persons, as they consider appropriate.
Each housing authority records information pertaining to its statutory homelessness activities under Part 7 of the Housing Act 1996. This includes the number of households and children in different types of temporary accommodation on a quarterly basis. The data are published on the GOV.UK website and allow comparison at a local authority, regional and national level. I think that it is unnecessary. Local housing authorities already record the number of children in temporary accommodation. They have clear duties to secure settled accommodation for them and must produce a homelessness strategy setting out how they will tackle the issue.
To conclude, I think that the Government’s current proposals strike the right balance. At this stage, I hope that the noble Lord will be happy to withdraw his amendment.
Lord Greaves
Before the noble Lord speaks, I have a question for the Minister. I am trying to work out how the compliance directions will work. Are they intended to apply to future development plan documents, including the core strategy or whatever and site allocations, or retrospectively to development plan documents that have already been historically agreed and which have things in them that conflict with the concept of starter homes?
Baroness Williams of Trafford
My Lords, I think that they will be for future plans, because they will include starter homes, but I will correct that if I am wrong.
Lord Greaves
In that case, why is it necessary to do this? Why cannot any defect in relation to starter homes be dealt with during the inspection?
Baroness Williams of Trafford
My Lords, that is a very good question. Can I come back to the noble Lord on that?
Lord Kennedy of Southwark
My Lords, I thank everyone who has spoken in the debate this evening. My amendment was only a probing amendment, although I fully accept that it is not the best that I have ever proposed from this Bench or elsewhere in the House. It is important that we had a debate on infrastructure, and we will discuss that further in the days ahead. It is very likely that it will come back to us on Report.
I very much agree with the noble Baroness, Lady Grender, on her concerns about developers having these proposals. I am also grateful to the noble Earl, Lord Lytton, for his support, as well as my noble friends Lady Hollis of Heigham and Lady Young. With that, I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
“Sunset provision: sections 1 to 7
(1) Subject to the following provisions of this section, sections 1 to 7 of this Act are repealed at the end of the period of three years beginning with the day on which this Act is passed. (2) The Secretary of State may by regulations made by statutory instrument provide that the provisions of sections 1 to 7 are not repealed in accordance with subsection (1) but instead continue in force indefinitely, or for a specified period of time.(3) 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 Kennedy of Southwark
My Lords, I will be as brief as I can. This amendment is in my name and that of my noble friend Lord Beecham. No one can deny that the sections of the Bill on starter homes are not without their critics. They include an interesting policy idea for building homes on brownfield sites that had not previously been considered for housing, having transformed overnight into the main housing policy for the Government to the exclusion of all others. This has been done without a Green Paper, without a White Paper, without any pre-legislative scrutiny or proper consultation and without any testing to see if this is the right way forward to deliver the homes that we all agree need to be built. I hope that noble Lords, whatever their view, can all agree that it is a bit risky and not the way to roll out a new policy. The saying “Act in haste, repent at leisure” could not refer to a more suitable policy.
On top of that, we must not forget that we have not seen a regulation yet, and we are not going to see the regulations perhaps until the autumn—which, when we consider the implications of this Bill, is nothing short of outrageous.
To try to bring some order to the whole process, we put down Amendment 53E for consideration by your Lordships’ House. It would provide for a sunset clause to bring an end to the programme unless the Secretary of State makes regulations for these clauses not to be repealed. That statutory instrument would have to be laid and approved by both Houses of Parliament. The period of three years was selected because we are in a fixed-term Parliament, so the Government can accept this amendment in the full knowledge that they will be able to get the regulations through Parliament without the risk of a general election getting in the way—unless of course some unforeseen circumstances arise. This is a useful device for the Government to consider, and I hope the noble Baroness will look at it carefully. I beg to move.
Baroness Williams of Trafford
My Lords, the noble Lord has just left me with a very horrible thought, but I thank him and the noble Lord, Lord Beecham, in his absence, for their amendment to introduce a sunset clause to the starter homes provisions. The effect would be that the starter homes provisions would be repealed unless affirmative regulations permitted them to continue.
I am sure the noble Lord will not be surprised that I strongly resist this amendment. This Government made a manifesto commitment to deliver 200,000 starter homes. The electorate supported the manifesto and expect the Government to deliver. We intend starter homes to be a new but enduring aspect of housing delivery. We have heard how first-time buyers are increasingly unable to access the housing market, and we want to ensure there are new opportunities for home ownership and to support young people into home ownership.
A sunset clause would introduce uncertainty to delivery. It would cause developers to pause as the sunset period approached and would be unhelpful not only in starter home delivery but in overall housing supply. If we want to achieve the uplift in housing supply we need, we must give clarity about the future rather than uncertain messages.
I accept that starter homes are new and we are embarking on a new journey in affordable housing delivery. We have made provision in regulations that give us flexibility for the future in setting the starter home requirement, the minimum site threshold and any exemptions to the requirement. With that assurance, I hope that the noble Lord will withdraw the amendment.
Lord Kennedy of Southwark
I am very happy to withdraw my amendment, but want to place on the record our thanks from these Benches, and from the whole Committee, to the noble Baroness. She has handled the debate today and all the questions from around the Committee with great skill. We appreciate that she has been very kind to us all and thank her very much for that. With that, I beg leave to withdraw the amendment.